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2015 (7) TMI 387 - GUJARAT HIGH COURT

2015 (7) TMI 387 - GUJARAT HIGH COURT - [2016] 89 VST 56 (Guj) - Principle of res judicata in taxation - Rate of VAT on Noodles - 4% or 12.5% - Classification - Covered by Entry 9(3) of Schedule I or Entry No.87 of Schedule II to the Gujarat Valued Added Tax Act - whether sale of Maggi, Noodles equating it to “Farsan” sold as branded product - Validity of order passed beyond the scope of show cause notice (SCN) - Held that:- there cannot be any dispute that generally, the principle of res judica .....

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case, where the officer and/or authority is of the opinion that the earlier decision though not challenged and/or even implemented for years is not a good decision and/or not in the interest of the revenue, the revenue is not remediless. However, as observed hereinabove, the Assessing Officer being lower in rank cannot be permitted to ignore and/or cannot be permitted to take a contrary view than the view taken by the higher forum, more particularly, when in the subsequent years, there are no ch .....

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old in sealed container under a brand) falling under Entry 22 and liable to be taxed at 4%. However, by impugned order, the adjudicating authority has passed the impugned order holding that product “Maggi Noodles” would fall within Entry 87 (Residuary Entry) and liable to be taxed at 12.5% plus additional duty. Under the circumstances also, the impugned order cannot be sustained. - Decided in favor of assessee on technical grounds. - SPECIAL CIVIL APPLICATION NO. 15842 of 2012 With SPECIAL C .....

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are heard, decided and disposed of together by this common judgment and order. SCA No.15842 of 2012:- 2.0 By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, direction and/or order to quash and set aside the impugned order dated 12.10.2012 passed by the respondent No.1 herein - Deputy Commissioner of Commercial Tax, Range IV, Ahmedabad (Annexure A to the petition), by which the petitioner is directed to pay value added tax at th .....

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the respondent No.1. 2.2 The petitioner has also prayed for an appropriate writ, direction and/or order directing the respondent No.1 to follow and adhere to the judgment dated 9.9.1986 passed in Appeal No.11 of 1984 passed by the learned Gujarat Sales Tax Tribunal (as it was in existence on that day). SCA Nos.5750 of 2014 & 6193 of 2014:- 3. In both these petitions, the prayers are made by the common petitioner Nestle India Limited challenging similar orders challenged in Special Civil App .....

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ure and sale of various food products including Noodles under various internationally acclaimed brands, such as MAGGI, NESCAFE and NESTLE. 3.2 It is the case on behalf of the petitioner that under section 5(1) of the VAT Act, the goods which are specified in Schedule I are exempt from tax. The case of the petitioner for its product Noodles is covered by Entry 9(3) of Schedule I to the VAT Act. The goods specified in Entry 48(iii)(c) of Schedule II would be liable to tax at 4% and the goods not s .....

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petitioner submitted its reply dated 10.10.2012 pointing out that the classification of the product Maggi Noodles is already concluded and stand settled on the basis of the decision of the Gujarat Sales Tax Tribunal in Appeal No.11 of 1984 in the petitioner's own case, which has been consistently followed for the last two decades without any objection whatsoever by the concerned authorities. 3.4 It appears that earlier in the year 1984, the petitioner applied for determination under section .....

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ved by and dissatisfied with the aforesaid determination order, the petitioner preferred appeal before the learned Sales Tax Tribunal being Appeal No.11 of 1984. It was the case on behalf of the petitioner that product Maggi Two Minutes Noodles is covered under Sub Entry (d) of Entry 1 of Schedule I to the Sales Tax Act and as such, tax free. It was the case on behalf of the petitioner that the product viz. Maggi Two Minutes Noodles is quite akin to Sev and therefore, covered by the term Sev men .....

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earned Tribunal further passed an order that any amount of tax paid by the original appellant - petitioner, if any, to the Government according to the determination order passed by the learned Deputy Commissioner shall be refunded to it. 3.6 That upto the year 31.3.2006, the adjudicating authority/Assessing Officers in respect of Noodles sold by the petitioner accepted that the Noodles would fall under the category Sev made by wheat flour or maida and was not liable to tax under the Sales Tax Ac .....

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Entry 9(3) of Schedule I to the VAT Act remains the same as that of original Entry 10(3) of Schedule I to the Sales Tax Act i.e. Sev made out of wheat flour or maida and it has not undergone any change whatsoever. 3.8 That on or about 19.6.2010, the Assistant Commissioner of Commercial Tax, Unit No.21, Ahmedabad issued a notice upon the petitioner proposing to impose tax on sales of Maggi Noodles at the rate of 12.5% by treating the same as covered by Residuary Entry 87 of Schedule II to the VA .....

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e to be completed and assessed the Maggi Noodles as Sev under Entry 9(3) of Schedule I to the VAT Act. 3.9 That thereafter, respondent No.1 herein issued a notice dated 30.8.2012 seeking to levy tax on the sales of Noodles by treating it as Farsan sold as branded product relying on the notification dated 29.3.2006 being No.GHN/15 VAT-2006. At this stage, it is required to be noted that Entry 22 of Schedule I to VAT Act exempts inter alia Farsan & Eatables except when sold in a sealed contain .....

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o 1.4.1992 and after 1.4.1992, under Sub Entry (3) of Entry 10 of schedule I to the Sales Tax Act. 3.10 That by impugned order dated 12.10.2012 at Annexure A, the respondent No.1 has accepted the petitioner's contention that it is not liable to be taxed at 4% on Farsan & Eatables . However, it is held that the petitioner is liable to be taxed on their product Maggi Noodles at 12% with 2.5% additional tax under Entry 87 of Schedule II to the VAT Act i.e. Residuary Entry. Thereafter, the p .....

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2.5% additional tax under Entry 87 of Schedule II to the VAT Act and the consequential notice for the amount assessed dated 12.10.2012 (Annexure AA), the petitioner has preferred the present Special Civil Application No.15842 of 2012 for the aforesaid reliefs. 4. Similar orders are passed with respect to different parties/assessment years, which are the subject matter of Special Civil Application Nos.5750 of 2014 and 6193 of 2014. 5.0 Shri SN Soparkar, learned Counsel appears with Shri Amar Bha .....

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les , which is falling under Entry 9(3) of Schedule I to the VAT Act i.e. Sev , which, as such, is tax free. 5.3 It is submitted that with respect to relevant Entry under the Sales Tax Act, the very product Maggi Two Minutes Noodles and in the case of the very petitioner, was held to be Sev falling under exemption i.e. Sub Entry (d) of Entry 1 of Schedule I to the Sales Tax Act by the Sales Tax Tribunal in Appeal No.11 of 1984 by the judgment and order dated 9.9.1986. It is submitted that the le .....

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is submitted that thereafter, after 1.4.1992, the aforesaid Entry was renumbered as Entry 10(3) and Sev made out of wheat flour or maida was falling under Entry 10(3) of Schedule I of Sales Tax Act. It is submitted that under the VAT act, the product/goods Sev made out of wheat flour or maida is falling under Entry 9(3) of Schedule I to VAT Act. It is submitted that there is no change in the wording of above entries under the Gujarat Sales Tax Act and thereafter, under the VAT Act. It is submit .....

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he year 31.3.2006, all the authorities/Assessing Authorities in respect of Noodles sold by the petitioner had accepted that Noodles would fall under category Sev made out of wheat flour or maida and therefore, not liable to be taxed under the Sales Tax Act. It is submitted that thereafter, all of a sudden, it is not open for the respondent to consider/treat the Noodles under Entry 87 of Schedule II to the VAT Act liable to be taxed at 12.5% plus 5% additional tax. It is submitted that therefore, .....

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ble for the respondent to take a contrary view than that of the Tribunal in Appeal No.11 of 1984 not to treat the product Maggi Two Minutes Noodles as Sev and hold that the product Maggi Two Minutes Noodles would fall under Entry 87 of Schedule II to the VAT Act. It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that even, otherwise the impugned order passed by the respondent dated 12.10.2012 holding that the product Maggi Two Minutes Noodles would f .....

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d that therefore, the petitioner was never called upon to show cause why the product Maggi Noodles may not be treated to have fallen under Entry 87 of Schedule II to the VAT Act. It is submitted that therefore, as such, no opportunity was given to the petitioner to show cause as to why the product Maggi Noodles may not be treated to have been fallen under Entry 87 of Schedule II to the VAT Act. It is submitted that therefore, the impugned order holding that the product Maggi Noodles of the petit .....

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tax and when the same has been accepted by the department for approximately 20 years and thereafter, all of a sudden, it is not open for the respondent to treat the said product Maggi Two Minutes Noodles falling within Entry 87 of Schedule II to VAT Act. 5.7 It is further submitted by Shri Soparkar, learned Counsel appearing on behalf of the petitioner that the impugned order suffers from non-application of mind, inasmuch as the petitioner along with its reply annexed copy of order dated 26.7.20 .....

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ng on behalf of the petitioner has vehemently submitted that while passing the impugned order, respondent No.1 has failed to appreciate that once the goods are covered by exemption, they cannot be taxed even if there is any other specific Entry in any other Schedule for taxable goods. In support of his above submissions, he has relied upon the decision of Hon'ble Supreme Court in case of Fenoplast Vs. State of A.P. And others reported in (1998) 8 SCC 185 as well as in the case of Kothari Pro .....

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sion of the Hon'ble Supreme Court in case of Mayuri Yeast India Private Ltd. Vs. State of Uttar Pradesh and another reported in (2008) 5 SCC 680. 5.10 It is submitted that even otherwise, the impugned order passed by the respondent is required to be quashed and set aside, as the same is hit by the provisions of constructive res judicata, inasmuch as the said order seeks to re-agitate the same issue of classification of the impugned product, which stands settled by the judgment of the Sales T .....

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ly, para 26 of the said decision in support of his submission that it is not appropriate to allow the reconsideration of any issue for subsequent assessment years if the same fundamental aspect permeates in different assessment years. 5.12 Shri Soparkar, learned Counsel appearing on behalf of the petitioner has also heavily relied upon the decision of the Hon'ble Supreme Court in the case of BSNL V. Union of India reported in (2006) 3 SCC 1, more particularly, para 20 of the said decision an .....

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orted in (2008) 8 SCC 369 in support of his above submissions. 5.14 Shri Soparkar, learned Counsel appearing on behalf of the petitioner has also relied upon the decision of the Division Bench of this Court in case of E I Dupont India Private Limited and another V. Union of India and others dated 25.10.2013 in Special Civil Application No.14917 of 2013 and other allied petitions in support of his submission that the respondent No.1 being the subordinate to the learned Tribunal, was bound to foll .....

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others Vs. Kamlakshi Finance Corporation Ltd. reported in AIR 1992 SC 711 in support of his submissions that the respondent authority, as such, is/was bound to follow the binding decision of the Tribunal even while maintaining the judicial discipline. Making the above submissions and relying upon the above decision, it is requested to allow the present Special Civil Application and grant the relief, as prayed for. 6.0 Present petition is opposed by learned AGP Shri Jaimin Gandhi appearing on be .....

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lved and whether the Noodles may be considered as Sev or not is a question of fact and therefore, the petitioner should be relegated to avail the alternative remedy by way of appeal and therefore, the present petition may not be entertained. Shri Gandhi, learned AGP has vehemently submitted that as observed by the Hon'ble Supreme Court in the case of Union of India V. VTR Verma reported in AIR 1957 SC 882 and in the case of Thansingh Nathmal V. Superintendent of Taxes reported in AIR 1964 SC .....

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relied upon the decision of the Hon'ble Supreme Court in the case of Tithagpur Paper Mills Ltd. V. State of Orissa reported in AIR 1983 SC 603 (para 12). 6.3 Now, so far as the contention on behalf of the petitioner that in view of the earlier decision of the Tribunal dated 9.9.1986 in Appeal No.11 of 1984, the impugned order of assessment cannot be sustained on the principles of res judicata/consistent and binding precedent of judicial order of the Tribunal is concerned, it is vehemently su .....

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, Kamladevi Jhawar 4. 211 ITR 635 (KER), CIT V. Kalpetta Estates Ltd. 5. 49 ITR 137(SC), New Jahangir Vakil Milks Ltd. 6. 257 ITR 242(DEL), CIT V. Sohanlal 7. 119 Taxmann 1 (MP), Lachhiram Puranmal 8. 161 ITR 234(BOM), Baijnath Brijmohan and Sons Pvt. Ltd. V. CIT 9. (1992) 60 Taxmann 248, Radhasoami Satsang Vs. CIT 6.4 It is vehemently submitted that as observed by the Hon'ble Supreme Court in the case of Radhasoami Satsang (supra), there cannot be a wide application of the rule of consisten .....

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dherence to the rule of consistency would lead to enormous results, for the reason that it would endanger the unequal application of laws and direct various authorities to adopt varied interpretations to suit individual assessee. 6.5 It is further submitted by Shri Gandhi, learned AGP that merely because order of Tribunal in earlier years is against the revenue, it is not a bar to pass assessment order against the assessee in the subsequent year. In support of his above submissions, Shri Gandhi, .....

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years. It is submitted that even on facts, the respondent authority is justified in passing the impugned order. It is further submitted that even, otherwise, in the years, the ingredients of Maggi has been changed and therefore, also, the Assessing Officer is justified in passing the impugned order. 6.7 It is further submitted that even otherwise, the order passed by the learned Tribunal dated 9.9.1986 passed in Appeal No.11 of 1984, upon which, much reliance has been placed by the petitioner i .....

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8. 6.8 It is submitted that the contention on behalf of the petitioner that in case, the Assessing Officer follows the earlier orders passed by the learned Tribunal and passes an order in favour of the assessee, in that case, the revenue will be able to challenge the order before the learned Tribunal is concerned, it is submitted that the aforesaid is actually premature as there is possibility that the Tribunal may take a view in favour of the revenue. It is submitted that the Tribunal may even .....

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ter at the relevant time, providing the exemption to Sev , the purpose of exemption to Sev was to provide employment to women in Gujarat. It is submitted that here the manufacturing of Noodles neither takes place in Gujarat nor it provides employment to women. It is submitted that the aforesaid relevant aspect either was not brought to the notice of the learned Tribunal at the time of deciding Appeal No.11 of 1984 nor the same has been considered by the learned Tribunal while deciding Appeal No. .....

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e is also relevant to consider the real object and purpose of providing exemption. It is submitted that the aforesaid relevant aspect was not considered by the learned Tribunal while passing the order in Appeal No.11 of 1984. It is submitted that therefore, on true interpretation and on considering the object and purpose of providing exemption to Sev , in the facts and circumstances of the case and as it is found that the manufacturing of Noodles neither takes place in Gujarat nor it provides em .....

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1 It is further submitted by Shri Gandhi, learned AGP that as rightly held by the respondent authority, product Noodles manufactured and sold by the petitioner shall not fall within Entry 22 of Schedule II, as Farsan are ready to eat items and Noodles is not ready to eat items and therefore, it is not Farsan . It is submitted that therefore, the respondent authority has rightly held that Maggi Noodles shall fall within Entry 87 and is liable to be taxed at 12.5% plus 2.5 % additional duty. It is .....

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v i.e. falling under Entry 9(3) of Schedule I. It is submitted that therefore, the impugned order passed by the respondent - assessing authority is absolutely just and proper and is not required to be interfered with by this Court in exercise of powers under Article 226 of the Constitution of India. Making above submissions and relying upon the above decisions, it is requested to dismiss the present petition. 7.0 Heard learned advocates appearing on behalf of the respective parties at length. 8. .....

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dmitted after hearing the learned AGP, the Division Bench, as such, overruled the said objection and has admitted the present Special Civil Application by observing that several issues purely on legal consideration arise and therefore, the petitioner may not prefer appellate remedy. Under the circumstances, when after considering the objection with respect to maintainability of the present petition in view of the statutory remedy available available, when the Division Bench had earlier thought i .....

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nd whether in the facts and circumstances of the case, the principle of res judicata will be applicable in light of the decision of the learned Sales Tax Tribunal dated 9.9.1986 in Appeal No.11 of 1984? 8.2 While deciding and considering the aforesaid main questions, entries in the erstwhile Gujarat Sales Tax Act and the subsequent entries under the VAT Act are required to be referred to so as to appreciate whether there is any material change in the respective entries under the erstwhile Gujara .....

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ecial Civil Applications under the VAT Act are as under: SCHEDULE - I [See: sub-section(1) of section 5] GOODS, THE SALES OR PURCHASE OF WHICH ARE EXEMPT FROM TAX Sr. No. Description of goods Conditions and exceptions subject to which exemption is granted. 1 2 3 22 Farsan and eatables (other than sweetmeats) as the State Government may by notification in the Official Gazette, specify for the purpose of this Entry. Note:-(1) refer-Noti.No.(GHN- 15)VAT-2006/CH-I(22)(1) TH dtd 29.3.2006 (2) Sales o .....

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he rupee levied an additional tax on the turn over of sales of goods w.e.f. 1-4-08. 8.4 From the above entries, it appears that under the Gujarat Sales Tax Act, prior to 1.4.1992 and thereafter, upto the Gujarat Value Added Tax Act, 2003 came into force from 1.4.2006 Sev made out of wheat flour or maida was exempt from payment of sales tax as if fall within exemption Entry 1(d) of Schedule I to the Gujarat Sales Tax Act (prior to 1.4.1992) and under exemption Entry 10(3) under the Gujarat Sales .....

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Residuary Entry of goods other than those specified in Schedule I or Schedule III are chargeable to tax at 12 ½ - 1. 8.5 Therefore, it is the case on behalf of the petitioner that Maggi Noodles would fall under Entry 9(3) of Schedule I of the VAT Act, as the same is held to be Sev as per the decision of the Sales Tax Tribunal dated 9.9.1986 in Appeal No.11 of 1984. The Assessing Officer/determination authority has taken subsequently contrary view and it is held that on the goods/product .....

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Noodles , which is held to be Sev , no sales tax is leviable as it is exempt as they will fall under exemption Entry 1(d) of Schedule I to the Gujarat Sales Tax Act. It is required to be noted that the said judgment and order passed by the Sales Tax Tribunal had attained finality, inasmuch as, not only the revenue had not challenged the same before the higher authority/forum, all throughout the Maggi Noodles has been considered as Sev and on sale of the same, the petitioner has been granted the .....

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ame into force, Sev made out of wheat flour or maida is falling under Entry 9(3) of Schedule I to the Value Added Tax Act,2003 and the Sev made out of wheat flour or maida is exempted from payment of sales tax/VAT. It is required to be noted that upto the year 31.3.2006, in all the assessments in respect of the Noodles sold by the petitioner, the department had accepted that the Maggi Noodles would fall under category Sev made out of wheat flour or maida and was not liable to tax under the Gujar .....

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missioner of Commercial Tax, Unit No.21, Ahmedabad issued notice upon the petitioner proposing to impose tax on sales of Maggi Noodles at the rate of 2.5% by treating the same as covered by Residuary Entry 87 of Schedule II to the VAT Act for AY 2006-07, to which the petitioner gave a reply and submitted that the Noodles would be covered by Entry 9(3) of Schedule I to the VAT Act and would be exempted from tax and as such, the Assessing Officer accepted the same and held that the Noodles being S .....

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the petitioner should not be subjected to tax on the sale of Maggi Noodles treating it as Farsan sold as branded product i.e. at 4%, despite the assessment order passed by the Sales Tax Tribunal dated 9.9.1986 in Appeal No.11 of 1984 treating the Maggi Noodles as Sev falling under Entry 1(d) of Schedule I to the Gujarat Sales Tax Act exempted from tax, by impugned order, the Assessing Officer - Deputy Commissioner (Assessment) has held that the petitioner is liable to pay tax on sale of Maggi N .....

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arat Sales Tax Act had attained finality and not only attained finality, but even the department had granted exemption to the petitioner for all these years upto 2007-2008 and there is no change in the wording of the erstwhile Entry 1(d) of Schedule I to the Sales Tax Act prior to 1.4.1992 under Entry 10(d) of Schedule I to the Gujarat Sales Tax Act after 1.4.1992 and even under Entry 9(3) of the Gujarat VAT Act. 8.9 It is also the case on behalf of the petitioner that even otherwise, the impugn .....

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s submitted that therefore, the impugned order has gone beyond the scope and ambit of the show cause notice. 8.10 On the other hand, it is the case on behalf of the revenue that as such, on the goods manufactured and sold Maggi Noodles which is under brand and the object and purpose for which the Sev was exempted from payment of tax under the Sales Tax Act even subsequently Gujarat VAT Act, the petitioner is not entitled to the exemption from payment of tax on manufacture and sale of Maggi Noodl .....

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Sev . 8.11 As observed hereinabove in view of the decision of the Tribunal, Maggi Noodles has been treated as Sev falling within exemption Entry 1(d) of Schedule I to the Gujarat Sales Tax Act and therefore, exempted from payment of tax. As observed herein above, the subsequent entries in the Gujarat Sales Tax Act - Entry 10(d) of Schedule I to the Gujarat Sales Tax Act w.e.f. 1.4.1992 and even Entry 9(3) of Schedule I to the VAT Act are absolutely similar/same and para materia and there is no .....

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considered. 8.12 First of all, we shall deal with the decisions relied upon by the learned Counsel appearing on behalf of the petitioner. 8.12.1 In the case of Ponds India Limited (supra), it has been observed and held by the Hon'ble Supreme Court that if an Entry had been interpreted consistently in a particular manner for several assessment years, ordinarily, it would not be permissible for the revenue to depart there from unless there is any material change. In the aforesaid decision, the .....

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in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision or where the earlier decision is per incuriam. However, these are fetters only .....

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further, but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. It is observed and held by the Hon'ble Supreme Court that the revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it. In the aforesaid decision, the Hon'ble Supreme Court has referred to para 16 and 17 of the decision of the Hon'ble Supreme .....

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not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. 17. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter - and if there was no change it was in support of the assessee - we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of Income Tax in the earlier proceedings, a different and contradictory stand .....

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the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified. In para 6 to 8 , the Hon'ble Supreme Court has observed as under: 6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not .....

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to the orders of authorities higher to them in the appellate heirarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities; The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function u .....

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hy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. 7. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the department would lose revenue and would also have no remedy to have the matter rectified is also incorrect. Section 35-E confers adequate powers on the department in this regard. Under Sub-section (1), where the Central Board of Direct Taxes come across any order pass .....

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e Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order and there is a further right of appeal to the department. The position now, therefore, is that,if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the App .....

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same officer.He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under Section.35-E (1) or (2) to keep the interests of the department alive. If the officer's view is the correct one, it will no doubt be finally upheld and the Revenue will get the duty, though after some delay which such procedure would entail. 8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional S .....

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The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them. 8.12.4 In the case of Claris Lifesciences Ltd. and another Vs. Union of India, the Division Bench of this Court in Special Civil Application No.3022 of 2013, when despite the bindin .....

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and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier peti .....

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y and/or lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Time and again the Hon ble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Still it appears that message has not reached the concerned authorities. In the recent decision in the case of Claris Lifesciences .....

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ourt particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allowed. Both the show cause notices dated 21.8.2012 and 22.1.2013 are quashed and struck down. It appears that still the message has not reached the concerned authorities .....

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of proceedings and lessen the burden of the courts. Being a part of the justice delivery system. All efforts should be made by the authorities/quasi judicial authorities and judicial authorities to see that there is no multiplicity of proceedings and to pass the orders considering the binding decisions. It would also avoid unnecessary harassment to the parties as well as the unnecessary expenditure. 8.13 Now, so far as the decisions, upon which the learned AGP has relied, which are referred to h .....

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ity, inasmuch as the same is not challenged and the decision of the higher forum has been followed consistently for number of years, unless there are change circumstances in the subsequent assessment years. Unless there are change circumstances, in the subsequent years, in case of interpretation of Entry i.e. whether a particular goods fall in a particular Entry or not and consequently, on the said goods, there is exemption leviable or not, the subordinate authority even on the ground of judicia .....

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e authority would be to pass an order following the earlier binding decision of the higher forum and thereafter, the revisional authority either may take the order in suo motu revision and thereafter, the matter may be carried to the Tribunal (in the present case, VAT Tribunal) and in that case, the Tribunal being Coordinate Bench may either follow the earlier decision of the Tribunal (Coordinate Bench) or may refer the matter to the Special Bench/Full Bench and if the Tribunal concurs with the .....

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wever, as observed hereinabove, the Assessing Officer being lower in rank cannot be permitted to ignore and/or cannot be permitted to take a contrary view than the view taken by the higher forum, more particularly, when in the subsequent years, there are no change circumstances and the decision of the higher forum (in the present case, learned Tribunal), has been acted upon and implemented for the years. 8.13.1 Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court .....

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observed and held that the order passed without jurisdiction renders the order ab initio because absence of jurisdiction goes to the root of the matter and such a defect is not curable at all. In the said decision, it is observed by the Hon'ble Supreme Court that every order passed in a wrongful manner by an authority having jurisdiction is not a nullity, but an irregularity or illegality which can be cured by passing a fresh order. Therefore, the observations made by the Hon'ble Supreme .....

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, the assessee was held not to be carrying on any trade, however, for the subsequent assessment years, the assessee was found to be a dealer in shares and securities and to that, it was observed that there is nothing as res judicata in income tax matters. Therefore, in the case before the Hon'ble Supreme Court, it was a case of changed circumstances with respect to the subsequent assessment years. 8.13.3 Similarly, other decisions relied upon by Shri Gandhi, learned AGP of various High Court .....

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ll be applicable to the facts of the case on hand. 8.14 Even, otherwise the impugned order passed by the Assessing Officer cannot be sustained, as the same is beyond the scope and ambit of the show cause notice dated 30.8.2012. It is required to be noted that by show cause notice dated 30.8.2012, the petitioner was called upon to show cause why Maggi Noodles shall not be treated as Farsan and Eatables (except sold in sealed container under a brand) falling under Entry 22 and liable to be taxed a .....

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and purpose of granting the exemption for the product Sev falling under exemption Entry 1(d) of the Gujarat Sales Tax Act. It is submitted that as per the speech made by the Hon'ble Finance Minister on the floor of the house while declaring the exemption for the product Sev , the object and purpose was to give benefit to the women and to encourage Home Made Sev and for upliftment of the women. It is the case on behalf of the State that it was never the intention to give exemption to such mul .....

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, as such, the judgment and order passed by the learned Sales Tax Tribunal dated 9.9.1986 in Appeal No.11 of 1984 is not under challenge. For whatever reason, the State did not challenge the aforesaid order passed by the learned Tribunal and granted the benefit of exemption to the petitioner on the manufacture and sale of Maggi Noodles till 2006-2007. As observed hereinabove, still the remedy available to the revenue/State would be to carry out the matter upto the Tribunal or this Court as obser .....

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