2016 (5) TMI 507 - HC - Central Excise

Territorial jurisdiction - Petitioner pleaded that having already been assessed to Sales Tax and having paid the entire dues for its operations in the State of Orissa, the Commissionerate at Bilaspur, Chhattisgarh has no jurisdiction to assess the petitioner once again for its operations in the State of Orissa - Held that - the petitioner having raised the issue of jurisdiction and also for the reason that if the petitioner is coerced to pay tax for its operations in the State of Orissa twice, it may amount to double taxation, this Court is inclined to issue notice to the respondents. - Matter listed on another date

Summary

Issues: Jurisdictional challenge under Section 35B of the Central Excise Act, 1944 regarding double taxation.

Analysis:

1. Jurisdictional Challenge: The petitioner contended that despite the availability of an alternative remedy, they approached the Court due to being assessed to Sales Tax in Orissa, arguing against the jurisdiction of the Commissionerate in Chhattisgarh to reassess them for operations in Orissa. The petitioner claimed that the Assessing Authority did not consider the objection to territorial jurisdiction, citing the submission of relevant documents as a waiver of objection. The Court noted this argument and the potential issue of double taxation if the petitioner is forced to pay taxes twice for operations in Orissa.

2. Legal Precedents: The respondent's counsel referred to judgments from the High Court of Bombay and the Supreme Court to support the impugned order. The High Court of Bombay's ruling in Oriental Export Corporation v. Union of India and the Supreme Court's decision in Titaghur Paper Mills Co. Ltd. v. State of Orissa were cited. These precedents were used to bolster the respondent's position in the case.

3. Court's Opinion and Decision: The Court, after considering the petitioner's jurisdictional challenge and the risk of double taxation, decided to issue notice to the respondents. This step indicates the Court's inclination to delve deeper into the jurisdictional issue raised by the petitioner. The Court's decision to issue notice implies a recognition of the seriousness of the petitioner's claim and a willingness to further examine the matter.

4. Procedural Directions: The Court directed the matter to be listed in the second week of January 2016, indicating a timeline for further proceedings. Additionally, the Court ordered that no coercive steps be taken against the petitioner until the next hearing, providing temporary relief to the petitioner. The issuance of a certified copy as per rules was also mentioned, ensuring compliance with procedural requirements.

In conclusion, the judgment primarily revolves around the jurisdictional challenge raised by the petitioner under Section 35B of the Central Excise Act, 1944, concerning the risk of double taxation for operations in Orissa. The Court's decision to issue notice to the respondents signifies a significant development in the case, setting the stage for a detailed examination of the jurisdictional issues at hand. The legal precedents cited by the respondent's counsel and the procedural directions provided by the Court further shape the trajectory of the case moving forward.