Rajasthan High Court - Jaipur
M/S Parle Products Pvt Ltd vs State (Tax Department)Ors on 20 February, 2013
Author: Alok Sharma
Bench: Alok Sharma
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH ORDER M/s. Parle Products P. Ltd. Vs. State of Rajasthan & Others (S.B. Civil Writ Petition No.20253/2012) S. B. Civil Writ Petition under Article 226 of the Constitution of India. Date of Order: February 20 , 2013. PRESENT HON'BLE MR. JUSTICE ALOK SHARMA Mr. Pankaj Ghiya, for the petitioner. Mr. Nikhil Simlote on behalf of Mr. R.B. Mathur, for respondents. BY THE COURT:
This writ petition has been filed against the order dated 26-7-2012 passed by the Rajasthan Tax Board Ajmer dismissing an application filed by the petitioner for grant of stay of the order dated 10-1-2012 passed by the Dy. Commissioner Appeals, Commercial Taxes Department, Ajmer. The said application was filed along with an appeal under Section 83 of the Rajasthan Value Added Tax Act, 2003 (hereinafter `RVAT Act').
Counsel for the petitioner submits that the dispute in the present matter relates to rate of tax determinable on the classification of the goods manufactured by the petitioner company under Entry 163 of Schedule IV of the RVAT Act (4% ad valorem), which relates to sugar candy made of sugar with glucose, but excluding cocoa or Entry (residual) under Schedule V of the RVAT Act (12.5% as valorem). Counsel submits that the petitioner company filed its return treating its goods classification under Entry 163 of Schedule IV and paying tax at the rate of 4% leviable in accordance with law in respect of its goods. However the department taking a different view treated the petitioner's manufactured goods as confectionery and thus pushing them as not otherwise classifiable and hence falling in the residual Entry in Schedule V of the Act of 2003 exigible to 12.5% as valorem tax.
Counsel submits that the dispute in the present case is not a case of evasion of tax, but the dispute has arisen about rate of tax dependent upon the classification of goods as per the provisions of the RVAT Act. It is submitted that the petitioner company is a good cooperate citizen, and in spite of challenging the classification of its goods wrongly by the department has already paid the amount of differential tax i.e. additional 8.5% tax over the 4% tax already paid. Counsel submits that in the facts obtaining the petitioner's dispute is bonafide and genuine not moonshine and the Tax Board ought to have exercised its discretion to protect the petitioner company from the liability to pay the interest on the additional tax following the order of assessment by the Commercial Tax Officer, Special Circle Ajmer as upheld by the Appellate authority. Instead the application for limited stay on recovery of interest on the disputed differential tax (already paid) has been mechanically dismissed by an unreasoned order.
It is submitted that in the facts of the case the dispute under consideration being a bonafide dispute and the petitioner company already having paid tax allegedly short paid discretion ought to have been exercised by the Tax Board in favour of the petitioner company and against the deposit of interest during the interregnum of hearing of the appeal. He submits that the petitioner company is not running away from the merits of the case and is willing to have the appeal adjudicated finally within fifteen days. It is submitted that the petitioner company is a well established and reputed company and there is no possibility whatsoever of the allegedly due amounts not being paid to the department in the event of the dismissal of the appeal.
Learned counsel for the department would submit that the order dated 26-7-2012 is a discretionary order and there is no occasion to interfere there with in the exercise of this court's powers under Articles 226 and 227 of the Constitution of India.
Heard learned counsel for the parties.
A bare look at the order dated 26-7-2012 indicates that it is non-speaking order. No reason whatsoever has been advanced by the Tax Board while refusing to exercise its discretion to protect the petitioner company from its liability (under challenge) to pay the interest in respect of demand raised by the department in spite of the fact that the petitioner company had already paid differential but disputed tax during the pendency of appeal under protest. It is quite plain that the present matter does not relate to a situation of evasion of tax having been found by the department. The dispute arises on the issue of classification of goods manufactured by the petitioner company. The petitioner company is not a fly by night operator but a well known and reputed company. Exercise of Jurisdiction for interim protection vested in courts and Tribunals has to be balanced taking into consideration the facts and circumstances of a given case. This has not been done by the Tribunal. Counsel for the petitioner has also agreed that petitioner's appeal be decided within a period of fifteen days.
Consequently, taking into consideration the overall facts obtaining in the case as detailed earlier in this order, I would direct the Tax Board to decide the appeal of the petitioner within a period of twenty days from today. Counsel for the petitioner is directed to move an application before the Tax Board, for preponement of the date of hearing of the appeal pending before the Tax Board, on or before February 26, 2013. On the said application for preponement of hearing of the appeal of the petitioner company, the Tax Board after fixing a date convenient to the parties shall decide the matter within a period of fifteen days thereafter.
During pendency of appeal before the Tax Board, there would be a stay on the deposit of interest on the amount different tax demanded by the department and already deposited by the petitioner company.
Writ petition stands disposed of accordingly.
(Alok Sharma),J.
arn/ All corrections made in the order have been incorporated in the order being emailed.
Arun Kumar Sharma, Private Secretary.