2015 (5) TMI 141 - SC - VAT and Sales Tax

Whether the respondent-Revenue could resile from a settlement entered into with the assessee on the basis of which the appellant has already paid and settled his dues under the Act - Held that - Plain reading of Section 45 of the Act would indicate that the legislature has vested the power of remission of tax only with the Commissioner and subjected the exercise of said power in accordance with such circumstances and conditions as prescribed by the State Government under the Bombay Sales Tax Rules, 1959 (for short, the Rules ). The proviso to the provision specifies that the remission of tax amount if exceeds ₹ 2000/- ought to be made by the Commissioner after obtaining sanction of the State Government. The Section neither speaks of any power to enter into a settlement for such purposes by the State Minister of Finance nor prescribes exercise of powers by the Commissioner in light of any such settlement. The statute herein clearly and expressly provides for the limitation on exercise of powers of remission by the Commissioner and mandates them to be exercised only in such circumstances and subject to such conditions as may be prescribed. Section 2(21) of the Act provides that prescribed under the Act would mean as prescribed under the Rules and herein, the Rules being silent on any settlement of the nature allegedly entered into between the appellant and the State Government, the external circumstances including a settlement cannot be considered by the Commissioner while exercising power of remission of tax under the Act. - The convoluted mesh of facts and the extremely protracted proceedings which span over three decades, at the instance of appellant, indicate that the basis of case made out by the appellant does not exist in either the statute law or, in fact, any law applicable to the present proceedings. The settlement, if any, reached between the appellant and the State Government for part payment of tax liability by the partner of an assessee-Firm would not fall under the four corners of the Act or the Rules as has been claimed by the appellant since the beginning of the proceedings under the Act. - High Court has rightly examined the issues before it and the judgment and order passed by it does not suffer from any error - Decided against assessee.

Summary

Issues:
1. Whether the respondent-Revenue could resile from a settlement entered into with the assessee?
2. Whether there exists a provision empowering authorities to settle the liability of an individual partner under the Bombay Sales Tax Act, 1959?
3. Whether the settlement entered into between the Commissioner and the appellant is permissible under the Act?
4. Whether the appellant can be absolved of all liabilities confirmed against the assessee-Firm for the relevant assessment years under the Act?
5. Whether the High Court's judgment and order are correct and free from errors?

Analysis:
1. The appeal questioned the High Court's judgment holding the appellant liable for tax payment under the Bombay Sales Tax Act, 1959. The key issue was whether the respondent-Revenue could retract from a settlement with the assessee. The Supreme Court noted the protracted proceedings spanning over three decades and examined the relevant facts for disposal of the appeal.

2. The main contention was whether there was a provision allowing authorities to settle the liability of an individual partner. The appellant argued that a settlement was reached with the State Minister for Finance, absolving him of liabilities. However, the Revenue contended that the Act did not empower authorities to settle individual partner liabilities, as Section 18 of the Act establishes joint and several liability of partners.

3. The Court analyzed whether the settlement between the Commissioner and the appellant was permissible under the Act. The High Court concluded that no provision in the Act allowed for such settlements, and Section 45 did not support the claimed settlement to relieve the appellant of his tax obligations. The Court upheld the High Court's decision to fix the entire liability on the assessee.

4. The question of whether the appellant could be absolved of all confirmed liabilities against the assessee-Firm was crucial. The Court examined the Act's provisions, including Section 18 and Section 45, which did not provide for settlements with individual partners. The Court emphasized strict adherence to the statutory language and ruled that external circumstances, like settlements, could not discharge tax liabilities.

5. The Court affirmed the High Court's judgment, stating that it was error-free and correctly addressed the issues. The appellant's argument that the settlement with the State Minister for Finance should absolve him of liabilities was rejected. The Court dismissed the appeal and confirmed the High Court's decision, imposing costs on the appellant.