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TMI Blog2019 (5) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... Writ in nature of Certiorari or any other appropriate Writ declaring that the grant of prospective effect would operate in terms of section 52(2) of the BST Act, for all the periods/transactions up to the date of passing of the order by the Tribunal on 20/01/2015 and the decision of the Hon'ble High Court on merit would be applicable only to the periods/transactions after 20/01/2015. (b) Writ of Certiorari or a Writ in nature of Certiorari or any other appropriate Writ for quashing and setting aside the totally illegal and arbitrary Assessment Orders passed for the period 2013-14 as illegal, unreasonable, untenable and vindictive and without jurisdiction to the extent it is passed contrary to the directions of this Court in Writ Petition No. 2217 of 2015 dated 22nd March 2018 and to grant prospective effect to its judgment and protect the Petitioner for all the periods up to 20th January 2015. (c) A Writ of Certiorari or a Writ in nature of Certiorari or any other appropriate Writ for quashing and setting aside, the Assessment Order for the period 2011-12 to the extent it is passed contrary to the order and the judgment passed by this Hon'ble Court in Writ Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DQ was filed by BPCL. In terms of agreement dated 24/08/1992 entered into by and between BPCL and RIL, it was agreed that BPCL shall provide to RIL, through a dedicated pipeline, kerosene to enable RIL to remove/extract N-Paraffin/ Special cut kerosene for manufacture of Linear Alkyl Benzene (for short 'LAB'). RIL, in turn, under the agreement was obliged to return the same kerosene confirming to BIS standard to the supplier BPCL. 6. Thus, BPCL by filing the determination application on 21/04/1992, requested the Commissioner-respondent No.2 to determine the following three questions : (a) Whether sale of KO (LABFS) by BPCL to RIL (vide sale invoice no. 000900 dated 25th April 1992 is liable to tax. (b) Whether the return stream i.e. return of Kerosene by the RIL to BPCL (vide sales return credit note no. 147857 dated 1st May 1992) would be legally allowable as sales return or whether that return will amount to purchase of Kerosene by BPCL from RIL. (c) Whether subsequent sale of kerosene effected by BPCL (vide sale invoice no. 357494 dated 21st May 1992) out of return stream is liable to tax. 7. The Commissioner decided, in answer to first question, that the sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018. Even Review Petition filed by the petitioner RIL came to be dismissed by the Hon'ble Supreme Court on 15/11/2018. 13. The State of Maharashtra, being aggrieved by that part of the judgment and order of this Court dated 22/03/2018, whereby this Court has given prospective effect to the order of the MSTT under section 52(2) of the BST Act, filed Special Leave Petition (Civil) Diary No.34461 of 2018. The Special Leave Petition, however, came to be dismissed. 14. It is the case of the petitioners that as prospective effect is allowed by this Court to the order of the MSTT, the petitioners applied for rectification under section 24 of the MVAT Act. By a communication dated 25/05/2018, the petitioners had received order dated 23/10/2017 being assessment order for the financial year 2011-12 raising exorbitant demand by disallowing the goods return claim and treating the same as taxable. The assessment is topped with levy of interest and penalty. The petitioner was served with yet another assessment order dated 17/04/2018 for the period 2013-14. This period is also prior to the date of MSTT's order dated 20/01/2015. 15. Simply put, it is the petitioner's case that once this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also to BPCL. 18. Learned Senior Counsel also submitted that this Court while holding that the MSTT was unjustified in not granting prospective effect to its judgment and order dated 20th January 2015, also said that "however, considering that there has been a long and checkered history between the parties, we think that it would be in the fitness of things, if the same was decided by us in the present proceedings especially when both parties have addressed us extensively on this issue." 19. Learned Senior Counsel would further submit that ultimately, this Court went on to hold that this was a fit case where the MSTT ought to have exercised its discretion and granted prospective effect to its judgment and order. Learned Senior Counsel urged that having answered thus on the issue of prospectivity and as even the challenge by State of Maharashtra to the judgment and order of this Court having failed before the Apex Court, the order passed by this Court dated 22nd March 2018 has thus attained finality and has a binding effect. Therefore in the submission of the learned Senior Counsel, the decision of this Court is binding on respondent No.3. Learned Senior Counsel would su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the annextures thereto. 22. The issue that arises for consideration is whether the impugned order denying prospective effect to the assessment from the date of MSTT order dated 20/01/2015 is unjustified. Admittedly, order of DDQ was passed by the Commissioner in 2006 holding that return stream of kerosene was not a 'return of goods' hence, not liable to be taxed. It was held that the transaction of return of kerosene by RIL to BPCL amounts to 'return of goods' by RIL to BPCL in terms of rule 4 of the BST rules and not sale. It is only on 20/01/2015, the MSTT overruled the order of the Commissioner and held that return of kerosene was not return of goods and hence, liable to be taxed for sale. 23. In this petition, filed by the Reliance Industries Ltd., a dealer engaged in the business of manufacture and trading of petroleum products, an order of assessment passed by the Deputy Commissioner of Sales Tax, Mazgaon, Mumbai is challenged. This is an assessment order. Although it is an appealable order within the framework of the Maharashtra Value Added Tax Act, 2005, still, the learned senior counsel appearing for the petitioners would submit that forcing the petitioners to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the tribunal's or this court's order would be governed by the tribunal's order of 20th January, 2015. In other words, the tribunal's and this court's order applies to all transactions and assessment orders subsequent to that order of 20th January, 2015. If the Department is seeking to reopen any of the transactions concluded by the assessment orders under consideration of the tribunal when it delivered and pronounced its order dated 20th January, 2015, then, those matters and assessments cannot be reopened. They stood concluded by this court's clarification that the tribunal's order shall be given prospective effect. It is restricted and confined to those matters and transactions. Admittedly, the financial year under consideration and the transaction performed therein is 2013-14. 28. A careful perusal of the tribunal's order leaves us in no manner of doubt that what the petitioners are seeking to do is to firstly impugn an assessment order and secondly to urge that the additions made to the sales turnover to the tune of Rs. 2692,80,63,558/and consequential levy of tax and penalty be deleted. The assessing officer refused to do so simply because the petitioner has itself stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bit "K" is the Stay Application. The Petitioner replied to this notice by letter dated 15th May 2018 and pointed out that a Rectification Application is already pending and the Appellate Authority may please await the outcome of the Rectification Application. The matter is pending before the Joint Commissioner (Appeal). 23. On 17th April 2018, the Petitioner was served with yet another Assessment order i.e. for the period 2013-14. This period of assessment is also covered by the Prospective effect i.e. prior to the date of the Tribunal Order 2001-2015. Despite specific detailed submissions to grant prospective effect as available up to 20th January 2015, the Assessing Authority has misinterpreted the Hon'ble High Court's order and directions and passed the order holding the Petitioner liable to full rate of tax on the Purchase return stream to BPCL by treating the same as taxable sale by Petitioner. As in the earlier year, the second Assessment order also raises an exorbitant demand. The turnover of sales of the Petitioner was enhanced and subjected to full rate of tax. The demand raised is to the tune of Rs. 166,51,76,429/along with interest of Rs. 133,21,41,184 and penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing was being taken up by the Hon'ble High Court in Writ Petition No.2217 of 2015 dated 22nd March 2018. c) The Petitioner submits that this Hon'ble Court has directed that the prospective effect be given to the order of the Tribunal up to 20th January 2015. The directions essentially mean that the decision on merit will not apply to any transactions/ periods prior to 2001-2015. It would also mean that the effect of the DDQ by Commissioner would continue upto 2001-2015, (till it is reversed by Tribunal). The Order of Determination is binding on all the authorities for all the acts administered by the State of Maharashtra. Therefore, for all the transactions prior to this date, similar to the transactions in dispute, the Petitioner should be allowed goods return claim so that the Petitioner is not adversely affected on account of the Hon'ble High Court's decision on merits. The Petitioner submits that the Hon'ble High Court has considered all the aspects and facts of the case minutely, considered the arguments made on both the sides and exercised the discretion for grant of relief of prospective effect. Assessing Officer misinterpreted the Judgment of the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 52(2) of the BST Act, it would be useful to reproduce section 52 for properly appreciating the controversy.: "S.52. Determination of disputed questions - (1) If any question arises, otherwise than in proceedings before a Court, or before the Commissioner has commenced, assessment or reassessment of a dealer under section 33 or 35, whether, for the purpose of this Act; (a) any person, society, club or association or any firm or any branch or department of any firm, is a dealer, or (b) any particular thing done to any goods amounts to or results in the manufacture of goods, within the meaning of that term, or (c) any transaction is a sale or purchase, or where it is a sale or purchase the sale price or the purchase price, as the case may be therefor, or (d) any particular dealer is required to be registered, or (e) in the case of any person or dealer liable to pay tax, any tax is payable by such person or dealer in respect of any particular sale or purchase, or if tax is payable the rate thereof, the Commissioner shall subject to rules, make an order determining such question. [Explanation - For the purpose of this subsection, the Commissioner shall be deemed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the plea for grant of prospective effect to the decision of the MSTT. After setting out the contentions of the learned Senior Counsel and hearing them at length, this Court after reproducing section 52 of the said Act, said as under: "what is ex-facie clear from reading the provisions of section 52 is that the Commissioner, in the given facts and circumstances of the case, certainly has the power to exercise his discretion and give prospective effect to the DDQ order passed by him under section 52(1). As correctly submitted by Mr. Venkatraman as well as Mr. Dada, in the facts of the present case, since the DDQ order dated September 11, 2006 was passed in favour of the assessee, there was no occasion nor any reason to request the Commissioner to grant prospective effect to his order. The question of prospective effect would only arise when the order of the Commissioner was reversed by the Tribunal vide the impugned order dated January 20, 2015. Further, it is not in dispute before us that it is for the first time in the history of the Bombay Sales Tax Act that the DDQ order passed by the Commissioner under section 52(1) was challenged by the State of Maharashtra before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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