Bombay High Court
Shapoorji Pallonji And Company Pvt. Ltd vs Union Of India 4 Ors on 5 April, 2023
Author: Nitin Jamdar
Bench: Nitin Jamdar, Sharmila U. Deshmukh
2023:BHC-OS:2725-DB
Trupti 1 41-wp-28-2023..doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 28 OF 2023
Shapoorji Pallonji and Company Pvt. Ltd. ... Petitioner
versus
Union of India & Ors. ... Respondents
......
Mr.Bharat Raichandani with Mr.Rishabh Jain i/b. UBR Legal
Advocates for the Petitioner.
Mr.V.A. Sonpal, Special Counsel with Ms. Jyoti Chavan, AGP for the
State.
......
CORAM : NITIN JAMDAR AND
SHARMILA U. DESHMUKH, JJ.
DATE : 5 APRIL 2023
ORDER :(Per: Nitin Jamdar, J.) We have heard the learned Counsel for the parties.
2. The Petitioner is a private limited company. The Petitioner is engaged in providing works contract services and other allied services. The Petitioner is registered under the Central Goods and Services Tax (CGST) Act, 2017 / Maharashtra Goods and Services Tax (MGST) Act, 2017. The Petitioner is also registered under the provisions of the CGST Act of 2017 / Goods and Services Tax (GST) Act, 2017. The Petitioner was also registered as a service provider ::: Uploaded on - 12/04/2023 ::: Downloaded on - 14/06/2023 09:20:47 ::: Trupti 2 41-wp-28-2023..doc under the erstwhile regime before GST. The Petitioner was paying Maharashtra Value Added Tax on the sale of goods and filing monthly returns. The Petitioner had submitted its monthly return. According to the Petitioner, the Petitioner noticed a discrepancy in the return filed in June 2017, and the Petitioner filed a revised return for the period June 2017 under section 20(4)(a) of the Maharashtra Value Added Tax (MVAT) Act, 2002.
3. After the GST regime was brought into force, the Petitioner filed GST Transition Form -1. In Trans -1, the Petitioner carried forward the unadjusted closing balance of VAT credit declared in the revised VAT return for the period June 2017 till the GST regime was brought into force. The Petitioner received a notice from the department on 29 October 2018 under the provisions of the MVAT Act of 2002 calling upon the Petitioner to provide books of accounts etc., for verification of transitional credit availed of. The Petitioner sought time and was granted time. The Petitioner filed a reply, and after that, Respondent No.5- Deputy Commissioner of Sales Tax, called upon the Petitioner to produce books of accounts which the Petitioner produced and an assessment order was passed on 29 October 2021, and Respondent No.4 allowed the excess credit of Rs. 2,05,79,330/-. Thereafter, the Petitioner applied for rectification of the assessment order.
4. The Petitioner received a notice from Respondent No.4 dated 21 June 2022, purportedly issued under section 25 of the MVAT Act ::: Uploaded on - 12/04/2023 ::: Downloaded on - 14/06/2023 09:20:47 ::: Trupti 3 41-wp-28-2023..doc of 2002, for review of the order of assessment dated 29 October 2021. The notice indicated that Respondent No.5 was of the opinion that transitional credit availed of by the Petitioner based on a revised return was not permissible in terms of Circular No. 35A dated 19 October 2019. The Petitioner was given a hearing, and the impugned order was passed on 4 October 2022, and the order of assessment was modified to the effect that unadjusted VAT credit carried forward under the GST regime was denied. Challenging this order and notice dated 18 September 2019, the Petitioner is before us.
5. We have heard Mr. Bharat Raichandani, the leaned Counsel for the Petitioner and Mr.V.A. Sonpal, the learned Special Counsel for the Respondents.
6. As regards the notice dated 18 September 2019 issued under Rule 142(1) of the Central Goods and Services Tax (CGST) Rules, 2017 is concerned, the learned Special Counsel for the Respondents points out that show cause notice dated 18 September 2019 was not taken further, and the relevant notice is one dated 21 June 2022 issued under Rule 30 of the Maharashtra Value Added Tax (MVAT) Rules, 2005 in Form 309 upon which the impugned order is passed. In view of this clarification, it is not necessary to set aside notice dated 18 September 2019 and the same has been abandoned.
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7. Turning now to the impugned order passed under section 25 of the MVAT Act of 2002. Section 25 states that after any order, including an order under section 25 or any order in appeal, is passed under the MVAT Act of 2002 by any officer or person subordinate to the Commissioner, the Commissioner may, on his own motion or upon information received by him would call for the record and after examining such order would proceed to pass necessary orders in that regard.
8. The learned Counsel for the parties point out that though it is termed a review, the power is akin to revision by the Commissioner of the orders passed by the subordinate officer. It is clear from the language of section 25 that exercise of power under it is of such nature that it could have consequences on the taxpayer; that is also why the opportunity is provided under section 25 (3) of the MVAT Act of 2002. Therefore, the reason why the power is being exercised must be specified in the order since the order has to be speaking one. We have examined the impugned order with keeping this nature of the power at the forefront.
9. The impugned order has relied upon internal Circular No. 35A. The said Circular is also referred to in the show cause notice dated 21 June 2022. We do not find any discussion in the impugned order as to whether the Petitioner is entitled to the term set of the transitional credit. The learned Special Counsel for the ::: Uploaded on - 12/04/2023 ::: Downloaded on - 14/06/2023 09:20:47 ::: Trupti 5 41-wp-28-2023..doc Respondents sought to argue that apart from the Circular, the statute would demonstrate that the Petitioner is not entitled to set of. The learned Counsel for the Petitioner contends that the statutory scheme would show that the Petitioner is entitled to set of and that this statute as it stands does not make any distinction between the regular return and revised return, and the circular being beyond the scope of the statute should not be relied upon apart from the reliance on the Circular No. 35A.
10. The arguments advanced before us are entirely different from the foundation of the impugned order, which has solely relied upon the Circular. Considering the nature of the power, as we have referred to above, the order should be self-speaking. It cannot be that the Authority passes an order without reasons, and then arguments are advanced in a writ jurisdiction at the first instance. Furthermore, the Petitioner before us is not the one who is delaying the payment of taxes. Remand is also necessary to highlight the need to give a reasoned order. The learned Counsel for the parties jointly state that the exercise of power under section 25 of the MVAT Act of 2002 in respect of the order in question would be within the period of limitation.
11. In light of this discussion, we quash and set aside the order dated 4 October 2022. If the Respondents proceed to exercise power under section 25 of the MVAT Act of 2002, will issue notice ::: Uploaded on - 12/04/2023 ::: Downloaded on - 14/06/2023 09:20:47 ::: Trupti 6 41-wp-28-2023..doc to the Petitioner as per law and pass necessary orders.
12. The learned Special Counsel for the Respondents states that the Respondents will initiate and complete the proceedings under section 25 of the MVAT Act of 2002 within six weeks from today.
13. The writ petition is disposed of in above terms.
(SHARMILA U. DESHMUKH, J.) (NITIN JAMDAR, J.)
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