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TMI Blog2015 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... le exercise as the tribunal derived its authority under BST Act itself. Issue of constitutionality and legality of rule 41E to the extent noted above could not have been decided by the tribunal in the second appeal of the assessee. It has clearly erred in law in undertaking the exercise of deciding the constitutionality and legality of the said rule. Therefore, the two questions will have to be answered by holding that the claim which was made in alternate would have to be dealt with and decided on the touch stone of rule 41E as it stood at the relevant time and its clear language. The tribunal could not have ignored the same in dealing with the alternate claim. - Reference disposed of. - Sales Tax Reference No. 3 of 2006 - - - Dated:- 2-9-2014 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Appellant : Mr. B. B. Sharma A.G.P. For the Respondent : Mr. C. B. Thakkar JUDGMENT P.C. 1. This Reference by the Maharashtra Sales Tax Tribunal, Mumbai seeks this Court's opinion and answer on the following questions : (i) Whether of the facts and circumstances of the case and on a true and correct interpretation of Rule 41E of the Bombay Sales Tax Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ats which is used in manufacture of S.S.Patta and which in turn is sold in Maharashtra is due compliance with the requirement of rules enabling set off. Therefore, this alternative claim atleast be granted. The assessment in question is for period from 16th January, 1995 to 31st March, 1995 and 1st April, 1995 to 31st March, 1996. The appellant's sales of output i.e. S.S.Patta was assessed to tax at 4% in addition to the 4% tax paid on purchases of S.S.Flats by him. Therefore, the set off was claimed by relying on the Rule 41E. However, that alternate claim was also rejected. That is why the matter was carried by the assessee in the second appeal to the Tribunal. On 13th April, 2000, the Tribunal delivered the order in the second appeal. It upheld the claim of the assessee of set off by concluding that rule 41E of the Bombay Rules under which the set off has been claimed are to the extent the same imposing a condition of the user within the State liable to be ignored. That is permissible because the judgment of the Hon'ble Supreme Court in the case of Loharn Steel Industries Ltd. and Anr. vs. State of Andhra Pradesh (105 Sales Tax Cases 30) lays down the principle that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has no vested right in such concession. The tribunal has seriously erred by relying on the judgment of the Supreme Court and virtually declaring rule 41E to the extent noted above as ultra vires and unconstitutional. This is clear overreaching the jurisdiction vested in the tribunal and under the BST Act. If it is exercising powers and functioning under the statute, then, it had no authority to declare any provisions of the statute or rules framed thereunder as unconstitutional or ultra vires. 7. Mr.Sharma has placed reliance on the settled principle of law of the tribunal deriving its authority and exercising powers under a statute being unable to declare any provision of that statute as ultra vires and unconstitutional. Mr.Sharma has also relied upon some of the observations made in M/s.Loharn Steel Ltd. (supra) to submit that the judgment of the Hon'ble Supreme Court does not ipso facto declare a rule whereunder the set off is claimed as unconstitutional and ultra vires Article 304(a) of the Constitution of India. There could be distinguishing features and can be pointed out by the revenue as and when the occasion arises. Mr.Sharma emphasized that it was not open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o rounds and flats in the re-rolling mills of appellant no.1 and the rerolled products were brought back to Andhra Pradesh and sold there. There was certain exemption granted by a notification in that behalf under Andhra Pradesh General Sales Tax, 1957. There was a certain condition therein and which made the exemption conditional upon reaching a satisfaction that re-rolled finished products of steel in units situated within Andhra Pradesh State. Thus, the notification under which exemption came to be granted became applicable to only re-rolled finished products of the steel re-rollers which was situated within the State of Andhra Pradesh. Since re-roller mills of the appellant no.1 was situated outside Andhra Pradesh, the re-rolled products of the appellant no.1 brought in the State of Andhra Pradesh became ineligible for this exemption. The argument was that there is discrimination vis-avis local products and therefore exemption has been wrongfully denied. It is in dealing with that argument and in the context of Article 304 of the Constitution of India and particularly clause (a) thereof, that the Hon'ble Supreme Court delivered its judgment. 12. Rule 41E and which was ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off is that the processing has not been undertaken in the State of Maharashtra and that is why sending raw material for processing outside the State of Maharashtra and bringing back processed material for sale within the State dis-entitles the assessee in this case from claiming set off. This stipulation is therefore ultra vires of Article 304(a) of the Constitution of India. There is hostile discrimination insofar as units or processors/dealers within the State and those outside. 13. We are of the view that in the present Reference this larger issue or controversy need not be answered. There is substance in the contention of Mr.Sharma that in the garb of deciding the issue of applicability of the Hon'ble Supreme Court's judgment in M/s.Loharn Steel Ltd. (supra) to the facts and circumstances of the present case, the tribunal travelled beyond its jurisdiction and authority. It declared rule 41E as ultra vires and unconstitutional and which it has no authority to declare. Apart therefrom the tribunal was obliged to consider the issue as to whether any assistance can be derived from the judgment of the Supreme Court assuming that the issue involved was identical. Assuming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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