2020 (8) TMI 605 - HC - VAT and Sales Tax

Mechanism for settlement of disputes - validity of Bihar Tax on Entry of Goods into Local Area For consumption, Use and Sale Therein Act, 1993 - validity of notification enhancing rate of tax - N/N. SO 95 dated 31.07.2008 - enactment of yet another legislation, i.e., Bihar Settlement Taxation Disputes Act, 2019 - HELD THAT - The Act does not postulate any settlement subject to the outcome of any order/judgment passed by any judicial or quasijudicial authority. It is complete and independent legislation with a specified object and purpose of settlement of disputes of different nature and categories - It is not in dispute that under such statutory right, Petitioner, within the prescribed time, applied for the settlement of a dispute in Form-I. It is also not in dispute that specific queries were raised by the Prescribed Authority, which also was answered by the Petitioner vide detailed response annexed to the Petition (s). However, the Petitioner application stands rejected vide impugned order dated 25.06.2020. The Hon ble Apex Court in M/S. DHARAMPAL SATYAPAL LTD. VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI OTHERS 2015 (5) TMI 500 - SUPREME COURT has elaborately discussed and laid down different facets of principles of natural justice, including the requirement of passing a reasoned order. Of course, such principles need to be applied to attending facts and circumstances, which in the instant cases, we find to apply with equal force. The Prescribed Authority does not assign any decipherable reason in rejecting the application. Hence, in our considered view, there is non-application of mind, much less consideration of material placed by the party in support of its claim for settlement under the Act - We may observe that with intent to put an end to the entire litigation, spread over more one and a half decades, and Petitioner sought to exercise its right under Law, which, unfortunately, appears to have been scuttled by the Prescribed Authority without application of mind. The Prescribed Authority are directed to decide the Petitioner's application afresh by assigning reasons - petition allowed.

Summary

Issues:
1. Petition for a Writ of Certiorari and Mandamus under the Bihar Settlement of Taxation Disputes Act, 2019 for Assessment Periods 2009-2010 and 2006-2007.
2. Rejection of settlement application by the Prescribed Authority without reasons.
3. Interpretation of the Bihar Settlement Taxation Disputes Act, 2019.
4. Application of principles of natural justice in passing orders.
5. State's justification for rejection based on non-compliance with interim order.

Analysis:

1. The petitioners sought relief through Writs of Certiorari and Mandamus under the Bihar Settlement of Taxation Disputes Act, 2019 for the Assessment Periods 2009-2010 and 2006-2007. The Act aimed to settle disputes arising from the Bihar Tax on Entry of Goods into Local Area legislation.

2. The Prescribed Authority rejected the settlement application without providing reasons, leading to a challenge by the petitioners. The High Court found the order lacking in clarity and reasoned analysis, emphasizing the importance of applying principles of natural justice in such decisions.

3. The Court delved into the interpretation of the Bihar Settlement Taxation Disputes Act, 2019, highlighting the defined terms such as arrear, dispute, disputed amount, and the procedure for settlement outlined in the Act. The Act aimed to settle various types of tax disputes within a specified timeframe and did not require the outcome of any judicial order for settlement.

4. Drawing on the principles of natural justice, the Court noted the necessity of passing reasoned orders and considering the material presented by the parties. The lack of clear reasoning in the Prescribed Authority's rejection indicated a failure to apply due diligence in evaluating the settlement application.

5. The State attempted to justify the rejection based on the petitioner's alleged non-compliance with an interim order from a previous case. However, the Court rejected this justification, emphasizing that the Act's purpose was settlement, not enforcement of court orders. The State's failure to address non-compliance through appropriate legal channels further weakened this argument.

In conclusion, the High Court allowed the writ petitions, quashed the impugned order, and directed the Prescribed Authority to reconsider the petitioner's application with proper reasoning. The Court stressed the importance of adhering to legal procedures and principles of natural justice in settling taxation disputes under the Act.