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TMI Blog2015 (2) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of four years or six years as the case may be for the purpose of making the assessment. Section 31(4A) - Where any proceeding under this section has been deferred on account of any stay orders granted by the High Court or Supreme Court in any case or by reason of the fact that an appeal or other proceedings is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the order or proceeding in question, the period during which the stay order is in force or the period during which such appeal or proceeding is pending, shall be excluded, while computing the period of two years specified in sub-section (4) for the purpose of passing appeal orders under this section. The Legislature, having retained a provision similar to Section 14(5) of the APGST Act in Section 21(7) of the VAT Act, has consciously chosen not to make a provision similar to Section 14(6) of the APGST Act which conferred on the Commissioner the power, in certain circumstances, to direct the assessing authority to defer assessment proceedings. The Commissioner has not been conferred the power to defer assessment proceedings under the VAT Act, and his power i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds outdoor catering; (b) the amount charged towards hiring of tent house equipment; and (c) the levy of VAT on sales made to dealers in other States. He also disallowed the petitioners claim for input tax credit on liquefied petroleum gas (LPG) used by them for cooking food items. The petitioner filed their objections thereto by letter dated 18.12.2012, and appeared before the assessing authority for a personal hearing. They filed an application before the Commissioner on 18.01.2013 requesting him to issue an order under Section 21(7) of the A.P. VAT Act (hereinafter called the VAT Act) deferring assessment proceedings initiated by the assessing authority against them. The petitioner contended that levy of VAT on the turnover on which service tax was levied as hire charges, and levy of VAT on supply of food and drinks on which also service tax was levied, was the subject matter of W.P. No.6692 of 2011 which was admitted, and was pending on the file of the High Court. In his order dated 02.02.2013, the Commissioner (1st respondent herein) held that the show cause notice issued by the assessing authority was for several issues, apart from the proposal to levy tax on the service p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantive issue i.e., on disallowance of ITC on LPG as per Rule 20(2)(q) of the VAT Rules; there were many issues involving questions of fact; and the question, whether a particular transaction would come under transfer of the right to use, had to be examined based on the facts of each case. It is this order of the Commissioner which is under challenge in this Writ Petition. Interim orders were passed by this Court in W.P.MP No.16922 of 2013 dated 30.04.2013, which were extended thereafter. Consequently, the assessing authority has been disabled from passing an assessment order pursuant to the show cause notice dated 12.09.2012. During the course of hearing of this Writ Petition on 11.11.2012, this Court called upon the Commissioner to file a counter-affidavit on whether the VAT Act conferred on him the power to defer assessment proceedings. In his counter-affidavit dated 22.11.2014, the Commissioner submitted that the petitioner was liable to pay tax on the total amount set out in the tax invoice; the Assistant Commissioner had, by his notice dated 12.09.2012, rightly proposed to tax the turnover which had escaped assessment; the petitioners application for deferment of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, confers power on the Commissioner to defer assessment proceedings. It is only if the Commissioner has the power to defer assessment proceedings, would he be entitled to entertain and examine any request for its deferment. As conferment of the power, to defer assessment proceedings, is a pre-requisite for its exercise, this Court must, at the outset, examine whether the VAT Act confers on the Commissioner the power to defer assessment proceedings, before considering whether exercise of the power to pass the impugned order dated 24.04.2013, rejecting the petitioners request for deferment of assessment proceedings, is valid or not. Before doing so, it is necessary to consider the submission of the Commissioner that, in view of the law declared by the Division bench of this Court in Global Fuels Lubricants Inc8, the Commissioner has the power to defer assessment proceedings. In M/s. Global Fuels Lubricants Inc.8, the order of the Commissioner, super-adding the condition of furnishing a bank guarantee for deferment of assessment proceedings, was under challenge. The Division Bench held that the order passed by the Commissioner, directing the petitioner to furnish a bank guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular facts of the case in which such expressions are to be found. A case is only an authority for what it actually decides. It cannot be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas it must be acknowledged that the law is not always logical at all. (State of Orissa v. Sudhansu Sekhar Misra ; Quinn v. Leathem ). While the premise, on which the judgment in M/s. Global Fuels Lubricants Inc8 is founded, is that the Commissioner has the power to defer assessment proceedings, the question whether the Commissioner had the power to defer assessment proceedings was not in issue before, nor was it examined by, the Division bench. Reliance placed on M/s. Global Fuels Lubricants Inc8 is, therefore, misplaced. Section 32(1) of the VAT Act enables the Commissioner to, suo moto, call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it under the provisions of the VAT Act, including sub-section (2), and, if such order or proceeding recorded is prejudicial to the interests of revenue, he may make such enquiry or cause s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the revisional jurisdiction when the issue or question is the subject matter of an appeal before the STAT. The bar is now limited only in respect of an issue or question decided in appeal by the STAT. As the proviso to Section 32, prior to its amendment, barred exercise of the revisional jurisdiction in respect of any issue or question which was the subject matter of appeal before the STAT, the power to defer revision proceedings was confined, under Section 32(5) of the Act prior to its amendment by Act 21 of 2011 dated 29.12.2011 with effect from 15.09.2011, only to cases where an appeal or other proceedings were pending before the High Court, or the Supreme Court, involving a question of law having a direct bearing on the order or proceedings in question. By Act 21 of 2011, the proviso to Section 32 was amended and, thereafter, the bar on the exercise of the revisional jurisdiction is now limited only in respect of an issue or question decided in appeal by the STAT, and not when an issue or question is the subject matter of an appeal pending before the STAT. It is only because the bar, under the proviso to Section 32, is no longer applicable when an appeal is pending bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the Appellate Tribunal or, as the case may be, the Andhra Pradesh High Court or the Supreme Court respectively, or where an appeal or other proceedings is pending before the Appellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force, or such appeal or proceedings was pending, shall be excluded in computing the period of four years or six years as the case may be for the purpose of making the assessment. The words as the case may be mean whichever the case may be, (Shri Balaganesan Metals v. M.N. Shanmugham Chetty ), and what the expression says, i.e., as the situation may be. (Subramaniam Shanmugham v. M.L.Rajendran ; Bluston Bramley Ltd. v. Leigh ; Words and Phrases, Permanent Edn. 4 page 596). The words as the case may be in Section 21(7) of the VAT Act mean whichever the case may be i.e., either the Commissioner under Section 32(5) or the STAT under the proviso to Section 33(4) of the VAT Act. As noted hereinabove, Section 32(5) confers on the Commissioner the power to defer revision proceedings initiated under Sections 32(1) (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise. (Kalawati Devi Harlalka v. CIT ; S. Sankappa v. ITO ; State of Bombay v. Jagmohandas ). One of the peculiarities of most tax enactments is that the expression assessment is used in its various sections to convey different connotations. The word assessment is used as meaning sometimes the computation of turnover, sometimes the determination of the amount of tax payable, and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer (M/s. J.K. Iron and Steel Co. Ltd. v. The Income Tax Officer, Kanpur ; Madangopal Kabra v. The Union of India ; Commr. of Income-tax v. Khemchand Ramdas ). The word 'assessment' may mean determination of the amount of tax payable. (Gulabrai Manohar Lal v. Commr. of Income-tax, Bihar). The said expression may also be so used as to include proceedings for imposing liability to additional tax called penalty on the assessee's guilt of fraud, gross negligence, dishonest or contumacious conduct. (M/s. J.K. Iron and Steel Co. Ltd.29; C.A. Abraham v. Income-tax Officer ; Mareddi Krishna Reddy v. Income Tax Officer, Tenali ). It can also be understood to include the entire machinery and procedure for impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amanatha Aiyer THE LAW LEXICON 2nd Edition Reprint 2002 defines Noscitur a sociis to mean that the meaning of a doubtful word may be ascertained by reference to the meaning of the words associated with it (Broom Legal Maxims). One is known by his companions; the meaning of a word or expression is to be gathered from the surrounding words, that is, from the context. The coupling of words together shows that, where the meaning of a particular word is doubtful or obscure or where a particular expression when taken singly is inoperative, the intention of a party who used it may frequently be ascertained by looking at adjoining words, or at expressions occurring in other parts of the same instrument. One provision of an instrument must be construed by the bearing it will have upon another. In construing the words assessment and has been deferred by the Commissioner under Section 32(5) or by the STAT under the proviso to Section 33(4), which are used in association with each other in Section 21(7) of the VAT Act, the rule of construction noscitur a sociis may be applied. The aforesaid words, read in juxtaposition, indicate that the meaning of one takes colour from the other. The Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of deferment of assessment proceedings either by the Commissioner under Section 32(5) or by the STAT under the proviso to Section 33(4) of the VAT Act. Just like Section 21(7), both Section 31(4A) and Section 32(7) of the VAT Act also provide for the consequences of deferment of proceedings. It is convenient to read Section 21(7), Section 31(4-A) and Section 32(7) of the VAT Act in juxta-position with each other. AP VAT ACT AP VAT ACT AP VAT ACT Section 21(7) Where an assessment has been deferred by the Commissioner under sub-section (5) of Section 32 or as the case may be, by the Appellate Tribunal under the proviso to sub- section (4) of Section 33 on account of any stay granted by the Appellate Tribunal, or as the case may be the Andhra Pradesh High Court or Supreme Court respectively, or whereas appeal or other proceedings is pending before the Appellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceedings was pending shall be excluded in computing the period of four years or six years as the case may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proceedings is restricted only to revision proceedings under Section 32 of the VAT Act, shows that the legislature has for the present, neither explicitly nor by necessary implication, chosen to confer the power to defer either the assessment proceedings under Section 21 of the VAT Act or the appellate proceedings under Section 31 of the VAT Act. This question can be examined from another angle also. Ambiguity, if any, in a statutory provision can be removed applying the Heydons Rule. The Heydons Rule is that, for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law), four things are to be discerned and considered: (1) what was the common law before the making of the Act/Rules; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the legislature has resolved to cure; and (4) the true reason of the remedy. The Court is always to make such construction as shall: (a) suppress the mischief and advance the remedy; and (b) suppress subtle inventions and evasions for the continuance of the mischief pro privato commodo (for private benefit); and (c) add force and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abled the STAT, in certain circumstances, to defer hearing of the appeal before it. Section 14(5) of the APGST Act was identical to Section 21(7) of the VAT Act before its amendment, and similar to Section 21(7) of the VAT Act after its amendment. It is useful to read Section 14(5) of the APGST Act in juxta-position with Section 21(7) of the VAT Act both before, and after, its amendment by Act 21 of 2011. THE APGST ACT THE AP VAT ACT (prior to its amendment by Act 21 of 2011 with effect from 15.09.2011) THE AP VAT ACT (after its amendment by Act 21 of 2011 with effect from 15.09.2011) Section 14(5) Where an assessment under this section has been deferred on account of any stay order granted by the High Court in any case, or by reason of the fact that an appeal or other proceedings is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceeding was pending, shall be excluded in computing the period of four years or six years as the case may be specified in this section for the purpose of making the assessments. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the APGST Act, enabled the Commissioner to defer assessment proceedings, and thereby ensure that assessment proceedings, under the VAT Act, are not interdicted before its completion, and are completed without hindrance. In the absence of a provision in the VAT Act, similar to Section 14(6) of the APGST Act, none of the authorities under the VAT Act can be said to have been empowered to defer assessment proceedings. Dr. T. Ramesh Babu, Learned Counsel for the petitioner, would submit that, since the Commissioner has also understood Section 21(7) of the VAT Act as conferring on him the power to defer assessment proceedings, this Court should not take a different view. Contemporanea expositio is a well settled principle or doctrine which applies only to the construction of ambiguous language in old statutes, (Baktawar Singh Bal Kishan v. Union of India ), but not in interpreting Acts which are comparatively modern. (Senior Electric Inspector v. Laxmi Narayan Chopra ; J.K. Cotton Spg. Wvg. Mills Ltd. v. Union of India, ). Even if persons who dealt with the statute understood its provisions in another sense, such mistaken construction of the statute does not bind the Court so as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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