2009 (8) TMI 1081 - HC - VAT and Sales Tax

Power of Commissioner to review his order - Held that - Admittedly, in the instant case, there has been non-compliance with the two provisos before the earlier communication of October 1, 2001 was recalled by communication dated May 18, 2005. For the foregoing reasons, this petition can be disposed of by giving the directions that if the communication dated October 1, 2001 was passed after approval of the Commissioner, then the Commissioner has to comply with the procedure under section 52(2A) of the Bombay Sales Tax Act and if the order was not passed by the Commissioner in terms of section 52(2), the question of complying with section 52(2A) of the Bombay Sales Tax Act would not arise. The Commissioner is then to inform the petitioners about the same. Petitioner No. 1 and its members would then be free to take recourse to law for whatever relief they are entitled to.

Summary

The High Court of Bombay delivered a judgment in 2009 regarding a case involving an association of traders providing temporary tarpaulin sheds to industrial concerns. The association sought clarification from the Commissioner of Sales Tax, Maharashtra State, regarding the liability of its members under the Maharashtra Sales Tax on Transfer of Right to Use any Goods for any Purpose Act, 1985. Initially, the Commissioner clarified that the activity of providing temporary sheds did not amount to leasing of goods. However, a subsequent communication stated that the transactions were covered by the Lease Act/Maharashtra Value Added Tax Act, 2002, leading to a retrospective liability for the association's members. The petitioners requested reconsideration, but the Commissioner denied it. The Commissioner abolished the Lease Act, 1985 and introduced the Maharashtra Value Added Tax Act, 2002. The court directed the Commissioner to comply with the procedure under section 52(2A) of the Bombay Sales Tax Act if the initial communication was approved by the Commissioner. If not, the petitioners were advised to seek legal recourse. The ruling was in favor of the petitioners, and no monetary costs were awarded.