1. ISSUES PRESENTED and CONSIDERED

• Whether the High Court can exercise writ jurisdiction at the stage when only a show-cause notice and articles of charge have been issued, but the departmental inquiry has not yet commenced.
• Whether the departmental proceeding initiated against the petitioner is valid in the absence of any imputation of misconduct or misbehavior in the articles of charge.
• Whether the petitioner can be implicated in the departmental proceeding for alleged distortion of public records when the assessment orders in question were passed by different officers and the petitioner was not holding the relevant posts at the relevant times.
• Whether the suspension order issued against the petitioner is sustainable, considering the nature of suspension and the authority's power to suspend pending inquiry.
• The scope and limits of judicial review in interference with departmental proceedings and suspension orders at the preliminary stage.
• Whether the petitioner was afforded reasonable opportunity of being heard as required under the relevant statutory provisions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Jurisdiction of the Court to entertain writ petition at the stage of issuance of show-cause notice and articles of charge before commencement of departmental inquiry

- Relevant legal framework and precedents:

It is a settled principle that ordinarily writ courts do not interfere at the stage of issuance of show-cause notice or framing of charges in departmental proceedings. The courts maintain judicial restraint to allow the disciplinary authority to conduct inquiry and adjudicate on the charges. Exceptions exist only in rare and exceptional cases where the show-cause notice is wholly without jurisdiction or is an abuse of process of law.

Precedents emphasize that judicial review is confined to the decision-making process and not the correctness of the decision itself. The courts cannot substitute their opinion for that of the disciplinary authority.

- Court's interpretation and reasoning:

The Court acknowledged the general rule of non-interference at the show-cause notice stage but found the present case to be exceptional. The departmental proceeding had not fully commenced; only the show-cause notice and articles of charge were issued. The petitioner was not alleged to have committed any misconduct or misbehavior, and the charges appeared to be based on erroneous assumptions regarding the petitioner's role in passing assessment orders.

- Key evidence and findings:

The petitioner was shown to be not holding the post of Superintendent of Taxes at the time the relevant assessment orders were passed by other officers. The departmental authority's memo initiating inquiry against the petitioner was based on a communication that did not specifically allege distortion of records by the petitioner. The articles of charge did not impute misconduct or misbehavior.

- Application of law to facts:

Since the departmental proceeding was initiated without any material implicating the petitioner and before inquiry had commenced, the Court found it appropriate to exercise writ jurisdiction to prevent abuse of process and harassment.

- Treatment of competing arguments:

Respondents argued that the writ petition was premature and that the petitioner had opportunity to defend before the disciplinary authority. They contended that suspension and inquiry orders were appealable and that judicial interference was unwarranted at this stage.

The Court distinguished this case on the ground of absence of any prima facie material and the petitioner's non-involvement in the alleged irregularity.

- Conclusion:

The Court held that it could exercise writ jurisdiction at this stage as an exceptional case and quashed the departmental proceeding initiated by the show-cause notice and articles of charge.

Issue 2: Validity of departmental proceeding in absence of any imputation of misconduct or misbehavior in the articles of charge

- Relevant legal framework:

Under Sub-Rule 14(2) of the CCS (CC&A) Rules, 1965, departmental proceedings cannot be initiated without imputing misconduct or misbehavior. The articles of charge must clearly specify the allegations constituting misconduct.

- Court's interpretation and reasoning:

The Court noted that the articles of charge merely detailed the allegations set forth by the prosecution without framing a separate charge of misconduct or misbehavior against the petitioner. The absence of such imputation rendered the departmental proceeding unsustainable.

- Key evidence and findings:

The articles of charge focused on alleged overwriting in an assessment order but did not allege any misconduct or misbehavior by the petitioner. The petitioner was not the assessing officer at the relevant time, and no evidence suggested his involvement in any irregularity.

- Application of law to facts:

Without a charge of misconduct, initiation of departmental proceeding was contrary to the statutory rules governing disciplinary actions.

- Treatment of competing arguments:

Respondents did not dispute the absence of misconduct allegations but argued that the inquiry was within the authority's jurisdiction and the petitioner could defend himself during inquiry.

The Court emphasized that the absence of any charge of misconduct at the threshold stage vitiated the proceeding itself.

- Conclusion:

The departmental proceeding was held to be invalid and liable to be quashed on this ground.

Issue 3: Implication of the petitioner in the departmental proceeding despite not holding relevant posts at the time of passing assessment orders

- Relevant legal framework:

Disciplinary proceedings must be based on cogent material and correct identification of the delinquent officer. Wrongful implication without basis amounts to abuse of process and violation of principles of natural justice.

- Court's interpretation and reasoning:

The Court examined the chronology and found that the assessment orders were passed by different officers, and the petitioner was not Superintendent of Taxes at the relevant times. The departmental authority's memo initiating inquiry was based on erroneous assumptions and a communication that did not implicate the petitioner.

- Key evidence and findings:

Documents showed the petitioner was Inspector of Taxes when the orders were passed. The orders were passed by other named officers. The communication relied upon by the department did not specifically allege any wrongdoing by the petitioner.

- Application of law to facts:

The departmental proceeding was initiated without any basis to implicate the petitioner, causing mental agony and harassment unjustifiably.

- Treatment of competing arguments:

The respondents did not dispute the petitioner's non-involvement but maintained the authority to proceed with inquiry. The Court found no satisfactory defense to the petitioner's submissions.

- Conclusion:

The Court held that the departmental proceeding was misconceived and liable to be quashed for wrongful implication.

Issue 4: Validity and scope of suspension order issued against the petitioner pending departmental inquiry

- Relevant legal framework and precedents:

Suspension pending inquiry is a recognized administrative action. The power to suspend is either expressly conferred or implied as incident to the power of appointment. Suspension can be interim (pending inquiry) or as a penalty. Payment during suspension depends on statutory or contractual provisions.

Precedents clarify that suspension pending inquiry is not a punishment but a temporary measure, and courts generally do not interfere unless there is abuse of power or violation of statutory provisions.

- Court's interpretation and reasoning:

The Court noted that suspension was ordered by the competent authority and is appealable. However, since the departmental proceeding itself was quashed for lack of basis, the suspension order became unsustainable.

- Key evidence and findings:

The suspension order dated 26.07.2024 was issued after placing the petitioner under suspension pending inquiry. The inquiry was based on flawed grounds.

- Application of law to facts:

In view of the quashing of departmental proceeding, the suspension order was also revoked as it lacked justification.

- Treatment of competing arguments:

Respondents argued that suspension was lawful and the petitioner had remedy of appeal. The Court found that since the inquiry was baseless, continuing suspension would cause unwarranted hardship.

- Conclusion:

The suspension order was revoked along with quashing of departmental proceeding.

Issue 5: Scope and limits of judicial review in departmental proceedings and suspension

- Relevant legal framework and precedents:

Judicial review in disciplinary matters is limited to examining the legality and procedural propriety of the decision-making process. Courts do not adjudicate on the correctness of charges or findings of disciplinary authorities. Interference is warranted only in cases of jurisdictional error, violation of natural justice, or abuse of process.

Precedents cited emphasize that writ courts should generally abstain from interfering at the stage of show-cause notice unless exceptional circumstances exist.

- Court's interpretation and reasoning:

The Court recognized the general principle of judicial restraint but found the present case exceptional due to absence of any charge of misconduct, wrongful implication, and error apparent on the face of record.

- Key evidence and findings:

The Court relied on documentary evidence showing the petitioner's non-involvement and absence of any misconduct allegation.

- Application of law to facts:

The Court exercised judicial review to prevent abuse of process and to protect the petitioner from unwarranted harassment.

- Treatment of competing arguments:

Respondents urged non-interference and reliance on appellate remedies. The Court acknowledged these but distinguished the case on facts.

- Conclusion:

Judicial review was appropriately exercised to quash the departmental proceeding and suspension order at the preliminary stage.

Issue 6: Compliance with principles of natural justice and statutory provisions regarding opportunity to be heard

- Relevant legal framework:

Section 74(1) of the TVAT Act, 2004 mandates that no rectification enhancing tax liability can be made without notice and reasonable opportunity of being heard. CCS (CC&A) Rules require departmental proceedings to be initiated only after imputation of misconduct and after giving reasonable opportunity to the government servant.

- Court's interpretation and reasoning:

The Court noted that the petitioner was given the show-cause notice and articles of charge with opportunity to submit written defense. There was no dispute on supply of charge sheet or denial of opportunity.

- Key evidence and findings:

Documents showed issuance of show-cause notice and articles of charge with no denial of opportunity to the petitioner.

- Application of law to facts:

Procedural requirements were complied with but substantive foundation for the proceeding was lacking.

- Treatment of competing arguments:

Respondents contended that procedural safeguards were followed. The Court agreed but emphasized that procedural compliance alone cannot sustain a baseless proceeding.

- Conclusion:

Procedural requirements were met but the proceeding was quashed on substantive grounds.

ISSUES:

Whether the insertion of the seventh proviso to Section 2(b) of the Maharashtra Entertainments Duty Act (MED Act) 2014, taxing convenience fees charged for online ticket booking as part of "payment of admission," is intra vires the State Legislature under Entry 62, List II of the Seventh Schedule of the Constitution of India.Whether the convenience fee charged for online ticket booking constitutes a separate business activity distinct from entertainment and thus outside the scope of entertainment duty under the MED Act.Whether the impugned proviso violates constitutional provisions including Articles 14, 19, and 246(3) of the Constitution of India.Whether the proviso improperly amends the measure of tax without corresponding amendment to the charging section, thereby exceeding legislative competence or constituting a colourable exercise of power.Whether the convenience fee charged for online ticket booking is a "payment of admission" connected with entertainment and a condition for attending entertainment under Section 2(b)(iv) of the MED Act.Whether there exists adequate procedural machinery under the MED Act to assess, levy, and recover entertainment duty on convenience fees.Whether the impugned proviso and related Circulars dated 31 January 2015 and 27 February 2015 are liable to be quashed.Whether the levy of entertainment duty on convenience fees conflicts with the Union's taxation of services under the Finance Act, 1994, and whether there is impermissible overlap or encroachment on Union List entries.

RULINGS / HOLDINGS:

The impugned proviso inserted by Maharashtra Act XLII of 2014 amending Section 2(b) of the MED Act is intra vires the State Legislature under Entry 62, List II of the Seventh Schedule and does not transgress into the Union List; it validly amends the measure of tax without constituting a new levy or taxing a separate activity.The convenience fee charged for online ticket booking is not a separate business activity distinct from entertainment but forms part of the composite payment for admission to entertainment and is therefore taxable under the MED Act.The convenience fee satisfies the ingredients of Section 2(b)(iv) of the MED Act as a payment "connected with an entertainment" and is a "condition of attending" the entertainment, thus constituting "payment of admission."The proviso excludes convenience fees up to Rs. 10/- per ticket from the definition of payment of admission, while amounts exceeding Rs. 10/- are included, which aligns with the legislative objective to curb exorbitant charges and is not a colourable exercise of power.The procedural machinery under the MED Act, including assessment, collection, and recovery provisions, suffices for entertainment duty on convenience fees; no separate machinery is required.The impugned Circulars merely implement the proviso by calling for data and are not liable to be quashed.The petitioners' challenge based on alleged violation of Articles 14 and 19 and on the ground of lack of uniformity or arbitrariness is rejected as the proviso is reasonable and has a rational nexus with the subject matter of taxation.The levy of entertainment duty on convenience fees does not conflict with the Union's service tax under the Finance Act, 1994, as the two taxes are on distinct aspects-service tax on rendering of service and entertainment duty on admission to entertainment-and can coexist without overlap.The petitioners' reliance on decisions concerning new forms of entertainment or different statutory schemes (e.g., Tata Sky Ltd., PVR Ltd.) is distinguishable and does not apply to the facts of this case.The proviso is not a deeming fiction enlarging the charging section but an exception carved out within the definition of payment of admission.

RATIONALE:

The Court applied the doctrine of pith and substance to determine that the true nature of the levy is on entertainment under Entry 62, List II of the Seventh Schedule, which empowers the State Legislature to tax luxuries including entertainments.The MED Act's scheme defines "entertainment," "payment of admission," and "proprietor," with Section 3 as the charging section and Section 2(b)(iv) providing a wide definition of payment of admission including any payment connected with entertainment as a condition of attending.The proviso to Section 2(b) excludes convenience fees up to Rs. 10/- per ticket from payment of admission, while including amounts above that, reflecting legislative policy to curb excessive convenience charges without taxing a new form of entertainment.The Court relied on precedents holding that the measure of tax does not determine the nature of the tax and that legislative competence includes the power to amend the measure of tax without amending the charging section.The Court distinguished cases relied upon by petitioners where new forms of entertainment were sought to be taxed without corresponding amendments or where the statutory definitions differed materially.The Court emphasized the principle that two taxes on different aspects of the same transaction-service tax by the Union and entertainment duty by the State-are permissible and do not constitute unconstitutional overlap.The Court rejected the argument of colourable legislation, noting that the Statement of Objects and Reasons cannot restrict the plain language of the statute and that legislative motive is irrelevant if the legislature is competent.The Court observed that the convenience fee is integrally connected to the ticket purchase and admission to entertainment, satisfying the statutory definition and legislative intent.The Court upheld the validity of the proviso and related Circulars, finding no procedural or constitutional infirmity.The Court noted that challenges based on lack of uniformity or arbitrariness failed as the classification of persons paying convenience fees online constitutes a reasonable legislative classification.

1. ISSUES PRESENTED and CONSIDERED

• Whether a writ petition challenging orders of the Joint Commissioner of State Tax (Appeals) can be entertained without exhaustion of statutory alternative remedies.
• Whether the impugned orders of the Joint Commissioner of State Tax (Appeals) are unreasoned or lack proper consideration of binding precedents.
• Whether the Joint Commissioner of State Tax (Appeals) was bound to follow the Tribunal's decision in Ajay Trading Company or could distinguish and follow the decision in M/s JNK India Private Limited.
• The scope and applicability of the principle of exhaustion of alternate remedies in fiscal matters, especially in the context of appeals under the Maharashtra Value Added Tax Act, 2002.
• The discretion of the Tribunal regarding pre-deposit requirements and the efficacy of the appellate remedy provided under the statute.
• The applicability of Supreme Court precedents concerning the entertainability of writ petitions bypassing statutory remedies.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entertainability of Writ Petition without Exhaustion of Alternate Remedies

Relevant legal framework and precedents: The principle that writ petitions in fiscal matters should not be entertained unless statutory alternative remedies are exhausted is well-established. The Hon'ble Supreme Court's decision in Godrej Sara Lee Ltd. clarifies that bypassing statutory remedies requires exceptional circumstances. Other precedents reinforce that where special statutory procedures exist, parties must adhere to them unless exceptional grounds justify deviation.

Court's interpretation and reasoning: The Court held that the petitioners' averments do not establish exceptional circumstances to justify bypassing the statutory appellate remedy. The grounds raised are routine and typically examinable by the appellate authorities. The Court emphasized the distinction between maintainability and entertainability of writ petitions, underscoring that without exceptional circumstances, writ petitions should not be entertained in fiscal matters without exhausting alternative remedies.

Key evidence and findings: The petitioners' assertion in paragraph 37 that no alternative remedy exists was found misleading. The petitioners had appealed the adjudicating authority's order and only after the appeal was dismissed did they approach the Court directly. The statutory appeal before the Tribunal remains available and efficacious.

Application of law to facts: The Court applied the principle that statutory remedies must be exhausted and found no exceptional circumstances in the facts presented. The petitioners' reliance on routine grounds and absence of clear exceptional circumstances weighed against entertaining the writ petition.

Treatment of competing arguments: The petitioners argued that the appellate order was unreasoned and that the Tribunal's decisions were not properly considered, justifying direct writ jurisdiction. The Court rejected these contentions, noting that such issues are appropriate for appellate consideration and do not constitute exceptional grounds to bypass the appeal process.

Conclusions: The writ petition is not entertainable without exhaustion of statutory remedies. The petitioners must pursue the appeal before the Tribunal, which is a viable and efficacious remedy.

Issue 2: Whether the Impugned Orders are Unreasoned and Failure to Follow Binding Precedents

Relevant legal framework and precedents: Administrative orders must contain reasons; however, the sufficiency and correctness of reasoning are matters for appellate scrutiny. Binding precedents from the Tribunal and higher courts must be considered and followed unless distinguishable.

Court's interpretation and reasoning: The Court found that the impugned order was not unreasoned. The Joint Commissioner of Appeals had considered relevant Tribunal decisions, including Ajay Trading and M/s JNK India Private Limited, and had distinguished between them based on facts. Whether the reasoning is correct is a matter for the appellate authority to decide.

Key evidence and findings: The impugned order contained reasoning applying the Tribunal's decision in M/s JNK India Private Limited rather than Ajay Trading. The order was not a mere cut-and-paste but involved an exercise of judicial discretion.

Application of law to facts: The Court declined to interfere at this stage, holding that detailed factual and legal analysis is best conducted by the appellate authority. The absence of detailed reasoning does not justify bypassing the appeal process.

Treatment of competing arguments: The petitioners argued that the order was a verbatim repetition of the show-cause notice order and thus unreasoned. The Court rejected this, emphasizing the appellate authority's competence to analyze and decide on the adequacy of reasoning.

Conclusions: The impugned orders are not unreasoned, and the Joint Commissioner of Appeals did not disregard binding precedents but exercised discretion in applying the appropriate precedent.

Issue 3: Binding Nature of Tribunal Decisions and Discretion to Distinguish Conflicting Precedents

Relevant legal framework and precedents: Decisions of the Tribunal are binding on lower authorities. However, where conflicting Tribunal decisions exist, the adjudicating authority may distinguish and apply the decision appropriate to the facts.

Court's interpretation and reasoning: The Court noted that the Joint Commissioner of Appeals considered both Tribunal decisions and chose to apply the one deemed applicable to the facts. This exercise is within the authority's jurisdiction and does not amount to ignoring binding precedents.

Key evidence and findings: The Tribunal decisions in Ajay Trading and M/s JNK India Private Limited were both cited and considered. The Joint Commissioner distinguished the facts and applied the latter decision.

Application of law to facts: The Court refrained from delving into factual disputes at this stage, leaving such analysis to the appellate authority empowered to consider all nuances.

Treatment of competing arguments: Petitioners contended the JCA was bound to follow Ajay Trading; the Court held that distinguishing precedents based on facts is permissible and not a ground to bypass appellate remedies.

Conclusions: The JCA's choice to follow one Tribunal decision over another is a matter for appellate review and does not justify writ jurisdiction.

Issue 4: Scope of Section 26 of the Maharashtra Value Added Tax Act, 2002 and Tribunal's Powers

Relevant legal framework and precedents: Section 26 vests the Tribunal with wide powers to hear appeals, including discretion over pre-deposit requirements, setting aside assessments, or remanding cases for fresh inquiry.

Court's interpretation and reasoning: The Tribunal's powers are substantial and provide an efficacious remedy. The discretion regarding pre-deposit and other procedural matters ensures that appellants can seek relief effectively.

Key evidence and findings: The petitioners had paid 70% of the duty, a fact which the Tribunal can consider in exercising discretion on pre-deposit and other reliefs.

Application of law to facts: The Court observed that all grounds raised in the petition can be urged before the Tribunal, which is better positioned to assess factual and legal nuances.

Treatment of competing arguments: Petitioners argued hardship and recurring issues over multiple assessment years; the Court acknowledged these but emphasized that the Tribunal is the appropriate forum to address such concerns.

Conclusions: The appellate remedy before the Tribunal is adequate, efficacious, and should be pursued.

Issue 5: Application of Supreme Court Precedents on Exhaustion of Remedies and Exceptional Circumstances

Relevant legal framework and precedents: Supreme Court decisions consistently hold that statutory remedies must be exhausted before approaching the writ jurisdiction, except in cases of exceptional circumstances such as lack of jurisdiction or gross illegality.

Court's interpretation and reasoning: The Court relied on recent Supreme Court rulings emphasizing that deviation from the statutory appellate process requires exceptional justification, which was not demonstrated here.

Key evidence and findings: The facts did not reveal jurisdictional errors or denial of natural justice that would warrant writ intervention. The issues raised are routine appellate matters.

Application of law to facts: The Court applied the principle that the statutory appeal process is the proper forum for dispute resolution in such fiscal matters.

Treatment of competing arguments: Petitioners sought to rely on Supreme Court authority to justify writ jurisdiction; the Court distinguished those facts and held that no similar exceptional circumstances exist here.

Conclusions: No exceptional circumstances exist to bypass the statutory appellate remedy; writ jurisdiction is not warranted.

Issue 6: Procedural Directions and Preservation of Rights

Relevant legal framework and precedents: Courts may grant liberty to file appeals out of time and direct early disposal where writ petitions are dismissed for non-exhaustion of remedies.

Court's interpretation and reasoning: The Court granted liberty to file appeal within four weeks without limitation objections and directed the Tribunal to consider early disposal requests. It explicitly kept all merits open.

Key evidence and findings: The petition was filed bona fide and within a reasonable time after the impugned orders.

Application of law to facts: The directions ensure that petitioners' rights are preserved while enforcing the principle of exhaustion of remedies.

Treatment of competing arguments: None specifically addressed; the Court balanced procedural propriety with substantive rights.

Conclusions: Petitioners may pursue appeal promptly; Tribunal to consider expedited hearing; no adverse inference from delay or prior writ petition.

ISSUES:

Whether the Tribunal was justified in law in holding that Section 15A of the Bombay Sales Tax Act, 1959, is not a charging provision but merely declares the rate of tax.Whether there exists an express and independent contract for the sale of packing material (HDPE bags) separate from the sale of the cement itself.

RULINGS / HOLDINGS:

On the issue of the independent sale of packing material, the Court upheld the Tribunal's finding that there was an express and independent contract for the sale of HDPE bags separate from the cement, based on detailed factual findings and application of the Supreme Court's ruling in Raj Sheel. The Court found that the Tribunal's conclusion was "not vitiated by any perversity or even lack of sufficient material" and that the packing material was sold "separately and independently of the packed product."Regarding the interpretation of Section 15A of the Bombay Sales Tax Act, 1959, the Court held that since the second question was answered in favor of the Assessee, "there is no question of levying any sales tax at the same rate as that levied on cement," rendering the first question academic and unnecessary to decide in this case.

RATIONALE:

The Court applied the legal framework established by the Hon'ble Supreme Court in Raj Sheel, which recognizes three possible characterizations of sales involving goods and their packing materials: separate sales of product and container, integrated components of a single sale, or sale of product with transfer of container without separate consideration. The factual inquiry into the nature of the transaction is paramount.The Court emphasized that the burden lies on the Revenue to prove that a turnover is liable to tax and that the question of whether packing material was sold is a "pure question of fact," not to be decided on "fiction or surmises."The Tribunal's detailed factual findings included separate pricing, separate sale bills, variation in packing material prices independent of cement prices, separate accounting and profit margins for packing materials, and customer knowledge of separate consideration, all supporting the conclusion of an independent sale.On Section 15A, the Court noted that its title is "never conclusive" and that similar provisions in other States often contain a non-obstante clause, which Section 15A lacks. The Court referred to the Supreme Court's interpretation of a similar provision (Section 6-C of the Andhra Pradesh General Sales Tax Act) in Raj Sheel, which treats such provisions as clarificatory legal fictions applying the tax rate of goods to packing materials only when there is no independent sale of packing materials.The Court declined to rule on the constitutional or substantive nature of Section 15A as a charging provision because the factual finding of an independent sale obviated the need to apply Section 15A's deemed sale provision.

ISSUES:

Whether an ex-parte assessment order passed without physical service of notice and draft assessment order violates principles of natural justice under the West Bengal Value Added Tax Act, 2003.Whether service of notice through e-mail is sufficient when the registered dealer is not found at the place of business.Whether the assessing officer is obligated to provide an opportunity of personal hearing before passing an assessment order affecting Input Tax Credit (ITC) claims.Whether the writ petitioner is entitled to contest the levy of purchase tax under Section 17 of the West Bengal Value Added Tax Act, 2003.

RULINGS / HOLDINGS:

The ex-parte assessment order was set aside to the extent of disallowed ITC claim and purchase tax levied, as the assessing officer failed to afford an opportunity of personal hearing, which is essential for a fair assessment under the Act.Service of notice solely through e-mail was deemed insufficient given the circumstances, since the registered dealer's physical presence at the business address was not established, thereby compromising proper communication.The matter was remanded to the assessing officer with directions to afford the registered dealer "an opportunity of personal hearing" and to consider all written submissions, books of accounts, and documents before passing a fresh order on the ITC claim.The writ petitioner was held entitled to contest the levy of purchase tax under Section 17 of the Act during the reassessment process.No coercive recovery action shall be initiated against the petitioner pending the reassessment and fresh order.

RATIONALE:

The Court applied the principles of natural justice requiring that a registered dealer be given adequate notice and an opportunity to be heard before an adverse assessment order is passed under the West Bengal Value Added Tax Act, 2003.The Court noted the statutory framework under the Act and the necessity of service of notices in a manner that ensures actual communication, rejecting the sufficiency of e-mail service alone when physical presence was not confirmed.The judgment relied on the established doctrine that partial allowance of ITC in an ex-parte order without explanation does not justify denial of opportunity to contest the remainder of the claim.The Court emphasized the availability of alternative remedies and the need for administrative fairness, directing reassessment within a fixed timeframe to ensure expeditious resolution.No dissent or doctrinal shift was indicated; the decision reaffirmed procedural fairness and statutory compliance in tax assessments.

ISSUES:

Whether findings of the Appellate Tribunal are perverse when the source of power is not specifically referred to or a wrong provision of law is cited, but the power exists and can be traced to a legal source.Whether invoking Section 67(1)(o) of the J&K VAT Act, 2005 instead of Section 17(1)(o) of the J&K GST Act, 1962 by the Assessing Authority vitiates the order and proceedings, considering the pari materia nature of these provisions.Whether penalty can be imposed under the Jammu & Kashmir Entry Tax on Goods Act, 2000 for bypassing the Commercial Taxes Check Post when no provision explicitly authorizes such penalty.Whether procedural provisions of the Jammu & Kashmir General Sales Tax Act, 1962 apply mutatis mutandis to the Entry Tax Act, 2000, including penalty provisions under other statutes.The constitutional validity and statutory requirements for imposing penalty under tax legislation, specifically the necessity of a substantive 'Charging Section' for penalty imposition.

RULINGS / HOLDINGS:

The Tribunal's findings are not perverse merely because the source of power was not specifically cited or a wrong provision was referenced, so long as the power "does exist and can be traced to a source available in law."Invoking Section 67(1)(o) of the VAT Act, 2005 instead of Section 17(1)(o) of the GST Act, 1962 does not vitiate the proceedings because these provisions are pari materia, as per Supreme Court precedent.Penalty for bypassing the Commercial Taxes Check Post cannot be imposed under the Entry Tax Act, 2000, as the only penalty provision under Section 4(3) applies exclusively to carrying goods with fake or false documents, which was not the case here.Section 6 of the Entry Tax Act, 2000 applies the provisions of the GST Act relating only to appeals, revisions, tribunals, recovery of fines, taxes or penalties, and procedural powers mutatis mutandis; it does not incorporate substantive penalty provisions such as Section 69(1)(o) of the VAT Act or Section 17(1)(o) of the GST Act.Penalty is a statutory liability that requires a substantive 'Charging Section' in the statute to create such liability; procedural or machinery provisions cannot be construed to create or impose penalty liability.

RATIONALE:

The Court applied the statutory framework of the Jammu & Kashmir Entry Tax on Goods Act, 2000 and the Jammu & Kashmir General Sales Tax Act, 1962, interpreting Section 6 of the Entry Tax Act as a machinery provision limited to procedural aspects and not substantive penalty imposition.The Court relied on constitutional principles under Article 265 of the Constitution of India, which mandates that no tax or penalty shall be levied except by authority of law, requiring a clear charging section for penalty imposition.The Court cited Supreme Court precedent from M/s Khemka and Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, emphasizing that penalty is an additional tax and cannot be imposed without a statutory charging provision; procedural provisions cannot enlarge or create penalty liability.The Court rejected the attempt to impose penalty under provisions of a different Act (VAT Act, 2005) where the Entry Tax Act, 2000 did not provide for such penalty, underscoring the principle that penalty provisions must be clearly and expressly provided in the relevant statute.The Court noted a legislative lacuna in the Entry Tax Act regarding penalty for bypassing Check Posts but held that judicial interpretation cannot create penal liability where none exists, and suggested remedial legislative action instead.

ISSUES:

Whether the supply of medicines, implants, stents, consumables, etc. used during treatment of indoor patients by hospitals amounts to "sale" under clause (g) of section 2(23) of the Gujarat Value Added Tax Act, 2003 ("VAT Act").Whether clause (g) of section 2(23) of the VAT Act is ultra vires the legislative competence of the State Legislature under Entry 54 of List II of the Seventh Schedule of the Constitution of India.Whether the supply of such goods during treatment falls within the ambit of "deemed sale" as defined under Article 366(29A) of the Constitution of India, particularly under sub-clauses (a) or (b) relating to "works contract".Whether hospital services involving supply of medicines and implants constitute a "works contract" under Article 366(29A)(b) of the Constitution and section 2(23)(b) of the VAT Act.Whether the "dominant intention test" applies to composite contracts involving supply of goods and services post the Forty-sixth Amendment to the Constitution.Whether the human body can be considered "property" for the purposes of applying the "works contract" definition in the context of medical treatment.Whether the judgments of various High Courts exempting hospital services from VAT are binding or applicable in light of the constitutional and Supreme Court jurisprudence.Whether clauses (g) and (h) of section 2(23) of the VAT Act can be read down to conform to Article 366(29A)(f) of the Constitution to save them from unconstitutionality.

RULINGS / HOLDINGS:

The supply of medicines, implants, stents, consumables, etc. during treatment of indoor patients constitutes a "sale" of goods involved in the execution of a "works contract" under clause (b) of Article 366(29A) of the Constitution and section 2(23)(b) of the VAT Act, and is therefore taxable.Clause (g) of section 2(23) of the VAT Act, which attempts to expand the definition of "sale" beyond the constitutional contours, is not invoked by the State in these cases; VAT is leviable under clauses (a) or (b) of section 2(23) as "deemed sales".The term "works contract" in Article 366(29A)(b) is of wide amplitude, encompassing all genres of contracts involving transfer of property in goods along with services, including composite contracts such as hospital services involving supply of medicines and implants.The "dominant intention test" has no application to contracts falling within the ambit of Article 366(29A); the legal fiction introduced by the Forty-sixth Amendment permits bifurcation of composite contracts into sale of goods and provision of services for taxation purposes.The human body is not treated as "property" in civil or criminal law; however, for tax purposes, the supply of goods (medicines, implants, consumables) used in medical treatment is a transfer of property in goods involved in a "works contract" and is taxable notwithstanding the non-applicability of the principle of accretion.Judgments of various High Courts exempting hospital services from VAT without examining applicability of "works contract" under Article 366(29A)(b) are not binding and are not followed.Clauses (g) and (h) of section 2(23) of the VAT Act may be read together and construed in pari materia with Article 366(29A)(f) to avoid unconstitutionality, but this is not determinative in the present case as VAT is levied under other clauses.

RATIONALE:

The legal framework is primarily based on the Forty-sixth Amendment to the Constitution of India which inserted clause (29A) in Article 366, defining "tax on the sale or purchase of goods" to include certain categories of "deemed sales", including "works contracts".Pre-amendment jurisprudence (e.g., State of Madras v. Gannon Dunkerly & Co.) held that indivisible works contracts were not subject to sales tax on goods used, as the property did not pass pursuant to a sale agreement; the Forty-sixth Amendment introduced a legal fiction allowing bifurcation of such contracts for taxation.Subsequent Supreme Court decisions (Larsen & Toubro Ltd. v. State of Karnataka, Associated Cement Companies Ltd. v. Comm. Customs) expanded the scope of "works contract" to include all genres of contracts involving transfer of property in goods along with services, diminishing the distinction between sale and service contracts for taxation.The "dominant intention test" for determining whether a contract is a sale or service is no longer applicable to contracts covered by Article 366(29A); the legal fiction mandates taxing the goods component irrespective of the dominant nature.The supply of medicines, implants, stents, consumables, etc. by hospitals to indoor patients forms part of a composite contract involving transfer of property in goods and provision of medical services, thus constituting a "works contract" taxable under VAT.The argument that the human body is not "property" and thus medical treatment cannot be a "works contract" is rejected for tax purposes, as the focus is on the transfer of goods involved in the contract, not on the nature of the recipient.Decisions of various High Courts exempting hospital services from VAT are distinguished on the basis that they did not consider the applicability of "works contract" under Article 366(29A)(b) and are therefore not followed.The GST regime and related rulings are not applicable to the VAT Act context due to differences in statutory frameworks and concepts such as "composite supply".The Court applies a purposive and constitutionally consistent interpretation of the VAT Act and the Constitution to uphold the State's power to levy VAT on the supply of goods involved in hospital services as "deemed sales" under "works contract".

ISSUES:

Whether the Commercial Tax Tribunal erred in not reducing the amount of tax on the stone dust ("Chura") manufactured by the assessee while reducing tax on solemstones.Whether the Tribunal failed to record any finding on the rectification application under Section 31 of the U.P. VAT Act regarding the tax amount related to stone dust.Whether the revision should be allowed to set aside the impugned order and decide the questions of law in favor of the assessee to prevent irreparable loss and injury.

RULINGS / HOLDINGS:

The Tribunal committed an error in not reducing the amount of tax on the stone dust ("Chura") while granting relief on the tax imposed on solemstones.The Tribunal failed to record any finding on the application under Section 31 of the U.P. VAT Act concerning the tax imposed on stone dust, despite the specific plea raised.The impugned order dated 14.08.2024 is set aside, and the matter is remitted to the Tribunal to decide the issue afresh under Section 31, recording findings on the stone dust tax issue within two months.

RATIONALE:

The legal framework applied includes Section 31 of the U.P. VAT Act, 2007, which governs rectification of mistakes in orders passed under the Act.The Tribunal's order was examined for compliance with the requirement to address all grounds raised in the rectification application, specifically the tax imposed on stone dust.The Court emphasized the necessity for the Tribunal to record findings on all aspects raised under Section 31, including the tax calculation based on royalty for both solemstones and stone dust, to ensure a complete adjudication.No dissent or doctrinal shift was noted; the decision follows established principles requiring comprehensive disposal of rectification applications.

ISSUES:

Whether the value taxable under the Haryana Value Added Tax Act (HVAT Act) and Central Sales Tax Act (CST Act) is limited to the goods that are actually transferred to the customer in the execution of a works or job contract'Whether the levy of tax on chemicals and dyes used as consumables in the job work process is justified when only a portion of these consumables is transferred to the principal, considering wastage during the process'Whether the findings that the entire property in dyes and chemicals used in the job work is transferred to the principal are perverse or unsupported by evidence'Whether reliance on precedent dealing with works contract tax is appropriate for determining the quantity of goods on which tax is leviable'Whether the impugned order remanding the matter to the Assessing Officer for factual determination and fresh decision is just, legal, and sustainable in the facts and circumstances?

RULINGS / HOLDINGS:

The Court held that "what is taxable under the HVAT Act and CST Act, is the value of the goods which get transferred to the customer in the execution of works contract either as goods or in any other form."The Court found that the learned Tribunal was not justified in levying tax on the entire quantity of dyes and chemicals used, ignoring the quantity wasted during the process, and emphasized the need to determine the actual quantity of consumables transferred.The Court concluded that the findings of the Tribunal that the entire property in the dyes and chemicals is transferred to the principals were not sustainable without factual inquiry, and such determination depends on evidence and factual aspects to be considered by the Assessing Officer.The Court held that reliance on the Bombay High Court judgment concerning works contract tax was misplaced for determining the quantity of goods on which tax is to be levied, as the said judgment did not address this issue.The impugned order remanding the matter to the Assessing Officer was upheld as just and legal, directing a factual enquiry to ascertain the quantity of chemicals, dyes, and colours that are retained or embedded in the fabric and thus taxable.

RATIONALE:

The Court applied the statutory framework under the HVAT Act and CST Act, focusing on the principle that tax liability arises only on the value of goods actually transferred to the customer in a works or job contract.The Court relied on a prior Division Bench judgment which remanded multiple VAT appeals to the Assessing Officer to determine the factual quantity of consumables lost or retained during processing, recognizing that tax cannot be levied on consumables wasted or not transferred.The Court noted that the factual determination of the quantity of dyes and chemicals transferred is a matter for the Assessing Officer, who must conduct a detailed enquiry with evidence from parties, consistent with the statutory provisions and case law.The Supreme Court's dismissal of the Special Leave Petition challenging the remand order was cited as authoritative confirmation of the correctness of the approach, leaving all contentions open for factual determination by the Assessing Officer.No dissent or doctrinal shift was indicated; the decision reaffirmed established principles on the taxable value in job work contracts and the necessity of factual inquiry for consumables.

ISSUES:

Whether delay in filing an application for recalling an order can be condoned in the absence of satisfactory reasons and proper affidavit.Whether penalty imposed under the relevant tax statute for non-generation of statutory Way-bill can be sustained where there is no intention to evade tax.Whether the rate of penalty imposed (@14.5%) is justified in circumstances where the violation is a clerical error without deliberate tax evasion.Whether the statutory obligation to generate Way-bill can be excused or mitigated due to bona fide mistakes or technical glitches.Whether the discretion of the tax authority to impose penalty should be exercised judicially considering all relevant circumstances.

RULINGS / HOLDINGS:

The tribunal rightly refused to condone the delay of 440 days in filing the application due to unsatisfactory reasons and improper affidavit, and this Court found no error in that conclusion.Penalty for failure to generate Way-bill is a statutory violation but "penalty could not ordinarily be imposed unless the party concerned either acted deliberately in defiance of law or was guilty of conduct which was contumacious or dishonest or that the dealer in question had acted in conscious disregard of his obligation".The imposition of penalty at the rate of 14.5% was excessive given the absence of any intention to evade tax and the nature of the violation as a clerical error.The petitioner's failure to generate the Way-bill on the date of movement was a "clerical error" and the statutory obligation, though not fulfilled timely, was ultimately complied with on the same day of inspection.The discretion vested in the Commissioner to impose penalty under sub-section (1) of section 77 must be exercised judicially and penalties may be reduced in cases of bona fide mistakes without deliberate tax evasion.

RATIONALE:

The Court applied the legal principles laid down in Hindusthan Steel Ltd. v. State of Orissa, emphasizing that penalty liability arises only upon deliberate or contumacious conduct or conscious disregard of statutory obligation.Precedents from the same High Court in Zarghamuddin Ansari and Kodak India Limited were considered, reinforcing the discretionary and judicial nature of penalty imposition in tax matters.The Court noted the absence of any allegation or evidence of tax evasion or dishonest conduct by the petitioner, and the existence of Form-F declaration establishing the stock transfer.The Court recognized the statutory obligation to generate Way-bill but found that the failure was due to "clerical error" and possibly technical glitches, which were not proven beyond reasonable doubt.The decision reflects a doctrinal approach that penalty imposition must be proportionate and considerate of the facts, allowing reduction of penalty where the violation is not deliberate.The Court modified the penalty to 5% of the fair market value of the seized goods, directing refund of excess amounts deposited without interest, emphasizing fairness and judicial discretion.

ISSUES:

Whether the Gujarat Value Added Tax Tribunal is justified in demanding pre-deposit despite the absence of incriminating documents related to sales and purchase transactions at the appellant's business place'Whether the Tribunal is justified in demanding pre-deposit when there is no dispute of suppression or evasion of sales and purchase transactions'Whether the Tribunal is justified in relying solely upon statements and extraneous material from a third party without any corroborative evidence on record'Whether the appeals should be remanded to the First Appellate Authority for consideration on merits upon payment of the pre-deposit amount?

RULINGS / HOLDINGS:

The Tribunal's order demanding pre-deposit was upheld, and the appeals challenging such demand on the grounds of absence of incriminating documents and non-suppression were not entertained.The Court accepted the appellant's affidavit agreeing to pay the pre-deposit amount of Rs. 21 Lakh within four weeks and directed that upon such payment, the appeals shall be remanded to the First Appellate Authority for hearing on merits.The orders passed by the Tribunal and the First Appellate Authority were quashed and set aside to facilitate remand for merits consideration upon compliance with the pre-deposit condition.The appeals on the proposed substantial questions of law were dismissed as not entertainable without pre-deposit payment.

RATIONALE:

The Court applied the statutory framework under section 78 of the Gujarat Value Added Tax Act, 2003, governing appeals and pre-deposit requirements before the Tribunal and appellate authorities.The Court emphasized the procedural necessity of pre-deposit as a condition precedent to entertaining appeals, consistent with established tax appeal jurisprudence.The decision reflects no doctrinal shift but underscores that absence of incriminating documents or suppression does not automatically exempt the appellant from complying with pre-deposit mandates.The remand order facilitates substantive adjudication on merits post compliance with procedural pre-deposit requirements, balancing procedural rigor with substantive justice.

ISSUES:

Whether interest on refund of tax demand raised under the repealed Haryana General Sales Tax Act, 1973 (HGST Act) but assessed after the commencement of Haryana Value Added Tax Act, 2003 (HVAT Act) is payable under the provisions of the HGST Act or the HVAT Act.Whether the provisions of Section 43(2) read with Rule 35(1)(b) of the HGST Act apply to interest on delayed refund where the assessment order was passed under the HGST Act after the HVAT Act came into force.Whether the provisions of Section 20(8) of the HVAT Act are applicable to claims for interest on refund in cases where the demand was originally raised under the HGST Act but the refund and assessment occurred after HVAT Act's commencement.Whether the repeal and saving provisions under Section 61 of the HVAT Act and Section 6 of the General Clauses Act, 1897 apply to preserve rights, liabilities, and procedures arising under the repealed HGST Act.Whether the learned Haryana Tax Tribunal was justified in allowing interest on the entire refund amount from the date of deposit till the date of refund under Section 20(8) of the HVAT Act, contrary to the provisions of the HGST Act.

RULINGS / HOLDINGS:

The Court held that the assessment order dated 29.03.2005, though passed after the commencement of the HVAT Act, was passed under the HGST Act; however, by virtue of Section 61 of the HVAT Act, such assessment order is deemed to have been passed under the HVAT Act, making the HVAT Act provisions applicable for interest on refund.The Court ruled that the provisions of Section 20(8) of the HVAT Act, which entitle the assessee to interest on the refund amount for the entire period from the date of deposit till the date of refund at the rate of 1% per month, apply in the present case.The Court set aside the orders of the lower authorities that restricted interest payment to the delayed period beyond 90 days under Section 43(2) of the HGST Act, holding that the learned Haryana Tax Tribunal was justified in allowing interest for the entire period under Section 20(8) of the HVAT Act.The Court emphasized that the repeal and saving provisions under Section 61 of the HVAT Act and Section 6 of the General Clauses Act, 1897 preserve rights, liabilities, and actions under the repealed HGST Act unless a different intention is manifest in the HVAT Act, which is not the case here.The Court observed that the judgment relied upon by the appellant regarding the applicability of HGST Act provisions for interest is distinguishable and that the settled law supports application of the HVAT Act provisions for interest in the present circumstances.

RATIONALE:

The Court applied the statutory framework of the HVAT Act, 2003, specifically Section 61 (Repeal and Saving), which repealed the HGST Act but preserved all rights, liabilities, and actions under the repealed Act, deeming them to be done under the HVAT Act as if it was in force on the date of such actions.The Court relied on Section 6 of the General Clauses Act, 1897, which provides that repeal of an enactment shall not affect rights, privileges, obligations, liabilities, or legal proceedings unless a different intention appears in the repealing Act.The Court referred extensively to authoritative precedents, including a Constitution Bench decision in State of Punjab v. Mohar Singh Pratap Singh, and decisions from other jurisdictions, establishing that simultaneous repeal and re-enactment is construed as a continuation of the law unless the new enactment manifests a contrary intention.The Court distinguished the judgment relied upon by the appellant, noting it involved exercise of extraordinary jurisdiction under Article 226 of the Constitution and did not decide the issue on statutory provisions applicable in regular appeals.The Court underscored the principle that the right to appeal and substantive rights under taxation laws vest at the commencement of lis and are governed by the law prevailing at that time, but procedural aspects and enforcement, including interest on refund post repeal, are governed by the repealing Act's provisions unless otherwise indicated.The Court found no manifest intention in the HVAT Act to exclude interest payment under Section 20(8) for refunds relating to assessments originally under the HGST Act but assessed and refunded after HVAT Act commencement.

ISSUES:

Whether the reassessment order passed under Section 40(1) of the Assam Value Added Tax Act, 2003 is barred by the limitation period prescribed under Section 40(2) of the Act.Whether the assessment order dated 22.11.2022 for the financial year 2007-2008 complies with the statutory time limit for issuance of assessment or reassessment orders under the Act of 2003.

RULINGS / HOLDINGS:

The reassessment order dated 22.11.2022 is barred by limitation as it was passed beyond the period of eight years from the end of the relevant financial year, in violation of Section 40(2) of the Act of 2003.Section 40(2) explicitly states that "no order of assessment and reassessment shall be made under subsection (1) after the expiry of eight years from the end of the year in respect of which or part of which the tax is assessable." Therefore, the assessment order for the year 2007-2008 passed on 22.11.2022 is "apparently barred" and is set aside along with the associated Notice of Demand and recovery proceedings.

RATIONALE:

The Court applied the statutory limitation provision contained in Section 40(2) of the Assam Value Added Tax Act, 2003, which imposes an absolute bar on passing assessment or reassessment orders beyond eight years from the end of the relevant financial year.The Court emphasized that the limitation applies to the passing of the order itself and not merely to the initiation of proceedings, noting that the assessment for the financial year 2007-2008 should have been completed on or before 31.03.2016.Since the impugned assessment order was passed on 22.11.2022, it fell outside the statutory period, resulting in the order being quashed. No unique interpretation or dissent was noted in the judgment.

ISSUES:

Whether the impugned Assessment Order passed ex-parte without providing an opportunity of hearing violates the principles of natural justice.Whether a petitioner who was unaware of the assessment proceedings due to migration outside India can seek quashing of the Assessment Order and attachment of bank accounts.Whether the petitioner's offer to deposit a sum as an undertaking can justify remanding the matter for fresh assessment proceedings.Whether the court should exercise its extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India to quash the impugned Assessment and Attachment Orders.

RULINGS / HOLDINGS:

The impugned Assessment Order passed ex-parte without notice to the petitioner is violative of the "principles of natural justice."The petitioner's lack of knowledge of the assessment proceedings due to migration and non-receipt of notices is a valid ground to challenge the Assessment Order and Attachment Order.The petitioner's affidavit of undertaking to deposit Rs. 5 lakhs demonstrates "bona fides" and willingness to cooperate, warranting remand of the matter for a fresh de novo assessment after providing an opportunity of hearing.The court exercised its extraordinary jurisdiction under Articles 226 and 227 to quash and set aside the Assessment Order and consequential Attachment Order, directing fresh proceedings in accordance with law.

RATIONALE:

The court applied the fundamental legal principle that an assessment order passed without affording the affected party an opportunity of hearing constitutes a breach of the "principles of natural justice."The petitioner's migration outside India and consequent non-receipt of notices were considered material facts affecting the petitioner's ability to participate in the assessment proceedings.The court relied on the petitioner's affidavit undertaking to deposit a substantial amount as evidence of good faith, justifying a discretionary relief by remanding the matter for fresh consideration.The judgment reflects the court's approach to balance procedural fairness with revenue interests by allowing fresh assessment only upon deposit of a specified sum and ensuring compliance with due process.No dissent or doctrinal shift was indicated; the decision adheres to established principles governing tax assessments and constitutional remedies under Articles 226 and 227.

ISSUES:

Whether a sale deed executed by a tax defaulter can be declared voidable by the Commercial Tax Department under Section 53 of the Transfer of Property Act, 1882.Whether the Commercial Tax Department can register a charge or encumbrance over the property purchased by a subsequent purchaser despite the sale deed.Whether the purchaser of the property can claim protection as a bona fide purchaser for consideration against the voidability of the sale deed.What remedies are available to the parties when a sale deed is alleged to have been executed to defeat or delay creditors.

RULINGS / HOLDINGS:

The sale deed executed by the tax defaulter is "voidable at the option of the Commercial Tax Department" under Section 53 of the Transfer of Property Act, 1882, if made with intent to defeat or delay creditors.The Commercial Tax Department has the liberty to take steps to cancel the sale deed as null and void and not binding on it; however, it must initiate such action affirmatively.The purchaser may assert the defense of being a "bona fide purchaser" for consideration, which is protected under the same section.In the absence of steps taken by the Commercial Tax Department to declare the sale void, no encumbrance or charge shall be registered against the property.The petitioner is entitled to file a suit before the Civil Court for appropriate relief, and pending such proceedings, the status quo shall be maintained.

RATIONALE:

The Court applied Section 53 of the Transfer of Property Act, 1882, which provides that every transfer of immovable property made with intent to defeat or delay creditors is voidable at the option of the creditor, but does not impair the rights of a transferee in good faith and for consideration.The Court relied on precedent decisions affirming the creditor's right to avoid fraudulent transfers and the protections afforded to bona fide purchasers.The judgment clarifies that the mere existence of arrears or tax liability does not automatically invalidate the sale deed unless the creditor exercises the right to avoid the transfer.The Court emphasized procedural fairness by allowing the Commercial Tax Department to initiate cancellation and the purchaser to defend bona fide status, maintaining the principle of balance between creditor rights and purchaser protection.No doctrinal shift or dissenting opinion was recorded; the ruling follows established statutory interpretation and case law.

The core legal questions considered by the Court were:

• Whether the Government Orders (G.O.s) dated 4 April 2013 (clause 3(d)) and 18 March 2014 (clause (a)) issued by the State of Maharashtra, prohibiting collection of convenience fees/service charges on online cinema ticket bookings, are constitutionally valid.
• Whether the impugned G.O.s have any statutory backing under the Maharashtra Entertainment Duty Act, 1923 (ED Act), including whether the State Government had power under Sections 7, 10, 3(3)(e), or 4(2)(b) of the ED Act to issue such prohibitory orders.
• Whether the impugned G.O.s violate the fundamental right guaranteed under Article 19(1)(g) of the Constitution of India, which protects the right to carry on any occupation, trade or business.
• Whether the impugned G.O.s can be saved by invoking the executive power under Article 162 of the Constitution of India.
• Ancillary issues raised but not decided included challenges under Article 14 relating to discrimination and whether the G.O.s apply to online service providers who are not agents of cinema exhibitors.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of the G.O.s prohibiting collection of convenience fees under the Maharashtra Entertainment Duty Act, 1923

Relevant legal framework and precedents: The Maharashtra Entertainment Duty Act, 1923 governs the levy and collection of entertainment duty on payments for admission to entertainment, including cinema exhibitions. Key provisions examined were Sections 2(b) (definition of "payment for admission"), 3 (charging section), 4 (method of levy), 7 (power to make rules), 10 (delegation of powers), and specifically Section 3(3)(e) which prohibits collection of amounts in excess of the payment considered for calculating gross collection capacity or houseful tax capacity.

Court's interpretation and reasoning: The Court analyzed the scope of the ED Act and found that the Act is primarily concerned with levy and collection of entertainment duty and does not confer any power to the State Government or its departments to regulate or prohibit the collection of convenience fees by theatre owners or agents. Section 7 empowers the State Government to make rules for securing payment of entertainment duty but does not authorize prohibition of convenience fees. Section 10 permits delegation of powers but only those conferred by the Act. Section 3(3)(e) prohibits collection of amounts exceeding the payment considered for duty calculation but does not authorize prohibition of convenience fees per se. Section 4(2)(b) relates to conditions for payment of entertainment duty and does not empower the State to prohibit convenience fees.

Key evidence and findings: The impugned G.O.s did not specify any statutory source of power. The Court noted that the prohibition on convenience fees was not part of the ED Act or its rules. The amendment to Section 2(b) of the ED Act in December 2014, which included service charges for online ticket booking within the definition of "payment for admission," post-dated the impugned G.O.s and supported the view that prior to this amendment, no such prohibition was statutorily authorized.

Application of law to facts: Since the impugned G.O.s sought to prohibit collection of convenience fees without any statutory backing, they were beyond the scope of the ED Act and thus invalid.

Treatment of competing arguments: The Respondents argued that Section 3(3)(e) and Section 4(2)(b) of the ED Act empowered the issuance of the G.O.s. The Court rejected this, holding that these provisions do not authorize prohibition of convenience fees but only regulate entertainment duty collection. The Petitioners argued that no power existed under the ED Act or otherwise to issue such prohibitions, which the Court accepted.

Conclusions: The Court concluded that the impugned G.O.s lack statutory authority under the ED Act and are therefore invalid to the extent they prohibit collection of convenience fees.

Issue 2: Violation of Article 19(1)(g) of the Constitution of India

Relevant legal framework and precedents: Article 19(1)(g) guarantees the right to practice any profession or carry on any occupation, trade or business. Article 19(6) permits the State to impose reasonable restrictions in the interest of the general public by law. Precedents include the Supreme Court decision in State of Bihar v. Project Uchcha Vidya Sikshak Sangh and Indian School, Jodhpur v. State of Rajasthan, which emphasize that restrictions on business must be by law and reasonable.

Court's interpretation and reasoning: The Court held that the impugned G.O.s interfere with the Petitioners' right to carry on legitimate business by prohibiting collection of convenience fees, which is a contractual consideration between private parties. Such interference requires a statutory basis and must be reasonable. The absence of any law or statute regulating convenience fees meant the G.O.s imposed unreasonable restrictions violating Article 19(1)(g). The Court also emphasized that the power to restrict business rights must be exercised through law, not executive orders or policy decisions.

Key evidence and findings: The Court noted the absence of any statute regulating convenience fees before the December 2014 amendment. The Petitioners' business model was legitimate and not shown to be contrary to law or public interest. The convenience fee represented a charge for providing online booking technology, which is a legitimate business expense.

Application of law to facts: Since the G.O.s were executive orders without statutory backing and imposed prohibitions on a legitimate business activity, they violated the fundamental right under Article 19(1)(g).

Treatment of competing arguments: The Respondents contended that the G.O.s were issued under executive power and for public interest. The Court rejected this, holding that executive power under Article 162 cannot be invoked in the absence of enabling legislation and that public interest restrictions must be by law.

Conclusions: The impugned G.O.s violate Article 19(1)(g) as they impose unreasonable restrictions on the Petitioners' right to carry on business without statutory authority.

Issue 3: Whether the impugned G.O.s can be saved under Article 162 of the Constitution of India

Relevant legal framework and precedents: Article 162 vests executive power in the State Government over matters on which the State Legislature may legislate. However, executive power cannot override or substitute the need for statutory authority. The Supreme Court in State of Bihar and Indian School, Jodhpur cases has held that executive power cannot be used to impose restrictions on economic or commercial matters between private parties in the absence of enabling legislation.

Court's interpretation and reasoning: The Court observed that Article 162 requires the existence of a law under which executive power can be exercised. Since no statute empowered the State to regulate or prohibit convenience fees, the impugned G.O.s could not be saved under Article 162. The Court relied on precedents holding that executive instructions or policy decisions cannot substitute for law in restricting fundamental rights or regulating contractual commercial transactions.

Key evidence and findings: The absence of any price control legislation or statutory regulation of convenience fees was emphasized. The Court noted that the impugned G.O.s were executive orders without legislative backing.

Application of law to facts: The impugned G.O.s could not be justified as valid exercises of executive power under Article 162 in the absence of enabling legislation.

Treatment of competing arguments: The Respondents argued that executive power under Article 162 justified the G.O.s. The Court rejected this, relying on authoritative precedents and constitutional principles.

Conclusions: The impugned G.O.s cannot be sustained under Article 162 of the Constitution.

Ancillary Issues: The Petitioners raised additional contentions regarding discrimination under Article 14 and applicability of the G.O.s to online service providers who are not agents of cinema exhibitors. The Court did not decide these issues, leaving them open for future consideration.

3. SIGNIFICANT HOLDINGS

"The impugned Government Orders, to the extent that they prohibit the collection of convenience fees on tickets booked online, violate Article 19(1)(g) of the Constitution of India, and therefore, the impugned Government Orders to the extent challenged herein are required to be quashed and set aside."

"On a reading of Sections 7 and 10 of the Maharashtra Entertainment Duty Act, 1923, there is no power conferred on the Respondents to issue Government Orders which prohibit collection of convenience fees by the theatre owners and/or others from the customers on the transaction of online booking of tickets."

"Section 3(3)(e) only prohibits collection of an amount more than what was considered for calculating gross collection capacity or houseful tax capacity. It does not empower the Respondents to issue Government Orders to prohibit collection of convenience fees."

"The power of the State Government to deal with matters during the pandemic situation or otherwise has already been delineated by Parliament as well as the State Legislature. The State Government cannot exercise executive power under Article 162 of the Constitution to denude the person offering service(s) or goods of his just claim to get fair compensation/cost from the recipient of such service(s) or goods, where the State has no direct causal relationship therewith."

"Any restriction imposed on a legitimate business must be by a law enacted by a competent legislature and must be reasonable. In the absence of any such law prohibiting collection of convenience fees, issuing impugned Government Orders cannot be saved by provisions of Article 19(6) of the Constitution."

"The impugned Government Orders are executive orders without statutory basis and cannot regulate or prohibit the collection of convenience fees which are part of the contractual consideration between private parties."

"The choice of whether to book the ticket online or purchase it at the theatre is left to the customers. If the customer feels it convenient to book the tickets online by not going to the theatre and paying the convenience fees, the Respondents cannot restrain the Petitioners from collecting the convenience fees since for providing this facility of online booking, the theatre owners have to invest in the technology."

Final determinations:

• The impugned clauses 3(d) of the G.O. dated 4 April 2013 and clause (a) of the G.O. dated 18 March 2014 are unconstitutional to the extent they prohibit collection of convenience fees/service charges on online ticket booking and are quashed and set aside.
• The impugned G.O.s lack statutory authority under the Maharashtra Entertainment Duty Act, 1923.
• The impugned G.O.s violate the fundamental right under Article 19(1)(g) of the Constitution of India.
• The impugned G.O.s cannot be saved under Article 162 of the Constitution of India.
• Issues relating to discrimination under Article 14 and applicability to online service providers are left open for future adjudication.

- Whether the petitioner's SPEC Division qualifies as a separate "Non Resident Dealer" unit under notification No. 43 dated 06.06.1995, distinct from the previously certified Saw Pipe Division, for the purpose of tax exemption benefits.

- Whether the NRI equity investment utilized to grant Non Resident Dealer status to the Saw Pipe Division can be considered again for the SPEC Division, or whether fresh NRI investment is required for the latter.

- The interpretation and application of conditions stipulated under notification No. 43 dated 06.06.1995, particularly condition No. 6 relating to new industrial units, equity lock-in periods, and the definition of "new industrial unit".

- The legal effect of the petitioner's corporate structure and investment pattern on eligibility for exemption under the relevant notifications and tax statutes.

- The applicability and relevance of precedents concerning the treatment of multiple units within a single corporate entity for tax exemption purposes.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Qualification of SPEC Division as a Separate Non Resident Dealer Unit under Notification No. 43 dated 06.06.1995

Relevant Legal Framework and Precedents:

The notification No. 43 dated 06.06.1995 under the MPGST Act, MPCT Act, and Central Sales Tax Act provides tax exemptions to certain categories of dealers, including Non Resident Dealers establishing new industrial units with minimum 26% NRI equity participation. Condition No. 6 defines a "New Industrial Unit" and sets forth requirements such as separate registration, separate factory license, separate building, distinct production of different products, maintenance of separate accounts, and independence from existing units.

Precedents cited include the Division Bench judgment of the Telangana High Court in State of Andhra Pradesh vs. Deccan Cements Ltd., which held that multiple units under the same corporate umbrella are not necessarily separate persons and that internal transfers between units do not constitute sales. The Apex Court in Commissioner of Trade Tax, U.P. vs. D.S.M. Group of Industries clarified that expansion, modernization, or diversification within a unit does not create a new unit for exemption purposes.

Court's Interpretation and Reasoning:

The Court analyzed the conditions of notification No. 43, particularly the requirement that a new industrial unit must manufacture products different from the existing unit and comply with registration and operational independence criteria. The SPEC Division manufactures coated and uncoated spirally welded pipes and coating of pipes, distinct from the Saw Pipe Division's production of large diameter welded steel pipes.

The Court found that the SPEC Division satisfies the criteria of a separate industrial unit under condition No. 6, having separate registration certificates, separate factory licenses, distinct products, and independent operations. Therefore, the SPEC Division qualifies as a new industrial unit for the purposes of the notification.

Key Evidence and Findings:

The petitioner obtained separate eligibility certificates and registrations for the Saw Pipe Division and the SPEC Division. The SPEC Division commenced production on 22.04.1999 and invested fresh capital. However, the NRI investment of Rs. 3.00 crores claimed for the SPEC Division was found to have been made after the production commenced, failing the requirement that investment must precede or coincide with commencement.

Application of Law to Facts:

While the SPEC Division qualifies as a separate new industrial unit, the timing and nature of the NRI investment are critical. Since the NRI investment was made post-commencement, it does not satisfy the notification's condition requiring equity participation and lock-in prior to or at the start of production.

Treatment of Competing Arguments:

The petitioner argued that the company's overall NRI equity investment should be considered across its divisions, relying on corporate law principles that a company need not issue fresh shares for new activities. The petitioner also relied on precedents to assert that multiple units under one company should not be treated as separate entities for tax exemption.

The respondents countered that each division is separately registered and treated as a distinct dealer for tax purposes, and that the NRI investment for the Saw Pipe Division cannot be reallocated to the SPEC Division. They emphasized the policy intent to attract fresh NRI investment for each new unit.

The Court distinguished the precedents relied upon, noting that in Deccan Cements, the units were adjacent and involved internal transfers, and in D.S.M. Group, the case involved expansion of an existing unit rather than a new unit producing different products. Here, the SPEC Division is a separate unit manufacturing different products, thus qualifying as a distinct entity under the notification.

Conclusions:

The Court concluded that the SPEC Division is a separate new industrial unit but the NRI investment conditions for Non Resident Dealer status were not met because the NRI investment was made after production commenced and the earlier NRI investment in the Saw Pipe Division cannot be counted again.

Issue 2: Whether NRI Equity Investment Already Utilized for Saw Pipe Division Can Be Reused for SPEC Division

Relevant Legal Framework and Precedents:

Notification No. 43 requires a minimum 26% NRI equity participation for a new industrial unit to qualify as a Non Resident Dealer. Condition No. 6 mandates a lock-in period of three years for such equity investment. The policy underlying the notification is to attract fresh foreign investment through NRIs.

Court's Interpretation and Reasoning:

The Court emphasized that the NRI equity investment that qualified the Saw Pipe Division for exemption was effectively "exhausted" for that unit. The lock-in period and equity participation requirements prevent the same investment from being reallocated to a different unit for exemption purposes.

Key Evidence and Findings:

The petitioner's NRI equity investment in the Saw Pipe Division was Rs. 1,66,65,406, representing 34.91% of the promoters' equity. This investment was locked in for three years. The claimed NRI investment in the SPEC Division of Rs. 3.00 crores was made after production commenced, failing the notification's timing requirement.

Application of Law to Facts:

Since the NRI investment for the Saw Pipe Division was already accounted for and locked in, it cannot be considered fresh investment for the SPEC Division. The petitioner failed to demonstrate fresh NRI investment in the SPEC Division prior to or at the commencement of production.

Treatment of Competing Arguments:

The petitioner argued that the company's overall NRI equity should be considered and that no fresh capital infusion is required to start a new activity under the same company. The respondents argued that the policy intent requires fresh NRI investment for each unit to qualify for exemption.

The Court sided with the respondents, interpreting the notification's conditions strictly to prevent double counting of the same NRI investment across multiple units.

Conclusions:

The Court held that the NRI investment utilized for the Saw Pipe Division cannot be reused for the SPEC Division. Fresh NRI investment prior to production commencement is mandatory for exemption under the notification.

Issue 3: Applicability of Precedents Relied Upon by the Petitioner

Relevant Legal Framework and Precedents:

The petitioner relied on the Telangana High Court's decision in Deccan Cements Ltd. and the Apex Court's decision in D.S.M. Group of Industries.

Court's Interpretation and Reasoning:

The Court distinguished the facts of those cases from the present case. Deccan Cements involved two adjacent units producing cement where internal transfers did not amount to sales, supporting a single entity treatment. D.S.M. Group involved expansion or diversification within the same industrial unit, not the establishment of a new unit producing different products.

Here, the SPEC Division and Saw Pipe Division manufacture different products and satisfy the notification's criteria for separate units, warranting separate treatment for exemption purposes.

Conclusions:

The Court found the precedents inapplicable to the facts of the present case and upheld the separate treatment of the SPEC Division for exemption eligibility.

3. SIGNIFICANT HOLDINGS

"The capital investment of 26% of equity invested by private promoters had been exhausted in the Saw Pipe Division for getting the status of Non Resident Dealer which was prior to 31.12.1999, hence the same NRI investment cannot be utilized to obtain Non Resident Dealer for another SPEC unit."

"The SPEC Division is rightly treated as a separate and distinct unit of the petitioner as per the conditions of notification No. 43 dated 6.6.1995, since it manufactures different products, has separate registration certificates, and maintains independent operations."

"The NRI investment of Rs. 3.00 crores claimed for the SPEC Division was made after the commencement of production and, therefore, does not satisfy the condition of investment prior to or at the time of commencement, as required under the notification."

"The petitioner is not entitled to the benefit of Non Resident Dealer status in respect of the SPEC Division, and the tax assessments made by the respondents for the relevant assessment years are valid."

ISSUES:

Whether the respondent can initiate suo moto revision under Section 64 of the KVAT Act, 2003 after the expiry of four years from the passing of the order by the First Appellate Authority'Whether the respondent was justified in invoking powers of revision under Section 64 of the KVAT Act to set aside the order of the First Appellate Authority without satisfying the twin conditions prescribed under the Act'Whether a rectification application under Section 69 of the KVAT Act merges with the reassessment order passed under Section 39(1) of the KVAT Act, thereby enabling the First Appellate Authority to consider grounds beyond rectification'Whether the limitation period under Section 64(3) of the KVAT Act is to be computed from the date of issuance of the show cause notice or from the date of calling of records?

RULINGS / HOLDINGS:

Proceedings initiated under Section 64 of the KVAT Act are not barred by time if initiated within four years from the date of calling of records, not from the date of the show cause notice; thus, initiation after four years from the appellate order but within four years from calling records is valid.The powers of revision under Section 64 cannot be exercised if the time limit for filing appeal has not expired, but where the First Appellate Authority's order is on merit under Section 62, sub-section (3)(a) of Section 64 does not bar revision proceedings.The rectification application under Section 69 is a distinct statutory remedy and does not merge with the reassessment order under Section 39(1); therefore, appeal against dismissal of rectification cannot be treated as an appeal against reassessment order.The First Appellate Authority cannot examine the validity of the reassessment order in an appeal filed solely against the rejection of a rectification application under Section 69.Both substantial questions of law raised do not arise for consideration as the revision proceedings were initiated within the prescribed period and the appeal against rectification dismissal does not confer jurisdiction to challenge the reassessment order.

RATIONALE:

The Court applied the limitation provisions under Section 64(3) of the KVAT Act, interpreting the four-year period as commencing from the date of calling of records rather than issuance of show cause notice, consistent with statutory intent to allow sufficient time for revision proceedings.The distinction between remedies under Sections 62 and 69 of the KVAT Act was emphasized, clarifying that rectification applications address mistakes apparent on the face of the record and do not substitute or merge with appeals against reassessment orders.The Court relied on the statutory framework providing separate and exclusive remedies for reassessment orders and rectification applications, thereby limiting the scope of appellate review in cases concerning rectification dismissals.No dissent or doctrinal shift was indicated; the judgment reaffirmed established principles regarding limitation and remedy exclusivity under the KVAT Act.

The core legal questions considered by the Court were:

- Whether the Maharashtra Sales Tax Tribunal ("Tribunal") had the jurisdiction or power under Section 26(5)(a) of the Maharashtra Value Added Tax Act, 2002 ("MVAT Act") to dismiss a Second Appeal on the ground of non-prosecution or absence of the appellant's consultant/advocate.

- Whether the Tribunal was bound to decide the Second Appeal on its merits as mandated by the statutory provisions, notwithstanding procedural defaults such as absence or non-prosecution.

- The interplay and primacy between the substantive provisions of the MVAT Act and the procedural rules framed thereunder, particularly concerning dismissal of appeals for default.

- The applicability and relevance of precedents, including the coordinate Bench decision in National Building Construction and the Supreme Court ruling in Balaji Steel Re-rolling Mills, to the facts of the present case.

- The appropriate remedy and conditions for restoration of the dismissed appeal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Jurisdiction of the Tribunal to dismiss appeals for non-prosecution or absence

Relevant legal framework and precedents:

The Court examined Section 26(5)(a) of the MVAT Act, which empowers the appellate authority to confirm, reduce, enhance, annul, or set aside assessments and remit the matter for fresh assessment. The provision does not expressly confer power to dismiss appeals for default or non-prosecution.

The Court also relied heavily on the coordinate Bench decision in National Building Construction, which interpreted Section 26(5)(a) in light of the procedural rules and held that the substantive statutory provision prevails over any conflicting procedural rules that permit dismissal for absence.

Further, the Supreme Court decision in Balaji Steel Re-rolling Mills was cited, where similar provisions under the Central Excise Act were considered. The apex court held that substantive provisions of the statute override procedural rules allowing dismissal for non-appearance, thereby requiring appeals to be decided on merits.

Court's interpretation and reasoning:

The Court emphasized the primacy of the statute over subordinate rules, stating that the Tribunal must comply with the mandate of Section 26(5)(a) to decide appeals on merits. The procedural rules permitting dismissal for non-prosecution cannot override this statutory command.

The Court noted that the Tribunal erred in dismissing the Second Appeal solely on the ground of the absence of the Petitioner's consultant or non-prosecution, without adjudicating the appeal on merits.

Application of law to facts:

Given the Tribunal's dismissal order dated 29th August 2024 and the refusal to restore the appeal on 24th October 2024, the Court found these orders contrary to the statutory mandate. The Tribunal's action was held to be without jurisdiction and hence invalid.

Treatment of competing arguments:

The Respondent-State's arguments supporting dismissal based on procedural default were implicitly rejected by the Court, which relied on binding precedents that prioritize substantive adjudication over procedural technicalities.

Conclusions:

The Tribunal lacked power to dismiss the appeal for non-prosecution and was obliged to decide the appeal on merits under Section 26(5)(a). The impugned orders were set aside accordingly.

Issue 2: Remedy and conditions for restoration of the dismissed appeal

Relevant legal framework and precedents:

The Court referred to the remedy adopted in National Building Construction, where restoration of the appeal was allowed subject to payment of costs to ensure compliance and deter frivolous or negligent conduct.

Court's interpretation and reasoning:

The Court adopted a similar approach, allowing restoration of the appeal on condition that the Petitioner pays costs of Rs. 25,000/- to the Bar Council of Maharashtra and Goa within a stipulated period.

Application of law to facts:

This condition was imposed to balance the interests of justice and procedural discipline, ensuring that the Petitioner's default did not go unaddressed but also that the substantive rights were preserved.

Treatment of competing arguments:

No specific competing submissions on costs were recorded, but the Court's discretionary power to impose costs as a condition for restoration was exercised in line with precedent.

Conclusions:

Restoration of the appeal was granted subject to payment of costs within four weeks, failing which the petition would be deemed dismissed. The restored appeal was directed to be decided on merits by the Tribunal.

3. SIGNIFICANT HOLDINGS

- "It is a settled position of law, that between a Statute and a Rule, it is the Statute, which has primacy and therefore, prevails upon the Rule."

- "While deciding the appeal, the Authority will have to be governed by the mandate of Section 26(1)(a) [sic, Section 26(5)(a)] of the Maharashtra Value Added Tax Act and decide the appeal in the manner as indicated therein, the Rule being subservient to it."

- "The Tribunal could not have dismissed the Petitioner's Second Appeal on the ground of absence of the Petitioner's Advocate/ Consultant or for non-prosecution. The Tribunal was obliged to decide the Second Appeal in the manner indicated in Section 26(5)(a), i.e., on merits."

- The Court's final determination was to set aside the impugned dismissal and refusal to restore the appeal, restore the appeal on payment of costs, and remit the matter to the Tribunal for adjudication on merits.

The core legal questions considered by the Court in this matter are:

- Whether Raw Petroleum Coke (RPC) and Calcined Petroleum Coke (CPC) fall within the phrase "Coal, including Coke in all its forms" as declared goods under Section 14 of the Central Sales Tax Act, 1956 (CST Act), thereby entitling the petitioner to reimbursement of local taxes paid under Section 15[b] of the CST Act.

- Whether the petitioner is entitled to reimbursement of Value Added Tax (VAT) paid on intra-State purchase of RPC when the converted CPC is sold in inter-State trade or commerce and Central Sales Tax (CST) is paid thereon.

- The validity and effect of the assessment and reassessment orders passed under the Assam Value Added Tax Act, 2003 (AVAT Act), particularly those under Section 42 of the AVAT Act, and whether the Commissioner of Taxes had jurisdiction to review or reverse earlier decisions recommending reimbursement proposals.

- Whether the petitioner's claims for reimbursement were barred by delay, laches, acquiescence, or failure to challenge original assessment orders.

- The procedural correctness of rejection of reimbursement claims by the Commissioner of Taxes, Assam, including the requirement of prior government approval and adherence to statutory provisions under the AVAT Act and Rules.

- The applicability of interest on delayed refund claims under Section 52 of the AVAT Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Whether RPC and CPC fall within "Coal, including Coke in all its forms" under Section 14 of the CST Act

The Court examined extensive precedent, including the landmark Supreme Court decision in India Carbon Ltd. vs. Superintendent of Taxes (1971), which held that Petroleum Coke is a form of Coke and thus included within the phrase "Coal, including Coke in all its forms" under Section 14 of the CST Act. The Court noted that despite physical and chemical differences between RPC and CPC, both are treated as the same declared goods for CST purposes. This principle was further affirmed in the Patna High Court and Supreme Court decisions in State of Bihar vs. Universal Hydrocarbons Co. Ltd. (1994) and subsequent rulings, which rejected the State's contention that CPC was a different commodity for tax purposes. The Division Bench of the Gauhati High Court in M/s India Carbon (1992) also held that treating RPC and CPC as distinct commodities for taxation would violate Article 286(3) of the Constitution and Section 15 of the CST Act.

The Court concluded that the settled legal position is that both RPC and CPC fall within the declared goods phrase and the petitioner's intra-State purchase of RPC and inter-State sale of CPC with CST paid entitles it to reimbursement under Section 15[b] of the CST Act.

Issue 2: Entitlement to reimbursement of VAT paid on RPC under Section 15[b] of the CST Act read with AVAT Act provisions

The petitioner claimed reimbursement of VAT paid on intra-State purchase of RPC, asserting that after conversion to CPC and inter-State sale with CST paid, the VAT paid was reimbursable under Section 15[b] of the CST Act. The Court referred to Section 50 of the AVAT Act and Rule 29 of the AVAT Rules, which provide the procedural framework for refund claims. The Court emphasized that Section 15[b] of the CST Act is an independent provision allowing reimbursement where local tax is paid on declared goods subsequently sold in inter-State trade with CST paid.

The Court found that the petitioner had complied with the statutory requirements, submitted refund claims within prescribed timeframes, and paid CST on inter-State sales of CPC. The audit assessments initially did not deal with the reimbursement claims, which did not amount to rejection. The Court held that silence or omission in assessment orders cannot be construed as rejection, and thus the petitioner was not required to challenge those orders as rejected claims.

The Court also noted that the Commissioner of Taxes had earlier forwarded reimbursement proposals to the Government for approval, acknowledging the petitioner's entitlement. This established that the petitioner's claims were valid and meritorious under the law.

Issue 3: Validity of reassessment orders under Section 42 of the AVAT Act and Commissioner's jurisdiction to review earlier decisions

The respondent contended that reassessment orders passed under Section 42 of the AVAT Act were void as the assessment period was time-barred and no court order authorized reassessment. The Court examined the delegation of powers under the AVAT Act and Rules, noting that the Assistant Commissioner of Taxes, who passed the reassessment orders, was a delegated authority empowered to do so. The Court held that the reassessment orders were in essence orders of the Commissioner himself and could not be overturned by the Commissioner acting as a superior authority without following appellate procedures.

The Court further held that the Commissioner did not have inherent or statutory power to review or reverse the earlier decision of forwarding reimbursement proposals to the Government, absent any express provision conferring review power. The impugned order rejecting reimbursement claims was thus a change of opinion by a successor Commissioner without jurisdiction and was illegal.

Issue 4: Effect of delay, laches, acquiescence, and failure to challenge original assessment orders

The respondent argued that the petitioner's claims were barred by delay, laches, and acquiescence, and failure to challenge original assessment orders which had attained finality. The Court distinguished between acquiescence and delay/laches, explaining that acquiescence requires active or tacit consent to a violation of a right, while laches involves passive delay. The Court found that the petitioner's claims were never rejected in original assessments, and thus there was no wrongful action to acquiesce to.

The Court further held that the petitioner was not a party to the Supreme Court case relied upon by the respondents but that the general principles of law declared by the Supreme Court are binding on all, including non-parties. The Court rejected the respondents' contention that the petitioner was a fence-sitter, noting that the petitioner had submitted claims timely and that delay in processing refunds by the authorities attracts statutory interest rather than forfeiture of claims.

Issue 5: Procedural correctness and statutory framework for refund claims and government approval

The Court reviewed the procedural provisions under Section 50 of the AVAT Act and Rule 29 of the AVAT Rules, which require refund claims to be processed by the prescribed authority, with prior approval of the Government for amounts exceeding Rs. 50 lakh. The Commissioner had forwarded proposals to the Government with reasons recorded, satisfying the procedural requirements.

The Court observed that the impugned order did not constitute a review of any passed order but was an unauthorized reconsideration of earlier proposals. Further, the Commissioner failed to consider the Government's directive to process the petitioner's claims similarly to other successful claimants, thereby overstepping his jurisdiction.

Issue 6: Applicability of interest on delayed refund claims

The Court noted that the petitioner submitted an undertaking to accept simple interest at 10% per annum from 12.07.2013 as per the Supreme Court's interim order. The Legal Remembrancer's opinion supported payment of interest at 9% per annum after the initial period. The Court directed that interest be paid as per statutory provisions and undertakings given.

3. SIGNIFICANT HOLDINGS

The Court made the following crucial legal determinations and principles, preserving verbatim excerpts where significant:

- "Petroleum Coke is one of the forms of Coke and it is covered within the phrase, 'Coal, including Coke in all its forms' under Section 14 of the CST Act and it was declared as a good of special importance in inter-State trade or commerce."

- "If a dealer purchased Raw Petroleum Coke [RPC] within the State by paying Value Added Tax [VAT] levied under the AVAT Act and the dealer after converting the purchased Raw Petroleum Coke [RPC] into Calcined Petroleum Coke [CPC], sold the Calcined Petroleum Coke [CPC] outside the State in the course of inter-State trade or commerce and the dealer had paid the Central Sales Tax under the CST Act on such sold Calcined Petroleum Coke [CPC], then the dealer would be entitled for reimbursement of the Value Added Tax [VAT] amount paid on the purchase of Raw Petroleum Coke [RPC] as per Section 15[b] of the CST Act."

- "Silence on an important issue like reimbursement of the local tax paid on the purchase of Raw Petroleum Coke [RPC] within the State in the statutory order, that is, the audit assessment order cannot amount to rejection of the claim for reimbursement under Section 15[b] of the CST Act."

- "When an authority passes an order in exercise of a power delegated to him by the delegating authority, the delegating authority cannot sit in appeal on the order passed by the delegated authority."

- "The Commissioner does not have jurisdiction to review or reverse earlier decisions forwarding reimbursement proposals in absence of any statutory power of review."

- "Delay and laches or acquiescence cannot be invoked to defeat a valid claim where there was no wrongful action or rejection of the claim at the time of original assessments."

- "The general principle of law declared by the Supreme Court is binding on all, including parties not before the Court."

- "The impugned Order dated 22.09.2022 is an order on change in opinion, without jurisdiction and is liable to be set aside and quashed."

- The Court directed the respondent authorities to process all pending reimbursement claims for the Assessment Years 2006-2007 to 2017-2018 in accordance with Section 15[b] of the CST Act and Sections 50 and 52 of the AVAT Act, within six weeks.