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2010 DIGILAW 97 (GAU)

Larsen and Toubro Limited v. State of Assam

2010-02-09

AMITAVA ROY

body2010
JUDGMENT Amitava Roy, J. 1. In assailment is the order dated August 28, 2009 passed by the Commissioner of Taxes, Assam, dismissing the revision petitions filed by the petitioner under Section 82 of the Assam Value Added Tax Act, 2003 pertaining to the assessment years 2001-02 and 2002-03 under the Assam General Sales Tax Act, 1993. The contextual facts though marginally vary figuratively for the different assessment years, are otherwise identical and having carried the same challenge, the petitions were analogously heard. 2. I have heard Mr. G.K. Joshi, senior advocate assisted by Mr. R.K. Joshi, advocate for the petitioner and Mr. D. Saikia, learned standing Counsel, Revenue for the respondents. 3. A synoptic citation of the pleaded averments of the petitioner in absence of a counter by the respondents is indispensable to provide the factual backdrop. 4. The petitioner has presented itself to be a public limited company incorporated under the Companies Act, 1956 engaged in the execution of contract works of various nature under the State of Assam as well as the Central Government besides being in the business of purchase and sale of plants and machineries of engineering and electrical goods within the State and beyond. It is a registered dealer under the Assam General Sales Tax Act, 1993, Assam Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956 and has been paying its dues thereunder to the concerned authorities. 5. As required, it submitted its monthly turnovers with the particulars of tax paid on the basis thereof for the assessment years 2001-02 and 2002-03 under the Assam General Sales Tax Act, 1993 and thereunder claimed deductions under various heads as admissible. On completion of the assessment, the tax liability of the petitioner for the aforementioned years were assessed and on being permitted, the deductions claimed by it, the following amounts were determined to have been paid in excess by way of tax: Assessment Year Amount 2001-2002 Rs. 74,53,091 2002-2003 Rs. 24,90,777 6. On completion of the assessment, the tax liability of the petitioner for the aforementioned years were assessed and on being permitted, the deductions claimed by it, the following amounts were determined to have been paid in excess by way of tax: Assessment Year Amount 2001-2002 Rs. 74,53,091 2002-2003 Rs. 24,90,777 6. The above notwithstanding, according to the petitioner, respondent No. 2, Superintendent of Taxes, Circle 5, Unit A, G.S. Road, Guwahati after a gap of one year from the completion of the assessment proceeding issued notices dated March 7, 2006 and April 10, 2007 for the respective assessment years requiring the petitioner to show cause as to why the earlier assessment made would not be rectified under Section 37(1) of the Assam General Sales Tax Act, 1993. Whereas, by the notice dated March 7, 2006 it was sought to be conveyed that the petitioner's turnover as mentioned therein had escaped assessment and that excess allowance of credit of tax of the figure referred to had been made, by the notice dated April 10, 2007 it was insisted that deductions of amount as recorded therein earlier on account of payment to the sub-contractor was irregular. Though, the petitioner appropriately represented against the notices refuting the exigency of any rectification in the assessment as suggested endorsing the earlier exercises determining its tax liability, the aforementioned revenue authority conducted fresh assessments under Section 37(1)of the Assam General Sales Tax Act, 1993 read with Section 107 of the Assam Value Added Tax Act, 2003 for both the assessment years and raised additional demands for Rs. 8,11,67,436 and Rs. 22,08,007 for the assessment years 2001-02 and 2002-03, respectively. 7. Being aggrieved by the impugned assessment orders dated May 18, 2007 and June 28, 2007 corresponding to the aforementioned assessment years, the petitioner preferred appeals before the Deputy Commissioner of Taxes (Appeals), Guwahati, along with applications for stay of realization of the disputed demands pending disposal thereof. The appellate authority however, after hearing the parties and being satisfied of the merit of the grounds of assessment disposed of the said petitions vide its order dated May 11, 2009 directing the petitioner to deposit 25 per cent of the disputed tax and interest as a precondition for the admission of the appeals. The appellate authority however, after hearing the parties and being satisfied of the merit of the grounds of assessment disposed of the said petitions vide its order dated May 11, 2009 directing the petitioner to deposit 25 per cent of the disputed tax and interest as a precondition for the admission of the appeals. Being still aggrieved, the petitioner filed two revision petitions before the Commissioner of Taxes, Assam, Guwahati on July 1, 2009 also with petitions for stay of the operation of the order dated May 11, 2009 requiring the interim deposit as above. 8. In course of the hearing that followed, though it was, inter alia, urged on behalf of the petitioner before the revisional authority that the insistence for deposit of 25 per cent of the disputed tax and interest which work out to a massive amount of Rs. 2,02,91,859 has the potential of causing undue hardship to it, besides pleading the untenability of the disputed demand in law as a whole, by the order impugned herein, the revision petitions were rejected. 9. These petitions have been heard at the motion stage in course of which the relevant official records have been produced on behalf of the respondents. No affidavit-in-opposition by them, however, has been filed. 10. Mr. Joshi has persuasively urged that having regard to the scheme of Chapter IX of the Assam Value Added Tax Act, 2003 (for short, hereafter referred to as, "the Act"), the impugned order being wholly incompatible therewith is liable to be adjudged inoperative, null and void. With special reference to Section 82 dealing with the revisional power of the Commissioner of Taxes, the learned senior Counsel has insisted that having regard to the scope and ambit thereof, its disinclination to interfere with the order of interim deposit by the appellate authority based on its flawed perception of Sub-section (5) of Section 79 of the Act per se tantamounts to its failure to exercise a jurisdiction vested by law and is thus liable to be adjudged as such. Mr. Joshi has maintained that the mandate of interim deposit as embodied in Section 79(5) of the Act notwithstanding, having regard to the supervening revisional jurisdiction acknowledged by Section82 of the Act, the view of the Commissioner of Taxes, if sustained, would render the remedy of revision otiose. Mr. Joshi has maintained that the mandate of interim deposit as embodied in Section 79(5) of the Act notwithstanding, having regard to the supervening revisional jurisdiction acknowledged by Section82 of the Act, the view of the Commissioner of Taxes, if sustained, would render the remedy of revision otiose. There being no fetter on the otherwise plenary powers of the revisional authority under Section 82 of the Act, the inhibition entertained by the Commissioner of Taxes in the attendant facts and circumstances comprehending a statutorily imposed embargo to relax the stipulations of interim deposit engrafted in Section 79(5) of the Act, is ex facie misguided and untenable in law, he urged. To brace up his contentions, the learned senior Counsel placed reliance on the following decisions: (1) Hukumchand Mills Ltd. v. Commissioner of Income Tax, Bombay [1967] 63 ITR 232 (SC). (2) Commissioner of Income Tax v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 (SC). (3) C. Parikh & Co. v. Commissioner of Income Tax, Baroda [1980] 122 ITR 610 (Guj). (4) Parekh Brothers v. Commissioner of Income Tax [1984] 150 ITR 105 (Ker). 11. Per contra, the learned standing Counsel for the Revenue while contending that the revision petitions, apparently had been filed against the order of interim deposit and not against the impugned assessment has unreservedly ratified the order impugned. Drawing the attention of this Court to Sections 79(5) and 82(2A) of the Act, Mr. Saikia has argued that the enjoinment of the interim deposit being patently peremptory, the revisional jurisdiction contained in Section 82 of the Act by no means can be exercised over-ridding the same more so in absence of any provision for easing such rigour. According to him, the said power endowed to the revisional authority in proviso to Section 82(2A) to relax the essential precondition of the deposit to proceed thereunder can by no means be construed to be extendable to the one statutorily prescribed qua, the appeal. In other words, he sought to contend that the revisional authority though empowered in the cited eventualities under Section 82(2A) to relax the requirement of deposit of 25 per cent of the disputed tax, etc., in entertaining the revision petition, no such prerogative was available to it to dispense with the stipulations embodied in Section 79(5) of the Act. Mr. In other words, he sought to contend that the revisional authority though empowered in the cited eventualities under Section 82(2A) to relax the requirement of deposit of 25 per cent of the disputed tax, etc., in entertaining the revision petition, no such prerogative was available to it to dispense with the stipulations embodied in Section 79(5) of the Act. Mr. Saikia also countervailed the petitioner's pleading that the revision petition had not been disposed of on merits. The learned standing Counsel pressed into service to buttress his arguments the following decisions: (1) Vijay Prakash D. Mehta v. Collector of Customs (Preventive), Bombay [1989] 72 STC 324 (SC). (2) State of Haryana v. Maruti Udyog Ltd. [2001] 124 STC 285 (SC) : [2000] 7 SCC 348. (3) State of Tripura v. Manoranjan Chakraborty [2001] 122 STC 594 (SC) : [2001] 10 SCC 740. 12. I have bestowed my conscious consideration to the pleaded facts, the documents on record and the competing arguments advanced. No dissidence as such is discernible on the authenticity or correctness of the facts constituting the factual background. 13. A bare perusal of the order impugned reveals that the revision petition seeking to invoke the jurisdiction under Section 82 of the Act had been directed against the order dated May 11, 2009 of the appellate authority ordering deposit of 25 per cent of the disputed tax and interest by the petitioner under Section 79(5) of the Act as a pre-requisite for the admission of its appeal. Noticeably, neither any argument as such has been advanced on behalf of the petitioner with reference to Section 82(2A) of the Act or on the merits of the impugned assessment before the revisional authority. No such endeavour as well has been made before this Court. The petitioner's assertions therefore essentially have to be analyzed in the touchstone of the revisional power available under Section 82 of the Act in the teeth of Section 79(5) thereof. 14. By the impugned order, the revisional authority in essence has rejected the revision petition on the ground that the imperative prescript of interim deposit as enjoined by Section 79(5) is beyond the purview of interference in exercise of powers under Section 82 thereof. The revision petitions have not been rejected on the ground of the petitioner's omission to make such deposit as contemplated under Section 82(2A). The revision petitions have not been rejected on the ground of the petitioner's omission to make such deposit as contemplated under Section 82(2A). The impugned order thus cannot be condemned to be one dehors the merit of the revision petition. The petitioner's plea to this effect thus not commend for acceptance. 15. Chapter IX of the Act outlines the statutory framework of the provisions pertaining to appeals and revisions before the corresponding for a contingent on the eventualities as enumerated therein. Whereas, Section 79 deals with the appeals to the appellate authority from the order passed under the Act by a taxing authority lower than the Deputy Commissioner of Taxes. Section 82contemplates revision by the Commissioner of Taxes either on his own motion or on an application made in the prescribed manner by the dealer or persons affected by the order(s) as referred to therein. Apart from prescribing the period of limitation to avail of the aforementioned two remedies, Sub-section (5) of Section 79 and Sub-section (2A) of Section 82 stipulates the edict of interim deposit of 25 per cent of the disputed tax, penalties, etc., as a condition precedent therefor. To mark the variance in the essential features of Sections 79(5) and 82(2A) as would be warranted to answer the issues in hand, the same are extracted hereinbelow: Section 79(5) of the Assam Value Added Tax Act, 2003: 79. Appeals to the appellate authority - (1) to (4).... (5) No appeal by a person shall be entertained by an appellate authority unless such appeal is accompanied by satisfactory proof of payment of minimum twenty five per cent of the disputed tax, penalty, if any imposed and the interest accrued thereon, if any: Provided that such authority may stay the recovery of the full or part of the balance amount of tax, interest and penalty, till the disposal of the appeal. .... Section 82.... .... Section 82.... (2A) An application by a dealer or person shall not be entertained by the Commissioner unless such application is accompanied by satisfactory proof of payment of minimum twenty five per cent of the disputed tax, penalty, if any, imposed and the interest accrued thereon, if any: Provided that the Commissioner may, if it thinks fit, for reasons to be recorded in writing and subject to furnishing of such security as Commissioner may deem fit, admit an application with part payment or without any payment of the disputed amount of tax including penalty, if any, required under this Sub-section with a view to mitigate undue hardship which is likely to be caused to the dealer or person if the payment of such disputed amount is insisted on: Provided further that the Commissioner may stay the recovery of the full or part of the balance amount of tax, interest and penalty, till disposal of the application. 16. Visibly, whereas, the precept for the interim deposit vis-a-vis the appeal as enjoined by Section79(5) is absolute in terms with no leeway for relaxation thereof, the revisional authority has been empowered, for reasons to be recorded in writing and subject to furnishing of such security, as it may deem fit, relax such ordainment. As noticed hereinabove, the impugned order had been rendered by the revisional authority in response to a challenge made to the orders of the appellate authority directing the interim deposit. The reliefs prayed for in the instant proceeding also dwell within the said contour. No endeavour has been made on behalf of the petitioner to assail the impugned assessment on merits. It is therefore, inexpedient rather impermissible to expand the scope of the present adjudication beyond the scrutiny of the legality and/or validity of the view taken by the revisional authority. 17. Section 82 in clear terms subjects the exercise of the revisional power to the other provisions of the Act. Thus, while empowering the revisional authority to pass such orders as it may think fit following the scrutiny of the records of any proceeding relatable to the order challenged and following any enquiry considered necessary, the same has been made subservient to the other provisions of the Act to be valid and enforceable in law. Thus, while empowering the revisional authority to pass such orders as it may think fit following the scrutiny of the records of any proceeding relatable to the order challenged and following any enquiry considered necessary, the same has been made subservient to the other provisions of the Act to be valid and enforceable in law. Therefore the otherwise perceived enormity of the power of the revisional authority notwithstanding, the same is made subject to the provisions of the Act to obviate the eventuality of any confrontation amongst the coeval constituents of the enactment. 18. It is no longer res integra that appeal is a creature of statute and any right to avail of such remedy can permissibly be conditioned by the legislation itself. Such a right then would have to be exercised subject to the regulatory norms statutorily prescribed. In such a premise, in absence of any specific provision permitting relaxation of such statutory fiat, any interpretation to fritter away such enjoinment would be subversive of an otherwise inviolable feature of the enactment involved. Any interpretation by any court of law favouring such construction to moderate or annihilate such essentiality would amount to curial legislation impermissible in law. 19. The revisional jurisdiction as couched in Section 82 of the Act is eminently a discretionary one and cannot be expected to be exercised as a matter of course. The scope and expanse thereof which seemingly appear to be plenary in nature has been consciously bridled to conform to the other provisions of the Act. The power therefore by no means can be construed to be absolute in supersession of the other provisions of the statute intended to regulate the same. Any conferment of power antithetical to the otherwise obvious scheme of the legislation as construed cannot thus be envisaged and countenanced. 20. In view of the unambiguous and imperious prescript of Section 79(5) requiring the interim deposit of 25 per cent of the disputed tax, penalty if any and the interest accrued thereon without any scope whatsoever for the relaxation thereof, the direction of the appellate authority to that effect therefore can by no means be viewed to be illegal or without authority of law. The impugned order of the revisional authority in the facts and circumstances of the case having regard to the legislative framework under Chapter IX of the Act and the regulated scope and ambit of the revisional jurisdiction as entrenched in Section 82 of the Act thus in the estimate of this Court is unimpeachable and not demonstrative of the failure of the exercise thereof. 21. In the comprehension of this Court, having regard to the nature and purpose of the revisional jurisdiction, the same can permissibly cater to the limited scrutiny of correctness, legality and propriety of any order of the authorities contemplated in Section 82 passed or rendered on the appreciation of facts and law, but never to neuter an express provision of the empowering enactment to the contrary. As none of the authorities cited on behalf of the petitioners deals with a situation of the kind as in the case in hand, namely, orientation of the revisional jurisdiction against an express statutory provision, the same are of no avail to them. These decisions deal in general terms the scope and power of the revisional authority as envisaged in other legislations and have been rendered in different factual contexts. 22. The apex court in Vijay Prakash D. Mehta [1989] 72 STC 324 (SC) as well as in the State of Haryana v. Maruti Udyog Ltd. [2001] 124 STC 285 (SC) : [2000] 7 SCC 348 had reiterated that a right of appeal is a creature of the statute and exercisable subject to conditions, if any, prescribed by it. In the latter decision, the apex court, in the above perspective disapproved the directions of the territorial High Court to entertain an appeal under the Haryana General Sales Tax Act, 1973 by occasioning a marginal relaxation of the requirement of interim deposit prescribed under Section 39(5) thereof. Incidentally, the validity of the prescription of pre-deposit as enjoined by Sections 20(1) and 21(2) of the Tripura Sales Tax Act and identical to the one as in Section 79(5) of the Act as involved herein had been upheld by the apex court in State of Tripura v. Manoranjan Chakraborty [2001] 122 STC 594 : [2001] 10 SCC 740. 23. Incidentally, the validity of the prescription of pre-deposit as enjoined by Sections 20(1) and 21(2) of the Tripura Sales Tax Act and identical to the one as in Section 79(5) of the Act as involved herein had been upheld by the apex court in State of Tripura v. Manoranjan Chakraborty [2001] 122 STC 594 : [2001] 10 SCC 740. 23. On a totality of the considerations as hereinabove as well as in view of the scope and extent of revisional jurisdiction under Section 82 of the Act as determined, the challenge to the impugned order in the estimate of this Court lacks in substance. Having regard to the limited parameters of assailment noticed as above, this Court in the attendant facts and circumstances is disinclined to accede to the reliefs prayed for. 24. The petitions therefore stand rejected. No costs.