2013 (2) TMI 275 - HC - VAT and Sales Tax

Inclusion of turnover concerning supply of ballast for the purpose of compounding under Section 7(7) - revisional orders passed under Section 35 of the KGST Act - Held that - Reading of Ext.P4 series of the revisional orders show that there is a specific finding by the revisional authority that the turnover for the supply of ballast to the railways is liable to be included for the purpose of Section 7(7). It is on that basis, the revisional authority has directed that fresh assessment shall be completed in accordance with law. It is pursuant to this direction, Ext.P8 series of orders were passed. Therefore, unless the petitioner succeeds in invalidating Ext.P4 series of orders of the revisional authority, petitioner cannot successfully impugn Ext.P8 series of orders. In other words, the remedy of the petitioner at this stage, is to pursue Ext.P9 series of appeals. For that reason, the writ petition fails and it is dismissed. The Tribunal is directed to consider the delay petitions and if delay is condoned, to consider the appeals on an expeditious basis.

Issues:
1. Revision of assessment orders under Section 35 of KGST Act for including turnover concerning supply of ballast.
2. Validity of assessment orders passed afresh pursuant to revisional orders.
3. Petitioner's appeal against revisional orders and applications to condone delay.
4. Contention regarding exclusion of turnover for supply of ballast under Section 7(7) of KGST Act.
5. Impugning assessment orders based on revisional authority's findings.

Analysis:

1. The judgment deals with the revision of assessment orders under Section 35 of the KGST Act concerning the inclusion of turnover related to the supply of ballast. The revisional authority revised the original assessment orders, holding that when a contractor opts for tax payment at a compounded rate, the entire contract receipts, including turnover from the supply of ballast, must be assessed under Section 7(7) of the KGST Act. The revisional orders were passed on specific dates in 2009 and 2010.

2. Following the revisional orders, the assessing authority issued pre-assessment notices, and subsequent assessment orders were passed. The petitioner challenged the validity of these assessment orders in a writ petition seeking to quash them. The petitioner also filed appeals against the revisional orders and applications to condone the delay in filing the appeals.

3. The petitioner's appeals against the revisional orders were based on the argument that the turnover for the supply of ballast should be excluded from assessment under Section 7(7) of the KGST Act. However, the revisional authority had made a specific finding that the turnover for the supply of ballast should be included for compounding purposes. The petitioner's remedy at this stage was to pursue the appeals filed against the revisional orders (Ext.P9 series) rather than challenging the assessment orders passed afresh (Ext.P8 series) through the writ petition.

4. The counsel for the petitioner contended that a previous judgment by the court had established that the supply of ballast constituted a contract for the supply of goods, not civil works, and therefore, the turnover related to ballast supply should be excluded from assessment under Section 7(7). However, the court noted that the revisional authority's specific finding supported the inclusion of ballast turnover for compounding, leading to the direction for fresh assessment orders.

5. Ultimately, the court dismissed the writ petition, emphasizing that unless the petitioner succeeded in invalidating the revisional orders (Ext.P4 series), challenging the assessment orders passed afresh (Ext.P8 series) was not viable. The court directed the Tribunal to consider the delay petitions filed by the petitioner and, if the delay was condoned, to expedite the consideration of the appeals filed by the petitioner.

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