TaxTMI 
TaxTMI 
2022 (11) TMI 217
X X X X Extracts X X X X
X X X X Extracts X X X X
....Richa Shukla, Dy. Government Advocate WPT Nos.1/2021 & 2/2021 For Petitioner : Mr. Sumeet Gadodia & Mr. K. Rohan, Advocates For Respondents : Mr. Sandeep Dubey, Deputy Advocate General with Ms. Richa Shukla, Dy. Govt. Adv.& WPT Nos.103, 106, 110, 111, 112 of 2020 For Petitioner : Mr. Anand Dadariya, Advocate For Respondents : Mr. Sandeep Dubey, Deputy Advocate General with Ms. Richa Shukla, Dy. Government Advocate C A V Order Parth Prateem Sahu, J 1. South Eastern Coalfields Limited (SECL) floated different tenders for the work of Hiring of Heavy Earth Moving Machines (HEMM) for excavating overburden (all kinds of strata/ overburden in situ), loading into tippers, transportation and unloading of excavated materials and sprinkling & spreading of material at the site shown and other related works. Pursuant to notice inviting tender, petitioners participated in tender proceedings and on being successful in tender, work order was issued in their favour on different dates. After issuance of work order by SECL, petitioners, who are registered dealer under the provisions of the Chhattisgarh Value Added Tax, 2005 (henceforth 'the Act of 2005') and the Cen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espondent No.1. 10.3. Quash and set aside the impugned order dated 14.10.2020 passed by respondent No.2. 10.4. Call for the record...." WPT No.103/2020;- "10.1. This Hon'ble Court may kindly be pleased to call for the entire record from the respondents pertaining to issuance of the order dated 12.10.2020 (Annexure P-1). 10.2. This Hon'ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside the order dated 12.10.2020 (Annexure P-1) 10.3. This Hon'ble Court may kindly be pleased to issue an appropriate writ directing the respondent department to restore the registration certificate of the petitioner with insertion of words 'High Speed Diesel' and 'mining' under the Chhattisgarh Value Added Sales Tax Act and Central Sales Tax Act as it stood vide order dated 15.05.2020 and dated 15.05.2020 respectively. 10.4. Any other relief (s)/ order (s)/direction (s) in favour of petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice. 10.5. Cost of petition." WPT No.106/2020;- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)/direction (s) in favour of petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice. 10.4. Cost of petition." WPT No.112/2020;- "10.1. This Hon'ble Court may kindly be pleased to call for the entire record from the respondents pertaining to issuance of the order dated 14.10.2020 (Annexure P-1). 10.2. This Hon'ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside the order dated 14.10.2020 (Annexure P-1) 10.3. Any other relief (s)/ order (s)/direction (s) in favour of petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice. 10.4. Cost of petition." WPT No. 1/2021;- "10.1. This Hon'ble Court may kindly be pleased to call for the entire record from the respondents pertaining to issuance of the order dated 14.10.2020 (Annexure P-1). 10.2. This Hon'ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside the order dated 14.10.2020 (Annexure P-1) 10.3. This Hon'ble Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate, petitioner started purchasing inter-state HSD at concessional rate of tax. Suddenly respondent Department issued notice under Section 49 (1) of the Act of 2005 to the petitioner calling upon to explain as why entry made in registration certificate of petitioner be not deleted. Petitioner submitted reply to said notice, but respondent No.2-Deputy Divisional Commissioner, Commercial Tax, Bilaspur Division No.2 overlooking contents of reply and provisions of law, passed impugned order 14.10.2020 and deleted entry in registration certificate of petitioner regarding 'mining and HSD' w.e.f. 5.2.2020. Consequent thereto, respondent No.4 passed amended order dated 29.10.2020 (Annexure P-19) for recovery of tax with penalty of Rs.1,96,08,045/- under Section 10(a) of the Act of 1956 and directing petitioner to deposit the same in government treasury within 30 days from receipt of order. He submits that after issuing notice under Section 49 (1) of the Act of 2005 to petitioner, the order dated 14.10.2020 has been passed. As per provisions of Section 49 (1), no order prejudicial to the interest of the dealer or person can be passed. If for any reason any order prejudicial to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payable if the goods of description referred to in sub-section (3) of Section 8 is in the course of inter-state trade or commerce. Petitioner is engaged in mining activities. The words 'in mining' are used under clause (b) of sub-section (3) of Section 8 of the Act of 1956. Goods specified for the purpose of work, as mentioned in sub-section (3), entitle the petitioner for concessional rate of tax and therefore, petitioner was charged with concessional rate of tax on inter-state purchase/trade of 'high speed diesel' to carry out mining activities. Respondent authorities have mentioned in document/letter issued in the course of correspondences that high-speed diesel (HSD) purchased by petitioner is being used for mining activities. SECL - employer had also issued certificate to the effect that nature of work awarded to petitioner comes within the category of 'mining activity', even then respondent Department had illegally and arbitrarily passed impugned orders. Nature of work awarded to the petitioner is one of the main process of mining in winning of coal. He referred to definition of words 'mining' & 'extract' given in the Black's Law Di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 49 (1) of the Act of 2005 is signed and issued by respondent No.2-Joint Commissioner, State Tax Bilaspur, Division No.2, Bilaspur, as appearing from notice (Annexure P-13). From the heading of notice filed along with reply as Annexure R-2, it is apparent that it is an 'amended notice'. Further, in this notice it is typed as '43 (1)', whereas correction is made by handwriting to figure '1' as '3' [49(3)] by overwriting, which is clearly reflecting from copy of notice annexed as Annexure R-2. The Prescribed Authority for issuance of notice under Section 49 (1) or (3) of the Act of 2005 is the 'Deputy Commissioner', whereas initial notice was issued by the Joint Commissioner and subsequently the words 'Deputy Commissioner, Commercial Tax' were added by handwriting and putting slash (/). As per Rule 55 of the Rules of 2006, the Commissioner may delegate powers conferred upon him to other officer for the purpose of taking any action under the provisions of the Act of 2005, described in table given in Rule 55. It is mentioned in Sr. No.13 of the column specified in Rule 55 that the Commissioner may delegate 'power of revision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e into force w.e.f. 1.4.2021, HSD cannot be purchased under concessional rate of tax. Work awarded to petitioner is primary and initial work of mining activities. For the purpose of winning of mineral like 'coal' in case at hand, removal of overburden is integral part of mining. On the issue of scope of mining activity, learned counsel places his reliance on the judgment rendered in Bhagwan Dass v. State of UP & ors reported in (1976) 3 SCC 784; Bharat Cooking Coal Ltd. vs. State of Bihar & ors reported in (1990) 4 SCC 557; State of Meghalaya vs. All Dimsa Student Union & ors reported in (2019) 8 SCC 177; Chougle & Co. Pvt. Ltd. vs. UOI reported in (1971) 3 SCC 162; Sadbhav Engineering Ltd. vs. State of UP (2014) SCC Online All 13564; Assessing Authority-cum-Excise and Taxation Officer, Gurgaon and another vs. East India Cotton Mfg. Co. Ltd., Faridabad reported in (1981) 3 SCC 531. On the issue of rule of interpretation of statutes, learned counsel relied upon judgment in case of Anwar Hasan Khan vs. Mohd. Shafi and other reported in (2001) 8 SCC 540. On the issue of levy of penalty under Section 10A of the Act of 1956, he relied upon judgment in case of Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities. For the purpose of winning of mineral like 'coal' in case at hand, removal of overburden is integral part of mining. Mining activities do not mean extraction of coal only, but all activities of extraction. Amendment/ addition in registration certificate of petitioners is made on 12.5.2019. It was deleted on 12.10.2020 from back date, which is not permissible under law. Amendment/modification or correction in registration certificate can be by the Commercial Tax Officer only. It is argued that registration of dealer is regulated under Sections 16 to 18 of the Act of 2005. Section 16 deals with application for registration. Rule 2 (1) (j) of the Rules of 2006 defines 'registering authority' which means appropriate Commercial Tax Officer or any officer appointed under section 3 to whom the Commissioner has delegated his power. Amendment or deletion or removal of any goods specified in registration certificate can be done only by registering authority. Notice as alleged was not issued by registering authority. Employer who awarded work to the petitioner i.e. SECL, issued certificate mentioning that work of removal of overburden and strata for extraction of coal f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 49 (3) of the Act of 2005 is not sustainable. Detailed reply to notice under Section 49 (1) of the Act of 2005 was submitted by respective petitioners raising all grounds as are available to them. Notice issued to petitioners is not for enhancing assessment and penalty thereupon or both, it is for amendment in registration certificate, hence Rule 6 of the Rules of 2006 will not apply to facts of present cases and as such, there was no requirement of issuing notice in Form-55 appended to Rule 6 of the Rules of 2006. Rule 2 (1) (j) of the Rules of 2006 is not having any application as the order was passed by Deputy Commissioner. SECL is not having any authority to issue any certificate because SECL itself is a lessee of land over which permission for mining operations was granted. Petitioners are not having any mining license or they have not taken any land on lease for mining and extraction of minerals. Referring to Page No.80 of writ petition, it is argued that in base price of diesel, GST is included in value of work awarded. Diesel price mentioned in documents placed on record includes 35% VAT. Petitioners have not produced any entry register showing consumption of diesel purcha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....strations, one under the Act of 2005 and another under the Act of 1956. Question involved of getting HSD under concessional rate of tax is of inter-state purchase, therefore, its registration certificate under the Act of 1956 is subject matter. Respondents have not considered the grounds of pleadings in reply to notice under Desptach No.1097, which is under Section 49 (1) of the Act of 2005 and passed the impugned orders. Non-consideration of reply amounts to violation of principles of natural justice. In support of his contention he places his reliance on the judgment of Hon'ble Supreme Court in Assistant Commissioner, Commercial Tax Department Works Contract and Leasing, Kota v. Shukla & Brothers reported in (2010) 4 SCC 785. It is contended that petitioners appeared in the proceedings initiated for imposition of penalty on the date fixed and sought time which was granted by respondents. However, thereafter no notice was issued intimating next date for appearance. Specific ground in this regard has been taken in writ petition. Respondents have in fact mentioned in the order that after submission of reply, petitioner chose not to appear in the proceedings, which is incorrec....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged [See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors. (1998) 8 SCC 11]. The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings. Recently, in case of Assistant Commissioner of Sales Tax & others vs. Commercial Steel Limited reported in 2021 SCC Online SC 884, Hon'ble Supreme Court while dealing with question of maintainability of writ petition has held that the High Court having regard to the facts of the case, can exercise discretion to entertain or not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icate, consequential order of recovery of tax with penalty has been passed against petitioners concerned. Question for consideration is whether in the above facts of the case, petitions can be entertained in view of the exception set out by Hon'ble Supreme Court in Harbans Lal Sinha's case (supra). and Commercial Steel Ltd. (supra) 13. The Act of 2005 is with respect to levy of tax on sale and purchase of goods in the State of Chhattisgarh. In case at hand, issue of levy of tax is on goods purchased by registered dealer from outside the State (inter-state purchase) and it will be governed by the Act of 1956. Section 2 (f) of the Act of 1956 defines 'registered dealer', which means a dealer registered under section 7. Section 6 deals with liability to tax on inter-State sales. Section 7 deals with 'registration of dealer' and sub-section (1) of Section 7 is extracted below for ready reference:- "(1) Every dealer liable to pay tax under this Act shall, within such time as may be prescribed for the purpose, make an application for registration under this Act to such authority in the appropriate State as the Central Government may, by general or spec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power...." 14. Under sub-section (3) (b) of Section 8 of the Act of 1956, there is mention of goods of classes specified in the certificate of registration of a registered dealer purchasing goods for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. Petitioners being registered dealers under the Act of 1956 made inter-state purchase of High Speed Diesel (HSD) for its use in the work of excavating overburden (all kinds of strata/ overburden in situ), loading into tippers, transportation and unloading of excavated materials. 15. Section 9 of the Act of 1956 talks about levy and collection of tax and penalties and relevant portion of which is quoted below:- "(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, be rules made in this behalf make necessary provision for all or any of the matter specified in this sub-section. [(2A) All the provisions relating to offences, interest and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in section 10 and 10A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, reassessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.] [(2B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;s certificate of registration, shall obtain from the 'appropriate 21 [Commercial Tax Officer] or any other officer as may be authorised by the Commissioner in this behalf 22[blank declaration in Form 'C' as prescribed under sub-rule (1) of rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957] for furnishing it to 1he selling dealer. Before furnishing the declaration to the selling dealer. the purchasing dealer, or any responsible person authorised by him in this behalf shall fill in all required particulars in the Form. and shall also affix his usual signature in the space provided in the Form for this purpose. Thereafter, the counterfoil of the Form shall be retained by the purchasing dealer and the other two portions marked "Original'. and "duplicate" shall be made over by him to the selling dealer." 18. Section 7 (1) of the Act of 1956 envisages that for registration of dealer an application for registration under this Act is to be made before such authority in the appropriate stage as the Central Government may, by general or special order, specify. The taxing authorities and other officers are prescribed under Section 3 of the Act of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Tribunal may, from time to time, make regulations not inconsistent with the provisions of this Act regulating the procedure and disposal of its business." 19. Vide order dated 14.10.2020 (Annexure P-1 to WPT No.1/2021) the entries 'mining' and 'high-speed diesel (HSD)' are deleted from registration certificates issued under the Act of 2005 and the Act of 1956. The order, Annexure P-1, bears Revision No.145 K.C.-1/20 (State) and Revision No.146 K.C.1/20 (Central). Revision petition was considered against the order of amendment in exercise of powers under Section 49 (3) of the Act of 2005. Perual of Annexure P-13 & P-14 toWPT No.1/2021, would show that these are show-cause notices to the petitioner. Notice Annexure P-13 issued bear despatch No.Rate Tax/GST/2020/1096 bilaspur Date 01.10.020 and issued to the petitioner in respect of Revision Case No.145 K.C.-1/2020 (State). This notice is under Section 49 (1) of the Act of 2005 for initiating suo motu revision proceeding for deletion of entry of 'mining activities' and 'high-speed diesel' from registration certificate and its amendment because of misuse of C-Forms. Similarly, notice of Annexure P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... registration certificate of petitioner issued under Rule 5 (1) of the Rules of 1957. Respondent Department along with its reply have submitted document as Annexure R-2, stated to be issued to the petitioner under Section 49 (3) of the Act of 2005. Perusal of this notice Annexure R-2 would show that at the top it is mentioned as 'amended notice'. This notice bears number Rate Tax/GST/2020/1096 bilaspur Date 01.10.020, which means there is no fresh despatch number of notice purported to have been issued under Section 49 (3) of the Act of 2005. Further, this notice is with respect to Revision No.145 K.C.-1/20 (State). It further revealed that some handwritten correction is made in it. Notice, if any as stated by learned counsel for respondent Department, is issued under Section 49 (3) of the Act of 2005, then it is only with regard to deletion of entries in registration certificate issued under the Act of 2005. Except notice of Annexure R-2, respondent Department has not placed on record any other show-cause notice under Section 49 (3) of the Act of 2005 having separate despatch number or for Revision Case No. 146 K.C.-1/20 (Central). 22. Registration of petitioner under t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oper notice was issued and served through email, but copy of notice placed before this Court along with reply as Annexure R-2 is only with respect to Revision No.145 K.C.-1/20 (State). Meaning thereby, even if notice issued under Section 49 (3) of the Act of 2005 is with regard to amendment in registration certificate for deleting some entries i.e. mining activities and high speed diesel, from the registration certificate (Annexure P-7) issued in Form-11 under Rule 12 (1) of the Rules of 2006, which is registered under the Act of 2005, then there is no notice with respect to registration certificate issued in Form 'B' issued under Rule 5 (1) of the Rules of 1957, which is registered under the Act of 1956. Whereas, order impugned dated 14.10.2020 (Annexure P-1) decides two revision petitions bearings Nos.145 K.C.-1/20 (State) and 146 K.C.1/20 (Central). 26. From the above facts and discussions, it is apparent that respondent Department had suo motu decided revision No.146 K.C. - 1/20 (Central) without issuing notice and without giving opportunity of being heard to registered dealer i.e. petitioner herien, which is mandatory under the provisions of Section 49 (3) the Act o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(state) and Revision Case No.154/AC-/2020 (Central) is liable to be and is hereby quashed. 30. Petitioner in WPT No.106/2020 has also raised identical grounds as raised in WPT No.1/2021. In this case also respondent State has filed Annexure R-2 along with return, which are copies of notices, purported to be under Section 49 (3) of the Act of 2005, mentioning at the top as amended notice. Desptach number of the said notice is the same as is mentioned in notice under Section 49 (1) of the Act of 2005 in Revision Case No.147-K.C.-1/2020 (Sate) and the amended notice is also for the same revision case. Respondent State has not placed any notice issued under Section 49 (3) of the Act of 2005 for Revision Case No.148 K.C. 1/2020 (Central). Hence, the order impugned dated 12.10.2020 (Annexure P-1) is hereby quashed. 31. WPT No.111/2020 is an offshoot of WPT No.106/2020 as after amending registration certificate under the Act of 1956, respondent Department had issued notice dated 29.10.2020 for recovery of tax with penalty on petitioner vide order dated 29.10.2020 passed in Case No.1/2020 Central, under Section10A of the Act of 1956. As WPT No.106/2021 filed by this petition challeng....