2017 (3) TMI 1650 - HC - VAT and Sales Tax

Prior permission as required under Section 29(7) of Act, 2008 - Circular issued by Commissioner dated 25.05.2016 - power of Commissioner to issue such Circular - Held that - Assessing Authority has not relied on any Circular and in any case the validity of Circular is not under challenge before this Court. Therefore, it would not be proper for this Court to make any comment thereon - So far as question, whether there is any escape of assessment of tax or that supply in question was for domestic purpose or not, has to be examined by Taxing authority concerned and the petitioner has statuary remedy including hierarchy of appeal etc., and, therefore, those aspects need not be examined in this writ petition - petition dismissed.

Summary

Issues:
Challenge to notices issued under Section 29(7) of U.P. Value Added Tax Act, 2008 regarding sale transactions of Liquefied Petroleum Gas (L.P.G.) to specific institutions.

Analysis:
The petitioners challenged the notices dated 22.03.2017 issued by the Joint Commissioner under Section 29(7) of the Act, 2008. The petitioners argued that the permission granted by the Additional Commissioner was based on an ultra vires Circular issued by the Commissioner. The petitioners contended that the Circular was beyond the Commissioner's power and, therefore, the approval granted was illegal, rendering the notice jurisdiction-less. The key issue challenged in this case was the legality of the notice issued under Section 29(7) of the Act, 2008.

The Assessing Officer initially issued a show-cause notice to the petitioner on 06.03.2017, stating that certain sale transactions of L.P.G. to specific institutions were excluded from taxation and should be taxed. The petitioner responded by citing a Government of India decision treating supply of L.P.G. to those categories as domestic. Subsequently, the Additional Commissioner granted approval on 18.03.2017, leading to the issuance of the impugned notice under Section 29(7) of the Act, 2008.

The Court highlighted that the Government of India's decision on the treatment of L.P.G. supply did not bind Tax authorities, and there was no statutory provision making it binding under the Act, 2008. The Court emphasized that the definition of "domestic use" for L.P.G. under the relevant Notification was subject to adjudication by the authorities under the Act, 2008. The approval granted by the Additional Commissioner was supported by various justifications, including reference to the Commissioner's Circular, which was not challenged in the writ petition.

The Court rejected the petitioner's reliance on previous judgments that held the Commissioner could not issue directions binding on Assessing Authorities. Since the Circular in question was not challenged, those judgments did not assist the petitioner. The Court emphasized that the Taxing authority needed to examine whether there was an escape of tax assessment or if the supply was for domestic purposes. The Court concluded that the writ petitions lacked merit and dismissed them, indicating that statutory remedies, including the hierarchy of appeal, were available to the petitioner for further recourse.