2015 (6) TMI 1048 - HC - VAT and Sales Tax

Rectification appeal - mistake apparent on the face of the record - Held that - Commissioner ought not to have impugned the ultimate direction. Today, the position is that the rectification application of the dealer is allowed. The dealer had partly succeeded before the Tribunal and had persuaded it to remand the matter to the Joint Commissioner. That initial order dated September 12, 2012, is wholly set aside. The Tribunal has directed that the appeal will have to be heard afresh on merits and in accordance with law. Both parties will have adequate opportunity of placing their versions when the appeal is heard afresh. We do not see any prejudice to the Commissioner and rather the Department of Sales Tax. We are surprised that the Commissioner has approached this court. Commissioner does not impugn the initial order of remand and partial success of the respondent in the appeal. It is the dealer-respondent who approached the Tribunal and by filing rectification applications. In such circumstances, the Commissioner could not have instituted the present writ petition. Moreso, when there is presently no loss of revenue nor is any serious prejudice caused to the Revenue. The Commissioner/Revenue will have full and complete opportunity to satisfy the Tribunal when it hears the appeal afresh that the order passed by the Joint Commissioner on April 21, 2011 is in accordance with law. In such circumstances, this writ petition has no merit and is completely misconceived. - Decided against the Revenue

Summary

Issues:
Quashing of order by Sales Tax Tribunal, Rectification application, Tax exemption claim, Remand of case by Tribunal, Writ petition filed by Commissioner of Sales Tax

Quashing of Order by Sales Tax Tribunal:
The State of Maharashtra filed a petition seeking the quashing of an order passed by the Sales Tax Tribunal and restoration of a previous order. The respondent, a dealer of labels, claimed tax exemption under relevant Acts for sales to garment manufacturers in Tamil Nadu for export. The Tribunal partially allowed the dealer's appeal, remanding the case to the Joint Commissioner for verification of export sales. The respondent filed a rectification application, which was initially withdrawn but later accepted by the Tribunal, leading to the recall of the remand direction. The High Court noted that the Commissioner had no grounds to impugn the ultimate direction, as the Tribunal's decision to allow the rectification application and hear the appeal afresh did not cause prejudice to the Revenue. The Court dismissed the writ petition, emphasizing that both parties would have an opportunity to present their case before the Tribunal without any influence from previous observations.

Rectification Application:
The respondent dealer initially sought rectification of the Tribunal's order, which was withdrawn but later refiled and accepted, resulting in the recall of the remand direction. The Commissioner challenged this decision through a writ petition. However, the High Court found that the Commissioner had no valid reason to contest the rectification, as it did not affect the Revenue and both parties would have a fair chance to present their arguments during the fresh appeal hearing. The Court dismissed the writ petition, allowing the Tribunal to decide the matter in accordance with the law.

Tax Exemption Claim:
The respondent dealer claimed tax exemption for the sale of labels to garment manufacturers in Tamil Nadu for export, arguing that it fell under deemed sales in the course of export. The assessing officer initially accepted this claim, but the Joint Commissioner set aside the order based on internal audit objections. The Tribunal partially allowed the dealer's appeal, remanding the case for verification of export sales. The subsequent rectification application and recall of the remand direction were contested by the Commissioner through a writ petition, which the High Court dismissed, stating that the Tribunal would hear the appeal afresh without any bias from previous proceedings.

Remand of Case by Tribunal:
The Tribunal initially remanded the case to the Joint Commissioner for verification of export sales after partially allowing the dealer's appeal. The respondent filed a rectification application, leading to the recall of the remand direction. The Commissioner challenged this decision through a writ petition, which the High Court dismissed, emphasizing that both parties would have an opportunity to present their case before the Tribunal without any influence from previous observations.

Writ Petition Filed by Commissioner of Sales Tax:
The Commissioner of Sales Tax filed a writ petition challenging the Tribunal's decision to recall the remand direction and hear the appeal afresh. However, the High Court found that the Commissioner's petition lacked merit, as the Tribunal's actions did not prejudice the Revenue, and both parties would have a fair chance to present their arguments during the fresh appeal hearing. The Court dismissed the writ petition, allowing the Tribunal to decide the matter independently and in accordance with the law.