2019 (2) TMI 929 - HC - VAT and Sales Tax

Jurisdiction - power of Commissioner of VAT to entertain Second Appeal - Imposition of penalty under Section 10(d) read with Section 10 A of the Central Sales Tax Act, 1956 - misuse of Form C - Transport business - registration under the The Daman and Diu Value Added Tax Regulation, 2005 obtained - whether respondent No.2, the Commissioner of VAT had jurisdiction to entertain the Appeal filed by the petitioner against the order passed by the First Appellate Authority respondent No.4 under the provisions of Section 74(1) of the Daman and Diu Value Added Tax Regulation, 2005? Held that - Chapter XII of the Regulation provides for hearing of Appeals, Disputes and Questions. Section 74(1) provides for a remedy to challenge an assessment or order or decision made under this Regulation. Section 74(1)(a) provides for an Appeal to the Joint Commissioner or Deputy Commissioner or Assistant Commissioner having jurisdiction, when such decision has been made or order has been made and assessment has been made by any Value Added Tax Officer or Assistant Value Added Tax Officer. Section 74(b) provides for an appeal against an assessment made under the Regulation or any other order made under the Regulation to the Commissioner, when such decision has been made or order has been made or assessment has been made by the Assistant Commissioner, Deputy Commissioner or Joint Commissioner - The language of the proviso to Section 74(1) is clear and unambiguous. The proviso in clear terms mentions that only one appeal shall be made by the person against an assessment, decision or order. In view of the clear mandate in the proviso to Section 74(1), only one appeal is contemplated against any assessment, decision or order and therefore, the question of entertaining the second appeal by the Commissioner under clause (b) does not arise. In clearest terms and by employing the words Such decision has been made or order has been passed or assessment has been made by the VAT Officer the Legislature did not provide for a Second Appeal to the Commissioner nor designate him as the Second Appellate Authority. The proviso makes this position clear if at all there was any ambiguity. In our opinion, if proviso to Section 74 restricts the number of appeals, no further appeal against an order passed in appeal can lie to the Commissioner under clause (b) of Section 74(1) as a second appeal is not expressly provided in the Regulation. On the contrary, Section 74 has restricted the right of appeal to only one. In this view of the matter, the respondent No.2 Commissioner, though in charge of the administration exercising control over the officers mentioned in clause (a) of Section 74(1), cannot confer authority on himself to hear an appeal against orders passed by his sub ordinate authorities in exercise of their appellate powers - when the language of Section 74(1), especially the proviso is so clear and unambiguous, we have no hesitation in holding that the Commissioner has no jurisdiction to hear and decide the second appeal. The impugned order passed by the respondent No.2 dated 9/11/2018, therefore, will have to be set aside for lack of jurisdiction. Whether the Administrative Tribunal constituted under the Administrative Tribunal Act, 1965 empowered to exercise powers of the Tribunal under the Sales Tax Act, 1964 can entertain and hear Appeals under the Regulation of 2005 till such time a Tribunal is constituted or notified in accordance with Section 73(1) of the Regulation of 2005? - Held that - The Administrative Tribunal empowered by the Notification dated 17/7/1970 and 13/4/1972 would continue to exercise the powers and discharge the functions conferred on the Appellate Tribunal by or under the Regulation of 2005 till the time Government constitutes a Tribunal under Section 73(1) or notifies any other Tribunal to act accordingly. We note that even the Appeal filed by the petitioner is styled as an Appeal before the Tribunal . It is well settled that a law does not create a vacuum nor does it leave anything to guesswork but always ensures that until a new regime is established, the earlier would continue to operate unless otherwise is provided by the new or reenacted law - there is no hesitation in observing that the Appeal filed by the petitioner on 15/5/2018 against the order dated 26/3/2018 passed by the respondent No.4 will have to be heard and disposed of by the Administrative Tribunal constituted by the Notification dated 8th July, 2003. Petition allowed.

Summary

Issues Involved:
1. Jurisdiction of the Commissioner of VAT to entertain a Second Appeal under Section 74(1) of the Daman and Diu Value Added Tax Regulation, 2005.
2. Authority of the Administrative Tribunal constituted under the Administrative Tribunal Act, 1965 to hear appeals under the Regulation of 2005 until a Tribunal is constituted under Section 73(1) of the Regulation of 2005.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner of VAT to entertain a Second Appeal under Section 74(1) of the Daman and Diu Value Added Tax Regulation, 2005:

The petitioner challenged the impugned order dated 9/11/2018 by the Commissioner of VAT, Daman, which dismissed the Second Appeal filed by the petitioner, upholding the assessment order and penalty under Section 10(d) read with Section 10-A of the CST Act. The petitioner contended that the Commissioner of VAT had no jurisdiction to entertain the Second Appeal. Section 74(1) of the Regulation of 2005 provides for appeals against assessments or orders. Clause (a) allows appeals to the Joint Commissioner or Deputy Commissioner or Assistant Commissioner, while clause (b) allows appeals to the Commissioner when the decision or order is made by the Assistant Commissioner, Deputy Commissioner, or Joint Commissioner. The proviso to Section 74(1) clearly states that only one appeal shall be made against any assessment, decision, or order.

The court held that the language of Section 74(1) and its proviso is clear and unambiguous, restricting the right to only one appeal. Thus, the Commissioner has no jurisdiction to hear and decide the Second Appeal. The impugned order dated 9/11/2018 was set aside for lack of jurisdiction.

2. Authority of the Administrative Tribunal constituted under the Administrative Tribunal Act, 1965 to hear appeals under the Regulation of 2005 until a Tribunal is constituted under Section 73(1) of the Regulation of 2005:

The petitioner argued that the Second Appeal should be heard by the Administrative Tribunal constituted under the Administrative Tribunal Act, 1965, as no Tribunal has been constituted under Section 73(1) of the Regulation of 2005. The respondents contended that the Commissioner was authorized to hear the appeal under Section 74(1) of the Regulation of 2005. The court examined the relevant provisions and historical context, noting that the Administrative Tribunal had been conferred with the powers of the Tribunal under the Sales Tax Act, 1964, by Notifications dated 17/7/1970 and 13/4/1972. Section 106 of the Regulation of 2005, which repeals the Sales Tax Act, 1964, includes savings provisions that preserve actions taken under the repealed Act.

The court concluded that the Administrative Tribunal empowered by the Sales Tax Act, 1964, would continue to exercise the powers of the Appellate Tribunal under the Regulation of 2005 until a new Tribunal is constituted or notified by the Government. The appeal filed by the petitioner on 15/5/2018 against the order dated 26/3/2018 should be heard and disposed of by the Administrative Tribunal constituted by the Notification dated 8th July 2003.

Order:

1. The impugned order passed by the respondent No.2 dated 09/11/2018 is quashed and set aside.
2. The Appeal dated 15/5/2018 shall be made over to and heard and disposed of by the Administrative Tribunal constituted vide Notification dated 8th July 2003 in accordance with law.
3. The court clarified that it did not decide on the merits of the case, and the contentions of both sides are kept open.

The Writ Petitions were disposed of accordingly, with Rule made absolute and no order as to costs.