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2012 DIGILAW 1271 (GAU)

Mittal Store v. State of Assam

2012-11-15

ADARSH KUMAR GOEL, UJJAL BHUYAN

body2012
JUDGMENT Ujjal Bhuyan, J. 1. This order will dispose of W. P. (C) Nos. 4833 of 2010, 3759 of 2010, 1614 of 2009, 3974 of 2010, 3975 of 2010, 3976 of 2010, 4036 of 2010, 4035 of 2010, 4071 of 2008, 1675 of 2009, 1672 of 2009, 1674 of 2009, 1678 of 2009 with 1987 of 2010. The basic issue being the same, all the writ petitions were heard together and are being disposed of by this common order. However, since W. P. (Q No. 1675 of 2009 was argued as the lead case, for the sake of convenience, facts of that case are briefly noted. 2. The petitioner is a partnership firm engaged in the business of purchase and sale of wet dates (khajoor). The petitioner was a registered dealer under the Assam General Sales Tax Act, 1993, since repealed, and presently registered under the Assam Value Added Tax Act, 2003. 3. The case of the petitioner is that it had been submitting its return under the Assam General Sales Tax Act, 1993 (AGST Act) regularly. The petitioner purchases wet dates (khajoor) from dealers outside the State of Assam and sells the same in the State of Assam in the same form without charging any tax, treating wet dates as fresh fruit. It may be mentioned that fresh fruits were exempted from payment of tax under the AGST Act. In the past, the Department had accepted the stand that wet dates were fresh fruit and hence exempted from payment of tax. Government of India in the Ministry of Food Processing had also issued a clarificatory note dated September 12, 1995, clarifying that wet dates were covered in the category of fresh fruits. 4. For the assessment years 1998-99 and 1999-2000, the petitioner submitted returns showing wet dates as exempted item, being fresh fruit and hence not liable to tax under the AGST Act. But the assessing authority did not accept the contention of the petitioner and instead treated wet dates as a taxable item vide orders of assessment dated March 31, 2003. 5. For the assessment years 1998-99 and 1999-2000, the petitioner submitted returns showing wet dates as exempted item, being fresh fruit and hence not liable to tax under the AGST Act. But the assessing authority did not accept the contention of the petitioner and instead treated wet dates as a taxable item vide orders of assessment dated March 31, 2003. 5. The petitioner filed appeals against the aforesaid orders of assessment before the appellate authority, who by order dated August 31, 2004 set aside the assessment orders and remanded the matter back to the assessing authority for making fresh assessment after giving opportunity of hearing to the petitioner and also after obtaining fresh clarification from the Ministry of Food Processing, Government of India. On remand, the assessing authority passed fresh assessment orders treating wet dates as preserved fruit instead of fresh fruit and levied tax thereon. The petitioner again preferred appeals before the appellate authority, who by the order dated July 16, 2007 set aside the orders of assessment and remanded the matter back to the assessing authority with a direction to complete the fresh assessment by passing reasoned order after giving opportunity of hearing to the petitioner. 6. In the meanwhile, the petitioner sought for a clarification from the Ministry of Food Processing Industries, Government of India, regarding wet dates. The Ministry of Food Processing Industries, Government of India, in its letter dated April 26, 2006 clarified that manufacturing of fruit products is regulated under the Food Products Order, 1955 and licence by a manufacturer of food products is mandatory. Stating that dehydrated dates manufactured from wet dates are covered in the category of dehydrated fruits under the Food Products Order, 1955, therefore, wet dates are treated as fresh fruits. 7. The Commissioner of Taxes, Assam, in reference to the direction of the appellate authority to the assessing authority to obtain clarification from the Ministry of Food Processing, Government of India, issued a clarificatory letter to the assessing authority dated July 27, 2007 stating that it is already legally settled that wet dates are not fresh fruit but processed fruit on account of the fact that they are imported from outside the country after necessary processing. Judgment in the case of Sait Rikhaji Furtarnal v. State of Andhra Pradesh [1992] 85 STC 1 (SC) was referred to. Judgment in the case of Sait Rikhaji Furtarnal v. State of Andhra Pradesh [1992] 85 STC 1 (SC) was referred to. The Commissioner, therefore, declared that wet dates are processed fruit and the assessing authority was requested to take necessary action accordingly. 8. The assessing authority thereafter, completed the assessment of the petitioner for another assessment year, i.e., the assessment year 2005-06. By the assessment order dated January 27, 2009, the assessing authority treated wet dates as preserved fruit and taxed accordingly. The assessment was based on the clarificatory note of the Commissioner dated July 27, 2007. 9. Aggrieved, the petitioner has filed the present writ petition challenging the legality and correctness of the assessment order dated January 27, 2009 for the assessment year 2005-06 as well as the clarificatory note dated July 27, 2007 issued by the Commissioner of Taxes, Assam. 10. Dr. A.K. Saraf, learned senior counsel for the petitioner, submits that the Commissioner was not justified in issuing the clarification dated July 27, 2007 as it amounted to interfering with the exercise of quasi-judicial powers of the assessing officer who was directed by the appellate authority to pass fresh orders of assessment. Learned senior counsel submits that the clarification given by the Commissioner amounts to unwarranted interference in the exercise of powers by the assessing authority as well as by the appellate authority. He further submits that the clarification goes against the settled position in the market where wet dates have always been treated as fresh fruit, which view also has the support of the Central Government. On reliance being placed by the Commissioner in the case of Sait Rikhaji Furtarnal [1992] 85 STC 1 (SC), learned senior counsel submits that in that case the honourable Supreme Court had held the findings of the Tribunal to be one of fact and, therefore, did not interfere with such finding of fact. He contends that wet dates is not a fresh fruit as each item has to be looked into from the stand point of the common parlance test. He, therefore, prays for a decisive intervention by this court in the palpably erroneous decision of the revenue authorities. 11. Mr. He contends that wet dates is not a fresh fruit as each item has to be looked into from the stand point of the common parlance test. He, therefore, prays for a decisive intervention by this court in the palpably erroneous decision of the revenue authorities. 11. Mr. R. Dubey, learned standing counsel, Finance Department, on the other hand, submits that the petitioner has sought to invoke the writ jurisdiction of this court against an order of assessment in respect of which statutory alternative remedy of appeal is available. On the merits, he, however, supports the view taken by the Revenue authorities. 12. We have heard the submissions made by the learned counsels for the parties. 13. The question whether wet dates (khajoor) is required to be treated as a fresh fruit, in which case the dealers would get benefit of tax exemption, or as a processed fruit, in which case it will be a taxable item, would require adjudication. It would be a fact-finding exercise where various aspects would have to be gone into. A petition under article 226 of the Constitution would not be a proper forum to embark upon such an exercise. 14. At the same time, we are of the view that the clarification issued by the Commissioner was not really called for inasmuch as it would pre-empt the assessing authority as well as the appellate authority from taking a fair and an independent decision in the matter. The manner in which the clarification was issued virtually amounts to guiding the assessing authority to pass the assessment orders in a particular manner after the matters were remanded back by the appellate authority for fresh assessment by the assessing authority. Assessing proceedings and proceedings arising therefrom, such as appeals and revisions, under the taxing statutes are quasi-judicial proceedings determining the tax liabilities of the parties. Interference in the exercise of such powers administratively by other authorities, howsoever higher in hierarchy, would not be justified. 15. Considering the above and in view of the fact that statutory alternative remedy is available, the petitioner is relegated to the remedy of filing appeal before the appellate authority against the order of assessment. Interference in the exercise of such powers administratively by other authorities, howsoever higher in hierarchy, would not be justified. 15. Considering the above and in view of the fact that statutory alternative remedy is available, the petitioner is relegated to the remedy of filing appeal before the appellate authority against the order of assessment. If the appeal is filed within a period of 1(one) month from today, the same shall be treated to be within time and the appellate authority shall thereafter decide the appeal in accordance with law after giving reasonable opportunity of hearing, without being influenced by the clarification of the Commissioner dated July 27, 2007. 16. As already indicated, this order will cover all the other writ petitions which are also disposed of on similar terms, except further clarifying that in those cases where assessment orders on remand have not been passed, the petitioners shall appear before the assessing authority within a period of one month from today, who shall thereafter proceed with the assessments in the manner as indicated in paragraph 16 above. 17. All the writ petitions are accordingly disposed of. No cost.