2023 (4) TMI 161 - HC - VAT and Sales Tax

Disallowance of Input Tax Rebate (ITR) in-respect-of the GST purchases made from few of the companies - dis-allowance primarily was on the ground that the sellers were bogus dealers who have not deposited the tax collected from the petitioner herein - HELD THAT - Both these Writ Petitions in-fact are squarely covered by the decision of the Division Bench of this High Court in the case of the STATE OF CHHATTISGARH AND OTHERS VERSUS TATA TELESERVICES LIMITED 2022 (12) TMI 264 - CHHATTISGARH HIGH COURT where it was held that Invocation of Section 22 is permissible only when assessment of a dealer (a) has been under assessed or has escaped assessment or (b) has been assessed at a lower rate or (c) any wrong deduction has been made while making the assessment or (d) a rebate of input tax has incorrectly been allowed while making the assessment or (e) is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal, which has become final. The aforesaid conditions precedent cannot be countenanced in absence of an order of assessment in writing and in that view of the matter, in respect of deemed assessment, recourse cannot be taken under Section 22 of the VAT Act. The issue involved in the present Writ Petitions since it stands squarely covered by the decision of the Division Bench and which is not in dispute in-terms-of the submission made by the Counsel for the State itself. This Court is of the firm view that under the circumstances, the question of relegating the petitioner to avail the statutory alternative remedy available to the petitioner would not be proper and justified at this juncture. This Court is also inclined to allow the present two Writ Petitions on the legal ground that is involved in the Writ Petitions so far as there being no assessment order passed by the respondent. Further without there being an assessment order as is otherwise required under Section 21(1) of the Chhattisgarh Vat Act, there could not have been any re-assessment proceedings drawn under Section 22(1) of the VAT Act initiated by the authorities concerned - the impugned orders passed by the Commercial Vat Tribunal dated 01.09.2021 and the order of the Appellate Authorities dated 14.12.2017 and the order of reassessment dated 26.03.2016 are set aside. Petition allowed.

Summary

Issues involved:
The challenge to the orders passed by the Chhattisgarh Commercial Tax Tribunal, Raipur dismissing the appeal against the order disallowing Input Tax Rebate (ITR) in respect of GST purchases made from certain companies.

Summary:

Issue 1: Challenge to Tribunal Orders

The petitioner challenged the orders of the Chhattisgarh Commercial Tax Tribunal, Raipur, dismissing the appeal against the disallowance of Input Tax Rebate (ITR) on GST purchases from specific companies. The Assistant Commissioner initiated re-assessment proceedings under the Chhattisgarh Vat Act 2005, disallowing ITR on the basis that sellers were bogus dealers. The Additional Commissioner and the Commercial Tax Tribunal upheld the decision, leading to the filing of two Writ Petitions.

Issue 2: Maintainability of Writ Petitions

The State raised objections regarding the maintainability of the Writ Petitions, citing statutory alternative remedies available to the petitioner under Section 55 for preferring a reference. The State argued that the petitioner had appeared before the Assistant Commissioner during re-assessment proceedings and requested a fresh assessment, making the objection to jurisdiction belated. Additionally, the State contended that the Writ Petitions were filed beyond the prescribed time for availing the remedy of reference.

Issue 3: Applicability of Division Bench Judgments

Although the State did not dispute that the issues in the present cases were covered by Division Bench judgments, they highlighted that these judgments were under challenge before the Supreme Court. However, as there was no interim order affecting the operation of the Division Bench judgments, the Court found that the petitioner should not be relegated to avail statutory alternative remedies.

Judgment:

The Court allowed both Writ Petitions, emphasizing that there was no assessment order passed by the respondent as required under the Chhattisgarh Vat Act. Without a proper assessment order, re-assessment proceedings could not have been initiated. Consequently, the orders of the Commercial Vat Tribunal, the Appellate Authorities, and the reassessment order were set aside and quashed.