TMI Blog2014 (5) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule. When the Legislature makes a provision not intending to apply the principles of natural justice, this has to be accepted howsoever unpleasant it is - The intention of the Legislature is to be gathered from the language employed having regard to the context in connection with which it is employed - The primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself – Relyied upon Unique Butyle Tube Industries P. Ltd. v. U.P. Financial Corporation [2002 (12) TMI 508 - SUPREME COURT OF INDIA] - In M/s. Hindustan Unilever Limited, the ARA has given a decision that the LPG is one of the categories of other similar fuels, hence, the said amended Rule is applicable in order to disqualify any dealer to get the input tax credit - Therefore, going by the aforesaid interpretation, although the petitioners are non-applicants, the decision is binding upon them. Applicability of Section 245S of Income Tax Act – Held that:- The persons, who shall be bound by the said authority, are limited because the word 'only' after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cannot be enforced though it is binding, meaning thereby, it operates as stay automatically - Since the Hindustan Unilever Limited has already preferred an appeal and the same is pending, naturally the decision of the ARA will automatically remain stayed, but that does not mean that the decision is obliterated and erased, and so long as it is not set aside, it remains, but may not be operative - Thus the orders, which have been passed relying on the decision of the ARA, will not be operative to the extent of which reliance has been placed. Upon reading of the entire machinery of Section 67 of the Act, it appears that the petitioners, being non-parties in the said Advance Ruling proceedings, cannot prefer any appeal directly to Tribunal against the decision of the ARA thereunder, but their remedy lies to prefer appeal under Section 33 after preferring an appeal u/s 31 of the Act - The decision of ARA can be challenged before Tribunal in the appeal itself - Therefore, writ petitions are disposed of giving liberty to all the petitioners to resort to alternative remedy in accordance with law – This Court has not decided the case on merits nor decided the legality and validity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR.Com.6/2011, dated 18-07-2012 under Section 34 of the said Act. 3. It is the contention of all the petitioners that the LPG cannot be treated to be other similar fuels, as the same is not used in the furnaces or boilers of the factories or manufacturing units or processing units. According to them, similar fuels must constitute and mean to that of the nature and character of the furnace oil and LSHS. Besides, the mode of usage is not the same as is described in the said amended Rules because none of the petitioners is using the LPG in the factories or manufacturing or processing units. They claim that the decision of the ARA in the case of M/s. Hindustan Unilever Limited holding that the LPG, which is a fuel, purchased from other dealers and used for the purpose of heating in the oven and in the manufacturing unit or processing unit will not be eligible for input tax credit, as per Rule 20(2)(q) of the Rules, is totally absurd and is patently wrong conclusion arrived at in the factual matrix of each case. It is their contention further that the LPG cannot be covered by Rule 20(2)(q) of the Rules since it is not akin to furnace oil and LSHS in terms of the properties, config ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner and the income tax authorities subordinate to him, and in respect of the transactions in relation to which the Ruling had been sought. Such decision will not be applicable to third parties irrespective of the nature of the transaction takes place. Going by the aforesaid analogy, he submits that if the provision of Section 67 of the Act is read and construed carefully, it would appear that the decision of the ARA will be binding upon the applicant, who had sought for it, and all the officers other than the Commissioner, and not upon the third party dealer. Therefore, the decision of ARA cannot be binding upon the petitioners and each of them. Hence, the impugned assessment orders passed relying upon the decision of ARA is liable to be set aside. 7. Learned counsel for the petitioners has cited a decision of the Supreme Court in case of COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR OF INCOME TAX, BANGALORE 2012(11) SCC 224 to support his arguments as above. He submits that the Supreme Court has allowed and explained the scope and purport of Section 245S of the Income Tax Act and it was held that the decision of ARA is binding upon those persons which are mentioned in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority shall be binding:- (i) on the applicant who had sought clarification; (ii) in respect of the goods or transaction in relation to which a clarification was sought; and (iii) on all the officers other than the Commissioner (emphasis supplied) 11. Upon plain reading of the above provision, the decision of the ARA would be binding (a) on the applicant who had sought for clarification, (b) on all the officers other than the Commissioner, and (c) in respect of the goods or transactions in relation to which a clarification was sought. The word 'or' denotes for both. Therefore, decision of the ARA will be binding upon any person, who has dealt in the same goods in relation to which decision of ARA is rendered, irrespective of the fact that any decision is sought for. To clarify this, the decision of the ARA will be binding upon any dealer, even though he has not applied for ruling, if he deals in the same goods in relation to which the decision has been rendered. Since the literal reading of the above statutory provisions emerges an intelligible result, the Court cannot interpret the same in other way. It is settled proposition of law made by a catena of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the word 'only' after the word 'binding' makes it clear that it would be binding on the applicant who had sought it, thereby no other person, and again on the Commissioner and the other income tax authorities subordinate to him in respect of the applicant and the said transaction. Therefore, it is binding in case of particular transaction where any assessee or income tax authorities were the parties. It is very significant that the word 'goods' like in Section 67(4) of the Act is missing in Section 245S of the Income Tax Act. Apart from this, the provisions of those two sections are similar, but it has been made significant difference with the insertion of the word 'goods' in section 67(4) of the Act. 14. Learned counsel for the petitioners has relied on a decision of the Supreme Court in COLUMBIA SPORTSWEAR COMPANY's case (supra) to support his contention that the decision of ARA has no manner of application on the issue involved herein. The Supreme Court in that case decided the only question whether the Advance Ruling pronounced by the Authority can be challenged by the applicant or by the Commissioner or any income tax authority s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARA would bind such other dealers also. 17. The aforesaid expressions in the previous decision clearly lend support to our finding as above. 18. It is contended in the petitions also that the decision of the ARA has been rendered only at the instance of Hindustan Unilever Limited and the same is made applicable to these petitioners who were not heard at all. Meaning thereby, the said decision is hit by the principle of natural justice, as the petitioners and each of them were not being heard at the time of rendering the Advance Ruling. It is very unfortunate that the Legislature has made the Ruling binding upon the other dealers, who have not asked for clarification. When the Legislature makes a provision not intending to apply the principles of natural justice, this has to be accepted howsoever unpleasant it is. It is settled proposition of law that the Legislature can make such provision in its own wisdom, and no legislation can be held to be invalid or for that matter, the provisions contained therein shall be held to be constitutionally invalid because of the missing of the principle of natural justice. 19. The fundamental rule of construction of a taxing statute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate Tribunal has got any impact as to applicability of the same. 22. It would appear from the proviso of clause (iii) of sub-section (4) of Section 67 of the Act that if the dealer, at whose instance the ruling was rendered, files appeal, the binding effect of the same ceases temporarily. For proper appreciation on this aspect, we reproduce the said proviso as follows: Provided the dealer does not file an appeal before Sales Tax Appellate Tribunal within 30 days of the Ruling in the manner prescribed. 23. In the decision of this Court in TIRUPATI CHEMICALS'S case (supra), at the bottom of page 100, it has been observed in similar lines. Thus upon reading of the said proviso, we are of the view that the said decision of the ARA, so long as the appeal is not decided, cannot be enforced though it is binding, meaning thereby, it operates as stay automatically. We have to conclude that since the Hindustan Unilever Limited has already preferred an appeal and the same is pending, naturally the decision of the ARA will automatically remain stayed, but that does not mean that the decision is obliterated and erased, and so long as it is not set aside, it remains, but ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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