Disposed

The Commissioner of Sales Tax Maharshtra State, Mumbai v. Gharda Chemicals Ltd.

Bombay HC14 Mar 2008STA/7/2006

Case brief

AI extract

What is this about?

This court dismissed an appeal by the Sales Tax Commissioner against a Tribunal order granting a sales tax refund. The Tribunal had presumed the assessment date was 31.3.1997 to validate it against limitation, despite a later date appearing on the order left by the officer. The court held no question of law arose on the date issue but directed an enquiry into the intentional act by the Assessing O

What did the court decide?

The Commissioner is directed to conduct an enquiry, fix responsibility, and initiate departmental proceedings against the erring officer.

The Commissioner of Sales Tax Maharshtra State, Mumbai Vs Gharda Chemicals Ltd. — Bombay HC (2008) — LawSathi Research

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IN	THE HIGH COURT OF JUDICATURE ORDINARY ORIGINAL CIVIL	AT JURIS	BOMBAY DICTION
	SALES TAX APPLICATION NO.7 IN REFERENCE APPLICATION NO.131	OF OF	2006 2003
The Gharda	Commissioner of Sales ....Applicant. Vs. Chemicals ....Respondent.		Tax. Ltd.
Mr.V.A.Sonpal,	AGP. for	the	Applicant.
Shri.	C.B. Thakkar i/by C.B. Thakkar	&	Company.
	CORAM : F.I. REBELLO & R.S. DATE : 14TH MA	MOHIT RCH,	E, JJ. 2008.
PC :	( Per R.S. Mohite,	J.	)
1.	This is an application preferred by the
Commissioner	of Sales Tax (hereinafter referre	d to	as
the	"applicant") against Gharda Che	micals	Ltd.
(hereinafter	referred to as the "responden	t").	The
applicant	is aggrieved by the judgment and	order	dated
15.10.2005	passed by the Maharashtra Sales	Tax	Tribunal
in Refere	nce Application No.131 of 2003.	By	the
impugned	judgment and order the Tribunal	rejected	the
applicant’s	request for referring the	questions	as
framed by the ap answer by this c	plicant in his reference application for ourt.

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The brief facts of the case are as under.

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a)	The resp	ondent	filed its ret	urn befor	e the Sales
Tax	authorities	for	the		period	from 1.4.1993	to
31.3.1994.	The		return	filed	for	the aforesaid	period

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was a Nil return and there was no claim for refund in

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the return as filed.

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b) The	return came to be assessed	by the Assistant
Commissioner of	Sale Tax (	Adm) (M-85)	Ratn	agiri.	Below
the assessment	order, the d	ate of	maki	ng of	the
assessment order	was typed as	31.3.1997.	On	the	right
hand column,	below the order,	was the	signatu	re of	the
aforesaid Asstt.	Commissioner	with no	date	there	under.
On the left	hand side yet	another dat	e was	shown	as
10.4.1997 without	any signature.	The	As	sessing	Officer,
after assessment	on merits,	came to	the	conclusion	that
the respondent	herein was	entitled to	a	refund	of
Rs.79,00,000/-.	On 22.9.	1997 the	Revis	ional	Authority,
being Commission	er of Sale	s Tax,	Mah	arashtra	State
issued a su	o moto show ca	use notice	calling	upon	the
respondent to	show cause as	to why	the	assessment	order
should not	be revised.	After hear	ing the	r	espondent,
ultimately by	an order	dated		16.1.1998	the
Dy.Commissioner	of Sales	Tax,	Kolhapur		Division,
Kolhapur allowed	the revision.	He	observed	that	main
issue involved	was as to	whether th	e asse	ssment	order

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was without jurisdiction as it was time barred. He

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decided this issue against the respondent.

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He also observed that on the other claims were

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also	not correctly	allowed	and	the admissible	sales	were
not	properly	determined.	He	therefore, set	aside	the

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assessment order and directed the Assessing officer to

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take action according to law.

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c)	Bei	ng aggrieved by this order d	ated 16.1.1998
the	respondent	preferred an	app	eal	before	the
Maharashtra	Sales	Tax Tribunal	being	Appeal	No.18	of
1998.	This,	appeal came to	be allow	ed by	the	Tribunal
by the	ir judg	ment and ord	er date	d 13.	6.2003.	The
Tribunal	held	that the asses	sment ord	er was	passed	on
31.3.1997	and	it would have	to be	presumed	that	the
assessment	order	was not	passed	on 1	0.4.1997.	It
further	held	that the assessme	nt order	was	thus	passed
within	the p	eriod of lim	itation.	It	directed	the
Assessing	officer	to grant	refund	to	the	appellant
expeditiously	with	interest und	er Section	43A	of	the

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B.S.T. Act. It also directed the Assessing Officer to

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pay the costs of Rs.500/-to the respondent.

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d) That thereafter, the applicant preferred an

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application	before		the	Tribu	nal	for	r	eferring	the	two
questions	of	law	as	stated	in	the		application	.	This
application	came	to	be	rejected		by	the	Tribunal	by	its
judgment	and	order		dated		15.10.	2005.		In	these

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circumstances, the present application came to be filed

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in this court by the applicant.

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The present application came to be admitted by

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this court on 30.6.2006 on the following substantial

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questions of law.

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Whether on the facts and in the

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circumstances of the case, it is within the

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jurisdiction of the Tribunal to change the facts regarding the date of passing assessment order

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from 10.4.1997 to 31.3.1997?

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Whether on the facts and in the

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circumstances of the case, the Tribunal was

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justified in law in granting interest under Section 43A of the B.S.T. Act, 1959 even when said section is incorporated w.e.f. 1.4.1995 and was not operating during the assessment period 1993-94?

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We have heard both the parties and perused the

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record.		The	Advocate fo	r the	respo	ndent	fairly	states
that	the	applic	ant would	not	press	for	interest	on
amount	of	ref	und under	Section	43A	as	the	provision
relating	to	the	same	was en	acted	with	effect	from
1.10.1995		and	would not	be	applicable	to	the	assessment
year i	n qu	estion.	In view	of	this	concess	ion the	second

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question as framed by this court is answered in favour

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of the revenue.

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5.		As far as first question is concerned, as
observed	he	rein above, there are two dates just	below
the	body	of the assessment order. A date 31.3.1997	is
typed.		The signature of the Assessing officer doe	s not
contain	any	date there under. Yet, another date	is
shown	as	10.4.1997 on the left hand side below	the
judgment	bu	t there is no signature therein above.	In
this	regard	the Tribunal has concluded that	the
Assessing	of	ficer must have known that the period	of
limitation		would expire on 31.3.1997 and therefore,	he
passed	his	order before that date. It is	further
concluded		that the date 10.4.1997 was probably made	to
defeat	the	refund claim. In our view, only a	disputed
question	of	fact and no question of law arises in	this
case.	The	second date 10.4.1997 as shown below	the
judgment	is	not below the signature of the	Assessing
officer.		There is no date below the signature of	the
Assessing	off	icer. On facts, the view taken by	the
Tribunal	is	a possible view and therefore, in our	view,

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the first substantial question of law as framed does not arise.

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6.	Bef	ore parting	of the mat	ter, we would	like to
observe	that an	attempt	appea	rs to	have	been	made	by the
Assessing	Officer	to	deprive	the	assessee		of the	benefit
of a	refund.	He	must	have had	knowl	edge	of the	fact

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that	if his	order	was	made	after 31.3.1997, the	effect
would	be	to	render	the	assessment orde	r without
jurisdicti	on as	by	virtue	of op	eration of Secti	on 33(4A)
of	the Bomb	ay	Sales Ac	t the	Nil return filed	by the
responde	nt would	be	deemed	to be	accepted. P	rima facie,
this	appears to	have	been	done	to deprive the	respondent
from	claiming	the	refund	as asse	ssed. This is	a very
serious	matter	and	therefore,	we	direct the	Commissioner
of	Sales	Tax,	Maharashtra	State	to conduct an	enquiry
into	the matter	and	take	steps	to fix the	responsibility
and	initiate	de	partmental	proce	eding against t	he erring
officer.	He	is	further	directed	to file a r	eport in
this	regards	in	respect	of the	steps taken	within a
period	of six	mon	ths from	today.	Office is	directed to

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send the copy of this order to the Commissioner of Sales

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Tax, Maharashtra State.

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In the light of above discussion, the reference

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application is answered and stands disposed of

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accordingly.

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(R.S. MOHITE, J.)

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(F.I. REBELLO, J.)

The Commissioner of Sales Tax Maharshtra State, Mumbai v. Gharda Chemicals Ltd.

Case brief

What is this about?

What did the court decide?

The Commissioner of Sales Tax Maharshtra State, Mumbai v. Gharda Chemicals Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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