TaxTMI 
TaxTMI 
2014 (9) TMI 341
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....notice, annexure A/8 dated August 30, 2001, proposing to revise the order, annexure A/3, on account of annexure A/8 being apparently illegal, ultra vires and without jurisdiction and hence violative of articles 14, 19(1)(g), 265 and 300A of the Constitution of India." 2. At the outset, learned counsel Shri Soparkar for the petitioners stated that the petitioners do not press the reliefs claimed in para 18(A) of the petition. We have, therefore, confined our inquiry with respect to the sole surviving prayer made in para 18(B) of the petition. Such prayer is made in following factual background. 3. Petitioner No. 1 is a company registered under the Companies Act and is engaged in production of pharmaceuticals drugs. Petitioner No. 1 and six other companies framed an amalgamation scheme. Under such scheme, five different companies, namely, Cadila Laboratories Limited, Cadila Chemicals Limited, Cadila Antibiotics Limited, Cadila Exports Limited and Cadila Veterinary Private Limited amalgamated with two companies, namely, Cadila Healthcare Private Limited (the present petitioner) and Cadila Pharmaceuticals Limited. We may hasten to add that even under such amalgamation scheme, Cadila ....
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....les made during the interregnum have been reduced from the total turnover on account of such developments. He noted the contention of the petitioners that sales made during the period from the effective date of the amalgamation scheme and the scheme being sanctioned by the High Court should be treated as branch transfers. Such sales would not fall within the definition of "sale" under the Act. On such transactions, no tax can be collected nor any penalty can be levied. The assessing officer accepted the contention of the petitioners and framed assessment by the order dated January 15, 1999. 6. It is this order that the Deputy Sales Tax Commissioner sought to take in revision in exercise of powers under section 67 of the Act. For such purpose, he issued a notice dated August 30, 2001. In the notice, he indicated that the amalgamation scheme was sanctioned by the High Court on August 16, 1997. The assessment proceedings for the year 1995-96 were consolidated in case of all companies and assessment was made considering the transfers made during the interregnum as "branch transfers" which is not acceptable. He further indicated that it is necessary to decide the tax liability examinin....
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....er submitted that in large number of cases of the products manufactured by the petitioners, they are governed by the price regulatory regime DPCO and in that view of the matter also, there would be no question of unjust enrichment. 11. Counsel submitted that in any case, such question would not arise in the present case, since the Deputy Commissioner is yet to finalize the liability of sales tax if at all and this court, therefore, should not go into the question of unjust enrichment only as a matter of principle. 12. On the other hand, learned Assistant Government Pleader Ms. Mithili Mehta opposed the petition. Relying heavily on the affidavit-in-reply dated December 6, 2001, filed by one Bhavesh Chandrakant Shukla, Sales Tax Officer, she contended that the transactions entered into between various transferors and petitioner No. 1 transferee-company under the scheme of amalgamation cannot be regarded as branch transfer till the date the scheme was sanctioned by the High Court. She submitted that the petitioners having passed on the burden of such taxes would be unjustly enriched if such amount is allowed to be retained by the petitioners. 13. Counsel further submitted that ther....
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.... to incidence of tax and provides, inter alia, that every dealer whose turnover either of all sales or of all purchases made during the year immediately preceding the year within which the specified day falls or the year commencing on the first day of the year within which the specified day falls has exceeded the limit specified in sub-section (4) shall until such liability ceases be liable to pay tax under the Act on his turnover of sales and on his turnover of purchases, made on or after the specified day. 16. 40 of the Act pertains to declarations and returns which every registered dealer has to furnish. Section 41 pertains to assessment of taxes. Sub-section (1) thereof provides that the amount of tax due from a registered dealer shall be assessed separately for each year during which he is liable to pay tax or on an application by any such dealer for such period exceeding one year during which he is so liable. Section 65 of the Act pertains to appeal provisions. Section 66 specifies order which are not appealable. Section 67 pertains to revision and is of considerable importance to us. Section 67 reads as under: "67. Revision.-(1) Subject to th....
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....cts any person unless such person is given reasonable opportunity of being heard. 18. From the above provisions, it can be gathered that the Commissioner has the power to take an order passed by any officer under the Act either on a motion being made to him or even suo motu. In case of a revision petition being presented before him, such powers could be exercised within one year from the date of the order questioned. Suo motu powers, however, could be exercised within three years from the date of the order. His powers flow from clause (a) of sub-section (1) which empowers him to call for and examine the record of any such order and pass such order thereon as he thinks fit just and proper. The powers of revision of the Commissioner are thus very wide. He can within three years from the date of the order being taken under revision (or one year in case of a motion being made to him) exercise such powers suo motu and pass such order as he thinks just and proper. In addition to this time-limit, there are only two procedural limitations to such exercise of powers. Firstly, the revisional order must be passed within twelve months from the date of service of notice of revision and secondl....
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....t is true that while sanctioning the scheme, it is open to the court to modify the said date and prescribe such date of amalgamation/transfer as it thinks appropriate in this facts and circumstances of the case. If the court so specifies a date, there is little doubt that such date would be the date of amalgamation/date of transfer. But where the court does not prescribe any specific date but merely sanctions the scheme presented to it-as has happened in this case-it should follow that the date of amalgamation/date of transfer is the date specified in the scheme as 'the transfer date'. It cannot be otherwise. It must be remembered that before applying to the court under section 391(1) a scheme has to be framed and such scheme has to contain a date of amalgamation/transfer. The proceedings before the court may take sometime; indeed, they are bound to take some time because several steps provided by sections 391 to 394A and the relevant Rules have to be followed and complied with. During the period the proceedings are pending before the court, both the amalgamating units, i.e., the transferor-company and the transfereecompany may carry on business, as has happened in this cas....
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....adopting this course inasmuch as separate balance-sheets may not be available for the transferor and transferee-companies. But that may not be an insuperable problem, inasmuch as assessment can always be made, on the available material, even without a balance-sheet. In certain cases, best judgment assessment may also be resorted to. Be that as it may, we need not pursue this line of enquiry because it does not arise for consideration in these cases directly." If this be the position, short question that arises is whether any transfers made by the transferor companies to the transferee-companies can be treated as "sale" within the meaning of the term as defined under the Act. 20. As already noted, the term "sale" has been defined under section 2(23) of the Act. Upon the High Court sanctioning the scheme for amalgamation, the effective date of amalgamation would be the date mentioned in the scheme, namely, June 1, 1995. Such legal fall out must be given its full implication for all purposes including for the purposes of the Act. If, therefore, in eye of law from June 1, 1995, the transferor-companies did not exist, and by virtue of the order of the High Court sanctioning the scheme....
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.... up to the date of the said order and the registration certificates of the said companies shall be cancelled, where necessary, with effect from the date of the said order. Explanation.-Words and expressions used in this section but not defined shall have the respective meanings assigned to them in the Companies Act, 1956." It is, perhaps, not possible to argue that in view of section 52 of the Gujarat Value Added Tax Act, 2003, in a situation as in the present case, the transfers could be treated as branch transfers and therefore not exigible to tax. Perhaps, to counter a situation as in the present case and other incidents of transfers of companies and to avoid pilferage of tax, the Legislature consciously provided such a provision in the Gujarat Value Added Tax Act, 2003. Admittedly, no such provision is made in the Act. In absence of any such statutory provision, the respondent would have no authority to collect tax on such transactions. Insofar as the legal contentions of the parties are concerned, the above is our view. 22. How would such a proposition of law apply in the present case is yet to be specified. We may recall that the petitioners ....
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....pect. Firstly, should we examine this question of unjust enrichment at all and secondly, if we permit ourselves to do so, would such a principle apply. 25. With respect to the first issue, learned counsel Shri Soparkar with all persuasive power at his command suggested that the court should consider the relief claimed by the petitioners and decide whether the same should be granted or not without opening the arena which does not arise in this litigation. 26. With respect to such contention, with great respect, we are unable to concur. Firstly, the situation is somewhat peculiar. At the time when the transactions took place, the merger scheme was not yet sanctioned by the High Court. Merger of the companies therefore had not yet been effected. Transactions of sale and purchase between the two companies thus were subject to sales tax regime. The assessee also accordingly filed returns of tax so paid/collected. By virtue of the subsequent order of the High Court sanctioning the amalgamation scheme and operation of law, such merger related back to the effective date envisaged in the merger scheme. Thus by virtue of such deeming fiction all transactions which took place between the da....
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....non-refund of duties which refund would amount to unjust enrichment, read as under: "11B. Claim for refund of duty.(1) . . . (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant if such amount is relatable to- (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's current acco....
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....ses of this nature where there is little or no possibility of refunding the excess amount collected from the ultimate consumer to him and the granting of the relief to the petitioner would result in his unjust enrichment, the court should not ordinarily direct any refund in exercise of its discretion under article 226 of the Constitution". 31. In the case of I.T.C. Ltd. v. State of Karnataka [1985] Supp SCC 476, the apex court in the context of levy of market fees by the APMC applied the principle of unjust enrichment. 32. In the case of Entry Tax Officer, Bangalore v. Chandanmal Champalal & Co. [1994] 95 STC 5 (SC); [1994] 4 SCC 463, the apex court once again applied the principle of unjust enrichment in the context of entry tax on goods in the State of Karnataka. The apex court refused to grant direction for refund of tax already collected on the premise that the burden thereof would have been passed on to the consumer. The apex court made the following observations (pages 8 to 10 in 95 STC): "6. While we cannot deny the force and substance in the submissions urged by Shri Narasimha Murthy, we do not find it possible to give effect to it in the light o....
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....f duty was not justified in law, the Bench dealt with the question of refund in para 23 in the following words: (SCC page 344) '23. Before parting with the appeal, we would however, like to take note of the submission made on behalf of the Municipal Corporation with regard to the question of refund of the octroi duty, already deposited by the appellant. The question of refund, in our opinion, does not arise. The IOC has collected the octroi duty from its dealers and agents, who have in turn passed on the burden to the consumer. Thus, having collected the octroi duty, there is no equity in favour of the IOC to claim a refund of the same. Learned counsel for the appellant also conceded that the question of refund, in the facts and circumstances of the case, does not arise and we, therefore, hold that the appellant shall not be entitled to any refund of the octroi duty already deposited by the appellant with the Municipal Corporation.' 8. We are in respectful agreement with the above principle. In this case also, it is not brought to our notice that the respondents have alleged and/or established that they have not passed on ....