Gujarat High Court
Lupin Ltd vs State Of Gujarat on 23 March, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/4602/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4602 of 2018
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LUPIN LTD
Versus
STATE OF GUJARAT
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Appearance:
UCHIT N SHETH(7336) for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 2
MR CHINTAN DAVE, AGP for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 23/03/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. RULE. Learned AGP Mr. Chintant Dave, who has been served with an advance copy, waives rule at our request.
2. The issue involved in the present petition is short and clearly covered by a recent judgement of this Court dated 16.03.2018 in case of Reliance Industries Ltd. vs. State of Gujarat and connected petitions.
3. Petitioner is engaged in manufacture and sale of drugs, drug intermediates and medicines. The petitioner purchases raw materials in the process of manufacturing activity which includes fuel and claims input tax credit under section 11 of the VAT Act while discharging its VAT liabilities. In terms of Page 1 of 6 C/SCA/4602/2018 ORDER clause (b) of sub-section (3) of section 11 of the Act, such input tax credit is to be reduced by prescribed percentage under certain circumstances. The petitioner willingly suffers such reduction once in case of fuel. The department, however, contends that the petitioner's case falls under sub-clause (1) or (2) as also under clause (b) of sub-section (3) of section 11 of the VAT Act and consequently, the petitioner must suffer such reduction twice. This issue was once decided by this Court in favour of the assessee holding that the reduction can apply only once even if the product happens to be fuel. The judgement of the High Court was reversed by the Supreme Court in case of State of Gujarat vs. Reliance Industries Limited reported in 2017 (12) Scale 17. In the meantime, the assessments were already made in the case of the petitioner on the basis of the judgement of the High Court. Judgement of the Supreme Court prompted the Commissioner to issue notice for suo motu revision of the assessments. This notice the petitioner has challenged in the present petition on the ground of limitation. It is undisputable and emerging from the face of the record that the Commissioner had not called for examination of the record of the case for exercise of reivisional powers within three years from the date of the order of the assessment.
4. Under similar circumstances, this Court in the afore mentioned case in case of Reliance Industries had, after referring to Page 2 of 6 C/SCA/4602/2018 ORDER section 75 of the VAT Act pertaining to revision, quashed the notices making following observations:
6. In terms of clause(a) of subsection (1) of section 75 thus, the Commissioner has revisional powers which can be exercised on his own motion or under an application made to him for such purpose. He could take any order in revision passed by the officer appointed under section 16 of the Act to assist him by calling for and examine record of any such order and pass such order as he thinks just and proper. Exercise of such powers however, comes with prescription of limitation. The suomotu power for calling any record of any such order can be exercised within three years. If the same is to be exercised on a motion by the person concerned, the period of limitation prescribed is one year. The statute further provides that the order of revision could be passed within five years from the date of the order taken in revision. There is nothing on record to suggest that in the present cases, the Additional Commissioner had called for the record of the assessment of the petitioner for the particular year within three years of the date of the order so as to enable him to exercise the revisional powers. In fact, looking to the tenor of the notice of revision it was not even possible for him to have done so. This is because the order of assessment was passed on 30.03.2013. Period of limitation would therefore expire on 30.03.2016. The judgment of the Supreme Court, to which, reference is made and reliance placed in the notices for revision was delivered on 22.09.2017. On all accounts thus, the action of the Additional Commissioner calling for the record of the assessment and issuing notice for revision is beyond the period of limitation prescribed.
7. Similar situation had come up before this Court in number of cases to which reference can be made shortly.
Before that, we may briefly note that clause( a) of subsection (1) of section 67 of the Gujarat Sales Tax Act made pari materia provisions concerning the revisional powers of the Commissioner. Under the said section also, the Commissioner Page 3 of 6 C/SCA/4602/2018 ORDER is empowered to call for and examine the record of any proceedings of the subordinate officer suomotu within three years or on an application made to him for such purpose within one year from the date of the order passed by such officer.
8. In case of Om Metals & Minerals Ltd. v. Assistant Commissioner of Sales Tax (Appeals) reported in 42 VST 50 (Guj), the Court in the background of pari materia provisions contained in section 67 of the Sales Tax Act, made following observations:
"13. The composition order under section 55A of the Act as noted hereinabove has been made on 31st March, 1998 and the impugned notice has been issued on September 25, 2001 which is clearly beyond a period of three years from the date of the said order. Section 67 of the Act inter alia lays down that the Commissioner on his own motion within three years from the date of order passed by any officer appointed under section 27 to assist him, may call for and examine the record of any such order and pass such order thereon as he thinks just and proper within 12 months from the date of service of notice of revision. In the facts of the present case, the impugned notice has clearly been issued after the expiry of the period of three years from the date of the order sought to be revised, that is, the period of limitation prescribed under clause (a) of subsection (1) of section 67 and as such, the same is apparently barred by limitation."
9. In case of M/s Tiger Steel Engineering (I) Pvt. Ltd. v. State of Gujarat (GH) vide judgment dated 06.04.2016 passed in Tax Appeal No.38 of 2007, the Division Bench once again in the context of the provisions of section 67 of the Sales Tax Act, observed as under:
"10. From the language employed in the section 67 of the Act, it is amply clear that the period of limitation of three years commences from the date any order has been passed by any officer appointed under section 27 to assist the Commissioner. In the present case, such order is the composition order dated 19.12.2000. In the light of the clear language of clause (a) of Page 4 of 6 C/SCA/4602/2018 ORDER sub section (1) of section 67 of the Act, the period of three years for exercising powers under section 67(1)(a) of the Act would commence from the date of such order, that is, from 19.12.2000. Therefore, such period would come to an end on 18.12.2003. In the present case, it is an undisputed position that the Commissioner had taken the order dated 19.12.2000 in revision by issuing notice dated 2.2.2005. Evidently therefore, the exercise of powers under section 67 of the Act by the Commissioner was beyond the period of limitation."
10. In case of S.K.Industries v. State of Gujarat reported in 100 VST 81 (Guj), the Division Bench of this Court in the context of section 67 of the Gujarat Sales Tax Act, had observed as under:
"21. Facts in the present case are not in dispute. Admittedly, the Commissioner had not exercised the revisional powers under sub section (1) of section 67 within the period of limitation prescribed as interpreted by us in this judgment. In fact, till the period of three years were over, it is doubtful whether the Commissioner could have said to have called for and examine the record of the case since the Commissioner issued the notice to the petitioner calling for the information from the petitioner in this respect after the period of three years."
11. In context of section 75 of the VAT Act, Division Bench of this Court vide judgment dated 07.04.2017, passed in Special Civil Application No.6928 of 2017, had observed as under:
"[2.1] It is not in dispute that the respondent herein M/s. Khadi Gram Udhyog Sangh, Rajkot was granted the certificate of entitlement for the period between 01/04/2006 to 31/03/2012 by the Commercial Tax Officer dated 18/02/2010. It is not in dispute that the same came to be cancelled by the revisional authority vide order dated 12/08/2013. It is not in dispute that the said certificate of entitlement was cancelled in exercise of revisional powers under Section 75 of the Value Added Tax Act (hereinafter referred to as the Act). Section 75 of the Act Page 5 of 6 C/SCA/4602/2018 ORDER provides limitation of three years by the revisional authority to exercise the revisional power. In the present case, the revisional authority exercised the powers after a period of 3 years i.e. beyond the period prescribed under Section 75 of the Act. Under the circumstances, the learned tribunal has rightly allowed the Revision Application preferred by the respondent and has rightly quashed and set aside the order passed by the revisional authority cancelling the certificate of entitlement as the revisional authority exercised the powers beyond the period prescribed under Section 75 of the Act. No error has been committed by the learned tribunal in quashing and setting aside the order passed by the revisional authority. Even otherwise, even on merits also, the issue is covered against the revenue in light of the decision of the Division Bench of this Court dated 22,29/07/2016 passed in Tax Appeal No.444/2015 by which the Division Bench has held that the authority has no jurisdiction to cancel the certificate of entitlement retrospectively. Under the circumstances and even on merits also, the order passed by the revisional authority cancelling the certificate of the entitlement retrospectively cannot be sustained."
12. Looked from any angle, the impugned notices for revision cannot be sustained, being clearly in exercise of revisional powers beyond the period of limitation prescribed. Respective notices in each petition are quashed.
13. All petitions are disposed of accordingly."
5. Under the circumstances, without recording separate reasons in the present case, impugned notices both dated 11.12.2017 produced at Annexures A and B are quashed. Petition is disposed of accordingly.
(AKIL KURESHI, J) (B.N. KARIA, J) JYOTI V. JANI Page 6 of 6