TaxTMI 
TaxTMI 
2017 (2) TMI 82
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.... claims itself to be a registered dealer under the provisions of the Haryana Value Added Tax Act, 2003 (for short, 'the Act'). The assessment of the petitioner for the year 2011-12 was framed vide order dated 15.5.2013. Notice under Section 34 of the Act for revision of the assessment order was issued on 4.6.2015. The revisional authority passed the order on 3.7.2015. The revisional order has been challenged, inter-alia, on the ground that the same is without jurisdiction. CWP No. 23671 of 2015 3. Assessment of the petitioner for the year 2010-11 was framed vide order dated 30.4.2012 while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 14.5.2005. The same was challenged by filing CWP No. 37858 of 2015, which was disposed of on 29.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed order on 21.8.2015 and served upon the petitioner on 7.10.2015. In the writ petition, challenge has been made to the aforesaid order being in violation of the....
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....2.2012, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the asssessment order was issued on 13.8.2015. The same was challenged by filing CWP No. 18119 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed order on 6.11.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction. CWP No. 25848 of 2015 9. Assessment of the petitioner for the year 2006-07 was framed vide order dated 4.3.2010, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the order was issued on 13.8.2015. The same was challenged by filing CWP No. 17766 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 9.11.0215 dismissing the objections. In the writ peti....
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....15494 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 16.11.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction. CWP No. 27032 of 2015 14. Assessment of the petitioner for the year 2007-08 was framed vide order dated 31.12.2009, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act dated nil was issued for revision of the assessment order, which was served upon the petitioner on 7.9.2015. The same was challenged by filing CWP No. 19417 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 16.11.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction. CWP No. 27448 of 2015 15. Assessment of the pet....
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.... disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 20.10.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction and vires of Explanation (i) to Section 2(1) (zg) of the Act. CWP No. 788 of 2016 19. Assessment of the petitioner for the year 2007-08 was framed vide order dated 26.11.2009, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 13.8.2015. The same was challenged by filing CWP No. 17752 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 9.11.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction and vires of Explanation (i) to Section 2(1) (zg) of the Act. Quash....
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...., while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 23.6.2015. The same was challenged by filing CWP No. 14586 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority passed the order on 20.10.2015 dismissing the objections. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction and vires of Explanation (i) to Section 2(1) (zg) of the Act. CWP No. 3748 of 2016 24. Assessment of the petitioner for the year 2010-11 was framed vide order dated 18.4.2012, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 13.2.2014. The same was challenged by filing CWP No. 17755 of 2015, which was disposed of on 14.9.2015 directing the authority to dispose of the objections raised by the petitioner for initiation of revisional proceedings before taking further action in the matter. The revisional authority pa....
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....9413 of 2016 28. Assessment of the petitioner for the year 2009-10 was framed vide order dated 29.9.2011, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 24.6.2015. Objections were filed by the petitioner on 7.7.2015. The revisional authority dismissed the objections of the petitioner vide order dated 30.11.2015. In the writ petition, challenge has been made to the aforesaid order being without jurisdiction and vires of Explanation (i) to Section 2(1)(zg) of the Act. CWP No. 18377 of 2016 29. Assessment of the petitioner for the year 2006-07 was framed vide order dated 30.3.2009, while accepting the returns filed by the petitioner. Notice under Section 34 of the Act for revision of the assessment order was issued on 28.12.2015. The same was challenged by filing CWP No. 6795 of 2015. The revisional authority dismissed the objections of the petitioner vide order dated 12.4.2016. Thereafter, the petitioner withdrew the writ petition on 25.4.2016 with liberty to challenge the order disposing of the preliminary objection. In the writ petition, challenge has been made to the aforesaid orde....
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....rtment, the revisional power could possibly be exercised within the period of three years from the date of service of assessment order and not beyond that. Even change of opinion is no ground for exercise of revisional jurisdiction. In some of the notices, judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) has been mentioned, which was delivered much prior to the framing of assessment, still extended period is sought to be invoked. 33. In support of the plea, reliance was placed upon Collector of Central Excise v. H. M. M. Limited, 1995(76) ELT 497 (SC); Kaur & Singh v. Collector of Central Excise, New Delhi, 1997 (94) ELT 289 (SC); Aban Loyd Chiles Offshore Ltd. v. Commr. of Cus., Maharashtra, 2006 (200) ELT 370 (SC); Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur, 2013 (288) ELT 161 (SC). 34. It was further contended that taxability of works contracts with reference to the builders was examined by Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) and it was so admitted and noticed by the Excise & Taxation Commissioner in the circular dated 7.5.2013, where specific words used....
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....Madhao v. The State of Maharashtra and others, 2009 SCC OnLine Bom 688. 38. Learned counsel further argued that in some of the cases, even at the stage of assessment, in the show cause notices issued, the Assessing Authority had referred to the judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra). Meaning thereby he was conscious of the law laid down on the subject, but still at the time of assessment, the same was not referred to in the order passed. In some of the cases, even in the show cause notice under Section 34 of the Act, only judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) was referred to, which was delivered on 5.5.2005, whereas in some of the cases, additionally judgment of Hon'ble the Supreme Court in L&T's 2 nd case (supra) has also been referred to, which merely approved the earlier judgment in K. Raheja Development Corporation's case (supra). In all the cases, the petitioners cannot be said to be at fault. They had filed their returns regularly. The law declared by Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) on 5.5.2....
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.... be taken by the authority. The submission is that Section 34(1) of the Act provides for normal period of three years before amendment and six years after amendment for exercise of power in terms of the conditions laid down in Section 34(1) of the Act. It is in normal circumstances. However, in case the exception as carved out under certain specified conditions is to be invoked, how much should be the reasonable period, as finality has to be accorded to the proceedings under the Act. It cannot be kept alive for infinity. If any of the event as narrated in the exception clause provided in second proviso to Section 34(1) of the Act takes place within the period of limitation provided for taking action for suo-motu revision, the action has to be taken within that period and in those circumstances, extended period of limitation cannot be invoked. If any of the events takes place just close to the expiry of the period of limitation for exercise of revisional jurisdiction, in a given fact situation, reasonableness of the period can be examined. However, in case the period of limitation expired and any of the situations, as enumerated in the exception clause, such as retrospective amendme....
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.... The aforesaid instructions were followed by subsequent instructions issued vide Memo No. 1166/ST-4 dated 4.6.2013 in continuation to the earlier one, where the issue regarding limitation for taking up cases for revision was also specified. If both the instructions are read together, it was clear therefrom that under normal circumstances, the assessment orders upto the year 2006-07 had attained finality and assessment orders for the year 2007-08 could be revised by March, 2014. In the cases where the assessment orders are prior to year 2007-08, as per the instructions issued by the Excise & Taxation Commissioner, which are binding in nature under Section 56(2) of the Act, limitation to revise that assessment order had already expired, hence, the notices issued or the orders passed for revision of the assessment for those years being without jurisdiction, deserve to be set aside. He further submitted that the validity of the aforesaid circular issued by the department was upheld by this court in CWP No. 5730 of 2014-- CHD Developers Limited, Karnal v. The State of Haryana and others, decided on 22.4.2015. 43. In support of the plea that the instructions issued in exercise of powe....
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....ase any other component is included for the purpose of taxation, the State Legislature will transgress its competence. In the case of a builder, the total sale consideration received does not include only the labour or certain service charges incurred for execution of works contract but includes land cost, external development charges, internal development charges, change of land use charges and various other different types of charges/expenses. These expenses incurred by the dealer which form part of the total cost of the works contract cannot, in any manner, be subjected to levy of VAT on the transfer of property in goods in execution of a works contract. The State Legislature does not have the jurisdiction to levy VAT on transfer of land. In the case of sale of flat in a building, proportionate share of land is also transferred, the value of which is included in total cost. 46. In the alternative, the explanation provides that where such labour and other service charges are not quantifiable, the sale price shall be the cost of goods used in execution of works contract adding margin of profit thereon plus cost of transferring the property in goods and any other expenses incurr....
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....axed under the Act, which is beyond the competence of the State Legislature. It was further submitted that a provision is bad if it includes something for the purpose of taxation, which cannot be taxed. It is also bad in case what is required to be excluded has not been excluded, such as cost of land and other service charges in the present case. In support of the plea, reliance was placed upon L&T's 2 rd case (supra); CHD Developers Limited's case (supra) and Gannon Dunkerley & Co. v. State of Rajasthan, (1993) 88 STC 204 (SC). 49. Learned counsel further submitted that details as to what is to be included and excluded for the purpose of taxation have to be provided either in the Act or at the most in the Rules, if the Act so permits. Mere statement in reply or the stand taken by counsel for the State in court is not sufficient for that purpose. Even administrative instructions also do not cure the mischief. In support of the plea, reliance was placed upon M/s Larsen & Toubro Ltd. v. The State of Bihar and others, (2004) 134 STC 354 (Patna) [hereinafter referred to as L&T's 3 rd case (supra)]; State of Jharkhand and others v. Voltas Ltd., (2007) 7 VST 317 (SC) and C....
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....tment. Even in the circular issued by the Commissioner on 7.5.2013, after the assessment of the petitioner had been framed, it was so referred. It was specifically mentioned therein that cost of land forming part of the houses or flats constructed by the developer/builder has to be excluded. Vide circular dated 10.2.2014, clause in the earlier circular was substituted stating that value of the land is also to be added. He further submitted that in the public notice available on the website of the department even today on the subject in question, it is mentioned that value of the land is not to be included for the purpose of taxation in the works contracts. The petitioner was issued notice under Section 34 of the Act on 13.8.2015 not invoking the extended period of limitation, as none of the ingredients, which enables the authority to issue notice for revision beyond the period of limitation has been mentioned in the notice. He further submitted that if the department could have exercised the revisional jurisdiction within the period of limitation, it cannot be permitted to allow the period to lapse and thereafter invoke the exception clause. 53. While referring to Section 34 of ....
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....n the case in hand, assessment had been framed against the company, namely, M/s Sukh Realtors Pvt. Ltd., which already stood dissolved on its merger with the petitioner w.e.f. 1.4.2013. It was in terms of the order dated 30.9.2014 passed by this court in CP No. 203 of 2013-In the matter of Amalgamation of Sukh Realtors Private Limited and M-Ganga Builders and Construction Pvt. Ltd. and others, as corrected on 10.11.2014. The assessment in the present case is pertaining to the year 2009-10. Show cause notice for assessment was issued under Section 16 of the Act on 19.2.2016 in the name of M/s Sukh Realtors Pvt. Ltd., which already stood dissolved. In reply dated 29.2.2016 submitted by the petitioner, without prejudice, besides raising other pleas, it was submitted that the company, namely, M/s Sukh Realtors Pvt. Ltd., in whose name notice was issued, already stood dissolved, hence, assessment cannot be framed in its name. The particulars of the transferee company were furnished. Other issue raised in the reply was regarding the notice being time-barred. Despite reply filed by the petitioner, assessment was framed on 8.3.2016 in the name of M/s Sukh Realtors Pvt. Ltd., which already ....
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....udicial to the interest of the State. Second proviso to the aforesaid section provides that the order can be revised within three years from the date of supply of copy of the order sought to be revised. There are three exceptions carved out, under which the period of limitation is not applicable. As far as the first exception is concerned, the same has to be an event subsequent to the passing of the order sought to be revised, namely, retrospective change in law. As far as other two exceptions are concerned, namely, on the basis of a decision of the Tribunal or on the basis of law declared by the High Court or the Supreme Court, the order/judgment could be either before the order is sought to be revised or later. There is nothing in the language of the section, which specifies that judgment of the Tribunal, High Court or the Supreme Court has to be subsequent to the order sought to be revised. The object for which the section has been added is to correct the errors committed by the authorities or where the law on the subject had been violated, such as any judgment had not been followed. The moment it comes to the notice of the Commissioner, he can initiate proceedings and limitatio....
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....initiated action on the basis of judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra). Even if that was earlier in point of time, still the case will fall in exception clause. Even in the absence of judgment of Hon'ble the Supreme Court in L&T's 2 nd case (supra), the notices could have been issued beyond a period of three years under Section 34 of the Act. Mere non-mentioning of judgment of Hon'ble the Supreme Court in L&T's 2 nd case (supra) in the notices issued to some of the parties will not make any difference. 63. As regards the contents in the notice, it was submitted that notice is not a condition precedent for assumption of jurisdiction. The Act only provides that reasonable opportunity has to be granted before passing an order, which merely implies issuance of notice. The same was given to the assessee. There are no reasons to be recorded or mentioned in the notice, especially regarding invocation of exception clause. A simple notice under Section 34 of the Act by the Commissioner intimating the party that the order is sought to be revised, is sufficient. After the notice is issued, the party can always repl....
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....t of Hon'ble the Supreme Court in Bhatinda District Coop. Milk P. Union Ltd.'s case (supra), where no limitation was provided under the Punjab General Sales Tax Act, 1948. In the present case, normal period of limitation of three years was provided, which now stands substituted with six years. However, for invocation of the exception clause under certain specified conditions, there is no period of limitation. In those eventualities, no time can be read in the provision. He further submitted that the department can issue notice at any time, as no prejudice as such is going to be caused to an assesee. Even if he is unable to produce the books of accounts, on the basis of proposition of law, order can be revised merely after seeing the returns or order of assessment. On a query of the court, as to what are the instructions of the department for preservation of records in office, he could not specifically answer. He further submitted that even if there is some delay in issuance of notice invoking any of the events in the exception clause, the reasons are not required to be given in the notice. The same have to form part of the order after considering the reply by the assessee. ....
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....included in the works contract. Section 2(zg) of the Act defines 'works contract'. The provision merely provides for levy of tax on sale of goods. Before the amendment was carried out in Section 2(1)(zg) of the Act w.e.f. 20.3.2009, in fact, no Rules were required. The necessity arose only after the amendment was carried out, which enabled the Government to provide for certain formulae for calculation of the sale price in the absence of quantifiable data. For the period prior to 20.3.2009, at this stage, there is no need to go into the validity thereof for the reason that admittedly, the petitioners have their books of accounts, which were maintained in normal course of business and from that taxable turnover can be determined and the case will not fall in second category, which shall be applicable only where quantifiable data of labour and service charges is not available. Whatever deductions are to be provided in terms of the law laid down by Hon'ble the Supreme Court or this Court will be taken care of by the authorities under the Act. 70. While referring to the judgment of Hon'ble the Supreme Court in Gannon Dunkerley and Co.'s case (supra), it was submit....
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....abeyance; to be fair to the assessee. It is not in dispute that the department could invoke jurisdiction under Section 34 of the Act on the basis of judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra). There were two eventualities possible in L&T's 2 nd case (supra), where the matter was referred for reconsideration-- one is reiteration of the same view and second is taking a different view. In these circumstances, the department was not going to gain anything by keeping the matter pending. No insurmountable difficulties have been pointed out by the State either in the notice or in the order passed explaining the reasons why the notice has been issued so late after the cause of action arose. 73. In the exception clause, three eventualities have been mentioned, namely, retrospective amendment of law, order passed by the Tribunal or law declared by the High Court or Hon'ble the Supreme Court. The provision has to be given purposive interpretation. Once it is admitted by the State that amendment in law has to be subsequent to the passing of the order by the assessing authority, the other two eventualities have also to be later i....
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....is no possibility of passing order under the Act merely on the basis of returns or order of assessment, as for that purpose, books of accounts will always have to be gone into to determine the factual aspects for calculation of the amount of tax, hence, the department cannot be granted liberty to issue notice at any time. 78. Mr. Sandeep Goyal, learned counsel for the petitioner submitted that in terms of Section 56(2) of the Act, the circulars issued by the department are binding on the authorities under the Act, except the appellate authority. The reasonable period for invoking revisional jurisdiction would start from 5.5.2005 when the judgment in K. Raheja Development Corporation's case (supra) was delivered by Hon'ble the Supreme Court. 79. The judgment of this court in M/s Haryana State Warehousing Corporation's case (supra) is distinguishable on facts as in that case, this court permitted invocation of extended period of limitation on the basis of a judgment delivered by the High Court. In that case, the assessment was framed on 15.3.2007. Copy was supplied to the assessee on 25.7.2007. The revisional jurisdiction was sought to be exercised in view of the ju....
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....8, even if the matter had been referred to be considered by a larger Bench by Hon'ble the Supreme Court ? 82. The relevant provisions of Section 34 of the Act, as existing before the amendment, are reproduced hereunder: 34. (1) The Commissioner may, on his own motion, call for the record of any case pending before, or disposed of by, any taxing authority for the purposes of satisfying himself as to the legality or to the propriety of any proceeding or of any order made therein which is prejudicial to the interests of the State and may, after giving the persons concerned a reasonable opportunity of being heard, pass such order in relation thereto as he may think fit: Provided that no order passed by a taxing authority shall be revised on an issue which on appeal or in any other proceeding from such order is pending before, or has been settled by, an appellate authority or the High Court or the Supreme Court, as the case may be: Provided further that no order shall be revised after the expiry of a period of three years from the date of the supply of the copy of such order to the assessee except where the order is revised as a result of retrospective change....
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....ght to be justified is the law declared by Hon'ble the Supreme Court. 87. Article 141 of the Constitution of India provides that the law declared by the Supreme Court shall be binding on all courts within the territory of India. Here, we need to examine, what is the law declared ? What is the law declared ? 88. Article 141 of the Constitution of India uses the phrase "law declared by the Supreme Court". It has been defined to mean law made while interpreting the statutes or the Constitution. It was held to be part of the judicial process. 89. The issue was considered by Hon'ble the Supreme Court in C. Golak Nath's case (supra) opining that to declare is to announce opinion. Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law. The relevant lines therefrom are extracted below: "51....... Article 141 says that the law declared by the Supreme Court shall be binding on all courts; and Article 142 enables it in the exercise of its jurisdiction to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it. These article....
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....udication by a larger Bench. The contention raised by the parties before Hon'ble the Supreme Court was that as the issue was pending consideration before a Constitution Bench, the case should not be decided. However, keeping in view the law, as existing, the matter was finally decided. The relevant paras thereof are extracted below: "7. It was contended before us that the question whether on the ground of absence of reasons, the award is bad per se, is pending consideration by a Constitution Bench of this Court in C.A. Nos. 3137-39 of 1985, 3145 of 1985 -Jaipur Development Authority v. Firm Chhokhamal Contractor. It was, hence, urged that this should await adjudication on this point by the Constitution Bench. We are unable to accept this contention. In our opinion pendency of this question should not postpone all decisions by this Court. One of the cardinal principles of the administration of justice is to ensure quick disposal of disputes in accordance with law, justice and equity...... 8. The law it stands today is clear that unless there is an error of law apparent on the face of the award, the award cannot be challenged merely on the ground of absence of reasons. This....
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....nd Co.'s case (supra) and other judgments on the issue, it was opined that pending decision of a reference to a larger Bench, any lis between the parties cannot be kept suspended. Any reference to a larger Bench does not make the law already laid down by the Apex Court not binding on the courts below till the issue is decided by a larger Bench. Relevant paragraph thereof is extracted below: "56. In view of the above referred observations of the Apex Court and the Division benches of this Court, it is evident that justice between the parties should not be kept in suspended animation in view of pendency of reference for decision before the larger Bench. Similarly, the decision of the Apex Court referred to the larger Bench does not make the law already laid down by the Apex Court not binding on the High Court till the authoritative pronouncement is delivered by the larger Bench of the Apex Court. In the instant case, the land acquisition proceedings were initiated much prior to 2005 and the award came to be passed by the Special Land Acquisition Officer on 20.6.2008. There is no challenge to the land acquisition procedure adopted by the Authorities nor validity of the award is....
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.... of the Supreme Court is likely to be reconsidered by a larger Bench of the Supreme Court since a similar question arising in a batch of matters before the Supreme Court has been referred to a larger Bench. Assuming it to be so, the decision of the Supreme Court is nonetheless binding upon me as the law of the land declared, which I am bound to follow having regard to the mandate of Article 141 of the Constitution. The mere fact that the matter has been referred to a larger Bench does not denude the decision of its authority as a binding precedent......." [Emphasis supplied] Similar was the view taken by Hon'ble the Supreme Court in State of Maharashtra and another v. Sarva Shramik Sangh, Sangli and others, (2013) 16 SCC 16. Finding 96. In view of our aforesaid discussions, it can safely be opined that judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) was a binding precedent declaring the law at that time on the subject to be followed by all courts and authorities below and action could have been taken by the authorities on the basis thereof, if considered appropriate. - ISSUE NO. (2) Whether extended period of l....
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..... Shanti Misra, (1975) 2 SCC 840; (iii) T. Kallamurthi v. Five Gori Thaikkal Wakf, (2008) 9 SCC 306; and (iv) Thirumalai Chemicals Ltd. v. Union of India and others, (2011) 6 SCC 739, Hon'ble the Supreme Court opined as under: "10. We have heard learned counsel for the parties and Shri Bagaria, the learned Amicus Curiae at some length. There is no doubt whatsoever that a period of limitation being procedural or adjectival law would ordinarily be retrospective in nature. This, however, is with one proviso super added which is that the claim made under the amended provision should not itself have been a dead claim in the sense that it was time barred before an Amending Act with a larger period of limitation comes into force....." [Emphasis supplied] 100. The issue was subsequently considered by Hon'ble the Supreme Court in M/s Shreyans Indus. Ltd.'s case (supra), where a judgment of this court dealing with similar proposition of law was upheld. In that case, normal period for framing assessment, as provided for in Section 11(10) of the Punjab General Sales Tax Act, 1948 was three years, however, the Commissioner was empowered to extend that period further afte....
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....such a power at any time even much after the last date of assessment in the instant appeals itself, when the last dates of assessment were 30th April, 2004." [Emphasis supplied] 101. The judgment in Jyoti Traders and another's case (supra) is distinguishable as in the aforesaid judgment, while relying upon two earlier judgments, it was opined that language of the amendment suggested that it was with retrospective effect, hence, it was given its true meaning. The facts of the case in hand are different. There are later judgments of Hon'ble the Supreme Court in Uttam Steel Ltd.'s case (supra) and M/s Shreyans Indus Ltd.,'s case (supra). Finding 102. In view of our aforesaid discussions, it can safely be opined that extended period for exercise of revisional jurisdiction will be applicable only in cases where period prescribed prior to the amendment had not expired and not where the period had earlier expired as the amendment cannot put life to a dead claim. ISSUE NO. (3) Whether a show cause notice issued to exercise revisional jurisdiction is bad as it is lacking in basic facts to invoke exception clause and extended period of limitation ? 103. T....
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.... had taken place during the normal period prescribed in the Act ? 107. A perusal of Section 34(1) of the Act provides that for the purpose of satisfying himself as to the legality of an order and propriety of any proceedings which, in the opinion of the Commissioner, is prejudicial to the interest of the State, he may call for the record of that case except the cases, which are either pending or have been disposed of by an appellate authority, High Court or the Supreme Court. Second proviso to Section 34(1) of the Act provides that no order shall be revised after the expiry of three years from the date of supply of copy of the order of assessment, sought to be revised. This is the normal period of limitation. However, the limitation is not applicable in three eventualities, namely, (i) where there is a retrospective change in law; (ii) any decision of the Tribunal in a similar case; and (iii) on the basis of law declared by the High Court or the Supreme Court. 108. It is the conceded position by learned counsel for the State that to enable the Commissioner to invoke revisional jurisdiction after expiry of normal period, retrospective change in law has to be after the order ha....
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....stance, which was beyond the control of the Commissioner for exercise of power within the period of limitation, as provided for under Section 34(1) of the Act. If interpretation, as is sought to be contended by learned counsel for the State is accepted, that would do away the period of limitation as provided for under the Act for exercise of revisional jurisdiction, as in all the cases the department would be at liberty to invoke the same at any time, without there being any distinction. 110. The law on the subject was laid down by Hon'ble the Supreme Court vide judgment delivered on 5.5.2005 in K. Raheja Development Corporation's case (supra), much prior to the assessment years involved herein. The details regarding assessment order; date on which order of assessment was passed; date of supply of copy of assessment order (wherever available); date on which normal period of limitation for revision had expired; date of issuance of notice under Section 34(1) of the Act; date on which the order was passed by the revisional authority finally or deciding the preliminary objection are given as under. The aforesaid information was furnished by the State in the form of a table a....
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.... expiry of period of limitation and the action was taken within reasonable time or the delay is satisfactorily explained. Exception clause is to be invoked only in exceptional circumstances. It is always required to be strictly interpreted even if there is hardship to any of the parties. ISSUE NO. (5) Whether the circulars issued by the Department are binding on the department and the assessees ? 114. Relevant provisions of Sections 56(2)(3) and (4) of the Act are reproduced hereunder: " 56. Tax administration. xx xx xx (2) The State Government or the Commissioner may, from time to time, issue such orders, instructions and directions to all such persons who are employed in the administration of this Act as the State Government or the Commissioner may deem fit for such administration and all such persons shall observe and follow such orders, instructions and directions of the State Government and the Commissioner: PROVIDED that no such orders, instructions or directions shall be issued so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions. (3) The State Government may, if it considers it necessary or expe....
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....ssioner to tax such transactions and reject all the claims made, which are contrary to the judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra). Guidance was also given regarding registration of such contractors/builders. The relevant paras of the aforesaid instructions are extracted below: "It has come to the notice of this office that there is some confusion amongst the departmental officers in determining the gross turnover and deductions allowable therefrom and consideration liable to tax in civil works contract cases, especially in case of builders and developers of flats and buildings. It has led to lack of uniformity in assessment of tax in such cases and has also resulted into avoidable disputes. The matter has been examined and it has been considered necessary that suitable instructions should be issued in this regard correct assessment and recovery of tax in these cases. Accordingly, the following instructions are being issued: 1. Assessment of tax in case of building contracts (Agreement for sale of constructed building): 1.1 It has been noticed that several builders and developers enter into agreements with prospecti....
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....spective buyers of constructed residential/commercial properties/buildings. xx xx xx" 117. In the aforesaid clarification, all the officers were specifically instructed to follow the instructions. 118. In addition to the aforesaid instructions, with a view to ensure that the orders passed by the authorities under the Act do not suffer from any illegality or impropriety, especially with reference to the issue of limitation in passing the orders, fresh instructions were issued on 4.6.2013. Para No. 1 of the aforesaid instructions provided for period of limitation to be observed by the authorities with reference to Section 15 of the Act providing for regular assessment, Section 16 of the Act provides for re-assessment of unregistered dealers, whereas Section 17 thereof provides for re-assessment. The dates were specifically provided till such time the action can be taken or has to be finalised. The issue regarding exercise of revisional power under Section 34 of the Act was also specifically dealt with in the instructions in para No. 1.5 thereof. It was mentioned therein that assessment orders for the years 2007-08 can be revised by March, 2014, the normal period of limitatio....
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....the Act about the correct position of law laid down by Hon'ble the Supreme Court and the second being the issue of limitation for passing order under the Act. As far as the second issue is concerned, in our opinion, the instructions do not specifically state that extended period of limitation can or cannot be invoked in the circumstances of the cases. It only provided for normal period during which the revisional power can be exercised. The issue as regards exercise of revisional jurisdiction by invoking exception clause has been dealt with in the present case, hence, to that extent it cannot be opined that action of the authorities below the Commissioner are in any way contrary to the instructions issued by the department. 123. However, one fact is clearly established from the instructions, i.e., acceptance of the fact that judgment of Hon'ble the Supreme Court in K. Raheja Development Corporation's case (supra) was the law of the land and should be meticulously followed by all the authorities. To this extent, the instructions were in consonance with the settled position. Finding 124. Any instructions issued by the Department are binding on the departmental au....
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....nitions (1) In this Act, unless the context otherwise requires,- xx xx xx (u) "gross turnover" when used in relation to any dealer means the aggregate of the sale prices received or receivable in respect of any goods sold, whether as principal, agent or in any other capacity, by such dealer and includes the value of goods exported out of State or disposed of otherwise than by sale; xx xx xx (zg) "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed at the time of sale as cash or trade discount according to the practice, normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof and the expression "purchase price" shall be construed accordingly; Explanation.- (i) In relation to the transfer of property in goods (whether as goods or in some other form) involved in execution of a works contract, 'sale price' shall mean such amount as is arrived at by deducting from the amount of valuable consideration paid or payable to a person for the execution of such works contract, the amount r....
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....(z) of the Act. 'Gross turnover' has been defined in Section 2(1)(u) of the Act to mean aggregate of sale prices received or receivable in respect of any goods sold and 'tax turnover' has been defined in Section 2(1)(zn) of the Act to mean the figure arrived at in terms of the provisions of Sections 6 and 3(3) of the Act. Levy of tax on the transfer of property in goods in a works contract is no more an issue. It is only the quantum for the purpose of taxation. 129. The definition of 'sale price', as existed upto 19.3.2009 and from 20.3.2009 onwards is extracted below: "Upto 19.3.2009 From 20.3.2009 onwards zg) "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed at the time of sale as cash or trade discount according to the practice, normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof and the expression "purchase price" shall be construed accordingly; (zg) "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allow....
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.... notification dated 23.7.2015 with retrospective effect from 26.3.2010. 131. The levy being bad in the absence of machinery provision was considered by Hon'ble the Supreme Court in L&T's 4 th case (supra). The issue under consideration before Hon'ble the Supreme Court was as to whether service tax can be levied on indivisble works contracts prior to its introduction on 1.6.2007 by Finance Act, 2007, which expressly made the works contracts liable to service tax. Hon'ble the Supreme Court traced entire history of the works contract. Service tax was levied with amendments carried out vide Finance Act, 1995. Section 65(105) of the Finance Act, 1994 defined taxable service. Clause (zzzh) thereof provides that service provided to any person, by any other person, in relation to construction of a complex, will be a taxable service. It was added in the year 2004. Section 67 of the Finance Act, 1994 provides for valuation of taxable services for charging service tax. It provides that value of any taxable service shall be the gross amount charged by the service provider for such service rendered by him. The provisions of the Finance Act, 1994 were amended vide Finance Act,....
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....otherwise contain, apart from other things, the entire cost of establishment, other expenses, and profit earned by the contractor and would transgress into forbidden territory namely into such portion of such cost, expenses and profit as would be attributable in the works contract to the transfer of property in goods in such contract. This being the case, we feel that the learned counsel for the assessees are on firm ground when they state that the service tax charging section itself must lay down with specificity that the levy of service tax can only be on works contracts, and the measure of tax can only be on that portion of works contracts which contain a service element which is to be derived from the gross amount charged for the works contract less the value of property in goods transferred in the execution of the works contract. This not having been done by the Finance Act, 1994, it is clear that any charge to tax under the five heads in Section 65(105) noticed above would only be of service contracts simpliciter and not composite indivisible works contracts. 15. At this stage, it is important to note the scheme of taxation under our Constitution. In the lists contained in....
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....s held by us in Gujarat Ambuja Cements Ltd. v. Union of India [(2005) 4 SCC 214] , SCC at p. 228, para 23:- " 23...This mutual exclusivity which has been reflected in Article 246(1) means that taxing entries must be construed so as to maintain exclusivity. Although generally speaking, a liberal interpretation must be given to taxing entries, this would not bring within its purview a tax on subject- matter which a fair reading of the entry does not cover. If in substance, the statute is not referable to a field given to the State, the court will not by any principle of interpretation allow a statute not covered by it to intrude upon this field." [Emphasis supplied] 132. Examining the provisions of the Finance Act, 1994, as amended vide Finance Act, 2006, with reference to levy of tax on the works contract, it was opined that for the first time with amendment in the Finance Act, 2006, provisions were made for ascertaining the amount of service component in a works contract. Relevant paras thereof are extracted below: "23. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to se....
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....rements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax." 133. Thereafter, the issue was considered regarding leviability of service tax on the composite works contract in the absence of machinery provision prior to 1.6.2007. Relevant paras thereof, where the earlier judgments were discussed, are extracted below: "33. The aforesaid finding is in fact contrary to a long line of decisions which have held that where there is no machinery for assessment, the law being vague, it would not be open to the assessing authority to arbitrarily assess to tax the subject. Various judgments of this Court have been referred to in the following passages from Heinz India (P) Ltd. v. State of U.P., (2012) 5 SCC 443. This Court said:- "15. This Court has in a long line of decisions rendered from time to time, emphasised the importance of machinery provisions for assessment of taxes and fees recoverable under a taxing statute. In one of the earlier decisions on the subject a Constitution Bench of this Court in K.T. Moopil ....
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....arried by Public Service Motor Vehicles) Act, 1961. Reiterating the view taken in K.T. Moopil Nair [AIR 1961 SC 552] this Court held that a statute is not beyond the pale of limitations prescribed by Articles 14 and 19 of the Constitution and that the test of reasonableness prescribed by Article 304(b) is justiciable. However, in cases where the statute was completely discriminatory or provides no procedural machinery for assessment and levy of tax or where it was confiscatory, the Court would be justified in striking it down as unconstitutional. In such cases the character of the material provisions of the impugned statute may be such as may justify the Court taking the view that in substance the taxing statute is a cloak adopted by the legislature for achieving its confiscatory purpose. 18. In Jagannath Baksh Singh v. State of U.P. [AIR 1962 SC 1563] this Court was examining the constitutional validity of the U.P. Large Land Holdings Tax Act (31 of 1957). Dealing with the argument that the Act did not make a specific provision about the machinery for assessment or recovery of tax, this Court held: (AIR pp. 1570-71, para 17) "17. ... if a taxing statute makes no ....
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....o be made to Vishnu Dayal Mahendra Pal v. State of U.P. [(1974) 2 SCC 306] and D.G. Gose and Co. (Agents) (P) Ltd. v. State of Kerala [(1980) 2 SCC 410] where this Court held that sufficient guidance was available from the Preamble and other provisions of the Act. The members of the committee owe a duty to be conversant with the same and discharge their functions in accordance with the provisions of the Act and the Rules and that in cases where the machinery for determining annual value has been provided in the Act and the rules of the local authority, there is no reason or necessity of providing the same or similar provisions in the other Act or Rules. 21. There is no gainsaying that a total absence of machinery provisions for assessment/recovery of the tax levied under an enactment, which has the effect of making the entire process of assessment and recovery of tax and adjudication of disputes relating thereto administrative in character, is open to challenge before a writ court in appropriate proceedings. Whether or not the enactment levying the tax makes a machinery provision either by itself or in terms of the Rules that may be framed under it is, however, a matter th....
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.... letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there be admissible in any statute, what is called an equitable, construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute". 35. We find that the Patna, Madras and Orissa High Courts have, in fact, either struck down machinery provisions or held machinery provisions to bring indivisible works contracts into the service tax net, as inadequate. The Patna High Court judgment was expressly approved by this Court in State of Jharkhand v. Voltas Ltd., East Singhbhum, (2007) 9 SCC 266. This Court held:- "9. Section 21 of the Bihar Finance Act, 1981, as amended states: "21.Taxable turnover.-(1) For the purpose of this part the taxable turnover of the dealer shall be that part of his gross turnover which remains after deducting therefrom- (a)(i) in the case of the works contract the amount of labour and any other charges in the manner and to the extent prescribed;" 10. Rule 13-A of the Bihar Sales Tax Rules which was also amended by a notifi....
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...., struck down Rules 6A and 6B of the Tamil Nadu General Sales Tax Rules as follows:- "32.....The eight principles are the criteria and the norms which every State legislation has to conform as per the decision of the Apex Court which has been already adverted to by us supra. In addition thereto, we have also referred to at considerable length the particular reasons assigned by the apex Court while striking down section of the Rajasthan Sales Tax Act and rule 29(2) of the Rules made thereunder. The impugned rules 6-A and 6-B of the Rules, in our view, do not pass the above vital and essential test and the basic requirements laid down by the ratio of the decision of the apex Court in Gannon Dunkerley's case supra; . The impugned rules are squarely opposed to the ratio of the said decision and particularly the ratio laid down in conclusion Nos. 1, 2, 3, 6 and 7 of the decision in Gannon Dunkerley's case [1993] 88 STC 204 supra; and also reiterated by the apex Court in the second Builders Association of India case [1993] 88 STC 248 (SC); [1992] 2 MTCR 542. In the light of the above, we see no merit in the stand taken for the respondents relying upon the decisions repor....
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...." [Emphasis supplied] 134. Finally, it was opined that no service tax was leviable prior to 1.6.2007. 135. In Suresh Kumar Bansal's case (supra), Division Bench of Delhi High Court, inter-alia, considered the issue regarding taxability of the service provided by the builders in the absence of machinery provision for computation of value of service, if any, involved in construction of a complex. Vide Section 65(105)(zzzh) of the Finance Act, 1994, service provided to any person by any other person in relation to construction of complex was defined to be taxable service. The term "construction of complex" was defined under Section 65 (30a) of the Finance Act, 1994. It was opined that service tax is essentially a tax on the value created by services as distinct from a tax on the value added by manufacturing goods. Construction of a complex essentially has three broad components, namely, land on which complex is constructed; (ii) goods which are used in construction; and (iii) various activities which are undertaken by the builder directly or through other contractors. The title of the unit (immoveable property) does not pass on to the prospective buyer at the stage of boo....
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....d, therefore, no such tax can be imposed." 137. Analysing the provisions, as existed and referring to the judgment of Hon'ble the Supreme Court in L&T's 4 th case (supra), considering the amendment as carried out in Finance Act, 1994 vide Finance Act, 2010 and in Service Tax (Determination of Value) Rules, 2006, w.e.f. 1.7.2012, it was opined that no service tax was chargeable in respect of composite contract as entered into by the builder. The relevant paras thereof are extracted below: "53. As noticed earlier, in the present case, neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract. xx xx xx 55. In view of the above, we negate the challenge to insertion of clause (zzzzu) in sub-section 105 of Section 65 of the Act. However, we accept the Petitioners contention that no service tax under section 66 of the Act read with Section 65(105)(zzzh) ....
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.... sale is to be excluded from the agreement value. The value of goods in a works contract in the case of a developer etc. on the basis of which VAT is levied would be the value of the goods at the time of incorporation in the works even where property in goods passes later. Further, VAT is to be directed on the value of the goods at the time of incorporation and it should not purport to tax the transfer of immovable property. Consequently, Rule 25(2) of the Rules is held to be valid by reading it down to the extent indicated hereinbefore and subject to the State Government remaining bound by its affidavit dated 24.4.2014. The State Government shall bring necessary changes in the Rules in consonance with the above observations." 140. Vires of the Rules is not in question in the present set of petitions. The stand of the petitioners was that to challenge the vires of the Rules, separate petitions have been filed, which are pending. Finding 141. For the period upto 16.5.2010, there were no Rules or instructions on the subject, to provide for manner of calculation of taxable turnover. In the absence of the machinery provisions specifying the details, though the levy as such can....
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....ted by the Tribunal in para 14 of its order extracted above. Having regard this consequence provided in law, in number of cases, the Supreme Court held that assessment upon a dissolved company is impermissible as there is no provision in Income-Tax to make an assessment thereupon. ........ xx xx xx 11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exist w.e.f. 1st July, 2003. Even if Spice had filed the returns, it become incumbent upon the Income tax authorities to substitute the successor in place of the said "dead person". When notice under Section 143(2) was sent, the Appellant/ amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the Appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non existing entity on that day. In such proceedings and assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the Appellant would be of no effect as there is no estoppel against law." Finding 145. The issue is answered in negative. It is hel....
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....upheld by this court, we do not find any reason to re-examine the issue. (7) For the period upto 16.5.2010, there were no Rules or instructions on the subject, to provide for manner of calculation of taxable turnover. In the absence of the machinery provisions specifying the details, though the levy as such cannot be disputed but it has become unenforceable upto 16.5.2010. From 17.5.2010 onwards, there being Rules in existence, having been amended in terms of judgment of this Court in CHD Developers' case (supra) and observations made therein, we do not find that the levy cannot be sustained. (8) The issue is answered in negative. It is held that no assessment can be framed against a company, which stood dissolved after its merger with another company. As fairly stated by learned counsel for the State, the assessment order dated 8.3.2016 (Annexure P-8), passed against M/s Sukh Realtors Pvt. Ltd., the company which already stood dissolved after merger with M/s S. S. Group Pvt. Ltd., is set aside. There is no question of grant of specific liberty to the department to pass any fresh order, as if the law permits, it can always take action. 146. The writ petitions stand ....
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....015 9.10.2015 18.6.2015 16.11.2015 12 27006 of 2015 Bestech India Pvt. Ltd. v. The State of Haryana and others 2010-11 नव 17.4.2012 18.6.2015 16.11.2015 13 27032 of 2015 Bestech India Pvt. Ltd. v. The State of Haryana and others. 2007-08 15.9.2015 16.11.2015 31.12.2009 14 27448 of 2015 Ajay Enterprises Pvt. Ltd. v. The State of Haryana and others 2009-10 26.2.2013 26.2.2013 25.02.2016 18.6.2015 18.8.2015 15. 27458 of 2015 Ajay Enterprises Pvt. Ltd. v. The State of Haryana and others 2008-09 31.5.2010 18.6.2015 16.11.2015 16. 27526 of 2015 Ajay Enterprises Pvt. Ltd. v. The State of Haryana and others 2010-11 29.11.2012 20.11.2015 18.6.2015 17. 787 of 2016 M/s BPTP Ltd. v. The State of Haryana and others 2007-08 22.4.2010 21.04.2013 2.7.2015 30.11.2015 22.4.2010 Document 3 Sr. No. CWP No. Parties Name Assessment year Date of assessment order Date of supply of assessment order Limitation for passing order Date of issuance of notice for revision 13.8.2015 Date of revisional order 23....