Quashed

Modi Car Agencies Pvt. Ltd. v. the State of Maharashtra and 2 Ors.

Bombay HC12 Apr 2023WP/2512/2021

Case brief

AI extract

What is this about?

The High Court of Bombay transferred multiple writ petitions by motor vehicle dealers challenging VAT assessment orders. Relying on a recent tribunal decision, the court quashed the assessment orders and restored proceedings to the Commissioner to examine facts regarding similar situation status under the VAT Act.

What did the court decide?

Impugned assessment orders quashed and set aside; proceedings restored to file before the Commissioner of Sales Tax to examine facts and apply law.

Modi Car Agencies Pvt. Ltd. Vs the State of… — Writ and Judicial Review | Bombay HC (2023)

¶1

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¶2

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶3

WRIT PETITION NO. 2512 OF 2021

¶4

Modi Car Agencies Pvt. Ltd. )...Petitioner vs. The State of Maharashtra and Ors. )...Respondents WITH WRIT PETITION NO.166 OF 2023 Cornerstone Automobiles )...Petitioner vs. The State of Maharashtra )...Respondent WITH WRIT PETITION NO.167 OF 2023 Cherry Corporation )...Petitioner vs. The State of Maharashtra )...Respondent WITH WRIT PETITION NO.173 OF 2023 Newaskar Automobiles )...Petitioner vs. The State of Maharashtra and Ors. )...Respondents WITH WRIT PETITION NO.168 OF 2023 Sablok Cars )...Petitioner vs. The State of Maharashtra )...Respondents avk 1/27

¶5

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¶6

WITH WRIT PETITION NO.169 OF 2023

¶7

Satish Motors (Akola) Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶8

WITH WRIT PETITION NO.174 OF 2023

¶9

Bhuvan Wheels Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.170 OF 2023
Dhoot Motors Private Ltd.)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶10

WITH WRIT PETITION NO.171 OF 2023

¶11

Ratnaprabha Motors)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶12

WITH WRIT PETITION NO.172 OF 2023

¶13

Sarra Motors Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶14

avk 2/27

¶15

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¶16

WITH
WRIT PETITION NO.175 OF 2023
Dhanlaxmi Automobiles)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.176 OF 2023
Sablok Cars)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.177 OF 2023
Shri Ram Bikes Scooters)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.178 OF 2023
Fine Autolines)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.179 OF 2023
Salasar Wheels Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶17

avk 3/27

¶18

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¶19

WITH WRIT PETITION NO.180 OF 2023

¶20

Satish Motors Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.181 OF 2023
Raj Auto)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶21

WITH
WRIT PETITION NO. 406 OF 2023
Raghuvir Motor Agencies Pvt Ltd.)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶22

WITH
WRIT PETITION NO. 410 OF 2023
Cherry Corporation)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO. 407 OF 2023
Sanya Motors Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶23

avk 4/27

¶24

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¶25

WITH WRIT PETITION NO. 409 OF 2023

¶26

Salasar Wheels Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶27

WITH
WRIT PETITION NO. 408 OF 2023
Shree Ram Bikes Scooters)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.423 OF 2023
Kankariya Automobiles Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION (L) NO.3658 OF 2023
Kifs Motors Private Limited)...Petitioner
 vs.
The State of Maharashtra )...Respondent
WITH
WRIT PETITION NO.478 OF 2023
Dhanlaxmi Motors)...Petitioner
 vs.
The State of Maharashtra )...Respondent

¶28

avk 5/27

¶29

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¶30

WITH WRIT PETITION NO. 479 OF 2023

¶31

Rironsi Automotive)...Petitioner

¶32

 vs.
The State of Maharashtra )...Respondent

¶33

WITH WRIT PETITION (L) NO.6743 OF 2022

¶34

Ishna Motors)...Petitioner

¶35

vs.

¶36

The State of Maharashtra and Anr)...Respondents
WITH
CHAMBER ORDER (L) NO.294 OF 2022
IN
WRIT PETITION (L) NO.6743 OF 2022

¶37

Ishna Motors)...Petitioner

¶38

vs.

¶39

The State of Maharashtra and Anr)...Respondents

¶40

WITH WRIT PETITION NO.4053 OF 2022

¶41

Modi Car Agencies Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶42

WITH WRIT PETITION (L) NO.7052 OF 2022

¶43

Modi Car Agencies Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶44

avk 6/27

¶45

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¶46

WITH WRIT PETITION NO.1749 OF 2021

¶47

Metro Motors Auto Hangar Division)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶48

WITH WRIT PETITION NO. 2904 OF 2021

¶49

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶50

WITH WRIT PETITION NO.2840 OF 2021

¶51

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶52

WITH WRIT PETITION NO. 2888 OF 2021

¶53

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶54

WITH WRIT PETITION NO.2877 OF 2021

¶55

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶56

avk 7/27

¶57

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¶58

WITH

¶59

WRIT PETITION NO.2834 OF 2021

¶60

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶61

WITH WRIT PETITION NO.2858 OF 2021

¶62

Fortpoint Automotive Mumbai Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶63

WITH WRIT PETITION NO.2161 OF 2021

¶64

Sharayu Autolinks Pvt. Ltd.)...Petitioner

¶65

vs.

¶66

The State of Maharashtra and Anr)...Respondents

¶67

WITH

¶68

WRIT PETITION NO.4055 OF 2022

¶69

Krishiv Motors Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶70

WITH

¶71

WRIT PETITION NO.2387 OF 2021

¶72

VCM Agencies Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶73

avk 8/27

¶74

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¶75

WITH
WRIT PETITION NO.3792 OF 2021
Ishna Motors)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.2194 OF 2021
Modi Motors Agencies Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.3727 OF 2021
Krishiv Motors Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.2561 OF 2021
S C Auto Agencies Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION (L) NO.24664 OF 2022
Spectra Motors Limited)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶76

avk 9/27

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¶78

WITH
WRIT PETITION NO.56 OF 2023
Infinity Autolinks Private Limited)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.439 OF 2022
SAP Holdings and Leasing Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.446 OF 2022
SAP Holdings and Leasing Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents
WITH
WRIT PETITION NO.322 OF 2022
Fortpoint Automotive Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra and Anr)...Respondents

¶79

WITH
WRIT PETITION NO.5231 OF 2022
Vidarbha Automobile Dealers Association)...Petitioner
 vs.
The State of Maharashtra )...Respondents

¶80

avk 10/27

¶81

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¶82

Mr.Ratan Samal with Mr.Manohar Samal, Advocates for the
Petitioners in WPs No. 2161/2021, 446/2022 and 439/2022.

¶83

Mr.Bharat Raichandani with Ms.Prachi Dhanani and Ms.Juhi
Bahirwani i/by M/s Veritas Legal, Advocates for the Petitioners
in WP No.1749/2021.

¶84

Mr.Bharat Raichandani with Mr.Rishabh Jain i/b M/s UBR
Legal, Advocates for the Petitioners in WP No.3792/2021 and
WPL No.6743/2022, WPL No.7052/2022.

¶85

Ms.Nikita Badheka a/w. Mr.Parth Badheka and Ms.Lata
Nagal, Advocates for the Petitioners in WPLs No.24664/2022
and 56/2023.

¶86

Mr.Arya Anil i/by Mr. Sriram Sridharan, Advocates for the
Petitioners in WPs No.2194/2021, 2387/2021, 2512/2021,
4053/2022, 4055/2022, 2561/2021, 3727/2021, 7052/2022.

¶87

Mr.Sharad Bhattad with Mr.Shashikant Gaikwad i/by SSP
Legal, Advocates for the Petitioners in WP (St.) 3658/2023.

¶88

Mr.Vaibhav Shukla a/w Ms.Ira Mishra i/by Mr.Prabhakar
Jadhav, Advocates for the Petitioners in WPs No.2840/2021,
2877/2021, 2834/2021, 1749/2021, 322/2021, 2858/2021,
2904/2021, 2888/2021 and 2834/2021.

¶89

Mr.Shashikant Gaikwad i/by Mr.Sharad Bhattad, Advocates for
the Petitioners in WPs No.5231/2022, 3686/2020, 3658/2020.

¶90

Mr.V.A.Sonpal, Special Counsel with Ms.Jyoti Chavan, AGP
for the State in WPs No.2194/2021, 2387/2021, 4053/2022,
4055/2022.

¶91

Mr.V.A.Sonpal, Special Counsel with Ms.P.H.Kantharia, GP for
the State in WP No.2512/2021.

¶92

avk 11/27

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¶94

Mr.V.A.Sonpal, Special Counsel with Mr.Hemant Haryan, AGP
for the State in WP No.3792/2021,WPL No.6743/2022.

¶95

Mr.V.A.Sonpal, Special Counsel with Mr.Himanshu Takke,
AGP for the State in WPs No.2561/2021, 3727/2021.

¶96

Ms.Jyoti Chavan, AGP for the State in WPs No.446/2022,
439/2022.

¶97

Mr.Himanshu Takke, AGP for the State in WPs(L)
No.7052/2022, 24664/2022.

¶98

Ms.Swatantri Waghmare, Advocate for Respondent No.1 in
WP No.2834/2021.

¶99

AND

¶100

CIVIL APPELLATE JURISDICTION

¶101

WRIT PETITION NO. 5600 OF 2021

¶102

Neelam Automobile Pvt. Ltd. & Anr.)...Petitioners
 vs.
Deputy Commissioner of Sales Tax & Ors.)...Respondents

¶103

WITH

¶104

WRIT PETITION NO.5546 OF 2022

¶105

Chavan Automobiles / Chavan Motor)
Engineering)...Petitioner

¶106

vs.

¶107

The State of Maharashtra & Ors.)...Respondents

¶108

avk 12/27

¶109

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¶110

WITH WRIT PETITION NO.5547 OF 2022

¶111

Chavan Auto Wheels Pvt. Ltd)....Petitioner

¶112

vs.

¶113

The State of Maharashtra & Ors.

¶114

)...Respondents

¶115

WITH WRIT PETITION NO.5548 OF 2022

¶116

Chavan Motors Division India Pvt. Ltd.)...Petitioner

¶117

 vs.
The State of Maharashtra & Ors.)...Respondents

¶118

WITH WRIT PETITION NO.5549 OF 2022

¶119

Chavan Auto Wheels Pvt. Ltd)....Petitioner

¶120

vs.

¶121

The State of Maharashtra & Ors.)...Respondents

¶122

WITH

¶123

WRIT PETITION NO.5550 OF 2022

¶124

Chavan Automobiles / Chavan Motor)
Engineering)...Petitioner

¶125

 vs.
The State of Maharashtra & Ors.)...Respondents

¶126

WITH WRIT PETITION NO.1985 OF 2021

¶127

Arpanna Motors Pvt. Ltd. & Anr.)...Petitioners

¶128

vs.

¶129

Deputy Commissioner of Sales Tax & Ors.)...Respondents

¶130

avk 13/27

¶131

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¶132

WITH WRIT PETITION NO.582 OF 2023

¶133

Bafna Motors Mumbai Pvt. Ltd.)...Petitioner

¶134

 vs.
The State of Maharashtra & Anr.)...Respondents

¶135

WITH WRIT PETITION NO.9326 OF 2021

¶136

Chavan Automobiles / Chavan Motor)...Petitioner

¶137

vs.

¶138

The State of Maharashtra & Anr.

¶139

)...Respondents

¶140

WITH WRIT PETITION NO.9340 OF 2021

¶141

Chavan Motors Division India Pvt. Ltd.)...Petitioner
 vs.
The State of Maharashtra & Anr.)...Respondents

¶142

WITH

¶143

WRIT PETITION NO.9341 OF 2021

¶144

Chavan Auto Wheels Pvt. Ltd)....Petitioner
 vs.

¶145

The State of Maharashtra & Anr.)...Respondents

¶146

WITH

¶147

WRIT PETITION NO.9339 OF 2021

¶148

Chavan Auto Wheels Pvt. Ltd)....Petitioner
 vs.
The State of Maharashtra & Anr.)...Respondents

¶149

avk 14/27

¶150

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¶151

WITH WRIT PETITION NO.4691 OF 2021

¶152

M/s. Regent Honda Division of M/s.Tejpal)
Motors Pvt. Ltd.)....Petitioner

¶153

vs.

¶154

The State of Maharashtra & Ors.

¶155

)...Respondents

¶156

WITH

¶157

WRIT PETITION NO.3685 OF 2020

¶158

Unnati Vehicles Pvt. Ltd. )....Petitioner

¶159

 vs.
The State of Maharashtra )...Respondent

¶160

WITH

¶161

WRIT PETITION NO.3686 OF 2020

¶162

M/s. Aditya Auto Agencies )....Petitioner

¶163

vs.

¶164

The State of Maharashtra & Ors.)...Respondents

¶165

WITH WRIT PETITION NO. 261 OF 2022

¶166

The Kothari Wheels )....Petitioner

¶167

vs.

¶168

The State of Maharashtra & Anr)...Respondents

¶169

WITH WRIT PETITION NO. 260 OF 2022

¶170

Garve Motors Pvt. Ltd. )....Petitioner

¶171

vs.

¶172

The State of Maharashtra & Anr.)...Respondents

¶173

avk 15/27

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¶175

WITH WRIT PETITION NO.9428 OF 2021

¶176

Arpanna Motors Pvt. Ltd. )....Petitioner
 vs.
Deputy Commissioner of Sales Tax & Ors.)...Respondents

¶177

Mr.Ratan Samal with Mr.Manohar Samal, Advocates for the
Petitioners in WPs No.5546/2022, 5547/2022, 5548/2022,
5549/2022, 5550/2022, 89326/2021, 9340/2021, 9341/2021
and 9339/2021.

¶178

Mr.Hemang Raythattha with Mr.Swapnil Shikhare i/by
M/s.RMG Law Associates, Advocate for the Petitioners in WPs
No.1985/2021 and 9428/2021.

¶179

Mr.Rahul Thakar i/by Mr.C.B.Thakar, Advocates for the
Petitioner in WP No.4691/2021.

¶180

Mr.V.T.Dubey a/w. Mr.N.K.Dubey, Advocates for Petitioner in
WP No.5600/2021.

¶181

Mr.Shashikant Gaikwad i/by Mr.Sharad Bhattad, Advocates for
the Petitioners in WPs No.3685/2020 and 3686/2020.

¶182

Mrs.Shruti D. Vyas, “B” Panel Counsel for the Respondent-
State.

¶183

Mr.Ishaan Patkar i/by M/s Alaksha Legal, Advocate for the
Petitioners in WPs No.582/2023, 260/2022 and 261/2022.

¶184

CORAM : NITIN JAMDAR AND
 ABHAY AHUJA, JJ.
DATE : 12 APRIL 2023

¶185

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¶187

ORAL JUDGMENT: (PER NITIN JAMDAR, J.)

¶188

Rule. Rule made returnable forthwith. Respondents were
served. Taken for disposal.

¶189

2.The Petitioners in these Petitions are motor vehicle
dealers, and they are engaged in the business of selling motor
vehicles. The Petitioners charge road tax, insurance premium,
octroi duty and other charges and duties from their customers.
A question has arisen about the applicability of the Value
Added Tax (VAT) under the Maharashtra Value Added Tax Act,
2002 (MVAT Act). The assessment orders have been passed
against the Petitioners, holding that the tax is leviable under
the MVAT Act of 2002. Challenging this order of assessment,
the Petitioners are before us.

¶190

3.By Administrative order, the Writ Petitions were pending
at Aurangabad and Nagpur Bench, have been transferred to the
Principal Seat to be heard along with Writ Petition No.2512 of
2021 (Modi Car Agencies Pvt. Ltd. vs. The State of
Maharashtra and Ors.).

¶191

4.The common thread in these Petitions is a question as to
the applicability of VAT to the charges as specified above. In

¶192

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¶194

some cases, the Assessing Officer has relied on the Advance
Ruling Authority's decision under the MVAT Act of 2002 in
the case of M/s. B. U. Bhandari Auto dated 20 June 2018,
wherein the Advance Ruling Authority has held that VAT is
applicable on these charges. In some of these orders, though
there is no direct reference to this Advance Ruling, an identical
position of law has been accepted and made the basis thereof.

¶195

5.While these challenges to Petitions are pending,
subsequent developments have occurred. That is, order passed
by the Advance Ruling Authority in the case of M/s.
B.U.Bhandari Auto Private Limited Vs. The State of
Maharashtra was challenged before the Maharashtra Sales Tax
Tribunal at Pune in VAT Appeals No.2 of 2018. The Tribunal
posed the following question for consideration :

¶196

“(1)Whether the registration Charges, Insurance
Charges, handling charges received and paid on behalf
of the customer of a motor vehicle, form part of the
“sale price” of such motor vehicle, considering the
provisions of Section 2(25) of the MVAT Act ?

¶197

(2)Whether Incentive and discount, received from
the automotive manufacturers form part of the “sale
price” or needs to be treated as a “sale price” of the
motor vehicle sold to the customer or whether it results
in reduction of set off ?

¶198

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¶200

(3)Whether the Applicant is entitled to claim set
off, on purchased motor vehicle and used it as “Demo
Vehicles”, irrespective of the fact that such vehicle
continuing to be “stock-in-trade” or not being treated as
“capital asset” in the books of accounts of the
Applicants ?

¶201

(4)Whether the prayer of “prospective effect,
considering the fact that the decision of the Hon. High
Court of Judicature at Bombay in the case of Sehgal
Autoriders Private Limited was rendered on 11th July,
2011 and whereas the decision of the Hon'ble Supreme
Court of India in the case of K.T.C. Automobiles was
rendered only on 29th January, 2016?”

¶202

6. Tribunal has rendered its decision on 6 March 2023 and has concluded thus :

¶203

“(b)The impugned Advance Ruling Order in
respect of the registration Charges, insurance
Charges, handling charges received and paid on
behalf of the customer of a motor vehicle, form part
of the “sale price” of such motor vehicle, is modified.
And, it is held that, these charges cannot fall within
the extended meaning of the expression “sale price”
considering the provisions of Section 2(25) of the
MVAT Act.

¶204

(c)The impugned Advance Ruling Order in
respect of the Incentive and discount, received from
the automotive manufacturers form part of the “sale
price” or needs to be treated as a “sale price” of the
motor vehicle sold to the customer is modified. And,
it is held that, the Incentive and discount, received
from the automotive manufacturers does not form

¶205

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¶207

part of the “sale price”. And, also it is held that, due
to this Incentive, the input tax credit does not reduce
to the extent of Incentive.”

¶208

Unless specifically referred, this decision of the tribunal is
henceforth referred to as M/s. B.U.Bhandari Auto.

¶209

7.We note that there has been no challenge to the decision
of the Tribunal in M/s. B.U.Bhandari Auto and we have not
been informed of any such challenge. Therefore, we proceed
based on the Tribunal's decision to consider its implications for
the Petitioners. Furthermore, it has not been debated before us
that the Tribunal's decision in the case of M/s. B.U.Bhandari
Auto has not changed the nature of the litigation following the
challenge to the assessment orders passed against each
Petitioner, directly or indirectly.

¶210

8.The learned Counsel for the Petitioners place
reliance on the order M/s. B. U. Bhandari Auto and
contend that this order answers the issue raised by the
Petitioners in their favour and the impugned orders of
Assessment be quashed and set aside so also the tax demand.
The learned Counsel for the Respondent-State contends that
the decision of the Tribunal in the case of M/s. B. U. Bhandari
Auto cannot be directly made applicable to the case of

¶211

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¶213

the Petitioners as under Section 55 of the MVAT Act, the
decision of the Advance Ruling Authority would apply to
others only if they are considered as similarly situated, and
therefore, without this enquiry, it cannot be held that
Petitioners are not liable for levy of VAT.

¶214

9.Section 55 of the MVAT Act reads as follows:

¶215

“55. Advance Ruling

¶216

(1)The Applicant may make an application to the
Commissioner for Advance Ruling on the question
prescribed.

¶217

(2)The Applicant desirous of obtaining Advance
Ruling under the Section may make an application to
the Commissioner in precise form and manner, stating
any question prescribed under sub-section(1) on
which the Advance Ruling is sought.

¶218

(3)The Commissioner shall constitute Advance
Ruling Authority, comprising three officials, not
below the rank of Joint Commissioner by notification
in the Official Gazette, for giving Advance Rulings.
He may allot any of the questions or as the case may
be, all the questions prescribed under sub-section (1)
to such Advance Ruling Authority.

¶219

(4) The Commissioner may also allot any application
or question in such application made under section 56
and pending on the date of effect of this amendment
or, as the case may be, any class of applications, to
such Advance Ruling Authority.

¶220

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¶222

(5) The Commissioner or, as the case may be, the
Advance Ruling Authority shall, subject to rules,
make Advance Ruling, within ninety days from the
date of acceptance of the application by the
Commissioner or, as the case may be, the Advance
Ruling Authority.

¶223

(6) The applicant may withdraw his application
within thirty days from the date of submission of the
application.

¶224

(7) (a) No application shall be accepted where the question raised in the application,-

¶225

(i) is already pending before the Tribunal,
Bombay High Court or, as the case may be, the
Supreme Court in respect of the applicant, or

¶226

(ii) relates to a transaction or issue which is
designed apparently for the avoidance of tax.

¶227

(b) The Commissioner or, as the case may be, the
Advance Ruling Authority, may call for a report from
the concerned officer, in the prescribed manner.

¶228

(c) The communication regarding the acceptance of
the application shall be made to the applicant within
thirty days from the date of submission of the
application.

¶229

(d) No application shall be rejected under this sub-
section unless an opportunity of being heard has been
given to the applicant and where the application
is rejected, reasons for such rejections shall be
recorded in the order.

¶230

(8) (a) The Advance Ruling of the Commissioner shall
be binding on all the officers, including the appellate
authority or, as the case may be, on the Advance
Ruling Authority in respect of the similarly situated
persons.

¶231

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¶232

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¶233

(b) The Advance Ruling of the Advance Ruling
Authority shall be binding on all the officers,
including the appellate authority, other than the
Commissioner, in respect of the similarly situated
persons.

¶234

(9) The Commissioner or, as the case may be, the
Advance Ruling Authority, may direct that the
Advance Ruling shall not affect the liability of the
applicant or, if the circumstances so warrant of any
other person similarly situated, as respects any
sale or purchase effected prior to the Advance Ruling.

¶235

(10) The Appeal against the Advance Ruling Order
shall lie to the Tribunal and shall be subject to the
conditions prescribed.

¶236

(11) Notwithstanding anything contained in this Act,
no Appeal shall be entertained under any
circumstances whatsoever, after the date of expiry of
period of thirty days from the date of communication
of the Advance Ruling Order to the Applicant.

¶237

(12) The Advance Ruling order passed by the Advance
Ruling Authority shall be subject to any directions or,
as the case may be, instructions, issued under
sub- section (10) of section 10 by the Commissioner
and any order passed by the Commissioner under
section 56, as it existed.

¶238

(13) The Commissioner or, as the case may be, the
Advance Ruling Authority may on his own motion,
rectify any mistake apparent from the record and may
rectify any order passed by it before the order so
issued has been given effect to by the
officer concerned. The applicant may also bring to the
notice of the Commissioner or, as the case may be,

¶239

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¶240

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¶241

Advance Ruling Authority, any such mistake within
thirty days from the date of receipt of the said order:

¶242

Provided that, no such rectification shall be done
unless the applicant has been given a reasonable
opportunity of being heard:

¶243

Provided further that, an order under this sub-section
shall be passed within a period of sixty days from the
date of receipt of the Advance Ruling by the
applicant.

¶244

(14) (a) The Commissioner may, on his own motion
call for the record of any Advance Ruling issued by
the Advance Ruling Authority to examine as to
whether the said ruling is erroneous in so far as it is
prejudicial to the interests of revenue. The
Commissioner may, by serving on the applicant a
notice in the prescribed form pass such order as he
thinks just and proper.

¶245

(b) The Commissioner may also, for reasons to be
recorded in writing on his own motion, review the
Advance Ruling passed by him under this section
and pass such order as he thinks just and proper.
However, before initiating any action under this
clause, the Commissioner shall obtain prior
permission of the State Government. Such permission
shall also be obtained when the Advance Ruling order
is proposed to be made contrary to the order passed
by the Commissioner under Section 56.

¶246

(c) The Commissioner may direct that, the order of
review shall not affect the liability of the person in
whose case review is made in respect of any sale
or purchase effected prior to the review and may
likewise, if the circumstances so warrant direct

¶247

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¶248

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¶249

accordingly in respect of any other person similarly
situated.

¶250

(d) No order shall be passed, -

¶251

(i) under clause (a), after the expiry of a period of six months from the end of the year containing the date of Advance Ruling;

¶252

(ii) under clause (b), after the expiry of a period
of three months from the end of the month in
which the State Government gives permission to
initiate action under clause (b):

¶253

Provided that, no order under this sub-section shall be
passed unless an opportunity of being heard is given
to the applicant.

¶254

(15) The regulations regarding the procedure to be
followed shall be formulated by the Commissioner.”

¶255

Thus, Section 55 of the MVAT Act provides for Advance
Ruling, which allows an applicant to apply to the
Commissioner for Advance Ruling on the specified question.
The application must be made in the prescribed form and
manner, stating the question on which the Advance Ruling is
sought, as prescribed under sub-section (1). The Commissioner
will then constitute the Advance Ruling Authority, comprising
three officials not below the rank of Joint Commissioner, by
notification in the Official Gazette, for giving Advance Rulings.
This procedure is provided in Section 55(3) to Section 55(7).
According to Section 558(a), the Advance Ruling is binding on

¶256

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¶257

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¶258

all officers, including the appellate authority and the Advance
Ruling Authority, regarding similarly situated persons. Section
55(10) provides that appeal against the Advance Ruling Order
shall lie to a Tribunal, and the order passed in such an appeal
would be binding on similarly situated cases.

¶259

10. After considering the arguments, we agree with the
Respondents that the decision of the Tribunal in the case of
M/s. B.U.Bhandari Auto, though it provides relevant legal
guidance for the Petitions under consideration, this decision
cannot be applied directly to each Petitioner to quash the
assessment orders. It is necessary to conduct an enquiry to
determine whether the Petitioners can be considered similarly
situated persons. The Assessing Officers based their decision on
the law the Advance Ruling Authority laid down in the case of
M/s. B.U.Bhandari Auto. If this order is reversed, the
implication of the order passed by the Tribunal will have to be
considered in each case of the Petitioners. Therefore, an
enquiry must be conducted to determine whether the facts of
each Petitioner case warrant similar treatment.

¶260

11. In light of the above discussion, we dispose of the Writ
Petitions by quashing and setting aside the impugned
assessment orders in each of these Petitions. The assessment

¶261

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¶262

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¶263

proceedings are restored to file before the concerned
Commissioner of Sales Tax. The Commissioner would examine
the issue pending before the Commissioner in light of the
decision rendered by the Tribunal in the case of M/s.
B.U.Bhandari Auto and in the context of the provisions of
Section 55 of the Act referred to above and take the decisions
as per law.

¶264

12. We make it clear that we have not concluded on other
aspects that may arise during the assessment proceedings other
than the decision of the Tribunal in the case of M/s.
B.U.Bhandari Auto and the Commissioner would examine the
facts of each case and pass the order as per law. Needless to
state, the contentions of the Petitioners and the department are
expressly kept open.

¶265

13. In the light of setting aside the impugned assessment
orders as above, the consequential effects of the setting aside of
the impugned orders would follow and be given effect to by
the concerned.

¶266

14. Rule made absolute in the writ petitions in the above
terms. No costs.

¶267

 (ABHAY AHUJA, J.) (NITIN JAMDAR, J.)

¶268

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¶269

ARTI VILAS KHATATE Digitally signed by ARTI VILAS KHATATE Date: 2023.04.18 20:22:57 +0530

Modi Car Agencies Pvt. Ltd. v. the State of Maharashtra and 2 Ors.

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Modi Car Agencies Pvt. Ltd. v. the State of Maharashtra and 2 Ors.

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