2011 (9) TMI 885 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to correctness of Sales Tax Tribunal's order for reference under section 61 of Bombay Sales Tax Act, 1959.

Detailed Analysis:

1. Challenge to Tribunal's Order:
The Revenue challenged the correctness of the Sales Tax Tribunal's order dated November 22, 2010, which dismissed the application for reference under section 61 of the Bombay Sales Tax Act, 1959. The Tribunal had partly allowed the second appeal filed by the assessee, granting relief towards purchase tax under section 13AA and consequential reliefs towards additional tax and interest. Subsequent rectification applications and orders were made by the Tribunal and the first appellate authority. The Revenue's applications for rectification were dismissed, leading to the application for reference under section 61.

2. Requirements for Reference Application:
Section 61(1) outlines the conditions for allowing a reference application. These include: the order must be passed in appeal, it must affect the liability of any person to pay tax, penalty, interest, or forfeiture, a question of law must arise from the order, and the application must be filed within ninety days of the order's communication. The Tribunal's order resulting from the rectification application did not impact the liability of any person to pay tax, penalty, or interest, as per precedents from Division Benches of the court.

3. Precedents and Legal Interpretation:
The judgment referred to previous decisions by Division Benches of the court, such as Commissioner of Sales Tax v. S.K. Manekia and Santoshi Tel Utpadak Kendra v. Deputy Commissioner. These cases established that an order on an application for rectification does not fall under the category of an order affecting liability to pay tax, penalty, or interest. In line with these precedents, the court concluded that the application for reference under section 61 was misconceived.

4. Dismissal and Remedy:
The High Court dismissed the application for reference under section 61 on the grounds that it was misconceived. However, the court left it open for the Revenue to pursue other available remedies in accordance with the law. The judgment concluded with a decision of no order as to costs, indicating that each party would bear their own legal expenses.

In conclusion, the High Court's judgment clarified the requirements for a reference application under section 61 of the Bombay Sales Tax Act, emphasizing that orders resulting from rectification applications may not necessarily impact the liability to pay tax, penalty, or interest. The court's decision was based on legal precedents and interpretations, ultimately dismissing the reference application while allowing the Revenue to explore alternative legal remedies.