2010 (12) TMI 1098 - HC - VAT and Sales Tax

Whether there were appeals pending as on the date of coming into force of the Act so that the petitioner would be entitled for the certificates? Whether the certificates were issued rightly or wrongly? Held that - There is nothing illegal in granting the certificates to the petitioner in all the cases under section 8 of the Tamil Nadu Sales Tax (Settlement of Disputes) Act of 2002 and to hold that the revocation of such certificates by means of the impugned orders cannot be held to be legal. Therefore we are inclined to quash all the revocation orders and allow these writ petitions. Appeal allowed.

Summary

Issues Involved:
1. Legitimacy of the appeals pending before the Sales Tax Appellate Tribunal.
2. Validity of the certificates issued under the Tamil Nadu Sales Tax (Settlement of Disputes) Act of 2002.
3. Alleged misrepresentation by the petitioner in obtaining the certificates.
4. Jurisdiction of the designated authority under the Tamil Nadu Sales Tax (Settlement of Disputes) Act of 2002.

Issue-wise Detailed Analysis:

1. Legitimacy of the Appeals Pending Before the Sales Tax Appellate Tribunal:
The primary dispute was whether the appeals pending as of the Act's enforcement date were legitimate, thereby entitling the petitioner to the certificates. The court noted that the appeals were pending before the Sales Tax Appellate Tribunal, and it was not within the designated authority's jurisdiction to determine the legitimacy or effectiveness of these appeals. The Supreme Court's judgments in *Raja Kulkarni v. State of Bombay* and *Tirupati Balaji Developers (P) Ltd. v. State of Bihar* were cited, establishing that the validity or competence of an appeal is a matter for the appellate court to decide, not the designated authority. The court concluded that since the appeals were registered and pending, they were legitimate for the purposes of the Act.

2. Validity of the Certificates Issued Under the Tamil Nadu Sales Tax (Settlement of Disputes) Act of 2002:
The court examined whether the certificates issued to the petitioner were valid. It was found that the certificates were issued after the designated authority considered all relevant matters. The court held that the subsequent issuance of show-cause notices to revoke the certificates on the grounds of misrepresentation was not justified. The court emphasized that once the appeals were pending, the petitioner was entitled to the certificates, and there was no basis for revoking them.

3. Alleged Misrepresentation by the Petitioner in Obtaining the Certificates:
The court addressed the allegation that the petitioner misrepresented facts to obtain the certificates. It was argued that the petitioner had not committed any misrepresentation as all necessary details were provided in Form I. The Supreme Court's ruling in *Shrisht Dhawan (Smt.) v. Shaw Brothers* was referenced, which defined fraud and misrepresentation. The court concluded that the petitioner had disclosed all required information and that there was no evidence of fraud or misrepresentation.

4. Jurisdiction of the Designated Authority Under the Tamil Nadu Sales Tax (Settlement of Disputes) Act of 2002:
The court examined whether the designated authority had the jurisdiction to revoke the certificates based on the nature of the appeals. It was determined that the designated authority did not have the jurisdiction to decide on the maintainability or effectiveness of the appeals. The court cited the Tamil Nadu Sales Tax Appellate Tribunal Regulations of 1959, which outline the procedure for registering appeals. The court held that the designated authority overstepped its jurisdiction by attempting to determine the nature of the appeals, which was the domain of the Appellate Tribunal.

Conclusion:
The court found that the appeals were legitimately pending, the certificates were validly issued, there was no misrepresentation by the petitioner, and the designated authority lacked jurisdiction to revoke the certificates. Consequently, the revocation orders were quashed, and the writ petitions were allowed.