ASSISTANT COMMISSIONER (CT) LTU, KAKINADA & ORS.
GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED
[A M Khanwilkar and Dinesh Mheshwari, JJ]
Dated: May 6, 2020
Writ- Jurisdiction of High Court – Power to entertain – Assessment order passed –Tax deposited – Appeal filed after expiry of limitation without substantiating reason for delay – Dismissal of – Writ invoked on grounds of injustice allowed and assessment order quashed – Challenge by Revenue – Held writ entertained on mere grounds of assessee’s willingness to explain discrepancies and factum of tax deposit – No finding by High court on failure to substantiate reason for delay in filing appeal or violation of principles of natural Injustice – Non compliance of statutory remedy available – Appeal accepted and writ dismissed
The Revenue has contested the power of High Court to exercise its writ jurisdiction in this case where an alternative statutory remedy exists. The Respondent was assessed for the year 2013-14 and a demand was raised vide order dated 21/6/2017 for the reason that no ;F’ forms were submitted by it in support of its claim. The respondent filed an appeal before the Appellate Authority on 24/9/2018 which was dismissed being barred by limitation as the Respondent had failed to substantiate on the reason for delay. Instead of availing the statutory remedy against the said order, the Respondent filed a writ before the Hon’ble High court seeking an opportunity to explain the discrepancies and consequent quashing of the impugned assessment order.
The Hon’ble High Court had allowed the writ observing that the Respondent had deposited 12.5% tax already and that the Respondent was unaware of the assessment order when it was passed. The impugned assessment order was quashed relegating the respondent to explain the discrepancies. Aggrieved by the order so passed, the Revenue has filed an appeal before the Apex court challenging the authority of High court in exercising its jurisdiction under Article 226 to entertaining a writ in the present case, where an alternative statutory remedy is available.
The Supreme Court has observed that the order passed by Appellate Authority concludes that the respondent had failed to substantiate the reason of delay .That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies and that the respondent had already deposited 12.5% of the additional amount in terms of the assessment order passed. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by respondent only on 24/9/2018, without substantiating the inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all. The appeal is thus accepted and the writ allowed by the High court and the order passed by it is dismissed.
CIVIL APPEAL NO. 2413/2020
COMMISSIONER OF CENTRAL EXCISE, DELHI-III
UNI PRODUCTS INDIA LTD.
[Deepak Gupta and Aniruddha Bose, JJ]
Dated: May 1, 2020
Entries in Schedule – Classification of goods – Car matting – Whether falling under ‘accessory and parts’ thereof under chapter 87 or under ‘carpets and other textile floor coverings’ under chapter 57 – Importance of HSN explanatory notes in arriving at decision emphasized– List of ‘accessory and parts’ contains mechanical components only – Mere fact that the said goods are used only in cars and not home no criteria to transplant them to residual entry ‘ other’ under chapter 87 – Hence, Goods in question held to be falling under chapter 57 being taxable @ 8% under Central Excise Tariff Act, 1985.
The Supreme Court has upheld the decision of the Tribunal in arriving at a decision that the goods- Car Mattings fall under the heading 5703.90 (carpets and other textile floor coverings’ of the First Schedule of Central Excise Tariff Act, 1985.
The Apex Court has considered it valid to take assistance taken from HSN Explanatory notes in deciding the matter. There is no need to resort to common parlance test, marketability test, popular meaning test when the chapter, section notes and explanatory notes view it as being classifiable under the heading 5703.90. The list of components under parts and accessory under chapter 87 are mechanical in nature.
Once the subject goods are found to come within the ambit of that subheading, for the sole reason that they are exclusively made for cars and not for ‘home use’ those goods cannot be transplanted to the residual entry against the heading 8708.
The appeal by Revenue is dismissed.
Civil Appeal Nos. 302-303 0f 2009
UNION OF INDIA & ANOTHER ETC. ETC.
V.V.F LIMITED & ANOTHER ETC. ETC.
[Arun Mishra, M R Shah and B R Gavai, JJ]
Dated: April 22, 2020
Promissory estoppel- Exemption – Excise duty – Notification A was issued in 2001 by Central government granting exemption to new industrial units from paying excise duty on goods cleared equivalent to the amount paid in cash/PLA on finished goods – Investment made by company more than Rs 20 Crores in pursuance thereto – Subsequently notification B issued curtailing the entitlement for refund to 34% and determination of special rate by commissioner where value addition was deemed to be more than actual value – Representations made by manufacturers – Notification C issued in 2008 revising deemed value addition to 75% on goods manufactured with no option of applying of special rate – Writ before High Court allowed on grounds of promissory estoppel- Appeal filed by revenue before Supreme Court allowed as new notification held to be only clarificatory in nature with a purpose to deal with tax evasion by unscrupulous manufacturers which went unvisualized earlier – No violation of vested rights – New notifications issued in public interest – Principle of Promissory Estoppel not to apply.
In this case, subsequent notification was issued by the Central government to lower the exemption percentage on goods cleared by new industrial units many years after the initial notification allowing 100% refund of Excise Duty. Such a notification was held to be clarificatory in nature and not hit by the principle of promissory estoppel.
Elaborating the facts, it is mentioned that in the year 2001, an earthquake caused devastation in area of Kutch in Gujarat. Consequently , to invite investment and to generate employment, the Central Government announced an Incentive Scheme for which a Central Excise Notification No. 39/2001- CE dated 31/7/2001 was issued, the purpose of which was to exempt the goods being cleared from the New industrial unit set up in the Kutch District prior to 31/7/2003 from duty of excise as was equivalent to the amount paid in cash/PLA on the finished goods .The said incentive of refund of the duty paid in cash / PLA was available upto a period of 5 years from the date of production.
The respondent company invested more than Rs 20 Crores in plant and machinery and the incentive limit for such investment was unlimited as there was no upper cap. Various amendments were made in the notification dated 31/7/2001 between year 2001 and 2004 to clarify certain matters and to extend the cut- off date of setting up a new unit from July 31, 2003 to December 31, 2005.
The respondent company set up their new unit in the area of Kutch only in pursuance of the original notification dated 31/7/2001 which granted exemption. This notification was amended by another notification No. 16/2008 – CE dated 27/3/2008. After amendment it was provided that the benefit of refund would be granted with reference to the value addition, which was notionally fixed @ 34% for the commodity manufactured. It also provided for determination of a special rate by the Commissioner in cases where the actual value addition was more than the deemed value addition as specified. This amendment led to their entitlement of refund being reduced from 100% to 34 %. Many companies and manufacturers made representations before the government for reconsidering the amendment made to the original notification. Resultantly, another notification was issued by the Central government – No. 51/2008 dated 3/10/2008 revising the deemed value addition to 75% in respect of products manufactured by the respondent company without giving any option for applying for a special rate.
The company approached the Hon’ble High Court by way of writ and contended that the promised incentive was curtailed midway before the expiry of 5 years and the subsequent notification amending the original notification dated 31/7/2001 was in breach of the principle of Promissory Estoppel. Writs filed were allowed on the ground of Promissory Estoppel. Aggrieved by the order of the Hon’ble High court, the Revenue filed an appeal before the Apex Court.
The Apex court held that The High Court has committed an error in quashing and setting aside the subsequent notification impugned before the High Court on the ground that they are hit by promissory estoppel and that they are retrospective and not retroactive.
The impugned notifications are clarificatory in nature and it can be said that it was an act to remove doubts.
Elaborating the circumstances due to which new notification was issued it was held that during the operation of earlier notifications it was noticed that certain unscrupulous manufacturers were indulging in tax evasion activities. This situation was not visualized by the government while issuing the earlier notifications Hence, another notification was issued which was clarificatory in nature. The subsequent notifications do not take away any vested right conferred under the said notifications. They were issued in public interest and seek to achieve the original object. Therefore, they are not hit by the principle of Promissory Estoppel. Therefore, the appeals are allowed.
Civil Appeal Nos. 2256-2263 of 2020
COMMERCIAL TAXES OFFICER
BOMBAY MACHINERY STORE
[Aniruddha Bose and Deepak Gupta, JJ]
Dated: April 27, 2020
Delivery of goods – Interstate sale – Goods bought from outside the state – Goods remained with transport company for over a month – ‘Constructive delivery’ assumed to have taken place after the time period as fixed by Tax Administration-exemption claimed u/s 6(2) of Rajasthan Sales Tax Act, 1964 rejected -Sale of such goods beyond the fixed time frame considered sale within the state –Held by Supreme court that S. 3 of 1956 Act is silent on time frame within which delivery ought to take place –States expressly that movement of goods would terminate only on delivery – No concept of constructively delivery – Fixing of time frame by tax administration not permissible – Interpretation of the provisions by tax administration based on trade practices not allowed – Appeal by revenue dismissed
Defining the scope of delivery as per S.3 of the Central Sales Tax Act, the Hon’ble High Court has passed an order where initially the assessee had purchased electricity motors and its parts from outside the state and sold it to the dealer within the state of Rajasthan. Documents of title were transferred during the movement of goods from one state to another and exemption u/s 6(2) of Rajasthan Sales tax Act 1964 was obtained. After the goods remained with the transport company upon their arrival at the Kota region for more than a month, the Revenue deemed the assessee to have taken constructive delivery of goods and sale of such goods after that period was deemed to be sale within the state. As per the revenue, such a sale attracted 12% tax on sale of goods within the State. Penalty and interest were imposed alongwith it by the tax officer.
It is worth mentioning here that the Tax Administration had issued two circulars dated 16 September 1997 and dated April 15, 1998 vide which the time frame for holding of goods in carrier’s godown was fixed beyond which the Revenue was to treat constructive delivery of goods involved. The High Court quashed the two circulars and upheld the order of the tax board. Aggrieved by the order of the High Court, the Revenue has filed an appeal before the Supreme Court.
The Court held that fixing the time frame by the Tax Administration is not permissible for the reason that in section 3 of the Central Sales Tax Act,1956 the term ‘delivery’ does not specify any time frame within which such delivery shall have to take place .It only specifies as to when the movement of goods is deemed to commence and that the time of termination of movement of goods is when the goods are taken from the carrier.
There is no concept of constructive delivery either expressed or implied. Section 3 of the 1956 Act states that the movement of goods would terminate only when the delivery is taken. The Tax Administration Authorities cannot interpret the legislative provisions on the basis of their perception of trade practice. Giving meaning would mean supplying words to legislative provisions as if to cure omissions of the legislature. Hence, the appeals are dismissed.
Civil Appeal No. 2217 of 2011
HIGH COURT OF KARNATAKA
Tata Hitachi Construction Machinery Company Pvt Ltd.
State of Karnataka
[Hon’ble Mrs. Justice S. Sujatha The Hon’ble Ms. Justice Jyoti Mulimani]
Dated : March11, 2020
Statutory Forms – Delay in producing – Statutory forms not filed in time – Concessional rate of tax denied on turnover – Penalty and interest also imposed – Forms produced before Tribunal not accepted as no sufficient cause given for the delay – On appeal High Court observed that undisputedly concessional levy of tax is meant for benefit of assessee – Since no material was placed on record by assessee to justify delay in production – Hence matter remanded to Tribunal to reconsider the application submitted alongwith ‘C’ forms furnished at this stage and re examine the matter – Petition disposed off.
In this case the concessional rate of tax has been denied to the petitioner on its turnover due to non filing of ‘C’ forms .The petitioner claims that for the relevant tax period, the turnover on the interstate sales of equipments, machineries and spares not covered by C-Forms were subjected to higher rate of tax by the Assessing Authority. The Assessing Authority had also levied penalty and interest under Section 72(2) and Section 36 of the KVAT Act, 2003. Before the Appellate Tribunal, additional C-Forms submitted by the petitioner relating to the relevant tax period with an interim application came to be rejected. Hence, the petitioner filed Revision Petitions seeking permission to produce C-Forms and 10 such original C-Forms are also placed before the Hon’ble Court along with the said application.
The Court held that It is well settled that the statutory declaration forms would be accepted by the Appellate Authority keeping in mind the inter-state transactions effected and on the sufficient cause shown by the assessee in obtaining such declaration Forms from the purchasers. Merely for the reason that C-Forms are produced belatedly, it cannot be rejected. It is also apparent that the petitioner has not placed on record satisfactory material to establish the circumstance of consignment agent and purchasers withholding the concerned declaratory Forms disabling the petitioner in producing the same within the relevant time prescribed under Rule 12(7) of the Rules. The original C-Forms now placed before the Court required to be examined in the light of the material to be placed by the petitioner to substantiate the reasons for the delay subject to authenticity of the documents.
It is not in dispute that concessional levy of tax which is provided by the legislature is to the benefit of the assessee, if such benefit is denied on technicalities, the purpose and object of extending the concessional rate of tax would be defeated. Hence, in the circumstances, the matter is remanded to the Appellate Tribunal to reconsider the applications submitted by the petitioner for production of C-Forms as well as original C-Forms now furnished before this Court.
C/W STRP NO.100017/2016
HIGH COURT OF GUJRAT
Paresh Nathalal Chauhan
State of Gujrat
[Honourable Mr. Justice G. R. Udhwani]
Date of decision: May 5, 2020
Arrest – Bail – Bogus invoices – Claiming ITC wrongfully in connivance with others – Arrest u/s 439 of CrPC – Bail sought on medical grounds –Well designed plan floated by accused needs thorough investigation– Possibility of it being a huge racket ,releasing the accused may lead to manipulation of evidence – No serious ill health of accused indicated – Investigation at crucial stage – Hence, application dismissed- Central Goods and Services Act, 2017
An application is filed u/s 439 of CrPC, 1973 in respect of an offence punishable u/s 132 of CGST Act, 2017.The accused is alleged to have obtained a huge amount of ITC( 60 Crores) in connivance with others who are not arraigned as accused as yet. The bail is sort on medical grounds that i.e. heart ailment of petitioner. The Hon’ble High Court has observed that the case requires thorough investigation with the possibility of adding more to the array. It could be a huge racket and releasing the applicant could mean potential threat to the investigation. In absence of detection of this crime, it would have continued causing more loss to the state exchequer. The quantum in the instant case is not important but the well designed pre-meditated plan floated by the accused to loot the public exchequer. There is nothing to indicate about then ill-health of the petitioner. Hence, the application is dismissed.
Application No 6237 of 2020
High Court of Telangana
Shiv Shakti Enterprises
Union of India and others
[M.S. Ramchandara Rao & T. Amarnath Rao, JJ]
Date of decision: March 4, 2020
Penalty – Goods in transit – Wong destination – Interstate purchase of goods – Goods in transit detained on grounds of wrong destination- Tax under CGST and SGST Act, 1975 levied alongwith penalty under threat and coercion- Held mere possibility of goods being delivered at a different destination is no ground to impose penalty – Possibility of driver losing way acceptable – Tax evasion not possible as IGST stood paid– Family wedding function is a good reason to pay tax and penalty by petitioner leaving no choice- No SGST provisions seen to be violated – Goods accompanied with proper documents – Action of Respondents arbitrary and violative of Articles 14, 265 and 300A of Constitution of India- Writ allowed with a direction to take disciplinary action against the Respondent and imposing costs.
In a recent case, the goods were bought from Karnataka by to Hyderabad dealer. They were accompanied with proper documents after payment of IGST@18%. However, the goods were detained due to ‘wrong destination’ as the vehicle had gone ahead of the destination mentioned. Assuming it to be an attempt to evade tax, tax under CGST and SGST Act, 1975 were levied alongwith penalty, which the petitioner alleges to have paid under coercion and threat.
A writ is filed in this regard where the Court has held that mere possibility of goods being delivered to a different address or being sold locally cannot be a ground to impose penalty under the GST Act, 1975. More over the goods had already suffered IGST, so escaping tax was is not possible. The Court observed that the day the goods were detained , there was a family wedding in the petitioner’s house due to which it had to pay the tax and penalty amount for release of goods due to economic duress leaving him with no choice. It is also possible that the driver lost its way. The goods were in interstate transit and there is nothing to show any violation of SGST provisions. The Court has held that the action of respondent no.1 is arbitrary and against the Consitutional provisions. The writ is allowed directing Respondent no.3 to take a disciplinary action against Respondent 1 and further directed the latter to pay cost.
Writ Petition No 2161 of 2020
High Court of Punjab & Haryana
Excise and Taxation Commissioner, Haryana
M/s Nivachem Pvt Ltd and another
[Ajay Tewari and Avneesh Jhingan, JJ]
Date of decision: January 13, 2020
Classification – Entries in schedule – Black Disinfectant fluid- whether falling under schedule C or under residuary Entry of HVAT Act 2003- held – BDF rightly falls under the definition of ‘drugs’ in the Drugs and Cosmetics Act, 1940- common parlance test applied – requisites to fall under Entry 25 of schedule C of HVAT Act i.e. item being a drug and should be licensed are fulfilled by BDF – Resort to residuary entry not to be made as the said item falls under specific entry of Schedule C of 2003 Act- Appeal dismissed
An appeal is filed by the department before the Hon’ble High Court against the decision of Tribunal in holding that the Black Disinfectant Fluid (BDF) fell under the category ‘Drugs’ of Entry 25 of Schedule C of HVAT Act and is therefore leviable to a concessional rate of tax. It has alleged that the said product cannot fall under schedule C as the list contains specific items and BDF has no mention therein. Instead the product should fall under the residuary entry.
The proposition is well settled by the Supreme Court in the judgments of many other cases whereby it has been laid down that in interpreting the entries of fiscal statutes , common parlance test is to be applied. In other words, as the goods are understood by the people dealing with it.
In the absence of a definition of drugs under the 2003 Act, reliance was rightly placed on S. 3(b) of the Drugs and Cosmetics Act, 1940 Act which is wide enough to include medicines for internal or external use by human beings/animals and it covers all substances intended to be used for prevention of any disease in humans or animals. It explains how people dealing with it understand the same.
The argument of the department that Entry 25 applied only to products for consumption of human beings and animals does not emanate from the Entry. The requisite is that it should be a drug and produced under a license. Both the requisites are fulfilled by the product BDF.
Moreover, a letter from the official dealing with the said product has been produced before the court which states that the said item falls under category of drugs and is defined in S 3(b) of 1940 Act.
The contention of the department that the product should be covered under the residuary entry is unacceptable as residuary entry is resorted to only when the item doesn’t find mention in a specific entry. Here BDF is covered under schedule C of HVAT Act, 2003Hence, the item in question is covered under the ‘drugs’ of entry 25 of schedule C. The appeal is dismissed.
VATAP No 165 of 2019
Rajasthan High Court
[Dinesh Mehta, J]
Date of decision: May 13, 2020
Bail – Fraud – Refund – Bogus firms allegedly created for claiming refunds and money transferred to bank accounts of relatives – Arrested for offences punishable under the IPC – Bail sought by petitioner with an undertaking of restrictions in his withdrawals, alienation of property, etc. – Considering that investigation stood completed and the undertaking offered, bail granted with a direction to furnish personal bond and two securities
An application for bail has been filed by the petitioner under Section 439 of the Cr.P.C. for the offences under Sections 420, 406, 467, 468 and 471 IPC.
It is alleged that the petitioner has devoured huge amount of Rs. 17 crores by fraudulent transactions and that the petitioner is kingpin of the whole fraud committed by him and of creating bogus firms/companies claiming GST Refunds for the transactions which never took place. It is further submitted that the money withdrawn by the petitioner has been deposited in the bank accounts of his relatives. If the petitioner is enlarged on bail, there are chances that he may influence the witness and recovery of the embezzled public money will be difficult. The petitioner is , however, willing to put himself to certain restrictions like alienation of property, surrendering of passport, restriction on bank withdrawals and furnishing its details.
The Court has observed that the investigation against the petitioner has already been completed and he is in judicial custody. The police have filed charges sheet against the petitioner for the offences, which are triable by the Court of Magistrate. Having seen the totality of the circumstances and the undertaking offered, the Court grants bail to the petitioner u/s 439 of CrPC. The petitioner shall be released on bail on his furnishing personal bond in the sum of Rs. 1,00,000/- and two sureties of Rs. 50,000/- each.
Criminal Miscellaneous Bail Application No. 15005/2019
HIGH COURT OF DELHI
BHARTI AIRTEL LIMITED
UNION OF INDIA & ORS.
(Vipin Sanghi and Sanjeev Narula, JJ)
Date of Decision May 5, 2020
Returns – GSTR-3B – Rectification – Allowed in the period for which the return has been filed – Circular providing for correction of return only in the period during which error is notice held to be contrary to CGST Act – Writ Allowed.
The petitioner laid a challenge to Rule 61(5) of CGST Rules, 2017, Form GSTR-3B and Circular No.26/26/2017-GST Dated 29.12.2017 as ultra vires the provisions of CGST Act, 2017 and contrary to Articles 14, 19 and 265 of the Constitution of India.
The challenge had been made principally for the reason that petitioner is being prevented from correcting its monthly GST returns which had been filed in Form 3-B and consequently seeking refund of the excess tax paid.
Allowing the writ : The Court observed that CGST Act contemplated is self policing system under which the authenticity of the information submitted in the returns by registered person is not only auto populated but is verified by the supplier and confirmed by the recipient in the same month. The statutory provisions therefore were not only procedural but provided a right and a facility to a registered person by whom it could be ensured that the ITC availed and the returns can be corrected in the very month to which they relate and the registered person is not visited with any adverse consequences for uploading incorrect data.
While the provisions of the Act envisaged the filing of returns and payment of taxes in a systematic manner, due to system issues and under preparedness the necessary functionalities in Form GSTR-2 and 3 were not made operational and have been now completely done away with. There is no reason that petitioner should be denied the benefit of correcting its returns in accordance with the scheme of the act which is being sought to be stifled by the respondents by permitting only limited rectification of returns.
Further circular no. 7/7/2017 acknowledged the fact that manual filing of forms can result in errors and thus allowed the correction of same in form GSTR-1 and GSTR-2 which would be auto populated and reflected in the return in Form GSTR-3 for that particular month. However, due to indefinite postponing of the filing of returns in GSTR-2 and 3 the impugned circular no.26/26/2017 was introduced on 29.12.2017, temporarily suspending the operation of circular no.7/7/2017. While doing so by virtue of Para 4, a limited facility for rectification of returns already filed in from GSTR-3B had been permitted by adopting the correction in the GSTR-3B filed for the month in which the mistakes are noticed.
The Court thus went on to hold that Para-4 of Circular No.26/26/2017-GST Dated 29.12.2017 is not in consonance with the provisions of CGST Act, 2017 and held it to be arbitrary. The court allowed the petition and permitted the petitioner to rectify Form GSTR-3B for the period to which the error relates.
IN THE HIGH COURT OF DELHI AT NEW DELHI
BRAND EQUITY TREATIES LIMITED
THE UNION OF INDIA & ORS
[VIPIN SANGHI and SANJEEV NARULA, JJ)
Date of decision : May 5, 2020
Transitional Credit – GST – Tran-1 not filed within time – Credit accrued is a vested right – Cannot be taken away by subordinate legislation – Period prescribed is also not sacrosanct – Is only directory – In absence of any mandatory period the limitation prescribed under Limitation Act of 3 years to enforce civil rights is applicable – Writ allowed.
The petitioner claims that in terms of the latest service tax returns from April, 2017 to June 2017, it had accumulated CENVAT Credit balance. The petitioner was unable to file the declaration in Form Tran 1 within the prescribed due date. As a result it was deprived of taking forward the credit balance in the new GST regime.
On writ held:
The CGST Act was introduced in July 2017. In pursuance to Section 140(1), Rule 117 was framed which imposed a limit of 90 days for availing the CENVAT Credit accumulated by way of filing of declaration in form TRAN-1 electronically. However, due to network problems, low bandwidth and many other technical problems, assessees had faced problems in filing forms. Hence, the period for filing of forms under Rule 117 was extended many times by the respondents, which shows that the period for filing of TRAN 1 is not considered sacrosanct or mandatory either by legislature or the executive.
The credit standing in favour of the assessee is property and it cannot be deprived of it by virtue of Article 300A of the Constitution. The petition is allowed and respondent is directed to either open online portal so as to enable the petitioner to file Form TRAN-1 electronically or accept it manually by 30/6/2020.
The court also went on to hold that the government could not curtail the vested right and restrict it to 90 days by a subordinate legislation. Conscious of the circumstances prevailing, the taxpayers cannot be robbed of their valuable rights on an unreasonable and unfounded basis of them not having filed TRAN 1 Form within 90 days, when civil rights can be enforced within a period of 3 year from the date of commencement of limitation under the Limitations Act, 1963.
Rule 117 is, thus, read down as being directory in nature, in so far as it prescribes the time limit for transfer of credit and the same would not result in forfeiture of rights in case credit is not availed within the prescribed period. In absence of any specific provision under the Act, in terms of residuary provisions of the Limitation Act, the period of three years should be the guiding principle and thus a period of three years from the appointed date would be the maximum period for availing such credit.
High Court of Andhra Pradesh
Walchandnagar Industries Limited
The Commercial Tax Officer
[D.V.S.S. SOMAYAJULU &. LALITHA KANNEGANTI, JJ.]
Date of decision: May 11, 2020
Assessment – Natural Justice – Covid-19 Pandemic – Extension of Limitation – Supreme Court – Article 142 – During Assessment Petitioner sought exemption due to Covid-19 – Adjournment sought refused and impugned order passed without personal hearing – On Writ – Order passed is violative of Natural Justice – Supreme Court extending the limitation period in all matters due to pandemic – Writ allowed and respondent directed to issue a notice as the restriction on movement is lifted.
The petitioner was sought by the respondent officer of taxation to appear before him. Letters were addressed to the respondent officer seeking exemption due to the prevalent pandemic situation of Covid -19. It was not possible to file a detailed reply as it was impossible to access the records from its offices situated at distant places. An adjournment was sought which was refused and as a result the impugned order along with penalty was passed without hearing the petitioner personally.
Held: The respondent misconceived the order of Supreme Court extending the period of limitation in all matters in the given situation. The plea of the petitioner that it was not able to access the records is convincing. The writ is maintainable as there is a failure of rules of natural justice and entails fair hearing. Writ is hence allowed with a direction to the respondent to issue a notice for hearing after the movement on restriction is lifted, giving the petitioner two weeks time to appear with this reply.
Writ Petition No.8425 and 8451 of 2020