Allowed

M/s. Mnm Krishnaswamy Mudaliar and Sons, v. Commercial Tax Officer

Telangana HC8 Oct 2012WP/28658/2012

Case brief

AI extract

What is this about?

The High Court examined an assessment order where tax was levied on bread rusk sales based solely on an Authority for Advance Ruling. The court held that since the original applicant appealed against the ruling within the statutory time limit, the assessment relying only on that ruling could not be sustained.

What did the court decide?

The order of assessment dated 18.08.2012 is quashed and the matter is remitted to the respondent to pass a fresh order of assessment without relying on the advance ruling dated 28.01.2010.

M/s. Mnm Krishnaswamy Mudaliar and Sons, Vs… — Banking and Recovery | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

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WRIT PETITION No.28658 of 2012

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ORDER (Per the Hon’ble Sri Justice Goda Raghuram):

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Heard Sri S. Dwarakanath, learned counsel for the petitioner and Sri B. Venkatadri, learned Special Government Pleader for Commercial Taxes for the respondent – Revenue.

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The order of Assessment dated 18.08.2012 under the APVAT Act, 2005 (for short ‘the Act’) passed by the respondent taxing the turnover of the petitioner in respect of Bread Rusk (suji toast) at 12.5% under Schedule V of the Act is challenged in this writ petition.

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The petitioner is an authorized wholesale distributor for Britannia Industries Limited (BIL) and sells branded bread and bread rusk manufactured by BIL. The petitioner filed its returns for the periods 2007-08, 2008-09 and 2009-10 (01.04.2009 to 14.01.2010) and another for the period 2009-10 (15.01.2010 to 31.03.2010). BIL charged tax at 4% on the sale of branded bread rusk treating the same as falling under Entry 15 of the IV Schedule of the Act. BIL had applied for Advance Ruling under Section 67 of the Act for clarification of the rate of tax for sale of bread rusk. By the order dated 28.01.2010, the Authority for Advance Ruling declared that bread rusk is not liable to tax under Entry 15 of the IV Schedule but is liable to tax at 12.5% under the V Schedule. Challenging the same, BIL had carried the matter in appeal before the Sales Tax Appellate Tribunal, Hyderabad in T.A.No.179 of 2010. This appeal is pending.

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While so, the respondent issued a show cause notice dated 07.06.2012 proposing to levy tax under Schedule V of the Act, on the basis of the ruling of the Authority for Advance Ruling and Clarification, dated 28.01.2010 (rendered in the application filed by BIL). After

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considering the objections filed by the petitioner to the show cause notice, the respondent passed the impugned order of Assessment.

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It is contended by Sri S. Dwarakanath, learned counsel for the petitioner that the ruling of the Authority for Advance Ruling and Clarification given under provisions of Section 67 of the Act qua Section 67 (3) of the Act is not applicable where the dealer does files an appeal within 30 days in the manner prescribed; since BIL had preferred an appeal to the STAT within the time stipulated in the proviso to Section 67 (3) of the Act, the impugned order of Assessment ought not to have been passed. In fact the petitioner by a representation had addressed the respondent to either drop the proceedings or await the order of the Tribunal in T.A.No.179 of 2010, the appeal preferred by the BIL against the ruling of the Advance Ruling Authority.

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In the impugned order of Assessment however the respondent had brought the turnover relating to the sale of bread rusk to tax under Schedule V of the Act relying solely on the ruling by the Advance Ruling Authority.

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In the circumstances and in view of proviso to Section 67 (3) of the Act, the order of Assessment cannot be sustained since the ruling dated 28.01.2010 passed by the Authority for Advance Ruling and Clarification is the only basis for the order of Assessment, treating the relevant turnover pertaining to bread rusks to tax under Schedule V of the Act.

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In the circumstances, the order of Assessment dated 18.08.2012 passed by the respondent in respect of the Assessment periods specified is quashed and the matter is remitted to the respondent for passing a fresh order of Assessment but without relying on the ruling dated 28.01.2010. The respondent may pass a fresh

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order of Assessment in accordance with law. The petitioner is also at liberty to assert any other contentions or objections including the bar of limitation period as is open to it under law, objecting to Assessment by the respondent.

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The writ petition is accordingly allowed at the stage of admission. In the circumstances however, there shall be no order as to costs.

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JUSTICE GODA RAGHURAM

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Date: 08.10.2012

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JUSTICE M.S.RAMACHANDRA RAO

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

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WRIT PETITION No.28658 of 2012 (order of the Bench delivered by the Hon’ble Sri Justice Goda Raghuram)

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Date: 08.10.2012

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M/s. Mnm Krishnaswamy Mudaliar and Sons, v. Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

M/s. Mnm Krishnaswamy Mudaliar and Sons, v. Commercial Tax Officer

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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