2019 (7) TMI 51 - HC - VAT and Sales Tax

Court Grants Review Petition, Emphasizes Correct Application of Statutory Provisions

The court allowed the Review Petition, recalling the previous order and deciding to reconsider the appeal due to an error in applying Rule 58 of the MVAT ... Rectification of error - error apparent on the face of record - Valuation - includibility - works contract sales - composition amount - whether the amount of service tax charged separately in the invoice will not be included in total contract value? - HELD THAT:- There is an error apparent on the face of the record, as this admittedly is a case of composition scheme and not of works contract. This issue of application of Rule 58 of MVAT Rules to the composition scheme would require our consideration in this appeal. Review petition allowed. Issues involved:1. Interpretation of Trade Circular No.6T of 2015 and its impact on the Revenue's appeal.2. Application of Rule 58 of the MVAT Rules in cases of regular assessments of works contract versus assessment under the composition scheme.Analysis:1. The judgment involved a Review Petition seeking a recall of an order passed by the Bombay High Court dismissing the Revenue's appeal. The court had previously held that the issue raised by the Revenue was concluded against them by Trade Circular No.6T of 2015, which accepted a Tribunal decision stating that Service Tax cannot be part of the sale price under the MVAT Act. The court found that the Revenue could not argue otherwise based on the Circular. However, it was later revealed that Rule 58 of the MVAT Rules, which was central to the decision, applied only to regular assessments of works contract, not assessments under the composition scheme. This led to the acknowledgment of an error in the previous order as the case pertained to the composition scheme, not works contract assessments.2. The court recognized the need to reconsider the application of Rule 58 of the MVAT Rules in the context of the composition scheme, as it was mistakenly overlooked in the initial judgment. Consequently, the court recalled the order dated 28th November, 2018, and decided to place the appeal for fresh consideration. The Review Petition was allowed based on the acknowledgment of the error in applying Rule 58 to a composition scheme assessment, necessitating a reevaluation of the case. The judgment highlighted the importance of correctly applying statutory provisions based on the specific nature of the assessment scheme involved, ensuring a fair and accurate interpretation of the law in tax matters.