9911796707
TMI Blog2012 (5) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ate to exercise the extraordinary writ jurisdiction under Article 226 as observations only prima facie, since the entire matter is still to be investigated following which a regular assessment would be framed – Writ dismissed. - WRIT PETITION NO. 347 OF 2012 - - - Dated:- 30-4-2012 - DR.D.Y. CHANDRACHUD R.D.DHANUKA, JJ. Mr.V. Sridharan, Senior Advocate with Mr.C.B.Thakar for petitioner. Mr.Darius J. Khambatta, Advocate General with Mr.E.P. Bharucha, Senior Advocate, Mr.D.A.Nalavade, Government Pleader, Mr.Vinay A. Sonpal, A-Panel Counsel, Mr.B.B.Sharma, AGP, Ms.Naira Jejeebhoy and Mr.S.E.Bharucha for respondents. ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD,J.) 1. In these proceedings under Article 226 of the Constitution, the petitioner has sought to question: (i) An order of provisional attachment dated 18 November 2011 in respect of certain bank accounts; (ii) In the alternative to restrict the attachment to the extent of Rs.1.81 Crores; (iii) An order striking down the provisions of Section 48(5) of the Maharashtra Value Added Tax Act, 2002 as unconstitutional; and (iv) A direction to the Commissioner of Sales Tax to hear an application filed by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den upon a purchasing dealer which is impossible of performance and is ultra vires. On this basis it has been asserted that the provisions of Section 48(5) are ultra vires Articles 14, 19(1)(g) and 300A of the Constitution. 4. An affidavit in reply has been filed in these proceedings by the Joint Commissioner of Sales Tax, Investigation-A. The reply notes that the petitioner who is a registered dealer filed its MVAT Returns for 2009-2010 and 2010-2011 and claimed Input Tax Credit / Set off on purchases claimed to have been effected from certain vendors against the tax liability on sales. An investigation was initiated at the behest of the Advisory Branch on an allegation that the transactions appeared to be with fictitious dealers. Records of certain vendors of the petitioner viz. (i) Accurate Multi Media Pvt.Ltd.; (ii) Ashrita Trading Co.; and (iii) Yashita Trading Co. were found to be fictitious and these vendors were found to be engaged in the activity of only issuing tax invoices without actual delivery of goods and passing on tax credit without paying it in the Government Treasury. The allegation is that Hawala transactions were thus carried out in order to defraud the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealers was Rs.54.36 crores, Rs.27.41 crores and Rs.14.76 crores respectively. These facts have been relied upon to submit before the Court that the petitioner is alleged to have purchased goods and to have consequently claimed a set off though a genuine business of purchase and sales was not shown in any of the transactions. Based on the preliminary estimates during the course of investigation the liability of the petitioner together with interest has been estimated to be Rs.1.81 crores. A provisional attachment was levied under Section 35 which has since been restricted to an amount of Rs.1.81 crores. Following the initial order of provisional attachment, the petitioner moved an application before the Commissioner of Sales Tax. On that application an order has been passed on 12 April 2012 by which the attachment has been confirmed only to the extent of an amount of Rs.1.81 crores. 7. Section 48 of the MVAT Act, inter alia, deals with set off and refund. Section 48(5) stipulates as under: (5) For the removal of doubt it is hereby declared that, in no case the amount of set-off or refund on any purchase of goods shall exceed the amount of tax in respect of the same goods, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al transactions. Where, however, the transactions and dealers are found to be genuine but a mismatch is due to cases of non filing or short filing of returns, the department initiates processes to recover taxes from the defaulting dealers / vendors. When such tax is recovered, the ITC claim of the dealer will be allowed to the extent of recovery. However, in no event is a set off or refund allowed in excess of the amount of tax actually paid to or received by the Government treasury as provided in Section 48(5). 10. Finally it has been pointed out in the affidavit in reply that after efiling was introduced from 2008-09, investigations have been carried out in a large number of cases and major Hawala operations consisting of 1009 Hawala operators and 35,000 beneficiary dealers have been unraveled by the Sales Tax Department. 11. We are not inclined to exercise our writ jurisdiction in the facts of the present case for more than one reason. Sub-section (1) of Section 35 provides that if during the course of inquiry in any proceedings including proceedings related to recovery of any amount due, in respect of any person or dealer or during any inspection or search in relation to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner is in the process of espousing the remedy of an appeal to the Tribunal under sub-section (6) of Section 35. 13. The material which has been placed on record in the affidavit in reply is prima facie sufficient to provide ample foundation for the action which has been adopted by the State Sales Tax authorities. At least, prima facie, it is evident from the affidavit in reply as well as the underlying materials which are annexed thereto, including statements which have been recorded during the course of investigation, that the selling vendors do not appear to be genuine parties. Almost immediately after registration, the alleged vendors have transacted business in large sums of Rs.54.36 crores, Rs.27.41 crores and Rs.14.76 crores. The material which has been revealed during the course of investigation suggests that the selling vendors are parties without any legitimate business or assets and have been set up only with a view to devise a scheme to defraud the Revenue. We clarify that we make these observations only prima facie, since the entire matter is still to be investigated following which a regular assessment would be framed. Nothing contained in this order would be rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
