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2016 DIGILAW 787 (GUJ)

State of Gujarat v. Ganesh Sales Corporation

2016-04-07

G.R.UDHWANI, HARSHA DEVANI

body2016
ORDER : Harsha Devani, J. 1. By this application, the applicant seeks review of the judgment and order dated 8.3.2016 passed by this court in Ganesh Sales Corpn. v. State of Gujarat [2016] 68 taxmann.com 243. It is the case of the applicant, as averred in the application, that the respondent herein had presented the captioned petition challenging the order dated 3.7.2015 passed by the Deputy Commissioner of Commercial Tax, Range 13, Nadiad and had prayed for disbursement of refund along with interest forthwith in terms of the provisional refund orders dated 18.2.2015 and 10.3.2015. It is further the case of the applicant that the respondent is a dealer registered under the provisions of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the "GVAT Act") as well as under the Central Sales Tax Act, 1956. The respondent purchased cigarettes of various brands from the State of Gujarat and availed input tax credit in terms of section 11(3) of the GVAT Act and such cigarettes were purchased for the purpose of re- sale in the State of Gujarat and in the course of inter-state trade and commerce as well as for resale of the same within the State of Gujarat. That it was the case of the respondent that it was unable to utilise the entire amount of input tax credit availed on purchase of the cigarettes had, therefore, filed a provisional refund claim for Rs. 1,69,68,477/- on 17.11.2014 for the assessment period 1.7.2014 to 30.9.2014. It was the case of the respondent that he had submitted the requisite documents to show that the sales and the purchase of the goods and further transactions of inter-state nature were genuine. The concerned authorities had granted personal hearing to the respondent and by an order dated 18.2.2015, sanctioned the claim of provisional refund of Rs. 1,52,42,129/- for the assessment period 1.7.2014 to 30.9.2014, under section 37 of the GVAT Act. 2. It is further averred in the application that on the provisional refund being sanctioned by the applicants vide order dated 18.2.2015, the authorities by an order dated 10.3.2015 directed the Assistant Commissioner to sanction the provisional refund and, accordingly, the respondent approached the Assistant Commissioner of Commercial Tax, Nadiad to disburse the refund amount in the light of the orders dated 18.2.2015 and 10.3.2015. In the meanwhile, a show cause notice dated 22.5.2015 was issued calling upon the respondent to produce supportive documents with respect to its claim of provisional refund pursuant to which, the respondent produced the relevant documents on 8.6.2015 as well as 9.6.2015. That on due consideration of all the documents produced by the respondent, the applicant authorities withheld the amount of refund sanctioned provisionally by exercising powers under section 39 of the GVAT Act. That the respondent herein approached this court by way of the captioned petition challenging the order of withholding refund under section 39 of the GVAT Act. It is the case of the applicant that revision notices dated 23.2.2016 under section 75 of the GVAT Act have been issued to the respondent for reviewing and recalling the refund sanctioning orders dated 18.2.2015 and 10.3.2015 and that this court, by not considering the same, has directed the authorities to pay the claim of refund with respect of the amount of Rs. 1,69,68,477/-. Being aggrieved by the directions issued by this court to forthwith disburse refund along with interest to the original petitioner in terms of the provisional refund orders dated 18.2.2015 and 10.3.2015 on the ground that the same would render the proceedings under section 75 of the GVAT Act nugatory; the applicant has filed the present application for review. 3. Ms. Maithili Mehta, learned Assistant Government Pleader for the applicants, submitted that before this court passed the order dated 8.3.2016, a revision notice dated 23.2.2016 had been issued to the respondent in the exercise of powers under section 75 of the GVAT Act for the purpose of taking the refund sanctioning orders dated 18.2.2015 and 10.3.2015 in revision, and that exercise of such power was well within the period of limitation prescribed therefor. It was submitted that if, pursuant to the directions issued by this court, the amount payable under the refund sanctioning orders is paid to the respondent, the exercise of powers under section 75 of the GVAT Act would be rendered nugatory, inasmuch as, the orders dated 18.2.2015 and 10.3.2015 would stand implemented by then. It was submitted that the issue involved being in respect of disputed question of fact qua the genuineness of the interstate transactions of the respondent, the appropriate efficacious remedy would be relegating the respondent for availing the statutory remedy under section 73 of the GVAT Act. It was submitted that the issue involved being in respect of disputed question of fact qua the genuineness of the interstate transactions of the respondent, the appropriate efficacious remedy would be relegating the respondent for availing the statutory remedy under section 73 of the GVAT Act. It was submitted that during the course of regular hearing of the writ petition, the Department had clearly stated in the affidavit dated 23.2.2016 that, if this court allows the present petition then it would render the remedy of provision of revision under section 75 redundant at the very threshold. It was urged that the provisional refund order issued under section 37 of the GVAT Act for sanctioning the refund is an order giving rise to a refund, which was subject to proceedings of further investigation. The Deputy Commissioner was also of the opinion that due to fraudulent and false transactions, the revenue of the State is likely to be adversely affected and he had, therefore, exercised powers under section 39(1) of the GVAT Act. It was contended that during the course of hearing of the writ petition, the Department had produced all the evidences of tax evasion and investigation with affidavit which needs to be appreciated by this court in the present review application. It was submitted that the court may consider to review and recall the order dated 8.3.2016 only to the extent it has quashed and set aside the order dated 3.7.2015 passed under section 39 of the GVAT Act and by deleting the direction to the applicants to pay the said amount as claimed by the original petitioner as provisional refund as it would affect the statutory right of the State Government of resorting to the remedy of revision which has already been exercised by the concerned authority. It was reiterated that the order dated 8.3.2016 renders the statutory remedy available to the applicants redundant by giving directions to pay refund of the amount which the respondent is not entitled. 3.1 In support of her submissions, the learned Assistant Government Pleader placed reliance upon the decision of the Supreme Court in the case of Board of Control for Cricket, India v. Netaji Cricket Club, AIR 2005 SC 592 and more particularly, paragraphs 90, 93 and 95 thereof. 3.1 In support of her submissions, the learned Assistant Government Pleader placed reliance upon the decision of the Supreme Court in the case of Board of Control for Cricket, India v. Netaji Cricket Club, AIR 2005 SC 592 and more particularly, paragraphs 90, 93 and 95 thereof. It was, accordingly, submitted that an application for review is also maintainable if there exists sufficient reason therefor and that the words "sufficient reason" under Order 47 rule 1 of the Code are wide enough to include a misconception of fact or law by a court or even an advocate. It was submitted that in the facts of the present case, there was a misconception of fact, inasmuch as, the proceedings initiated under section 75 of the GVAT Act had not been taken into consideration and hence, the present case falls within the ambit of the review jurisdiction of this court as contemplated under Order 47 rule 1of the Code. It was, accordingly, urged that the application deserves to be allowed and that the order dated 8.3.2016 passed by this court is required to be modified to the extent that the directions issued to the applicant to forthwith disburse the refund along with interest to the respondent original petitioner are required to be deleted. 4. Opposing the application, Mr. S.N. Soparkar, Senior Advocate, learned counsel with Mr. Dhaval Shah, learned advocate for the respondent submitted that from the submissions advanced by the learned Assistant Government Pleader, it appears that the only contention is that the order passed by this court hurts the applicants. It was submitted that the subsequent events referred to in the decision of the Supreme Court would not include the subsequent action taken by the applicants herein after the hearing of the petition. It was argued that the mere fact that the order passed by this court adversely affects the applicants is no ground for review thereof. It was, accordingly, urged that the application being devoid of merits, deserves to be dismissed. 5. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the decision on which reliance has been placed by the learned Assistant Government Pleader. 6. It was, accordingly, urged that the application being devoid of merits, deserves to be dismissed. 5. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the decision on which reliance has been placed by the learned Assistant Government Pleader. 6. The facts, as emerging from the record, are that the respondent (original petitioner) had by filing the captioned petition challenging the order dated 3.7.2015 passed by the Deputy Commissioner of Commercial Tax, Range 13, Nadiad under section 39 of the GVAT Act and seeking a direction to him to disburse the refund along with interest forthwith in terms of the provisional refund orders dated 18.2.2015 and 10.3.2015. This court, after considering the submissions advanced by the learned counsel for the respective parties, had, after considering the material on record, found that the ingredients of section 39 of the GVAT Act for resorting to the power of withholding the refund were not satisfied in the present case. The court, therefore, set aside the order passed under section 39 of the GVAT Act and directed the applicant herein (original respondent) to forthwith disburse the amount under the refund orders. Now the applicants have come out with a case that since the refund sanctioning orders were taken in revision in exercise of powers under section 75 at the time when the order dated 8.3.2016 came to be passed by this court, such proceedings would become redundant if the amount payable under the refund sanctioning orders is paid over to the respondent. 7. Testing the above contention of the applicants on the anvil of the facts of the case, the record reveals that the captioned writ petition was heard from time to time, and by an order dated 29.2.2016, the matter was adjourned to 2.3.2016 for dictation of the judgment. It appears that while the court was in the midst of hearing of the petition, a notice came to be issued under section 75 of the GVAT for taking the refund sanctioning orders dated 18.2.2015 and 10.3.2015 in revision. It appears that while the court was in the midst of hearing of the petition, a notice came to be issued under section 75 of the GVAT for taking the refund sanctioning orders dated 18.2.2015 and 10.3.2015 in revision. It may be noted that the Deputy Commissioner of Commercial Tax, Nadiad had, as late as on 23.2.2016, viz., the date on which the alleged revision notice came to be issued, filed a further affidavit in reply wherein, while it was inter alia contended that if this court allows the present petition it would render the remedy of provision of revision under section 75 redundant at the very threshold, no facts regarding such action having been initiated or that such action was under contemplation have been stated. Thus, as on 23.2.2016, viz., the date on which the further affidavit came to be filed, it is evident that no action had been taken for invoking the revisional jurisdiction as otherwise such fact would have been mentioned therein. In fact, even thereafter, no fact as regards invocation of powers under section 75 of the GVAT Act had been brought on record at any point of time, when the matter was heard by the court or even at the date when the judgment came to be dictated, either in writing or even orally. Except for the bald and vague averment made in the further affidavit dated 23.3.2016, that if this court allows the present petition it would render the remedy of provision of revision under section 75 redundant, there is not even a whisper as regards the invocation of powers under section 75 of the GVAT Act. Except for the bald and vague averment made in the further affidavit dated 23.3.2016, that if this court allows the present petition it would render the remedy of provision of revision under section 75 redundant, there is not even a whisper as regards the invocation of powers under section 75 of the GVAT Act. If the contention raised in the further affidavit that in case relief is granted in favour of the petitioner the same would render the provisions of section 75 of the GVAT Act redundant, is considered on a standalone basis divesting it of the subsequent events which have been brought on record in this application, it appears to be the case of the applicant that when an order sanctioning refund is passed by the concerned authority and the same is not implemented, then even if the dealer comes to the court seeking implementation of such order, the court should not exercise jurisdiction under Article 226 of the Constitution of India and grant relief to the petitioner simply because under the GVAT Act the Commissioner is empowered to take such order in revision within a period of three years from the date of the order. In other words, for a period of three years from the date of the order, the court should wait and see if the Commissioner deems it fit to invoke section 75 of the GVAT Act in respect of such order as otherwise the powers under section 75 of the Act would be rendered redundant. In the opinion of this court, while it may be open for the applicant to invoke powers under section 75 of the GVAT Act within a period of three years from the date of the order which is sought to be taken in revision, the same does not mean that for a period of three years from the date of such order the party cannot seek implementation of such order simply because the statute provides for taking such order in revision under section 75 of the GVAT Act. In the present case what clearly emerges is that during the course of hearing when it appeared that the order of withholding the refund is not likely to be sustained, the concerned authority under the GVAT Act has invoked powers under section 75 of the GVAT Act by issuing notice dated 23.3.2016 for taking the orders of refund dated 18.2.2015 and 10.3.2015 in revision. It may be noted that not only has the fact regarding issuance of notice invoking powers under section 75 of the GVAT Act not been brought on record at any time till the order under review came to be dictated in the open court on 8.3.2016, such notice has not been placed on record even with this application. Thus, except for the bare assertion that proceedings have been initiated under section 75 of the GVAT Act, till date no document in support of such assertion has been placed on record. 8. It may be noted that what was subject-matter of challenge in the captioned petition was the order passed under section 39 of the GVAT Act seeking to withhold the provisional refund which was granted in favour of the original petitioner. The court set aside the order on the ground that the necessary ingredients for invoking powers under section 39 of the GVAT Act had not been satisfied. Since there was no warrant for the applicants to thereafter withhold the refund, this court had directed that the refund pursuant to the said orders be disbursed forthwith. As noted earlier, at the stage when the court heard the matter, the fact regarding invocation of powers under section 75 of the GVAT Act had not been brought to the notice of this court, either by way of pleadings or orally upon instructions. Hence, the contention that the court had proceeded on a misconception of law or fact at the time of passing the order dated 8.3.2016 does not merit acceptance. Accordingly, the decision of the Supreme Court in the case of Netaji Cricket Club (supra) on which reliance has been placed by the learned Assistant Government Pleader for the proposition that the words "sufficient cause" in Order 47 Rule 1 of the Code are wide enough to include a misconception of fact or law by a court or even an advocate, would not be applicable to the facts of the present case. 9. 9. Insofar as the submission that the direction to disburse the refund adversely affects the State Government as the orders sanctioning refund have been taken in revision is concerned, as noted hereinabove, as on the date when the order dated 8.3.2016 came to be passed no such fact had been brought on record. Besides, if the applicant is aggrieved by the order passed by this court, the remedy lies elsewhere. Moreover, for the reasons that follow it is evident that the invocation of powers under section 75 of the GVAT Act is by way of an afterthought with a view to thwart the proceedings of the writ petition filed before this court and with a view to render the same futile. The record of the case reveals that notice was issued in the captioned petition on 9.7.2015 and the matter was adjourned from time to time. The Commissioner of Commercial Tax and the Deputy Commissioner of Commercial Tax were respondents No. 2 and 3 therein and were therefore, right from the inception, aware that the respondent (original petitioner) was seeking implementation of the refund orders. However, till the petition came to be heard on merits in the month of February 2016, the Commissioner did not deem it fit to exercise powers under section 75 of the GVAT Act and only at a belated stage on or about 23rd February, 2016 sought to invoke powers thereunder, that too, without bringing such fact to the notice of the court. 10. As regards the contention that the respondent should be relegated to avail of the remedy of appeal under section 73 of the GVAT Act, such contention was also raised at the time of hearing of the captioned petition and has been duly dealt with in paragraph 6 of the order dated 8.3.2016 and hence, if the applicant is aggrieved thereby, it has to challenge the same before the higher forum. 11. It has also been submitted that the Deputy Collector was also of the opinion that due to fraudulent and false transactions, the revenue of the State is likely to be adversely affected and he had, therefore, exercised powers under section 39(1) of the GVAT Act. 11. It has also been submitted that the Deputy Collector was also of the opinion that due to fraudulent and false transactions, the revenue of the State is likely to be adversely affected and he had, therefore, exercised powers under section 39(1) of the GVAT Act. In this regard, apart from the fact that this is a submission on the merits of the main petition, it is a matter of record that in the order dated 3.7.2015 made under section 39(1) of the GVAT Act, no such satisfaction has been recorded, inasmuch as, there is not even a whisper therein to the effect that grant of refund would adversely affect the revenue nor is there any reference to any fraudulent or false transaction, and now by way of this application the grounds stated in the said order are sought to be supplemented by bringing in new grounds. 12. Before the court apart from the above grounds, the main refrain of the learned Assistant Government Pleader was that the order passed by this court adversely affects the revenue. As rightly submitted by the learned counsel for the respondent, merely because an order hurts a party, is no ground for taking such order in review. Though the applicant has invoked powers of review, none of the circumstances, warranting review of the order dated 8.3.2016 as contemplated in rule 1 of Order XLVII of the Code have been made out. On behalf of the applicant no new or important matter or evidence which after the exercise of due diligence could not be produced on record has been produced, nor has any error apparent on the face of the record been shown. For the reasons recorded hereinabove, no other sufficient reason for exercise of review jurisdiction can be stated to have been made out. In the absence of any of ingredients for invoking powers of review as contemplated under rule 1 of Order XLVII of the Code of Civil Procedure being satisfied, the applicant is not entitled to any of the reliefs prayed for in the application. The application, therefore, fails and is, accordingly, rejected.