2016 (3) TMI 884 - HC - VAT and Sales Tax

Liability of tax - Narrow woven fabrics - As per 1st clarification dated 03.03.2008, no tax was leviable and product found to be exempted for the purpose of tax and as per 2nd clarification dated 25.06.2012, tax is leviable at the rate of 5% - Commissioner rejected the appeal for no jurisdiction of review - Held that - the application has been rejected only on the ground the Commissioner has no jurisdiction. Hence, the matter is remanded back to the Commissioner for reconsideration of the clarification and thereafter he may take appropriate decision in accordance with law. - Matter remanded back

Summary

Issues:
1. Clarification on tax liability for the product "Narrow Fabrics" issued by Commissioner of Commercial Taxes.
2. Review of the clarification by the Commissioner.
3. Jurisdiction of the Commissioner to review the clarification.

Analysis:
1. The appeal challenged the order issued by the Commissioner of Commercial Taxes on 25.06.2012, which clarified the tax liability for the product "Narrow Fabrics" at 5%. The appellant had previously received a clarification in 2008 stating that no tax was leviable on the same product. The appellant requested a review of the 2012 clarification, but the Commissioner rejected the review citing lack of jurisdiction. The High Court noted the conflicting clarifications and decided to remand the matter to the Commissioner for reconsideration based on the appellant's request for review.

2. The High Court emphasized that the change in personnel manning the Commissioner's office between 2008 and 2012 did not negate the need for a review. The Court found that the rejection of the review solely on jurisdictional grounds was not justified. Therefore, the Court directed the Commissioner to reexamine the matter and make a decision in accordance with the law. The Court ordered the restoration of the appellant's application to the Commissioner and instructed a prompt resolution within four months from the date of the Court's order.

3. The High Court allowed the appeal to the extent of remanding the matter to the Commissioner for reconsideration. No costs were awarded, considering the circumstances of the case. The judgment focused on ensuring a fair review of the tax liability clarification for the product "Narrow Fabrics" and emphasized the importance of proper jurisdiction and due process in such matters.