The court rejected claims by MGST taxable persons not registered under MVAT for the earlier-period 3% VAT concession on natural gas. It held that the concession applied only from the later notification’s effective date and could not be extended through trade circulars. The petitions were dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2424 OF 2018
Deepak Fertilisers and Petrochemicals Corporation Ltd. a Company registered under the Companies Act, 1956 having its office at Sai Hira, Survey No.93, Mundhwa, Pune-411 036.
...Petitioner
V/s.
WITH
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WRIT PETITION NO.2430 OF 2018
Smartchem Technologies Ltd. a Company registered under the Companies Act, 1956 having its office at Sai Hira, Survey No.93, Mundhwa, Pune-411 036. ...Petitioner
V/s.
WITH WRIT PETITION NO.3406 OF 2018
Empire Industries Limited a Company registered under the Companies Act, 1956 having its office at
Empire Complex, 414, Senapati Bapat Marg,
Lower Parel, Mumbai.400 013
...Petitioner
V/s.
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WRIT PETITION NO.2007 OF 2018
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WITH WRIT PETITION NO.2008 OF 2018
JSW Steel (Salav) Ltd. A company incorporated under the Companies Act, 1956 and having its office at VII, Salav, PO-Revdanda, Dist-Raigad, Maharashtra-402202.
V/s.
WITH
WRIT PETITION NO. 2009 OF 2018
JSW Steel Coated Products Ltd.
A company incorporated under the Companies Act, 1956 and having its manufacturing units at Village: VASIND, Tal: Sahapur, Dist: Thane-421 604. and B-6, Tarapur MIDC Industrial Area, Boisar, Tal & Dist Palghar-401 506 ...Petitioner
V/s.
1. The State of Maharashtra
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Through the Government Pleader PWD Building, High Court, Mumbai.
WITH ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.819 OF 2018
Maharashtra Seamless Ltd Having its Western Region Office at 402, Sarjan Plaza, 100, Dr. Annie Besant Road, Opp. Telco Showroom, Worli, Mumabi-400 018, through its Authorized Signatory, Shri Meghraj Saraf (Manager) ...Petitioner V/s. 1. State of Maharashtra Having its office at Mantralaya Mumbai – 400 020. 2. Commissioner of Sales Tax Maharashtra State, Having his office at GST Bhavan, Mazgaon, Mumbai – 400 010. 3. JT. Commissioner of Sales Tax (Adm), Raigad Division, having his office at Room No.611, Kokan Bhavan, Belapur, Navi Mumbai, Maharashtra. ...Respondents
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Mr.Prakash Shah i/b M/s.PDS Legal for the Petitioner in WP No.2424 of 2018 and wp No.2430 of 2018.
Mr.B.V. Samant AGP for Respondent-State in all matters.
Mr.Rafiq Dada Senior Advocate with Mr.Jitendra Motwani, Mr.Harsh Shah and Mr.Rinkey Jassuja i/b M/s. Economic Law Practice for the Petitioner in WP No.2007, 2009 and 2018.
Mr.Vikram Nankani with Mr.Jitendra Motwani, Mr.Harsh Shah and Rinkey Jassuja i/b M/s.Economic Law for the Petitioner in WP No.2008 of 2018.
Mr.Jitendra Motwani a/w Mr.Harsh Shah and Rinkey Jussuja i/b M/s.Economic Law for the Petitioner in WP No.2009 of 2018.
Mr.V.A. Sonpal, Special Counsel a/w Mr.B.V.Samant AGP for Respondent Nos.2 and 3-State.
Mr.A.R. Bamane i/b Mr.A.R. Bamane and Co. for Respondent No.5.
Smt.Nikita Badheka a/w Ms.Neha Chaudhary and Mr.Parth Badheka for the Petitioner in Writ Petition No.819 of 2018.
Ms.Jyoti Chavan, AGP for the Respondents in Writ Petition No.819 of 2018.
CORAM : S.C. DHARMADHIKARI & PRAKASH D. NAIK, JJ.
RESERVED ON : 10th APRIL 2018
PRONOUNCED ON : 26th JULY 2018
COMMON JUDGMENT : (Per S.C. Dharmadhikari,J)
fact and law and identical arguments were canvased by both the
sides, we proceed to dispose them of by this common judgment.
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1517/C.R.136(A)/Taxation-1 dated 13th October 2017 should be given effect to and operated from 24th August 2017. The argument is that the Trade Circular No.3T of 2018 dated 16th October 2018 and the Addenda 30th January 2018 enabled recovery of Value Added Tax in excess of 3%.
Petrochemicals Corporation Ltd., in WP No.2424 of 2018 more or less represented the common case of parties, we take the facts from its case.
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respondent is the State of Maharashtra, whereas the respondent Nos.2,3 and 4 are the Officers and the Authorities exercising powers under the Maharashtra Value Added Tax Act, 2002 (for short 'MVAT'). The respondent No.5 is Gas Authority of India Limited, a company registered under the Companies Act, 1956 and has been impleaded as a respondent simply because the petitioner says that for the purposes of manufacture of fertilizers, the petitioner purchases natural gas from respondent No.5. This is an intra-state purchase. The purchase is under various gas purchase agreements. The purchase in natural gas is either utilized as fuel or as an input in the manufacture/processing of fertilizers/chemicals.
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the insertion of Section 16(6A) into the MVAT Act which provided that any person who was not involved in the sale of the six commodities mentioned in Para 5 above would no longer have a valid registration under the MVAT Act. However, the proviso to Section 16(6A) provided that any person who was affected by Section 16(6A), but wished to continue to do business in the aforementioned six commodities would have to apply to the Respondents in the prescribed manner to have the cancellation of his registration revoked.
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collect full tax from him at the rate of 13.5%. However, since the person was no longer a dealer under the MVAT Act due to Section 16(6A), he could not claim set-off or refund of the input MVAT collected from him. Furthermore, he would be liable to pay GST on his outputs at the full rate since the GST Act only provided for adjustment of GST paid and not of VAT paid. Hence, such a person would be taxed at the full rate on his outputs without adjustment of the input tax paid by him. Whilst the effective rate of taxation on natural product prior to 01.07.2017 was 3%, the effective rate after 01.07.2017 rose to 13.5%.
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purchasing dealer must be certified by the Respondents in ProformaA. The petitioners duly applied and received from the Respondents Proforma w.e.f. 24.08.2017 (Exhibit-F of WP No.2424 of 2018 and Exhibit-F of W.P. No.2430 of 2018).
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13.5% to 3%. Copies of the various invoices raised by respondent No.5 and credit notes issued are annexed as Exh-G to the petition.
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that the Writ Petition is filed challenging it on various grounds.
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a supplier or manufacturer used to pay 13.5% to supplier and they were entitled to full input tax credit subject to production of 3% under Rule 53(1) and 53(1)-A of the value of purchase if it is used as fuel or raw material in manufacturing goods. Hence, net effective burden on dealers who use natural gas as fuel or raw material was 3%. However, if natural gas was not used as fuel or raw material, then, no retention of 3% was required. However, if the taxable person under the MGST Act does not continue to be registered under the MVAT Act, he is not entitled to input tax credit or refund of tax paid on purchases of goods covered by the MVAT Act, since under MGST Act any tax paid under MVAT Act is not available to be claimed as input credit. In order to extend the benefit to the taxable persons under the MGST Act and in order to ensure that impact of tax on dealers registered under the MVAT Act and MGST Act is same, the Government issued notification (Exhibit-E) to the Writ Petition No.2424/2018 w.e.f. 14.10.2017. Earlier similar notification was issued on 24.08.2017 for benefit of MVAT Act registered dealers only and sales to MGST dealers were excluded.
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gas is required to be a registered dealer under MVAT Act or MGST Act, though requirement of being registered under the MGST Act was not included in the notification under consideration. In absence of such reference to requirement of registered dealer under the MGST Act in notification dated 24.08.2017, circular mentioning it as such, is irrelevant. Notification dated 24.08.2017 must be read in the context and therefore reference to registration under the MGST Act 2017 is irrelevant in its circular dated 08.09.2017 and not binding on the Government. It is therefore, claimed that rate of tax was reduced to 3% under notification of 24.08.2017 provided the purchaser is registered dealer under Section 2(21) of MVAT Act, the purchaser uses gas in manufacture of goods as enumerated in paragraph 7 of the affidavit, or any other goods, which meant that he should use the natural gas in manufacture of any goods or use it as fuel. A bare reading of this notification clearly excludes taxable persons under the MGST Act. Thus, the reduced rate of tax was not applicable to the sales made to taxable persons registered under the MGST Act. In paragraphs 15 and 16 of this affidavit in reply, the State Government clarifies the position as under:-
“15. I say by Notification dated 24.08.2017 at ExhibitC at page No.49 of the Writ Petition, rate of tax was reduced to 3% provided the purchaser is registered dealer
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under section 2(21) of MVAT Act; purchaser uses gas in manufacture of goods as enumerated in para 7 above or any other goods, which meant he should use the natural gas in manufacture of any goods or use it as fuel. Bare reading of the Notification on 24.08.2017 conspicuously, noticeably and clearly excludes taxable person under the MGST Act. Thus the reduced rate of tax was not applicable to sales made to taxable person registered under the MGST Act.
16. I say if registered dealer manufactures goods enumerated at para 7 above INPUT TAX CREDIT would be permissible on 13.5% except reduction of 3% of the purchase price when goods are used as fuel. But if he manufactures any other goods which State is not entitled to tax under Item 54 List II after Constitution (One Hundred and First Amendment) Act, 2016, there is no provision in the MGST Act 2017 to get INPUT TAX CREDIT on the goods which are not covered under the MGST Act. That means the purchases of Natural Gas made by the taxable person shall not get INPUT TAX CREDIT under MGST Act 2002 on the tax paid for purchase of natural gas under MVAT Act and will consequently bear a burden of tax at 13.5 %. In order to remove the brunt of 13.5% and make it comparable with the dealers who are manufacturers of any of the goods as mentioned in para 7 of this reply, the rate of VAT on the purchases made by taxable persons under MGST Act
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2017 of Natural Gas when used in manufacture of any other goods or as fuel for manufacture of any other goods was reduced from 13.5% to 3%. Therefore the Notification dated 13.10.2017 with effect from 14.10.2017 was issued.”
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The petitioner has no locus standi to file the present petition, for what the petitioner is paying by way of price and a component thereof is a tax. Once the restrictions imposed by the notifications and the notifications themselves are clear, then, the Writ Petition has no merit and must be dismissed.
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as it is impossible to manufacture the other five items mentioned in MVAT Act from natural gas. Hence, it is submitted that the concessional rate cannot be said to be only applicable on sales made to dealers registered under the MVAT Act.
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operate prospectively. Hence, the Trade Circular No.3T of 2018 dated 16.01.2018 would operate prospectively and would not affect the earlier period, namely, 24.07.2017 to 13.10.2017. The Department cannot argue that the circulars issued by them are contrary to law. Similarly, the Department cannot challenge the Trade Circular No.3T of 2018. Hence, it is only open to the purchaser to challenge the circular as the burden of taxation in indirect taxes falls on the purchaser. In any event, this aspect need not be gone into in this matter wherein the rate of tax depends on to the purchaser and such certification issued to the petitioners is also under challenge.
in support of his contentions:-
“1. Birla Jute and Industries Ltd.V/s. Asstt. Collr. Of C.E.(1992) 57 ELT 674 (Cal.).
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2. CST V/s. Indra Industries (2000) 9 SCC 66
3. Suchitra Components Ltd. Vs. CCE (2007 (208) ELT 321 (SC).
4. Zile Singh Vs. State of Haryana (2004) 8 SCC 1
5. W.P.I.L. Ltd V/s. CCE (2005-181-ELT 359 (SC)”.
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Tax on petroleum products used as inputs in the making of goods, after the introduction of the Goods and Service Tax Act.
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appearing for the respondents argued that the Writ Petitions deserve to be dismissed. He pointed out that there is no substance in any of these petitions. Mr.Sonpal, has invited our attention to the affidavit in reply, which is filed in these petitions.
“1. Accountant General V/s. S.Doraiswamy (1981) 4 SCC 93.
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2. Glaxo Smithkline Pharmaceuticals Ltd V/s. Union of India (2014) 2 SCC 753.
3. Director General of Foreign Trade V/s.Kanak Exports and Another (2016) 2 SCC 226.”
the petitioners can seek the Writ of mandamus and the direction claimed by them.
of MVAT Act to provide for the deemed cancellation of the registration, with effect from 01.07.2017, of the dealers who have not effected any sales of the aforesaid six goods during the period
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2016-2017. Therefore, only those dealers who are effecting the sales of these goods remain registered dealers under the MVAT Act.
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available to the taxable persons registered under the MGST.
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the period 24.08.2017 to 13.10.2017.
“(a) For the period 24th August 2017 to 13th October 2017 the sales of Natural Gas, to manufactures, who were not holding the registration certificate under the MVAT Act during the said period, shall be liable for VAT @ 13.5% under Schedule entry B-15.
(b) For the period starting on or after 14th October 2017 the sales of Natural Gas, to manfactueres, whether registered under the MVAT Act or under the MGST Act, subject to the conditions given in the notification against a certificate in “Proforma A” would be entitled to avail the benefits of reduced rate of VAT @ 3%.
(c) In view of the aforesaid circumstances, it is also
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necessary that the concerned Joint Commissioners, who had earlier issued certificate in “Proforma A” with effect from the 24th August 2017, issue an addenda and change the date of effect to the 14th October 2017.
(d) From the date of issuance of this Trade Circular, the certificate in Proforma 'A' shall be issued effective from the date of filing of the application for the said certificate.
(e) The dealers, who have sold natural gas during the period 24th August 2017 to 13th October 2017 to manufactures who were not holding registration certificate under the MVAT Act, applying lower rate of tax at 3% during the aforesaid period, are advised to arrange their affairs accordingly and take the necessary corrective steps at earliest.
8. In view of the above, the clarification issued vide Trade Circular No.39T of 2017 dated 8th September 2017 shall stand modified.”
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made:-
“54. In the long title of the Maharashtra Value Added Tax Act, 2002 (hereinafter, in this Chapter, referred to as “the Value Added Tax Act”), the words “or purchase” shall be deleted.
55. In the preamble of the Value Added Tax Act, the words “or purchase” shall be deleted.
56. In section 2 of the Value Added Tax Act,-
“(3-b)”appointed date for the Maharashtra Goods and Services Tax Act” means the date on which the Maharashtra Goods and Services Tax Act, 2017 comes into force.”;
“(12)” “goods” means petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption;”;
“(14A) “Maharashtra Goods and Services Tax Act” means the Maharashtra Goods and Services Tax Act, 2017;”;
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human consumption” shall be substituted; (12) in clause (25), Explanation IA shall be deleted; (13) clause (27) shall be deleted.
Act, amendments have been made to the Section 16 of the MVAT Act Sub-Section 6A has been inserted in Section 16 and its reads as
under:-
“(6A) The registration of a dealer, who has not effected sale, during the year 2016-17, of any goods, specified in column (2) in SCHEDULE A or, as the case may be SCHEDULE B, as it exists on the appointed date for the Maharashtra Goods and Services Tax Act, shall be deemed to be cancelled with effect from the said appointed date:
Provided that, any such dealer, whose registration is deemed to be cancelled, may apply in the prescribed manner for the revocation of the cancellation of his registration, if he intends to carry on the business in these goods.”
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may apply in the prescribed manner for the revocation of the cancellation of his registration if he intends to carry on the business in these goods.
Act by this Chapter-XI of the amendment Act, but they have not been relied upon.
“ NOTIFICATION
Maharashtra Value Added Tax Act, 2002: No.VAT-1517/CR-136(A)/Taxation-1-In exercise of the powers conferred by sub-section (1) of Section 9 of the Maharashtra Value Added Tax Act, 2002 (Mah.IX of
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2005), the Government of Maharashtra, thereby effect from the 24th August 2017, amends the SCHEDULE 'B' appended to the said ACT, as follows namely :-
In the Maharashtra Value Added Tax Act, 2002, in Schedule 'B'
(1) in entry 25, in column (2) for the words 'Natural Gas” the words and figures “Natural Gas, other than the Natural Gas, specified in entry 16 shall be substituted; (2) after entry 15, the following entry shall be added, namely:-
“16. Natural gas, sold to registered dealer, subject to the following conditions :
(i) A dealer, who uses the natural gas for use in manufacture of goods, as defined under the act or any other goods, whatsoever, or a dealer, who uses it as fuel. (ii) The purchasing dealer, under this entry, should be certified by the Commissioner in the Proforma 'A'.
(iii) The purchasing dealer shall, by the end of the April, furnish to the Commissioner, a statement of account of purchases effected in the immediately preceding financial year, in the Proforma 'B'. Explanation-for the purposes of this entry, conversion of 'natural gas' from one form to another shall not be deemed to be “manufacture”.
PROFORMA-A
This is to certify that M/s..........................holder of TIN....................w.e.f......................is a manufacturer of goods, as defined under the Act or any other goods, whatsoever.
This certificate is being issued on his application dated..........., in which he has given an undertaking that the natural gas purchased by him shall not be resold by him.
(Commissioner of Sales Tax), Maharashtra State, Mumbai.
MVAT Act, the State Government is empowered to amend the
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Schedule from time to time by notification in the official gazette. The amendment of the Schedule may be by adding or modifying or deleting any entry therein, providing for reducing and enhancing rate of tax or for specifying, rates of tax where Nil rates are specified. The mode in which this has to be done, namely, by issuing and publishing a notification in the official gazette is the same and identical to the manner and mode of making rules.
a registered dealer and that is also subject to the conditions reproduced herein above. Thereafter, Proforma-A also would read accordingly.
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that for better implementation of this scheduled entry, the Trade Circular was issued, copy of which is at Exhibit-D to the petition.
October 2017, a copy of which is at page 57 of the paper book which reads as under:-
“ NOTIFICATION
Maharashtra Value Added Tax Act, 2002
No.VAT.1517/C.R.136(a)/Taxation-1-In exercise of the powers conferred by sub-section (1) of section 9 of the Maharashtra Value Added Tax Act, 2002, (Mah.IX of 2005), the Government of Maharashtra hereby with effect from the 14th October 2017, amends Schedule 'B', appended to the said Act, namely :-
In the Maharashtra Value Added Tax Act, 2002, in Schedule 'B', in entry 16,-
(1) for clause 9i), the following clause shall be substituted, namely :-
“(i) A registered dealer who uses natrual gas as a raw material or fuel in manufacture of goods”;
(2) the existing Explanation shall be numbered as '(a)' thereof ; and after the said Explanation as so numbered, the following clauses shall be added, namely :-
“(b) The “goods” refereed to in this entry shall mean goods as defined under this Act and goods defined under the Maharashtra Goods and Services Tax Act; 2017 9Mah. XLIII of 2017) (hereinafter, in this entry referred to as “MGST Act”);
(c) 'Registered dealer' refereed to in this entry, shall also include 'taxable person' registered under the MGST Act; (d) Benefits of this entry shall not be available to a registered taxable person, if it is a hotelier or a restaurant and has opted to pay tax under section 10 of the MGST Act.”
(3) in Proforma 'A',
(i) After the abbreviated words and sign “TIN.....w.e.f.........”the sign and abbreviated words “/GSTIN..........w.e.f...........” shall be added;
(ii) for the words “as defined under the Act or any other goods whatsoever” the words and figures “as defined
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under this Act or goods defined under the MGST Act, 2017” shall be substituted ;
(iii) after the words “being issued” the abbreviated words and sign “w.e.f.........” shall be added.
By order and in the name of Governor of Maharashtra R.D. Bhagat, Deputy Secretary to Government
also issued in terms of the powers conferred by Section 9(1) of the MVAT Act. The Government of Maharashtra w.e.f. 14.10.2017 amended schedule-B appended to the Act and now in that schedule in Entry 16 for Clause (I) a substitution has been made, namely, a registered dealer who uses natural gas as a raw material or fuel in the manufacture of goods and then there is an addition. That addition is by inserting the portion in Clause-II of this notification. That is inserted/added below the existing explanation. That will now stand numbered as explanation (a). There, the goods referred to in the Entry shall mean goods as defined under the MVAT Act and goods defined under the MGST Act. 'Registered dealer' referred to in the Entry shall also include taxable person registered under the MGST Act and then, as reproduced above, there are subsequent amendments.
whether this concessional rate of duty could be availed of by the
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petitioner from 24.08.2017 to 13.10.2017. The intervening period where the taxable person under MGST Act does not continue to be registered under the MVAT Act would result in denial of input tax credit or refund of tax paid on purchases of goods covered by MVAT Act. That is because under MGST Act any tax paid under MVAT Act is not available to be claimed as input tax credit. Hence, in order to benefit the person under the MGST Act and in order to ensure that the impact of tax on the dealers registered under both laws is same, the notification which we reproduced above, namely, Exhibit-E page 57 of the paper book, has been issued. In the earlier notification of 24.08.2017 the parity between both dealers was not brought out or recognized. Now it is recognized and w.e.f. 14.10.2017. We do not see how we can then rely upon any Trade Circulars and grant the benefit as claimed by the petitioners.
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cannot control the substantive notifications. The notifications amending the schedule would enjoy the same status as that of the rules under the Act. In the circumstances, we do not think that relying upon these circulars, the petitioners can claim the benefit in the intervening period, more so, when both dealers were not included under the earlier notification. In the circumstances, we feel that the petitioners are not right in their contentions based on which the reliefs have been claimed. The relief claimed is that we should quash the Trade Circular dated 16.01.2018. That Trade Circular No.3T of 2018 is but clarifying the position resulting from issuance of these two notifications, namely, of August and October 2017. We cannot see how we can hold that the State Government intended to grant the benefit by circular to a taxable person registered under the MGST Act when he was not within the purview of the substantive law, MVAT. In other words, a taxable person registered under the MGST Act by virtue of the amendment to the MVAT Act went out of the purview of the MVAT Act. That is how Section 16(6-A) reads and that provides for deemed cancellation of his registration. If any benefit has to accrue to such dealers, then, it is not disputed that issuance of the substantive notification or an exercise similar to the same will have to be carried out. That was carried out by amending Schedule-B. Thus, Section 9 empowers the
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Government to carry out an amendment to the Schedule appended to the MVAT Act. In the earlier amendment by notification dated 24.08.2017 the registered dealers were not defined to include taxable persons registered under the MGST Act. Further, the word 'goods' referred to in the entry as defined under the Act did not take within their import the goods defined under the MGST Act. Hence, merely because the 24.08.2017 notification employs the words “or any other good's, whatsoever” for the purposes of availing of the concessional rate of duty that is not enough. By that we cannot infer that from 24.08.2017 itself both, the goods as defined the MGST Act and the taxable persons contemplated thereby, are included in the amendments to Schedule-B as the August-2017 notification at page 51 first time brings in a substitution in Entry-15 and after Entry-15, inserts the portion as reproduced from the notification of 24.08.2017. Thus, the conditional relaxation from the rate of duty from 13.5% to 3% was a benefit not extended to taxable persons under the MGST Act as also to the goods defined under the MGST Act.
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of Schedule-B and Entry-16. In such circumstances by any
interpretative process or by resorting to the exercise suggested by the petitioners, we cannot bring in the goods as defined under the MGST Act and the taxable person registered under the MGST Act in the Schedule-B as amended. As already held above, Schedule-B to the MVAT Act, 2002 has been amended and by resorting to the power to amend conferred by Section 9(1) of the MVAT Act. It is entirely for the Maharashtra Government therefore, to bring a notification to the Maharashtra Value Added Tax Act, 2002 to extend the concessional rate of duty or to enable availing of the concession by such persons who were earlier not eligible and entitled to it. It is in these circumstances that we are of the opinion that Mr.Sonpal is right in his submission that this Court cannot rely upon the language of the Trade Circular or the understanding of the Government as reflected from the Trade Circulars to grant any benefits to the petitioners from an earlier date or an earlier period. The benefit will have to be granted only from the date from which it is extended, namely, w.e.f. 14.10.2017. The explanation that is provided in paragraph 26 of the affidavit in reply filed in the Writ Petition of M/s.Deepak Fertilizers (Writ Petition No.2424 of 2018) is, therefore, correct.
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of excise duty leviable thereon if it was intended to be used in the manufacture, inter alia, of explosives, provided the procedure set out in Chapter X of the Central Excise Rules, 1944, was followed. The Appellant before the Supreme Court enjoyed benefit of the exemption notification. It was found that a show cause notice was issued to the appellant as to why ammonium nitrate should not be
1 1996 (86) E.L.T. 182 (S.C.)
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reclassified under Tariff item No.68. One of the authorities came to the conclusion that there was no need to reclassify ammonium nitrate. Later on, there was some communication from the Central Board of Excise and Customs and the Ministry of Chemicals and Fertilizers. The reclassification would be necessary because ammonium nitrate is accepted as a fertilizer and hence it was not falling within the Tariff item 14HH. With the result the exemption notification could not have been availed of and the benefit thereof was sought to be denied. That is how there was a further show cause notice, adjudication and the demand. After this controversy reached the Supreme Court, the Hon'ble Supreme Court relied on observations, based on the contentions, noted from paras 9 to 12. The Supreme Court held that there was enough material to hold that the appellants suffered adverse consequences. Therefore, the Writ Petition filed by the appellant should have been entertained. The High Court should have dealt with the contention of the appellant that ammonium nitrate was exempt from excise duty by reason of exemption notification until 21st July 1979 after which it was removed from the preview thereof.
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dealt with the merits and, therefore, this judgment will have no application.
N.S. Kamble page 43 of 45
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issued by the Officer of the Revenue Department bind the Revenue and they cannot ignore or repudiate it.
petitioners case that a latter circular was wrongly issued, but a prior circular remains as it is consistent with the legislature policy. The issue is when there are two different statues and merely because under one statue of the State legislature there is a concessional rate of duty, but restricted to the dealers covered by that law, then, dealers under a distinct law, may be made by the very State legislature can claim the benefit of the reduced rate or not. The issues decided in Ranadey and by the present judgment are not identical. Hence, we do not see any reason to take assistance from paragraphs 13 to 16 of the judgment.
dealt with by those judgments arising before us. This is not curative/clarificatory amendment which could be given retrospective effect but this is a question of interpretation of the schedule entry and whether schedule entry under the MVAT Act prescribing concessional rate of duty could be relied on by dealers
N.S. Kamble page 44 of 45
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not registered under the MVAT Act but termed as taxable persons under the MGST Act. Hence, the other judgments also are of no assistance.
(PRAKASH D. NAIK, J.) (S.C. DHARMADHIKARI, J.)
Nilam Digitally signed by Nilam Santosh Santosh Kamble Date: 2018.07.27 Kamble 01:02:10 +0530
N.S. Kamble page 45 of 45
2 issues framed by the court
Could MGST taxable persons not registered under MVAT claim the 3% natural-gas concession for 24.08.2017 to 13.10.2017?
Could trade circulars or retrospective treatment of the later notification extend the concession to an earlier period?
Colour shows how this judgement treated each authority
Birla Jute and Industries Ltd. V/s. Asstt. Collr. Of C.E.Distinguished¶324
Birla Jute and Industries Ltd.V/s. Asstt. Collr. Of C.E.(1992) 57 ELT 674 (Cal.).
CST V/s. Indra IndustriesDistinguished¶324
CST V/s. Indra Industries (2000) 9 SCC 66 · Who else cites this
Suchitra Components Ltd. Vs. CCEDistinguished¶324
Suchitra Components Ltd. Vs. CCE (2007 (208) ELT 321 (SC).
Zile Singh Vs. State of HaryanaDistinguished¶324
Zile Singh Vs. State of Haryana (2004) 8 SCC 1 · Who else cites this
W.P.I.L. Ltd V/s. CCEDistinguished¶324
W.P.I.L. Ltd V/s. CCE (2005-181-ELT 359 (SC)
Accountant General V/s. S.DoraiswamyReferred¶171
Accountant General V/s. S.Doraiswamy (1981) 4 SCC 93. · Who else cites this
Glaxo Smithkline Pharmaceuticals Ltd V/s. Union of IndiaReferred¶174
Glaxo Smithkline Pharmaceuticals Ltd V/s. Union of India (2014) 2 SCC 753. · Who else cites this
Director General of Foreign Trade V/s. Kanak Exports and AnotherReferred¶175
Director General of Foreign Trade V/s.Kanak Exports and Another (2016) 2 SCC 226. · Who else cites this
I.D.L. Chemicals Ltd V/s. Union of IndiaDistinguished¶306
1996 (86) E.L.T. 182 (S.C.)
Usha B. AgarwalDistinguished¶316
Usha B. Agarwal (Supra)
M/s.Ghodawat Energy Pvt Ltd.Distinguished¶317
M/s.Ghodawat Energy Pvt Ltd.
Ranadey MicronutrientsDistinguished¶318
Ranadey Micronutrients (Supra),
3 provisions across 1 enactments
Deepak Fertilisers and Petrochemicals Corporation Ltd.
The State of Maharashtra
The Commissioner of Sales Tax
The Joint Commissioner of Sales Tax (LTU-1)
The Deputy Commissioner of Sales Tax (PUN-VAT-E-612-LTU-1)
GAIL (India) Ltd
S.C. DHARMADHIKARI
PRAKASH D. NAIK
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
