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2023 (10) TMI 107 - HC - VAT and Sales TaxPower of review - error apparent on the face of record or not - Extraction of coal primarily for captive consumption in its Industrial Unit situated at Jamshedpur - transfer of goods for captive consumption and not for sale - demand of additional tax liability - HELD THAT - It transpires that Petitioner-Tata Steel Ltd. is having its industrial unit at Jamshedpur wherein it is engaged in manufacturing of Iron and Steel. It has its colliery in the District of Dhanbad known as Jamadova Colliery and from the said colliery, coal is being extracted and stock transferred to its unit at Jamshedpur in the District of East Singhbhum for captive consumption, which is intra-state stock transfer . Original assessment proceedings of the petitioner were completed and its gross turnover was accepted and no dispute was raised with respect to intra-state stock transfer of goods. A bare perusal of Section 21(1A) of the Bihar Finance Act would reveal that if any dealer claims that he is not liable to pay any tax on the part of his turnover by reason of transfer of such goods to any other dealer or agent or principal for sale the burden of proving this claim shall be on the dealer and the dealer would furnish before the prescribed authority a declaration in the form and in the manner prescribed. Under the Rules, the declaration prescribed is Form IX-D - In the instant case, admittedly, the dealer-Tata Steel Ltd. stock transferred its goods to its Jamshedpur Unit for captive consumption and not for sale and, thus, on a bare reading of Section 21(1A), it would be evident that there was no requirement of furnishing of statutory Form IX-D. A perusal of the review order would demonstrate that the review order has been passed not for correcting any mistake or error apparent on the face of record, but review order has been passed to change alleged erroneous decision which is not permissible in the eye of law. Reference in this regard may be made to numerous decisions of Hon ble Apex Court, wherein it has been clearly held that power of review is limited to correcting mistake/error apparent on the face of record and not to change an erroneous decision - reliance can be placed in the case of S. Madhusudan Reddy v. V.Narayan Reddy, reported in (2022) SCC Online SC 1034 2022 (8) TMI 1337 - SUPREME COURT . Thus, the very initiation of the review proceedings pursuant to Show Cause Notice dated 04.01.2011 was void ab initio, as neither any satisfaction was recorded by the Assessing Authority nor any reason was assigned for initiation of review proceedings - It is a settled law that vague show cause notice lacking details amounts to violation of the principles of natural justice and in that view of the matter, we are inclined to entertain the present writ applications. Petition disposed off.
Issues Involved:
1. Quashing of Review Orders dated 27.09.2012. 2. Validity of Notice initiating review proceedings. 3. Validity of Sanction Letter for initiation of review proceedings. 4. Declaration of review proceedings as void ab initio. Summary: Issue 1: Quashing of Review Orders dated 27.09.2012 The petitioner, Tata Steel Ltd., sought quashing of the Review Orders dated 27.09.2012, communicated on 29.06.2020, which imposed additional tax liabilities based on an audit objection. The court found that the review orders were passed ex parte without following due procedure and were communicated after an undue delay of eight years, violating principles of natural justice. Issue 2: Validity of Notice initiating review proceedings The court observed that the show cause notices initiating review proceedings lacked any reasons or grounds, making them vague and violating principles of natural justice. The notices merely referenced a sanction order without providing any specific details or reasons for initiating the review. Issue 3: Validity of Sanction Letter for initiation of review proceedings The Sanction Letter dated 27th December 2010, issued by the Joint Commissioner of Commercial Taxes, was found to lack any application of mind or recorded reasons. The court noted that the sanction was granted mechanically on the mere request of the Assessing Authority, which is contrary to established legal principles. Issue 4: Declaration of review proceedings as void ab initio The court declared the review proceedings void ab initio, noting that the original assessment had accepted the intra-state stock transfer for captive consumption without requiring Form IX-D. The review proceedings were initiated without any new grounds or reasons, and the review orders were based on the same audit objection previously dropped by the Assessing Authority. Conclusion: The High Court quashed the Review Orders dated 27.09.2012 and declared the review proceedings void ab initio. The court emphasized that the initiation of review proceedings without proper reasons and the mechanical sanctioning of such proceedings violated principles of natural justice. The court also highlighted that the statutory requirement of Form IX-D did not apply to intra-state stock transfers for captive consumption.
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