2015 (4) TMI 698 - HC - VAT and Sales Tax

Whether the goods purchased by the petitioner for carrying on its business activities, are eligible for issuance of C Forms and whether it has to be appreciated by the authority concerned by examining the nature of goods purchased - Held that - The first respondent would state that the petitioner is a manufacturer of Food items and Fried Chicken, the items purchased do not come within the purview of Section 8(3)(b) of the Act. However, such a decision was taken without affording a reasonable opportunity to the petitioner. Therefore, the petitioner gave a representation to the second respondent on 16.04.2014 by setting out all the facts. But, the second respondent, instead of considering the contentions raised by the petitioner, forwarded the same to the first respondent, which should not have been done. It is clearly an abdication of power vested with the statutory authority as pointed out by the Bombay High Court in decision cited supra that all these matters are quasi judicial and if an officer has rendered incorrect findings, then the same could be revised by the appropriate authority. The second respondent, having sufficient jurisdiction to revise the orders passed by the first respondent, ought not to have simply forwarded the matter to the first respondent, who has already rejected the petitioner's request. Therefore, this Court is convinced that the manner in which the application has been dealt with, is not in consonance with the provisions of the Act - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for issuance of C Forms for goods purchased by the petitioner.
2. Reasonableness and arbitrariness of the impugned order.
3. Failure to consider the peculiar nature of the petitioner's business.
4. Jurisdiction of the second respondent in revising orders passed by the first respondent.

Analysis:

Issue 1:
The petitioner sought C Forms for goods purchased, but the first respondent rejected the request, stating that the items, namely Food items and Fried Chicken, were not eligible under Section 8(3) of the Central Sales Tax Act, 1956. The ambiguity arose regarding which items the C Forms would be issued for. The High Court noted the need to examine the nature of goods purchased to determine eligibility for C Forms.

Issue 2:
The petitioner argued that the impugned order was unreasonable, arbitrary, and against natural justice. It was contended that the first respondent failed to consider the unique nature of the petitioner's business and that the second respondent did not properly review the petitioner's representation before forwarding it. Reference was made to a Supreme Court decision emphasizing the need for correct decisions in quasi-judicial inquiries.

Issue 3:
The High Court found that the first respondent's decision was made without affording a reasonable opportunity to the petitioner. The second respondent's action of forwarding the representation without proper consideration was deemed an abdication of power. Quoting a Bombay High Court decision, the Court emphasized the quasi-judicial nature of such matters and the need for correct findings.

Issue 4:
The Court concluded that the second respondent, having the authority to revise orders, should have reviewed the matter instead of simply forwarding it to the first respondent. The Court held that the handling of the application did not align with the provisions of the Act. Consequently, the writ petition was allowed, the impugned order was quashed, and the matter was remitted to the second respondent for fresh consideration, emphasizing the need for a reasoned order within a specified timeframe.

This detailed analysis covers the issues involved in the judgment, highlighting the arguments presented, legal references made, and the Court's findings and directives.