M/S. Vishnu Chemicals Ltd. Vs State of Odisha

-------------------------------------------------------------------------------------------- Dates of Hearing: 21^st October, 2024 and 19^th November, 2024 Date of Judgment: 19^th November, 2024

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ARINDAM SINHA, J.

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1. Petitioner is a registered dealer, who wants to file for revision against order dated 16^th March, 2018 made by Odisha Sales Tax Tribunal, Cuttack. It was a common order dealing with S.A. nos.239(V) and 255(V) both of 2011-2012. Mr. Rath, learned advocate

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appears on behalf of petitioner and Mr. Mishra, learned advocate, Standing Counsel, for revenue.

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Page 1 of 10

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2. The revision petition was moved on 21^st October, 2024. We

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reproduce below paragraphs 1 to 6 of our order made that day.

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“1. Mr. Rath, learned advocate appears on behalf of petitioner and submits, the revision be admitted against impugned order dated 16^th March, 2018 made by Odisha Sales Tax Tribunal in two second appeals dealt with thereby. He submits, the order was not to knowledge of his client. Upon having information that the appeal had been dealt with, his client applied for certified copy and soon thereafter filed for revision. He submits further, the second appeals preferred by his client and revenue were all dismissed by impugned order.

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2. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and draws attention to paragraph-9. It is reproduced below.

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“That the petitioner at a belated stage came to know regarding disposal of appeal before the Learned Sales Tax Tribunal and accordingly instructed the present counsel to obtain the certified copy of the order. The certified copy of the impugned order has been served on the counsel today and as such the present filed is filed.”

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He hands up list of events and attached documents with copy to Mr. Rath. He submits, the less tax was recovered from petitioner on liberty given in impugned order. He demonstrates that petitioner had paid the balance tax of ₹8,95,842/- by demand draft no.605406 dated 31^st March, 2018. Petitioner thereafter filing for revision is seeking to

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abuse the process of Court. Mr. Mishra relies on judgments of the Supreme Court.

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i) Judgment dated 10^th August, 2017 in Civil Appeal no.10214 of 2017 (M/s. Shoeline v. Commissioner of Service Tax and others) . He submits, the writ petition filed by appellant dealer was dismissed by the learned single Judge and confirmed by the Division Bench in appeal. Facts include appellant before the Supreme Court not having preferred statutory appeal against the adjudicating order. The Supreme Court found that appellant not having preferred first appeal was sitting on the fence, waiting for adjudication on challenge mounted by others. As such, the Supreme Court did not interfere. ii) Judgment dated 18^th April, 2024 of the Supreme Court in Civil Appeal no.5027 of 2024 (Mrinmoy Maity v. Chhanda Koley and others) . He clarifies, the Supreme Court restored order of the learned single Judge in the High Court dismissing the writ petition on ground of delay.

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3. Mr. Mishra next draws attention to sub-section(2) in section 98 of Orissa Value Added Tax Act, 2004 to submit, communication of impugned order cannot be called into question on petitioner having acted upon it. He draws attention to extract from the dispatch register showing impugned order dispatched by hand for communication on 20^th March, 2018 and a signature acknowledging receipt. On query made he submits, the signature was made by learned advocate for petitioner.

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4. Mr. Rath in reply draws attention to rules 113 and 99 of Orissa Value Added Tax Rules, 2005, in that order. He demonstrates from the rules that supply of copy of order is to be made upon the party while notice of appeal may be given to the agent. He lays emphasis on the distinction to submit, the order was not served/communicated as sought to be contended. Without prejudice he submits, his client having paid balance of the tax demanded, does not thereby lose its right of appeal.

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5, We see that in M/s. Shoeline (supra) the Supreme Court said that the High Court committed an error by not dealing with the aspect of the matter inasmuch as the claim for interest and penalty was still outstanding against appellant before it. In the circumstances, though the Supreme Court said that appellant had approached belatedly and may not be entitled to refund of service tax already paid but at the same time appellant should not be called upon to pay any interest or penalty levied on a tax, which was not payable at all in law. In that case challenge to the demand had been made by others and appellant was found to have been waiting without being himself vigilant. Mrinmoy Maity (supra) clearly does not apply as distinguishable on facts relating to condonation of delay for admission of a writ petition regarding LPG dealership, where there is no prescribed period of limitation.

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6. Considering a question of fact has arisen regarding application of sub-section (2) in section 98,

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revenue may file affidavit to demonstrate service of impugned order by hand, as shown in the dispatch register, to petitioner, after receipt of which the balance tax was paid on 31^st March, 2018. The affidavit will be accepted on adjourned date, upon advance copy served.” 3. Revenue filed affidavit. In it stands disclosed, inter alia, page

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extract from the dispatch register showing dispatch of impugned order by hand and initialed on 20^th March, 2018, said to be by learned advocate engaged by petitioner in the Tribunal. So we have assertion that there was service to learned advocate of the party. Mr. Rath relies

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on judgment of the Supreme Court in Benarsi Krishna Committee v. Karmyogi Shelters (P) Ltd. reported in (2012) 9 SCC 496 , paragraphs 15, 16 and 17. He submits, the declaration of law was made in interpretation of sections 31(5) and 34(3) in Arbitration and Conciliation Act, 1996. The provisions are pari materia to provisions in section 80 in the Act of 2005 read with rule 113 of the rules. Paragraph 17 is reproduced below.

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“17. In the instant case, since a signed copy of the award had not been delivered to the party itself and the party obtained the same on 15-12.2004, and the petition under Section 34 of the Act was filed on 3-2.2005, it has to be held that the said petition was filed within the stipulated period of three months as contemplated under Section 34(3) of the aforesaid Act. Consequently, the objection

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taken on behalf of the petitioner herein cannot be sustained and, in our view, was rightly rejected by the Division Bench of the Delhi High Court.”

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He submits, delay be condoned and the revision petition admitted on any or all the substantial questions of law suggested in it.

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4. Revenue’s contention is that the party was duly served through learned advocate engaged on its behalf. Furthermore, proof of service and knowledge had of impugned order is on petitioner having thereafter liquidated the assessed tax by demand draft. We have to consider whether this amounts to waiver of right to petition for revision. For the purpose we find that sub-section (6) in section 80 says, notwithstanding a petition has been moved, the tax or any other dues shall be paid in accordance with the order, against which the petition has been moved. There is a proviso which says that the fate of the deposit will depend on adjudication in the revision. Sub-section (6) in section 80 along with the proviso is reproduced below.

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“(6) Notwithstanding that a petition has been moved under sub-section (1), the tax or any other dues under this Act shall be paid in accordance with the order against which the petition has been moved :

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Provided that if, as a result of the petition, any change in the assessment becomes necessary, the High Court may

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direct the assessing authority to amend the assessment and the assessing authority shall amend the assessment accordingly and, thereupon, the excess amount paid, if any, by the assessee shall be refunded to him without interest or the additional amount of tax or other dues payable by him shall be collected in accordance with provisions of this Act, as the case may be.”

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It thus becomes clear that in any event petitioner had to pay. As such, the payment does not in any way affect petitioner’s right to petition for revision. We further note that sub-section (1) in section 80 provides discretion to the High Court for admitting a petition for revision filed on delay. The stamp report says the petition was filed in time obviously going by the certified copy. We condone the delay.

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5. On merits Mr. Rath submits, substantial questions of law arise because the reassessment was made prior to amendments in sections 39(2) and 43(1), which came into effect from 1^st October, 2015. The earlier provisions were applicable to his client’s case. It had filed selfassessment. There was no communication of acceptance thereof. In the premises, there could not have been reopening under section 43(1) as it stood prior to 1^st October, 2015.

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6. We admit the revision petition on the question of law formulated as below.

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For self-assessment made and filed prior to 1^st October, 2015, which did not receive formal communication or acknowledgement from the department as accepted and there was reopening and reassessment under section 43(1), can the self-assessment be said to have been accepted?

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7. Mr. Rath relies on view taken by coordinate Bench on judgment dated 1^st December, 2021 in STREV no.64 of 2016 (M/s. Keshab Automobiles v. State of Odisha) paragraph 22, reproduced below.

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“22. From the above discussion, the picture that emerges is that if the self-assessment under Section 39 of the OVAT Act for tax periods prior to 1^st October, 2015 are not “accepted‟ either by a formal communication or an acknowledgment by the Department, then such assessment cannot be sought to be re-opened under Section 43 (1) of the OVAT Act and further subject to the fulfillment of other requirements of that provision as it stood prior to 1^st October, 2015.”

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He submits, the reassessment was bad ab initio because there was no formal communication or acknowledgement in respect of his client’s self-assessment as ‘accepted’. In the circumstances, the question formulated be answered in favour of his client and impugned order, set aside and quashed.

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8. Mr. Mishra relies on section 98 to submit, petitioner having been unsuccessful both before the First Appellate Authority and the Tribunal, cannot invite interference with impugned order, as barred under the provision. He reiterates that knowledge of the order was had on notice of it and it was complied with upon the demand of tax, paid. Impugned assessment order is not open to challenge on the ground of maintainability.

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9. It appears to us there cannot be deemed acceptance of selfassessment prior to 1^st October, 2015 per view taken in M/s. Keshab Automobiles (supra). On query made Mr. Rath submits, revenue preferred special leave petition to the Supreme Court. By order dated 13^th July, 2022 the Supreme Court, in Special Leave to Appeal (C) no. 9912 of 2022 and several applications made therein, recorded complete agreement with the view. Reproduced below is text of order dated 13^th July, 2022 (supra).

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“We have gone through the impugned order(s) passed by the High Court. The High Court has passed the impugned order (2) on the interpretation of relevant provisions, more particularly Section 43(1) of the Odisha Value Added Tax Act, 2004, which was prevailing prior to the amendment. We are in complete agreement with the view taken by the High Court. No interference of this Court is called for in exercise of

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powers under Article 136 of the Constitution of India. Hence, the Special Leave Petitions stands dismissed.

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Pending application(s) shall stand disposed of.”

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(emphasis supplied)

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10. We are clear our mind, view taken by coordinate Bench received confirmation from the Supreme Court. The view was, prior to 1^st October, 2015 there had to be formal communication or an acknowledgment by the department that the self-assessment stood ‘accepted’ for there to be reopening under section 43(1). In this case there is no dispute that such acceptance was neither communicated nor made known as acknowledged by the department.

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11. In view of aforesaid we answer the question in the negative. Consequence is that the self-assessment of petitioner was never accepted. Impugned order is set aside and quashed.

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12. The revision petition is disposed of.

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(Arindam Sinha) Judge

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(M.S. Sahoo) Judge

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Signature Not Verified

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Digitally Signed Sks Signed by: SISIR KUMAR SETHI Reason: Authentication Location: ORISSA HIGH COURT Date: 20-Nov-2024 15:16:46

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STREV no. 11 of 2023 Page 10 of 10

M/S. Vishnu Chemicals Ltd. v. State of Odisha

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M/S. Vishnu Chemicals Ltd. v. State of Odisha

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