2015 (7) TMI 1289 - HC - VAT and Sales Tax

Interpretation of Statute - Scope of the term Dealer - Section (2) sub-section (8) of the MVAT Act,2002 - Held that - The dealer includes and at least with effect from 1.4.2005 an auctioneer who sells or auctions goods whether acting as an agent or otherwise or, who organises the sale of goods or conducts the auction of goods whether or not he has the authority to sell the goods. Thus, the bracketed words were brought in by the Maharashtra Act 14 of 2005 with effect from 1.4.2005 - By the very Act the explanation below the subclauses came to be amended and by insertion of clause (iva) with effect from the same date. Now the deeming fiction would make a person like the appellant, even if it is a public charitable Trust, be a dealer. The reasons that are assigned by the Commissioner for refusing to give prospective effect to his determination order, have not been found to be suffering from any error of law apparent on the face of the record or perversity warranting interference in the appellate jurisdiction of the Tribunal. The appeal, therefore, does not raise any substantial question of law, as the concurrent orders do not suffer from a serious legal infirmity or perversity - appeal dismissed.

Issues Involved:
1. Inclusion of the appellant within the definition of 'dealer' under Section 2(8) of the Maharashtra Value Added Tax Act, 2002.
2. Classification of offerings in the form of cash and jewelry as donations or taxable transactions.
3. Applicability of Section 56 of the MVAT Act for relief from past liabilities.

Issue-wise Detailed Analysis:

1. Inclusion of the Appellant within the Definition of 'Dealer':

The appellant questioned the inclusion within the definition of 'dealer' under Section 2(8) of the MVAT Act, 2002. The court noted that the language of the statute is plain, unambiguous, and clear. Section 2(8) defines a 'dealer' as any person engaging in the business of buying or selling goods in the state, including auctioneers who sell or auction goods. The court highlighted that the definition was amended by Maharashtra Act 14 of 2005, effective from 1.4.2005, to include auctioneers explicitly.

The court concluded that the appellant, a public charitable trust, falls within this definition due to its activities of organizing and conducting auctions of donated jewelry and articles. The appellant's activities of auctioning these items and issuing receipts to purchasers were deemed to be within the statutory framework, making the appellant a 'dealer' as per the MVAT Act.

2. Classification of Offerings as Donations or Taxable Transactions:

The appellant argued that offerings in the form of cash and jewelry by devotees during the annual Ganesh Festival should be considered voluntary donations and not taxable transactions. The court observed that after collecting and accounting for these offerings, the appellant conducted auctions of the items, which were purchased by devotees and interested parties. The court found no merit in the argument that these activities were purely religious and charitable, emphasizing that the appellant was aware of the legal position and delayed compliance with the law.

The court stated that the clear pronouncement of law enabled both the Commissioner and the Tribunal to reject the appellant's contentions. The court emphasized that if the law is amended to include such activities within the statutory framework, the remedy is to challenge the amendment's validity, which was not done in this case.

3. Applicability of Section 56 for Relief from Past Liabilities:

The appellant sought relief from past liabilities under Section 56 of the MVAT Act. The court explained that Section 56 allows the Commissioner to determine disputed questions and, under sub-section (2), to direct that the determination shall not affect the applicant's liability for sales or purchases made prior to the determination. However, this is a discretionary power vested in the Commissioner and not a mandate.

The court noted that the Commissioner must exercise this discretionary power judiciously, reasonably, and in the larger public interest. The Tribunal upheld the Commissioner's refusal to grant relief, finding that there was no ambiguity in the provisions and no scope for doubt. The Tribunal concluded that the appellant utilized the process to delay compliance with the Act's mandate.

The court agreed with the Tribunal's findings and stated that the reasons assigned by the Commissioner for refusing to give prospective effect to the determination order were not erroneous or perverse. The court concluded that the appeal did not raise any substantial question of law, as the concurrent orders were consistent with the material produced and the legal provisions.

Conclusion:

The appeal was dismissed as devoid of merits, with no substantial question of law arising for interpretation and determination. The court upheld the concurrent orders of the Commissioner and the Tribunal, finding no serious legal infirmity or perversity. No costs were awarded.

← Previous Next →