TaxTMI 
TaxTMI 
2015 (2) TMI 750
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....tes. He also disallowed the petitioners claim for input tax credit on liquefied petroleum gas (LPG) used by them for cooking food items. The petitioner filed their objections thereto by letter dated 18.12.2012, and appeared before the assessing authority for a personal hearing. They filed an application before the Commissioner on 18.01.2013 requesting him to issue an order under Section 21(7) of the A.P. VAT Act (hereinafter called the VAT Act) deferring assessment proceedings initiated by the assessing authority against them. The petitioner contended that levy of VAT on the turnover on which service tax was levied as hire charges, and levy of VAT on supply of food and drinks on which also service tax was levied, was the subject matter of W.P. No.6692 of 2011 which was admitted, and was pending on the file of the High Court. In his order dated 02.02.2013, the Commissioner (1st respondent herein) held that the show cause notice issued by the assessing authority was for several issues, apart from the proposal to levy tax on the service part of outdoor catering services; and all the issues mentioned in the show cause notice were not the subject matter of W.P. No.6692 of 2011, pending....
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....e question, whether a particular transaction would come under transfer of the right to use, had to be examined based on the facts of each case. It is this order of the Commissioner which is under challenge in this Writ Petition. Interim orders were passed by this Court in W.P.MP No.16922 of 2013 dated 30.04.2013, which were extended thereafter. Consequently, the assessing authority has been disabled from passing an assessment order pursuant to the show cause notice dated 12.09.2012. During the course of hearing of this Writ Petition on 11.11.2012, this Court called upon the Commissioner to file a counter-affidavit on whether the VAT Act conferred on him the power to defer assessment proceedings. In his counter-affidavit dated 22.11.2014, the Commissioner submitted that the petitioner was liable to pay tax on the total amount set out in the tax invoice; the Assistant Commissioner had, by his notice dated 12.09.2012, rightly proposed to tax the turnover which had escaped assessment; the petitioners application for deferment of assessment proceedings was rejected by him in accordance with law; on a conjoint reading of Section 21(7) and 32(5) of the VAT Act, the Commissioner has the p....
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....e entitled to entertain and examine any request for its deferment. As conferment of the power, to defer assessment proceedings, is a pre-requisite for its exercise, this Court must, at the outset, examine whether the VAT Act confers on the Commissioner the power to defer assessment proceedings, before considering whether exercise of the power to pass the impugned order dated 24.04.2013, rejecting the petitioners request for deferment of assessment proceedings, is valid or not. Before doing so, it is necessary to consider the submission of the Commissioner that, in view of the law declared by the Division bench of this Court in Global Fuels Lubricants Inc8, the Commissioner has the power to defer assessment proceedings. In M/s. Global Fuels Lubricants Inc.8, the order of the Commissioner, super-adding the condition of furnishing a bank guarantee for deferment of assessment proceedings, was under challenge. The Division Bench held that the order passed by the Commissioner, directing the petitioner to furnish a bank guarantee, was destructive of the purpose for which the power and discretion was conferred under Section 32(5) of the Act; this provision enabled the Commissioner to defe....
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....ay seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas it must be acknowledged that the law is not always logical at all. (State of Orissa v. Sudhansu Sekhar Misra ; Quinn v. Leathem ). While the premise, on which the judgment in M/s. Global Fuels Lubricants Inc8 is founded, is that the Commissioner has the power to defer assessment proceedings, the question whether the Commissioner had the power to defer assessment proceedings was not in issue before, nor was it examined by, the Division bench. Reliance placed on M/s. Global Fuels Lubricants Inc8 is, therefore, misplaced. Section 32(1) of the VAT Act enables the Commissioner to, suo moto, call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it under the provisions of the VAT Act, including sub-section (2), and, if such order or proceeding recorded is prejudicial to the interests of revenue, he may make such enquiry or cause such enquiry to be made and, subject to the provisions of the Act, initiate proceedings to revise, modify or set aside such order or proceeding and to pass such order in r....
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....d in appeal by the STAT. As the proviso to Section 32, prior to its amendment, barred exercise of the revisional jurisdiction in respect of any issue or question which was the subject matter of appeal before the STAT, the power to defer revision proceedings was confined, under Section 32(5) of the Act prior to its amendment by Act 21 of 2011 dated 29.12.2011 with effect from 15.09.2011, only to cases where an appeal or other proceedings were pending before the High Court, or the Supreme Court, involving a question of law having a direct bearing on the order or proceedings in question. By Act 21 of 2011, the proviso to Section 32 was amended and, thereafter, the bar on the exercise of the revisional jurisdiction is now limited only in respect of an issue or question decided in appeal by the STAT, and not when an issue or question is the subject matter of an appeal pending before the STAT. It is only because the bar, under the proviso to Section 32, is no longer applicable when an appeal is pending before the STAT, has power now been conferred on the Commissioner, under Section 32(5) of the VAT Act after its amendment by Act 21 of 2011 w.e.f. 15.09.2011, to defer revision proceeding....
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....ellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force, or such appeal or proceedings was pending, shall be excluded in computing the period of four years or six years as the case may be for the purpose of making the assessment. The words as the case may be mean whichever the case may be, (Shri Balaganesan Metals v. M.N. Shanmugham Chetty ), and what the expression says, i.e., as the situation may be. (Subramaniam Shanmugham v. M.L.Rajendran ; Bluston & Bramley Ltd. v. Leigh ; Words and Phrases, Permanent Edn. 4 page 596). The words as the case may be in Section 21(7) of the VAT Act mean whichever the case may be i.e., either the Commissioner under Section 32(5) or the STAT under the proviso to Section 33(4) of the VAT Act. As noted hereinabove, Section 32(5) confers on the Commissioner the power to defer revision proceedings initiated under Sections 32(1) & (2) of the VAT Act. The proviso to Section 33 (4) of the VAT Act confers power on the STAT to defer hearing of the appeal before it, if the appeal involves a question of law, a decision on which....
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.... its various sections to convey different connotations. The word "assessment" is used as meaning sometimes the computation of turnover, sometimes the determination of the amount of tax payable, and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer (M/s. J.K. Iron and Steel Co. Ltd. v. The Income Tax Officer, Kanpur ; Madangopal Kabra v. The Union of India ; Commr. of Income-tax v. Khemchand Ramdas ). The word 'assessment' may mean determination of the amount of tax payable. (Gulabrai Manohar Lal v. Commr. of Income-tax, Bihar). The said expression may also be so used as to include proceedings for imposing liability to additional tax called penalty on the assessee's guilt of fraud, gross negligence, dishonest or contumacious conduct. (M/s. J.K. Iron and Steel Co. Ltd.29; C.A. Abraham v. Income-tax Officer ; Mareddi Krishna Reddy v. Income Tax Officer, Tenali ). It can also be understood to include the entire machinery and procedure for imposing and enforcing the tax liability. (M/s. J.K. Iron and Steel Co. Ltd.29; Commr. of Income-tax, Andhra Pradesh v. Bhikaji Dadabhai and Co., ). The word assessment is often used in a compreh....
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.... with it (Broom Legal Maxims). One is known by his companions; the meaning of a word or expression is to be gathered from the surrounding words, that is, from the context. The coupling of words together shows that, where the meaning of a particular word is doubtful or obscure or where a particular expression when taken singly is inoperative, the intention of a party who used it may frequently be ascertained by looking at adjoining words, or at expressions occurring in other parts of the same instrument. One provision of an instrument must be construed by the bearing it will have upon another. In construing the words assessment and has been deferred by the Commissioner under Section 32(5) or by the STAT under the proviso to Section 33(4), which are used in association with each other in Section 21(7) of the VAT Act, the rule of construction noscitur a sociis may be applied. The aforesaid words, read in juxtaposition, indicate that the meaning of one takes colour from the other. The Rule is explained as the meaning of doubtful words may be ascertained by reference to the meaning of words associated with it. (Ahmedabad (P) Primary Teachers Assn. v. Administrative Officer). The settin....
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.... Section 32(7) of the VAT Act also provide for the consequences of deferment of proceedings. It is convenient to read Section 21(7), Section 31(4-A) and Section 32(7) of the VAT Act in juxta-position with each other. AP VAT ACT AP VAT ACT AP VAT ACT Section 21(7) Where an assessment has been deferred by the Commissioner under sub-section (5) of Section 32 or as the case may be, by the Appellate Tribunal under the proviso to sub- section (4) of Section 33 on account of any stay granted by the Appellate Tribunal, or as the case may be the Andhra Pradesh High Court or Supreme Court respectively, or whereas appeal or other proceedings is pending before the Appellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceedings was pending shall be excluded in computing the period of four years or six years as the case may be for the purpose of making the assessment. Section 31(4A) Where any proceeding under this section has been deferred on account of any stay orders granted by the High Court or Supreme Court in any case or by reas....
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.... defer either the assessment proceedings under Section 21 of the VAT Act or the appellate proceedings under Section 31 of the VAT Act. This question can be examined from another angle also. Ambiguity, if any, in a statutory provision can be removed applying the Heydons Rule. The Heydons Rule is that, for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law), four things are to be discerned and considered: (1) what was the common law before the making of the Act/Rules; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the legislature has resolved to cure; and (4) the true reason of the remedy. The Court is always to make such construction as shall: (a) suppress the mischief and advance the remedy; and (b) suppress subtle inventions and evasions for the continuance of the mischief pro privato commodo (for private benefit); and (c) add force and life to the cure and remedy according to the true intent of the makers of the Act/Rules pro publico (for the public good). The Heydons rule is applied in order to suppress the mischief which was intended to be remedied ....
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....ct after its amendment. It is useful to read Section 14(5) of the APGST Act in juxta-position with Section 21(7) of the VAT Act both before, and after, its amendment by Act 21 of 2011. THE APGST ACT THE AP VAT ACT (prior to its amendment by Act 21 of 2011 with effect from 15.09.2011) THE AP VAT ACT (after its amendment by Act 21 of 2011 with effect from 15.09.2011) Section 14(5) Where an assessment under this section has been deferred on account of any stay order granted by the High Court in any case, or by reason of the fact that an appeal or other proceedings is pending before the High Court or the Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceeding was pending, shall be excluded in computing the period of four years or six years as the case may be specified in this section for the purpose of making the assessments. Section 21(7) Where any assessment has been deferred on account of any stay order granted by the High Court or where an appeal or other proceedings is pending before the High Court or Supreme Court involving a question of law having a dire....