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TMI Blog2017 (11) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Pondicherry Value Added Tax, 2007and is it sustainable in Law? - Held that: - Object of the then Pondicherry General Sales Tax Act, 1967, is to levy general tax on sale or purchase of goods in the Union territory of Pondicherry and to validate the levy and collection of such tax under certain Act of Pondicherry. Pondicherry Value Added Tax Act, 2007 is enacted to provide for the levy and collection of value added tax on the sale or purchase of goods in the Union territory of Puducherry and for matters connected therewith or incidental thereto - Under Article 265 of the Constitution of India, Government is empowered to levy tax. Tax is paid to the Government and it is the duties and functions of the authorities in the Commercial Taxes Department, to implement the taxing laws. Ultimately, it is the revenue, which is collected by the Government, by way of tax. As regards intra-state sale, there are provisions, both in the PVAT Act, 2007 or TNVAT, 2006, as the case may be. Finality of orders, against the Government, at the first appellate stage, at the instance of an assessee, ie., before the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst revisionist. - Tax Case (Revision) No. 38 of 2017 C.M.P. No. 16997 of 2017 - - - Dated:- 27-10-2017 - S. Manikumar And R. Suresh Kumar, JJ. For the Petitioner : Mr.P.Suresh For the Respondents : Mr.C.T.Ramesh, Government Advocate (Pondicherry) ORDER ( Common order of the Court was made by S. Manikumar, J. ) Tax Case Revision is filed against the order, dated 28.06.2017, made in Tax Appeal No.15 of 2015., by the Pondicherry Value Added Tax Appellate Tribunal, Puducherry. 2. Tax Case Revision Petition has been filed, on the following substantial questions of law, 1. Whether un-constituted Tribunal i.e., Pondicherry Sales Tax Appellate can admit the Tax Appeal in respect of Puducherry Value Added Tax Act, 2007. The said Act came into force on the 1st of July' 2007.Whether is it sustainable in Law? 2. Whether the Assessing Officer has got power to file the Tax Appeal before the Tribunal under Section 49(1) of the Pondicherry Value Added Tax, 2007and is it sustainable in Law? 3. Whether non-issuing of notification has been issued by the Government for constitution of Pondicherry Value Added Tax Appellate Tribunal and non - appointing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was filed stating that M/s.Gas World was selling small cylinders, weighing 12 kgs for domestic use and big cylinders weighing 17 kgs for commercial use. To verify the returns of the petitioner, the 1st respondent issued a letter to the seller, M/s.SHV Energy Privated Limited, Sriperumabathur, Chennai. The seller furnished the quantity of sales of 12 kgs and 17 kgs of cylinders, sold to the petitioner, which revealed that the petitioner purchased larger quantities of 17 kgs cylinder, meant for commercial use, taxable at 12.5%, compared to 12 kgs of cylinders meant for domestic use. However, in the report, the petitioner showed the converse. They showed purchase of 12 kgs of LPG cylinders, at a higher quantity than 17 kgs of LPG cylinders. Consequently, a best judgment assessment order, under Section 24(2) of the PVAT Act 2007 was proposed, by notice, dated 24.10.2014. Subsequently, objections were invited. Since documents were not produced, the Deputy Commercial Tax Officer-II, Commercial Taxes Department, Pondicherry, 1st respondent, confirmed the best judgment assessment, proposed in the notice, dated 24.10.2014, and determined the tax liability, vide order, dated 19.12.2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2007. The Government has specifically reduced the rate of tax for this commodity which is intended for sale within the UT from 4% to 1% and not for any other goods taxable under other entries falling within the scope of other schedule. Further it is clear, the rate of 4% of LPG for domestic use in the declared goods alone was reduced from 4% to 1% and as such there is no. ambiguity arise in respect of rate of tax. It is further seen that the reduction of tax for LPG for domestic use is effected by virtue of G.0.Ms.No.27/F2/2007, dated 1.7.2007 and according the 1st respondent (petitioner), had also filed returns for LPG for domestic at the rate of 1% and LPG for commercial use at the rate of 12.5% and therefore the contention of the 1st respondent (petitioner) that the appellant (1st respondent) had erred in noting the fact that the demand was raised only on, the basis of the said GO. However, the appellant (1st respondent) had contended that the GO reduces the rate of tax of LPG for domestic use and not for LPG for commercial use and as such he has to pay tax at the rate of 12.5% for commercial cylinders and not 1% uniformly for both LPG for domestic and LPG for commercial use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, namely, Assessing Authority had found as follows: The proposal made out in the notice dated 24.10.2014 and reproduced above was based on the invoice wise details of 12 kg and 17 kg cylinders sold to M/s.Gas World, Puducherry, furnished vide letter dated 28.10.2013 by M/s.SHV Energy Privated Limited, Chennai, the seller. The dealer's had signed and issued 12 C-Forms bearing No.PYC 11 178373, PYC 11 178387, PYC 11 178397, PYC 11 251951, PYC 12 284309, PYC 11 251976, PYC 12 299624, PYC 12 299168, PYC 12 299662, PYC 12 409337, PYC 12 409555, PYC 12 417997 (copy of the C-Forms with Annexture enclosed with the notice, dated 24.10.2014) invariably for aI/ the invoices figuring in the invoice wise sales details for 2011-12 furnished by Mls.SHV Energy Private Limited, Chennai along with their letter dated 28.10.2013. Therefore the quantitative details of 12 kg and 17 kg cylinders relied upon in the proposal contained in the (notice dated 24.10.2014 was based on the dealers own document namely C form. The best judgment proposal in the said notice relied on the policy prevalent in LPG trade that 12 kg cylinders are meant for domestic use and 17 kg cylinders are meant for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Puducherry dated 19.12.2014 is hereby set aside. 9. Being aggrieved by the same, the present Tax Case (Revision) petition has been filed by the assessee, on the following grounds, (i) The Tribunal has failed to consider the order passed by the Appellate Authority (Appellate Assistant Commissioner (CT), who had discussed the issue elaborately, and arrived at the conclusions. (ii) The Tribunal did not consider the core ingredients of rate of Tax, applicable in respect of sale of Liquefied Petroleum Gas (LPG), for domestic and other than domestic. (iii) The Tribunal has misunderstood the facts and appeal filed by the 1st respondent was allowed, without looking into the merits and Government Notifications, in the matter of applicability of rate of Tax, for sale of LPG domestic use upto 31.03.2011. (iv) The Tribunal has failed to appreciate the orders of the appellate authority, dated 27.08.2015, wherein, he has passed an order, in respect of 2011-2012 that LPG is taxable at 1% irrespective of the usage of Liquefied Petroleum Gas (LPG) for domestic use or commercial use. (v) G.O.Ms.No.68, dated 31.12.2011 has clearly spelt out that the rate of Tax for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rate of tax imposed, he reiterated the grounds extracted. 13. Per contra, Mr.C.T.Ramesh, learned Government Advocate (Pondicherry), submitted that notification had already been issued by the Government of Puducherry, entrusting the duties of the Appellate Tribunal to the Principal District and Sessions Judge, Puducherry. Inviting the attention of this Court to the proviso to Section 44 of the PVAT Act, 2007, he submitted that the Government may entrust the duties of the Appellate Tribunal to the Principal District and Sessions Judge, Puducherry, which has been done. Inviting the attention of this Court to sub-Section (8) of Section 81 of the Pondicherry Value Added Tax Act, 2007, notification issued already, is saved, and no fresh notification is required, under the New Act, PVAT Act, 2007. 14. He further submitted that being aggrieved by any order, involving loss of revenue, in the case on hand, the Deputy Commercial Tax Officer-II, Commercial Taxes Department, Puducherry, first respondent herein, is competent to file an appeal to the Appellate Tribunal and the words, any person in PVAT Act, 2007, should not be narrowed down only to an assessee. 15. On the merits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower of the Appellate Tribunal, to regulate the procedure and disposal of its business. Order, issued in 1968, extracted hereunder, indicates appointment of a District Judge, as the appellate Tribunal, GOVERNMENT OF PONDICHERRY FINANCE DEPARTMENT (G.O.Ms.No.59, dated the 7th March, 1968) NOTIFICATION S.O.35. In exercise of the powers conferred by sub-section (1) of section 33 of the Pondicherry General Sales Tax Act, 1967 (Act No.6 of 1967), the Lieutenant Governor, Pondicherry hereby appoints Shri.S.Maharajan, President, Tribunal Superieur d' Appel and Chief of the Judicial Department, Pondicherry, as a single member Sales Tax Appellate Tribunal for the entire Union territory of Pondicherry to exercise the functions conferred under the said Act. (By Order of the Lieutenant Governor) P.N.SUBRAMANIAM, Secretary to Government. Thus, in exercise of the powers in Section 33 of the erstwhile Pondicherry General Sales Tax Act, appointment has been made and since then, the Appellate Tribunal is functioning. 18. Section 81 of the PVAT Act, 2007, deals with repeal and savings and the same is extracted hereunder: (1) The Pondicherry Gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act will also be heard and disposed by the officer appointed or authority constituted under the repealed Act subject to the terms and conditions prescribed for this purpose under this Act until such officer is appointed or such authority is constituted under this Act; and (d) as soon as the officer appointed or the authority constituted under this Act who have jurisdiction to entertain such application, appeal, revision or other proceedings under this Act assumes charge, then all the applications, appeal, revision or other proceedings pending both under the repealed Act and under this Act shall respectively be transferred to them and disposed by them under this Act: Provided that where such applications, appeal, revision or other proceedings made or preferred to any officer or any authority which have arisen under the repealed Act and transferred under this clause shall continue to be regulated subject to the terms and conditions prescribed for this purpose under the repealed Act until it is finally disposed. (7) Any order delegating any power under the repealed Act or rules framed thereunder to any person appointed, by any designation, immediately before the commencemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein, to prefer any appeal, to the Appellate Tribunal and the distinction drawn by the respondents, the relevant provisions from the two Acts, viz., Pondicherry Value Added Tax Act, 2007 and Tamil Nadu Value Added Tax Act, 2006, are extracted, as hereunder: Section 49 of the Pondicherry Value Added Tax Act, 2007 Section 58 of the Tamil Nadu Value Added Tax Act, 2006 (1) Any person objecting to an order passed by the Appellate Assistant Commissioner under sub-section (3) of section 47 or an order passed under the proviso to sub-section (4) of section 77 may, within a period of sixty days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Tribunal: (1) Any officer prescribed by the Government or any person objecting to an order passed by the Appellate Deputy Commissioner under sub-section (3) of section 51, or by the Appellate Joint Commissioner under sub-section (3) of section 52, or by the Joint Commissioner under sub-section (1) of section 53, may,-- (a) within a period of one hundred and twenty days, in the case of an officer so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly and on such amendment being made, any amount overpaid by the appellant shall be refunded to him without interest, or the further amount of tax, if any, due from him shall be collected in accordance with provisions of this Ordinance, as the case may be. (5) Notwithstanding that an appeal has been preferred under sub-section (1) the tax shall be paid in accordance with the order of assessment against which the appeal has been preferred: Provided that the Appellate Tribunal may, in its discretion, give such directions as it thinks fit in regard to the payment of the tax before the disposal of the appeal, if the appellant furnishes sufficient security to its satisfaction, in such form and in such manner as may be prescribed: Provided further that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1), the Appellate Tribunal shall dispose of the appeal within a period of ninety days from the date of such order: Provided also that if such appeal is not disposed of within the period specified in the above proviso, the stay order shall, on the expiry of that period, stand vacated and no further stay shall be granted. (6) (a) The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Deputy Commissioner or by the Appellate Joint Commissioner, as the case may be; (b) under sub-section (1) of section 53, unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable, as the case may be, and twenty-five per cent of the difference of the tax ordered by the Joint Commissioner under section 53 and the tax admitted by the appellant: Provided also that no appeal shall be admitted against an order, passed by the Appellate Deputy Commissioner under section 51 or by the Appellate Joint Commissioner under section 52, as the case may be, setting aside the assessment and directing the assessing authority to make a fresh assessment. (2) The officer empowered under sub-section (1) or the person against whom an appeal has been preferred, as the case may be, on receipt of notice that an appeal has been preferred under sub-section (1) by the other party, may file within sixty days of the receipt of the notice, a memorandum of cross objections and such memorandum shall be disposed of by the Appellate Tribunal, as if it were an appeal presented within the time specified in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any assessing authority or his representative appearing before the Appellate Tribunal may file an enhancement petition or a petition for restoration of the assessment or penalty or both, fully or partially, as the case may be, in the prescribed form and in the prescribed manner against the order of the Appellate Deputy Commissioner or the Appellate Joint Commissioner or the Joint Commissioner, as the case may be. The Appellate Tribunal may, after giving a reasonable opportunity to the appellant and assessing authority or the representative of the assessing authority of being heard, pass such orders on the petition, as it thinks fit: Provided that the Appellate Tribunal may admit an enhancement petition or a petition for restoration of the assessment or penalty or both, fully or partially, as the case may be, presented after the expiration of the said period, if it is satisfied that the assessing authority or his representative had sufficient cause for not filing such petition within such period. (6) Notwithstanding that an appeal has been preferred under sub-section (1), the tax shall be paid in accordance with the order of assessment against which the appeal has been preferred: Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and amend the law relating to the levy of tax on the sale or purchase of goods in the State of Tamil Nadu. 24. Under Article 265 of the Constitution of India, Government is empowered to levy tax. Tax is paid to the Government and it is the duties and functions of the authorities in the Commercial Taxes Department, to implement the taxing laws. Ultimately, it is the revenue, which is collected by the Government, by way of tax. As regards intra-state sale, there are provisions, both in the PVAT Act, 2007 or TNVAT, 2006, as the case may be. 25. Though usage of the words, any person , in the opening sentence of Section 49 of the PVAT Act, at the first blush, in comparison to Section 58 of the TNVAT Act, appear to be ambiguous, that it has not enabled any authority or the Officer of the Commercial Taxes Department, Pondicherry, to prefer a appeal to the Appellate Tribunal, we deem it fit to consider few decisions, as to how, interpretation has been made, to achieve the object of any enactment. (i) In the words of Tindal, C.J., in Sussex Peerage case [(1844) 11 Cl F 85], wherein, he said thus, If the words of the statute are in themselves precise and unambiguous, then no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpreted in their plain grammatical meaning and it is only when such words are capable of two constructions that the question of giving effect to the policy or object of the Act can legitimately arise. When the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the courts would prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the, Act purports to remedy and correct. (vi) In State of W.B., v. Union of India reported in AIR 1963 SC 1241, the Hon'ble Apex Court held that, in considering the expression used by the Legislature, the Court should have regard to the aim, object and scope of the statute to be read in its entirety. (vii) In State of Uttar Pradesh v. Dr.Vijay Anand Maharaj reported in AIR 1963 SC 946, the Hon'ble Supreme Court held as follows: But it is said, relying upon certain passages in Maxwell on the Interpretation of Statutes, at p, 68, and in Crawford on Statutory Construction' at p. 492, that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 953 SCR 667 : AIR 1953 SC 274]). The only recognised exception to this well-laid principle is that it cannot be called in aid to alter the meaning of what is of itself clear and explicit. Lord Coke laid down that: 'it is the most natural and genuine exposition of a statute, to construe one part of a statute by another part of the same statute, for that best expresseth meaning of the makers' (Quoted with approval in Punjab Breverages Pvt. Ltd. v. Suresh Chand [(1978) 3 SCR 370 : (1978) 2 SCC 144 : 1978 SCC (L S) 165]). (x) In Nyadar Singh v. Union of India reported in AIR 1988 SC 1979, the Hon'ble Supreme Court observed that ambiguity need not necessarily be a grammatical ambiguity, but one of the appropriateness of the meaning in a particular context. (xi) In Nasiruddin v. Sita Ram Agarwal reported in (2003) 2 SCC 577, the Hon'ble Supreme Court held as follows: 35. In a case where the statutory provision is plain and unambiguous, the court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom.... 37. The court s jurisdiction to interpret a statute can be invoked when the same is ambiguous. It is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpreting or construing a statute is to gather the mens or sententia legis of the legislature. 13. Interpretation postulates the search for the true meaning of the words used in the statute as a medium of expression to communicate a particular thought. The task is not easy as the language is often misunderstood even in ordinary conversation or correspondence. The tragedy is that although in the matter of correspondence or conversation the person who has spoken the words or used the language can be approached for clarification, the legislature cannot be approached as the legislature, after enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the legislature retains the power to amend or repeal the law so made and can also declare its meaning, but that can be done only by making another law or statute after undertaking the whole process of law-making. 14. Statute being an edict of the legislature, it is necessary that it is expressed in clear and unambiguous language..... 15. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat when an expression is capable of more than one meaning, the Court would attempt to resolve the ambiguity in a manner consistent with the purpose of the provision, having regard to the great consequences of the alternative constructions. (xv) In State of Haryana v. Suresh reported in 2007 (3) KLT 213, the Hon'ble Supreme Court held that, One of the basic principles of Interpretation of Statutes is to construe them according to plain, literal and grammatical meaning of the words. If that is contrary, to or inconsistent with any express intention or declared purpose of the Statute, or if it would involve any absurdity, repugnancy or inconsistency, the grammatical sense must then be modified, extended or abridged, so far as to avoid such an inconvenience, but no further. The onus of showing that the words do not mean what they say lies heavily on the party who alleges it must advance something which clearly shows that the grammatical construction would be repugnant to the intention of the Act or lead to some manifest absurdity. (xvi) In Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., reported in (2008) 4 SCC 755, the Hon'ble Supreme Court, at Paragraphs 52, 54, 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie., before the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein and the same cannot be questioned by the Government and that no officer, would not be in a position to challenge the correctness of the the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein, even if there is an incorrect approach, either on facts or law. In a lis, involving tax, it is the Government and assessee, who are the parties and the assessing officer, is only an officer, implementing the taxing laws, on behalf of the Government. 27. If the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein, has committed an error, on facts or law or both, as the case may be, certainly the Government or any authorised officer, to levy tax, on behalf of the Government, can always maintain an appeal to the Appellate Tribunal, testing the correctness of the order. 28. As per sub-Section (6) of Section 81 of the Act, notwithstanding anything contained in sub-sections (1) and (2), which deal with repealing and validation of the Act, 1967, (a) any application, appeal, rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the expressed intention of the legislature. 32. In the light of the above decisions and discussion, substantial questions of law No.2 is answered in the negative, against the petitioner. 33. On the substantial question of law No.4, as to whether the Assessing Officer has got power to levy higher rate of tax by overlooking the Government order and whether is it sustainable in Law?, perusal of the material on record shows that the Appellate Tribunal has analysed the evidence and recorded a categorical finding of misclassification of Liquefied Petroleum Gas (LPG) and filing of returns, to gain benefit of lesser tax. The Tribunal has properly applied the Government Orders, applicable to the period in question. There is no perversity. Hence, the Substantial Question of Law No.4, is answered in the negative, against the assessee. Considering the material on record, we are of the view that the petitioner has not made out a case for interference, with the order of the Appellate Tribunal, Puducherry, dated 28.06.2017 passed in Tax Appeal No.15 of 2015. 34. After the dismissal of the writ petition, Mr.P.Suresh, learned counsel for the petitioner submitted that business of Dis ..... 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