2016 (4) TMI 680 - HC - VAT and Sales Tax

Period of limitation - Notice of revision - Cancellation of composition permission orders previously ordered - Held that - it is a settled legal position of law that in a taxing statute one has to go by the clear language of the statute and equity has no role to play while interpreting a taxing statute. One can only look fairly at the language used. To try to stretch the law to meet hard cases is not merely to make bad law but to run the risk of subverting the rule of law itself. The Tribunal, in the present case, to meet with a hard case, has tried to stretch the law by interpreting the provisions of section 67 of the Act in a manner not contemplated by the clear language of the statute, which is clearly not permissible in law. The interpretation made by the Tribunal on the basis of equitable considerations, that the period of limitation for exercise of powers under section 67 of the Act would commence from the date of knowledge of the Deputy Commissioner of Sales Tax, is inconsistent with the language of section 67(1)(a) of the Act, which clearly and unambiguously provides for a period of limitation of three years from the date of the order, for invoking revisional jurisdiction. The Tribunal, therefore, was not justified in holding that the notice for revision was not time barred as the period of limitation would commence from the knowledge of purported mischief of Government record. - Decided in favour of appellant

Summary

Issues:
Challenge to order passed by Gujarat Value Added Tax Tribunal regarding composition permission cancellation and limitation period for revision application.

Analysis:
1. The appellant challenged an order passed by the Gujarat Value Added Tax Tribunal dismissing the revision application and confirming the order of the Deputy Commissioner of Sales Tax. The appellant, a registered company, had obtained composition permission under the Gujarat Sales Tax Act, 1969, for two works contracts. The Sales Tax Officer later assessed the appellant as if no composition permission was granted, leading to a notice proposing cancellation of the composition permission. The Tribunal dismissed the appellant's revision application, stating that the revisional powers were not time-barred.

2. The appellant argued that the notice for revision was beyond the limitation period prescribed under section 67 of the Act. The Tribunal's decision was challenged on the grounds of exceeding jurisdiction and lack of material evidence. The appellant contended that the Tribunal's interpretation of the limitation period starting from the knowledge of the Deputy Commissioner of Sales Tax was unjustified.

3. The High Court analyzed the relevant provisions of section 67 of the Act, which set a three-year limitation period for revisional powers from the date of the order being revised. The Court determined that the Commissioner's revision notice issued in this case was beyond the prescribed limitation period, rendering it time-barred. The Court emphasized the importance of adhering to the clear language of tax statutes without introducing equitable considerations.

4. Referring to legal precedents, the Court highlighted that interpreting tax statutes based on equity could lead to subverting the rule of law. The Tribunal's attempt to stretch the law by considering the knowledge of the Deputy Commissioner as the starting point for the limitation period was deemed inconsistent with the statute's language. Consequently, the Court ruled in favor of the appellant, holding that the notice for revision was indeed time-barred.

5. As a result of the time-barred revisional proceedings, the Court did not delve into the merits of the second question raised in the appeal. The Court allowed the appeal, quashed the Tribunal's order, reinstated the composition permission dated 19.12.2000, and set aside the Deputy Commissioner's order. The judgment favored the appellant based on the interpretation of the limitation period for revision applications under the Act.