2021 (6) TMI 148 - HC - VAT and Sales Tax

Works contract - rate of tax on transfer of material - suppression of purchases during inspection - HELD THAT - In view of the fact that the Appellate Deputy Commissioner considered the issues elaborately and allowed portion of the claim set out by the petitioner the Commercial Tax Officer cannot pass any order contrary to the orders passed by the Appellate Deputy Commissioner and therefore the Commercial Tax Officer exercised excess jurisdiction which is impermissible - This Court is of the considered opinion that in respect of the said appeal filed by the respondent-Department before the Tribunal the respondents are at liberty to pursue the matter pending before the Tribunal and the Tribunal is expected to consider the appeal on merits and pass orders in accordance with law by affording opportunity to the parties. The impugned order dated 29.01.2016 is clear that the issues considered by the Appellate Deputy Commissioner were considered by the Commercial Tax Officer and the order was passed which runs counter to the order passed by the Appellate Deputy Commissioner. The subordinate authority is not empowered to supersede the orders passed by the appellate authority and an administrative discipline requires that the subordinate authorities should follow the orders of the appellate authority and even if any lapse error or otherwise the subordinate authority is bound to approach the appropriate higher authority for the purpose of setting aside the order passed by the appellate authority. The excess amount of tax already paid by the petitioner is to be adjusted with reference to the financial year 2010-11 and such adjustment is to be made subject to the orders to be passed in the appeal which is pending before the Tribunal - Petition allowed.

Summary

Issues:
Challenge to the impugned order dated 29.01.2016 by the first respondent.

Analysis:
The petitioner contested the impugned order based on the decision of the Appellate Deputy Commissioner, Vellore, which favored the petitioner's claim. The Appellate Deputy Commissioner found that the majority of the work involved significant labor work, leading to a different tax calculation than that adopted by the Assessing Officer. The Appellate Deputy Commissioner set aside the taxes levied at different rates on a specific amount, relying on legal precedents to support the decision. The petitioner argued that the Commercial Tax Officer's order contradicted the Appellate Deputy Commissioner's detailed consideration of the issues, making it unsustainable.

The petitioner further argued that the works contract in question had already been adjudicated by the Appellate Deputy Commissioner, who had allowed a portion of the claim. Therefore, the Commercial Tax Officer exceeded jurisdiction by issuing an order contrary to the Appellate Deputy Commissioner's decision. On the other hand, the Government Advocate for the respondents contended that the Commercial Tax Officer's revision orders were based on new materials found during an inspection conducted post the Appellate Deputy Commissioner's decision, justifying the new order.

The Court noted that an appeal had been filed by the Department against the Appellate Deputy Commissioner's order before the Tribunal, which was pending. The Court emphasized that subordinate authorities should follow appellate authority orders and approach higher authorities for any necessary modifications. The Court granted liberty to the respondents to pursue their appeal before the Tribunal and quashed the impugned order, directing the adjustment of excess tax paid by the petitioner subject to the Tribunal's decision. The parties were permitted to file additional grounds or documents before the Tribunal for consideration.

In conclusion, the Court found the Commercial Tax Officer's order to be in conflict with the Appellate Deputy Commissioner's decision, emphasizing the importance of administrative discipline and adherence to appellate authority orders. The judgment allowed the writ petition, quashed the impugned order, and directed further proceedings before the Tribunal, ensuring the adjustment of excess tax paid by the petitioner.