2010 (11) TMI 864 - HC - VAT and Sales Tax

Interpretation of statute - officer - dealer - whether or not the clarification given by the ARA is binding under section 67(4)(ii) of the Act, in respect of goods or transactions in relation to which the clarification was sought, on dealers other than the applicant-dealer? - Held that - the order of the ARA would be binding in respect of the goods or trans actions in relation to which a clarification was sought irrespective of whether such goods or transactions relate to the applicant or other dealers. It is no doubt true that such a ruling would bind other dealers, who had not sought a clarification, without their being heard by the ARA. That, by itself, would not necessitate this court reading the words the applicant into clause (ii) of section 67(4). A construction which requires, for its support, addition or substitution of words or which results in rejection of words, has to be avoided. It, no doubt, appears harsh that the ruling of the ARA would bind dealers, other than the applicant, in respect of goods or transactions in relation to which a clarification was sought - Under section 67(4)(iii) of the Act, the order of the ARA binds officers in the Commercial Tax Department below the rank of the Commissioner of Commercial Taxes - appeal disposed off.

Summary

List of Issues Involved:
1. Binding nature of the ruling of the Advance Ruling Authority (ARA) on various authorities and dealers.
2. Availability of appellate remedies for dealers against orders following the ARA's ruling.
3. Interpretation of section 67(4)(ii) of the Andhra Pradesh Value Added Tax Act, 2005 (the Act).
4. Harmonious construction of section 67 with other provisions of the Act.
5. Validity of section 67(4)(ii) under Article 14 of the Constitution of India.
6. Procedural aspects and implications of the ARA's rulings on non-applicant dealers.
7. Interpretation of statutory provisions and the role of courts in statutory construction.

Issue-wise Detailed Analysis:

1. Binding Nature of the ARA's Ruling:
The court held that the ruling of the ARA is binding on the applicant who sought the clarification, in respect of the goods or transactions for which a clarification was sought, and on all officers of the Commercial Taxes Department except the Commissioner. This is evident from the language of section 67(4)(i) to (iii) of the Act.

2. Availability of Appellate Remedies:
The court clarified that under the proviso to section 67(4), the remedy of an appeal to the Sales Tax Appellate Tribunal (STAT) is available only to the applicant-dealer. However, section 33(1)(c) of the Act, as amended by Act 4 of 2009, provides any dealer with the right to appeal to the STAT against an order passed by any authority following the ruling of the ARA within sixty days from the date of service of the order.

3. Interpretation of Section 67(4)(ii):
The court emphasized that the order of the ARA is binding "in respect of the goods or transactions in relation to which a clarification was sought," thereby including both the applicant and other dealers dealing with similar goods or transactions. This interpretation ensures uniformity in the orders of assessment, appellate, and revisional authorities.

4. Harmonious Construction of Section 67:
The court rejected the petitioners' contention that a harmonious construction of section 67 would restrict the binding effect of the ARA's ruling only to the applicant. The court noted that the statutory scheme aims to ensure uniformity and avoid conflicting orders by different authorities, which would be undermined if the ruling were confined only to the applicant.

5. Validity under Article 14:
The court found no basis to declare section 67(4)(ii) arbitrary or in violation of Article 14 of the Constitution of India. The petitioners failed to establish how the provision was discriminatory or unreasonable. The court noted that the legislative intent was clear and aimed at addressing specific mischief in the tax administration.

6. Procedural Aspects and Implications:
The court acknowledged the difficulties for quasi-judicial authorities and dealers in being aware of pending matters before the ARA. However, it held that such practical difficulties do not justify a construction contrary to the plain language of section 67(4)(ii). The court suggested that procedural rules might need amendments to address these issues but maintained that hardship cannot be a ground for altering statutory interpretation.

7. Interpretation of Statutory Provisions:
The court reiterated the principles of statutory interpretation, emphasizing that the intention of the Legislature must be gathered from the language used in the statute. The court held that the words used in section 67(4)(ii) are clear and unambiguous, and there is no need to resort to other rules of construction. The court also noted that it is not within its purview to add or omit words from the statute.

Conclusion:
The court dismissed the writ petitions, upholding the validity of section 67(4)(ii) of the Act and confirming that the ruling of the ARA binds not only the applicant-dealer but also other dealers dealing with similar goods or transactions. The court directed that any appeals filed by the petitioners should exclude the period during which the writ petitions were pending before the court in computing the period of limitation. The court emphasized the need for uniformity in tax administration and the legislative intent behind the statutory provisions.