2010 (1) TMI 1111 - HC - VAT and Sales Tax

Summary

Issues:
1. Application under section 70(2) of the Chhattisgarh Commercial Tax Act, 1994 for quashing the impugned order passed by the Chhattisgarh Commercial Tax Tribunal and referring questions of law to the High Court.
2. Rejection of application under section 70 of the Act by the Tribunal on grounds of limitation.
3. Dispute regarding imposition of VAT under section 9B of the Act.
4. Consideration of delay in filing the application for reference under section 70 of the Act.

Analysis:
1. The State filed an application under section 70(2) of the Chhattisgarh Commercial Tax Act, 1994, seeking to quash the order passed by the Chhattisgarh Commercial Tax Tribunal and requesting the Tribunal to refer questions of law to the High Court. The State contended that the Tribunal erred in rejecting the application on technical grounds without considering the legal question's revenue implications. The Tribunal dismissed the application citing an inordinate delay of over two years in filing the reference application. The High Court declined to interfere, upholding the Tribunal's decision based on the delay without delving into the case's merits.

2. The dispute revolved around the imposition of VAT under section 9B of the Act. The assessing officer imposed tax and penalty on the respondent, who objected on the grounds of not being liable to pay tax under section 9. The Appellate Commissioner partially allowed the appeal, but the Board of Revenue concluded that the imposition of VAT under section 9B was incorrect due to the absence of tax liability under section 9. The Revenue's application for reference to the High Court was dismissed as time-barred, leading to the State's application under section 70(2).

3. The respondent argued that as a dealer of tax-paid goods not liable for tax under section 9, VAT under section 9B could not be imposed during the relevant period. The respondent emphasized that section 9B only applied to dealers with a turnover exceeding one crore rupees and liable to pay tax under section 9. The respondent highlighted the inapplicability of VAT under section 9B due to the absence of tax liability under section 9, which was the crux of the dispute.

4. The High Court considered both parties' arguments regarding the delay in filing the application for reference under section 70 of the Act. The State contended that the delay was due to technical reasons and sought the High Court's intervention to address the legal question's significance. However, the High Court upheld the Tribunal's decision, emphasizing the importance of adhering to procedural timelines and rejecting the reference application based on the delay without delving into the substantive legal issues.

In conclusion, the High Court's judgment upheld the Tribunal's decision to reject the reference application based on the inordinate delay in filing, without delving into the substantive legal issues raised by the State and the respondent regarding the imposition of VAT under section 9B of the Chhattisgarh Commercial Tax Act, 1994.