2010 (6) TMI 338 - HC - Customs

SEZ - company has evaded payments of Central Sales Tax and Value Added Tax, by way of mis-declaration on documents and thus evaded payment of Customs Special Additional Duty - keeping in view the prayer clause, as the matter has been remanded back to the Approval Committee for de novo consideration and it has also been directed that the Unit Approval Committee, after due deliberations and after having provided adequate opportunity to the appellant to present their cases, shall pass a speaking order backed up by proper legal documentation, and therefore, the question of issuing any direction/order to the Unit Approval Committee in the peculiar facts and circumstances does not arise Held that - appeal of the petitioner-company has been decided and the Approval Committee has been directed to pass a fresh order, after granting adequate opportunity to the petitioner-company in the matter - Appellate Authority further reveals that any further follow up action lies on the part of the Unit Approval Committee and the Development Commissioner of the Special Economic Zone, and therefore, in case the petitioner-company is further aggrieved in the matter, is certainly having a remedy to approach by filing a proper application before the Unit Approval Committee/before the Development Commission of Special Economic Zone - no relief can be granted to the petitioner in respect of stay - writ petitions are disposed of. No order as to costs

Summary

Issues:
Petitioner seeking stay of order passed by Approval Committee in Special Economic Zone; Allegations of tax evasion and cancellation of Letter of Approval (LoA); Appeal under Special Economic Zones Act, 2005; Appellate Authority remanding matter back to Approval Committee for fresh adjudication.

Analysis:
The petitioner, a limited company registered under the Companies Act, 1956, filed a writ petition seeking a stay on the order passed by the Approval Committee in the Special Economic Zone. The petitioner alleged that a notice was issued under Section 16(1) of the Special Economic Zones Act, 2005, accusing them of evading Central Sales Tax, Value Added Tax, and Customs Special Additional Duty. The petitioner challenged this notice through a writ petition, which was disposed of with directions for the Approval Committee to pass an order after hearing the petitioner. Subsequently, the Approval Committee canceled the Letter of Approval (LoA) issued to the petitioner on the grounds of deliberate tax evasion. The petitioner then appealed under Section 16(4) of the Act, as there was no provision for stay. The Appellate Authority remanded the matter back to the Approval Committee for fresh adjudication.

The respondent argued that the writ petition had become infructuous as the Appellate Authority had already passed a final order remanding the matter back to the Approval Committee. The respondent contended that issuing any further direction to the Approval Committee was unnecessary as the matter was already being reconsidered. The Court noted that the Appellate Authority had directed the Approval Committee to pass a speaking order with proper legal documentation after providing adequate opportunity to the petitioner. The Court held that since the matter had been decided by the Appellate Authority and was being reconsidered by the Approval Committee, there was no need for a stay on the earlier order. The petitioner was advised to seek remedy through proper channels if further aggrieved.

In conclusion, the Court disposed of the writ petitions, stating that no relief could be granted regarding the stay of the order passed by the Approval Committee as the matter was under reconsideration. The petitioner was advised to approach the Unit Approval Committee or the Development Commissioner of the Special Economic Zone for further recourse. No costs were awarded in the judgment.