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The Addl. Commissioner of Sales Tax, Vat-II, Mumbai Versus M/s Agarwal Containers Pvt. Ltd.

2015 (8) TMI 1060 - BOMBAY HIGH COURT

Validity of Revisional notice issued by the Commissioner – Barred by Limitation – Doctrine of merger - Original Assessment order was passed as on 12.1.2006 - Addl. Commissioner passed the revision order passed on 28.8.2006 – period of 3 years to be computed from the date of order order or first revision order - Revenue contended that revision was not barred by limitation as assessment order and revision order was merged by applying principle of merger.

Held that:- As per section 57, C .....

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ion that there is impropriety allegedly committed in allowing G-I form – Principle could have been applied provided assessment order made originally had merged in revisional order after noticing that revisional order also deals with such exemption issue – Thus, notice was barred because order of assessment was sought to be revised and that was made prior to more than three years from issuance of notice dated 13.7.2009 – No perversity on part of Tribunal nor order passed can be termed as erroneou .....

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some material in the form of hierarchy in the department of Sales Tax and to support the submission of the Revenue that it is open for the Commissioner to exercise his revisional powers even if the appellate order is made by the Additional Commissioner. 2. All submissions of the rival parties revolved around the request of the Revenue as made by the Additional Commissioner of Sales Tax, VAT II, Mumbai, vide this Application, that the Tribunal's order passed on 29.6.2012 in Reference Applica .....

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acts and circumstances of the case, the Tribunal was justified in holding that there is no merger of assessment with Revision Order passed by Joint Commissioner of Sales Tax (Adm), Pune and hence, the Revision order passed by the Additional Commissioner of Sales Tax (VAT1), Mumbai dated 02.07.2011 was barred by limitation ?" 4. A brief factual background would be necessary so as to appreciate the contentions of Mrs.Anjali Helekar, learned Counsel appearing for the appellant as also Mr.P. V. .....

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of credit notes and increased the turnover from ₹ 2,28,68,346/- to ₹ 2,29,24,211/-. The revision order passed on 28.8.2006 resulted in increase of demand. 6. The matter came to be placed before the Additional Commissioner as the Revenue was of the opinion that the sales of packing goods sold against G-1 form to M/s.Gharda Chemicals was not admissible to sales tax exemption under G-5 notification as M/s.Gharda Chemicals was a manufacturer and packing material was not used in the pack .....

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ner of Sales Tax (Vat) 1, Mumbai was incharge of this revisional proceeding and therefore, passed an order on 13.7.2011 holding that the assessment merged in the revision order and hence, the notice dated 13.7.2009 is within the limitation of three years. He withdrew the benefit of exemption and levied tax. That revision order a copy of which is at 'Annexure C' resulted in an appeal being preferred by the respondent to the Tribunal. The appeal of the respondent, thus, was allowed and the .....

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mits that there is no substance in the contentions of the respondent and which have been accepted by the Tribunal that the principle of merger cannot be invoked. Secondly, she submits that the order of the Joint Commissioner could have been revised and the Additional Commissioner, therefore, has power, authority and jurisdiction to do so. She invites our attention to Section 57 of the Bombay Sales Tax Act, 1959 and the pari materia provisions under the Mahrashtra Value Added Tax Act, 2002. Lastl .....

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regard, he would submit that the substantive order on the appeal of the Tribunal is clear. The Tribunal has held that the Assessment for the year 2001-02 is completed on 12.1.2006. The order of Assessment is communicated to the appellant on 22.2.2006. Initially the Joint Commissioner of Sales Tax revisited the admissibility of the credit notes and revised the assessment on 28.8.2006. However, the notice of the Additional Commissioner of Sales Tax issued on 13.7.2009 is regarding withdrawing the .....

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condly, what is proposed to be withdrawn by the revision notice is the exemption of sales tax on sale against G-1 form. That is beyond three years from the date of communication of assessment order. In the circumstances and when the decision of the Additional Commissioner of Sales Tax is beyond the period of five years from the date of communication of the assessment order and the proceedings are barred by limitation, is the ground on which the appeal has been allowed by the Tribunal. Mr.Surte w .....

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is conferred and it is subject to the provisions of Section 56 and to any Rules which may be made in this behalf. The relevant part of the provisions read as under: "S.57. Revision - (1) Subject to the provisions of section 56 and to any rules which may be made in this behalf,( a) the Commissioner may, of his own motion, call for and examine the record of any order passed (including an order passed in appeal) under this Act or the rules made thereunder by an officer or person subordinate to .....

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revision proceedings is the subject matter of any proceedings pending before the Tribunal, High Court or Supreme Court; and in such a case it shall be competent for the Commissioner to decide the revision proceedings within eighteen months from the date of notice of hearing served on the assessee after the conclusion of the proceedings in the Tribunal, High Court or, as the case may be, Supreme Court. (1A) Notwithstanding anything contained in this section or any other provisions of this Act, wh .....

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h point until the decision by the appropriate forum." 10. A perusal of this provision would indicate that the Commissioner may on his own motion, call for and examine the record of any order (including an order passed in appeal) under this Act or the Rules made thereunder by an Officer or person subordinate to him and pass such order thereon as he thinks just and proper. The Proviso mandates that no notice in the prescribed form shall be served by the Commissioner under this clause namely c .....

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ressing any opinion on the issue as to whether the orders passed by the Joint Commissioner of Sales Tax are capable of being revised on a notice addressed by the Additional Commissioner and whether that satisfies the requirement of the suo motu exercise of power of revision by the Commissioner when an order is made in an appeal or revision by the officer subordinate to him. In other words, whether the Additional Commissioner could have invoked this power and revised the order of a Joint Commissi .....

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s made and the Joint Commissioner passed an revisional order which was brought to the notice of the Additional Commissioner. The Joint Commissioner scrutinized the assessment made by the Assessment Officer and he revised the taxable turnover. At that time he disallowed the amount of credit notes and increased the turnover by the figure indicated in his order dated 28.8.2006. This was the power of revision which was exercised by the Joint Commissioner and when he made the order dated 28.8.2006, w .....

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rlier which was sought to be withdrawn by the Additional Commissioner of Sales Tax and that is why he issued a notice in the Form No.40 dated 13.7.2009. He issued notice on the basis that the assessment merged in the revisional order dated 28.8.2006. 14. Precisely this exercise was interfered with by the Tribunal as it found that it had no legal sanction. The Tribunal found that the order of assessment has been already made and communicated on 22nd February,2006. That notice in the form No.40 da .....

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n account of disallowance of the amount of credit notes. That has gained finality and this revisional order dated 28.8.2006 does not speak of any impropriety nor it made any reference to the issue of sale against G-1 form. While scrutinizing this order of revisional Authority, the Additional Commissioner thought that the same failed to notice the alleged impropriety in allowing G-1 form. This was altogether a new aspect and for that to be taken into account the principle of merger will not save .....

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the order of assessment was sought to be revised and that was made prior to more than three years from issuance of notice dated 13.7.2009. 15. On such a factual finding, we do not see how the questions of law would arise. Eventually, the plea of limitation and raised was decided by taking into account the admitted facts. It was also found that the issue of merger as raised also is a mixed issue. Unless the relevant orders and issues dealt with thereunder are pointed out, these principles cannot .....

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m the date of communication of the assessment order which was sought to be revised. Once the revisional exercise was held to be barred by limitation and on the ground and for the reasons assigned hereinabove, we do not find that the reference application has been erroneously dealt with. The Tribunal reiterated this very principle. 16. For the judgment in the case of "Kirloskar Oil Engines Ltd." (supra) what has been found relevant thereunder was that the respondentdealer therein was as .....

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n 31.7.2000. The Additional Commissioner of Sales Tax by notice dated 27.8.2001 proposed to revise the order of assessment dated 31.3.1999 and the appellate order of the Deputy Commissioner dated 30.6.2000. The notice of revision was forwarded in the Form 40 on 21.12.2001 and the revision order which dealt with four issues was passed on 27.6.2005. 17. That is how the dealer filed the appeal which was allowed on 28.7.2010. The Tribunal held that the period of limitation within the meaning of prov .....

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