2017 (10) TMI 1362 - HC - VAT and Sales Tax

Rectification of mistake - levy of Sales Tax - purview of rectification - review of order not allowed in garb of rectification - Section 71 of the Chhattisgarh Commercial Tax Act, 1994 - Held that - The application was made under Section 70 (1) of the Act of 1994 before the Board of Revenue for making reference to this Court for consideration on the question of law, but that was not done and reference application has been allowed to be converted into rectification application under Section 71 of the Act of 1994 immediately and without notice in writing as required under second proviso to sub-section (1) of Section 71 of the Act of 1994 - original application was filed for making reference to this Court, in that event, application for rectification ought not to have been entertained by the Board of Revenue that too without statutory notice prescribed under the Act of 1994 to the petitioners. The impugned order dated 26.9.2003 and consequential orders passed by the Board of Revenue qua the petitioners herein are hereby set aside - the matter is remitted to the Commercial Tax Tribunal, who shall hear the parties and consider the application under Section 71 (1) of the Act of 1994 expeditiously in view of the fact that matter is old one - petition allowed by way of remand.

Summary

Issues:
Challenging order by Board of Revenue converting reference applications into rectification applications under Section 71 of the Act of 1994 without proper notice.

Analysis:
The writ petitions contested the Board of Revenue's order dated 26.9.2003 and subsequent decisions converting reference applications into rectification applications without adhering to the requisite procedures. The petitioners argued that the Board of Revenue initially ruled in their favor, exempting them from sales tax. However, the Department subsequently sought rectification of this order, leading to a review that reversed the earlier decision. The petitioners contended that this review was impermissible under Section 71 of the Chhattisgarh Commercial Tax Act, 1994. They highlighted that the conversion of reference applications to rectification applications lacked proper notice, causing prejudice due to the time limitations set forth in the Act.

The Government Advocate representing the State supported the impugned order, emphasizing the Board of Revenue's actions as valid. However, the Court meticulously examined the arguments presented by both parties and scrutinized the records to reach a just conclusion. The Court referenced Section 71 of the Act of 1994, emphasizing the procedural requirements for rectification of mistakes, especially the necessity of notice to the concerned party before any rectification that could impact their tax liability.

The Court found that the Board of Revenue's actions were not in accordance with the statutory provisions outlined in the Act of 1994. The conversion of reference applications into rectification applications without proper notice and the subsequent reversal of the earlier decision were deemed impermissible. Consequently, the Court set aside the impugned order dated 26.9.2003 and directed the matter to be remitted to the Commercial Tax Tribunal for expedited consideration under Section 71 (1) of the Act of 1994. The Court emphasized the importance of following due process and ensuring that parties are not prejudiced by procedural irregularities. Ultimately, the writ petitions were allowed, and no costs were imposed on the petitioners.