2015 (11) TMI 879 - HC - VAT and Sales Tax

Review petition - exemption from tax under Schedule B notified by the State of Himachal Pradesh under section 9 of H.P. VAT Act. 2005 - Held that - what appears to be more than settled law is that an error contemplated under the rule must be such which is apparent on the face of the record and not an error which has to be fished out and searched. It must essentially be an error of inadvertence and definitely something more than a mere error and must be one which must be manifest on the face of the record. If the error is so apparent that without further investigation or inquiry only one conclusion can be drawn in favour of the applicant in such circumstances the review will lie. However under the guise of review the parties are not entitled to re-hearing of the same issue but the issue can be decided just by a perusal of the record and if it is manifest can be set right by reviewing the order. It must be remembered that in exercise of the powers of review this court cannot sit in appeal over its own order. Re-hearing of the matter is impermissible in law since the power of review is an exception to the general rule that once the judgement is signed or pronounced it should not be altered. It has to be remembered that power of review can be exercised for correction of a mistake but not to substitute a view. The review cannot be treated like an appeal in disguise. Whether the sales of the petitioner are inter-State or intra-State are findings of fact which have already been determined by this court and cannot be interfered with because power of review cannot be exercised on the ground that decision is incorrect or erroneous on merit as the same lies within the ambit of a higher court having appellate power which alone is in a position to correct the error committed by the subordinate courts by virtue of power of appeal conferred on the said court by some statute - Based upon the documents on record it had been found by the Assessing Officer that company had created false documents by generating invoices in the names of the farmers from the State of Haryana. While in fact the goods were transported to the State of Himachal Pradesh and the name of consigner was declared the department of agriculture. Whereas it was proved on record that company was not supplying the agriculture implements i.e. manually operated and animal driven agriculture rather installing a complete irrigation system which required material like pipes joints sockets sprinklers etc. and these were not exempted from tax (VAT) - petitioner has failed to make out a case within the four corners of Section 114 read with Order 47 Rule1 and section 151 CPC Accordingly we find no merit in this review petition - Decided against assessee.

Summary

Issues Involved:
1. Whether the transaction of supplying sprinklers from Haryana to Himachal Pradesh constituted an inter-State or intra-State sale.
2. Whether the irrigation sprinkler system supplied by the petitioner falls under the category of "agricultural implement, manually operated or animal driven" and is exempted from tax under Schedule "B" of the H.P. VAT Act, 2005.
3. The scope and grounds for review under Section 114 and Order 47 Rule 1 of the Code of Civil Procedure (CPC).

Issue-wise Detailed Analysis:

1. Inter-State vs. Intra-State Sale:
The petitioner claimed that the supply of sprinklers from Haryana to Himachal Pradesh constituted an inter-State sale, exempt from tax under Schedule "B" of the H.P. VAT Act, 2005. However, the court found that the petitioner did not provide sufficient records to prove that the supply of sprinklers or Micro irrigation systems originated from Haryana. The court noted that documents revealed the goods were brought from Gurgaon to Mandi Branch in Himachal Pradesh and supplied to local farmers under a government scheme. The petitioner charged local taxes from farmers, indicating intra-State sales, thus liable to VAT. The court concluded that the transactions were intra-State sales.

2. Classification of Sprinkler System:
The petitioner contended that the irrigation sprinkler system was an "agricultural implement, manually operated or animal driven," and thus exempt from tax. The court, however, determined that the sprinkler system did not fall under this category. The system required materials like pipes, joints, sockets, and sprinklers, which were not manually operated or animal driven. Therefore, the system did not qualify for tax exemption under Schedule "B" of the H.P. VAT Act, 2005.

3. Scope and Grounds for Review:
The petitioner sought a review of the judgment, arguing inherent contradictions in the court's findings and citing errors apparent on the face of the record. The court emphasized the limited scope of review under Section 114 and Order 47 Rule 1 of the CPC, which allows review only for errors apparent on the face of the record, new and important evidence, or other sufficient reasons. The court referenced several precedents, including the Supreme Court's rulings in Board of Control for Cricket in India vs. Netaji Cricket Club and Inderchand Jain vs. Motilal, which clarified that review is not an appeal in disguise and should not involve re-hearing or re-appreciation of evidence.

The court found no error apparent on the face of the record in the original judgment. It noted that the petitioner's arguments had already been considered and addressed in the detailed judgment. The court reiterated that the findings of intra-State sales and the classification of the sprinkler system were based on factual and legal analysis, which could not be revisited under the guise of review. Consequently, the court dismissed the review petition, affirming the original judgment and leaving the parties to bear their own costs.