TaxTMI 
TaxTMI 
2025 (10) TMI 256
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....ated 11.11.2013, imposing tax at the rate of 12.5% on the afore item, placing reliance on a clarification dated 12.08.2006 of the Commissioner of Commercial Taxes, as per which, the tax payable was at 12.5%. The assessment was challenged before the first appellate authority by filing KVATA No.99 of 2014 and by the appellate order dated 31.01.2014, the first appellate authority noticed that the clarification relied on while finalizing the assessment has been set aside by this Court in the judgment dated 15.02.2008 in OTA No.3 of 2008, since there was no proper consideration of the issue by the Commissioner, directed the Commissioner to revisit the issue afresh. 3. Consequent to the remit as above, the assessing authority passed a fresh order dated 16.10.2015(Annexure-C), imposing tax at 4% with respect to the products dealt with by the assessee. 4. Later, the authority under Section 94 of the Act issued Annexure-D order dated 07.04.2016, holding that since "thermic fluid heaters" have not been specifically covered by any of the entries in Schedule III, the tax applicable would be at 12.5% as an RNR item under S.R.O.No.82/2006. Placing reliance on the proceedings of the authori....
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....on petitioner was assessable only at the rate of 4% and the order issued by the Authority under Section 94 of the Act would not apply to the case at hand. He submits that the item is falling under Entry 83(1) of Schedule III to the Act, and the findings to the contrary were without any justification. iii. The clarificatory order (Annexure-D) dated 07.04.2016 can only have prospective operation. 8. Per contra, Sri. V.K. Shamsudheen, the learned Senior Government Pleader, would contend that: i. The Deputy Commissioner is perfectly within his power to exercise the suo motu power insofar as the order dated 16.10.2015 passed by the assessing authority was against the clarificatory order issued by the authority under Section 94 of the Act. According to him, it is the error in the order dated 16.10.2015, which is sought to be rectified by the Deputy Commissioner. ii. He would also seek to sustain the classification of the item as done in Annexure-D order dated 07.04.2016 by the authority under Section 94 of the Act. 9. We have considered the rival contentions and the connected records. 10. On an evaluation of the contentions raised as above and the impu....
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....ater. (4) No order under this section adversely affecting a person shall be passed unless that person has had a reasonable opportunity of being heard." 12. The learned counsel for the revision petitioner contends that the power under Section 56 of the Act cannot be exercised, since the order of assessment was the subject matter of an appeal, and it is the modified/consequential order of assessment dated 16.10.2015, which is set aside, exercising the suo motu power. According to him, since the order dated 16.10.2015 is only a consequential order, the suo motu power cannot be exercised, and the revenue ought to have challenged the appellate order dated 31.01.2014. 13. However, we note that under Section 56 of the Act, the Deputy Commissioner (presently Joint Commissioner) is entitled to call for and examine any order passed or proceedings recorded under this Act by any officer or authority subordinate to him which, in his opinion, is prejudicial to the interest of the revenue and pass such orders thereon as he thinks fit after making the required enquiry in the matter. In the case at hand, the assessment was originally completed by the order dated 11.11.2013, levying t....
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....d, there was no effective reconsideration of the issue at the hands of the Assessing Authority while issuing the order dated 16.10.2015. The order is silent as regards the additional material, if any, produced by the revision petitioner-assessee. When that be so, the revision petitioner-assessee is not justified in contending that the suo motu power under Section 56 of the Act is not attracted, on account of the embargo under Section 56(2)(b). It is further to be noticed that Section 56 seeks to empower the Deputy Commissioner to exercise the suo motu power of revision as regards an "order passed" under the Act. Here, it is not the order dated 11.11.2013 that is revised by the Deputy Commissioner under Section 56. Instead, it is the order dated 16.10.2015, which is cancelled as seen from Annexure-E order dated 03.09.2016. 14. The learned counsel for the revision petitioner-assessee sought to rely on the judgment of a Division Bench of this Court in OT. Rev. No. 93 of 2022 dated 18.3.2025, in support of his submissions. However, we notice that the Division Bench in the afore case was considering a situation where the assessment was made, subject matter of an appeal, and the Ap....
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....N Code, the question of application of "common parlance or commercial parlance" arises. Here, Entry 83 to Schedule III contains the HSN Code for each for the sub entries. When that be so, it was for the revision petitioner-assessee to have pointed out the HSN Code of the product dealt by him to support the classification thereunder. However, such a course of action has not been adopted by the revision petitioner-assessee in the case at hand. 18. The petitioner-assessee further contends that he had relied on an expert opinion from a Chartered Engineer, and this ought to have been accepted. The opinion of the Chartered Engineer is dealt with by the Commissioner of State Tax in its order (Annexure-I) as under: "The expert opinion of the Chartered Engineer produced by the Petitioner to beef up his contentions has also been examined in detail. The report says that Thermic Fluid Heaters is technically and by utility, a Heat Exchanger. He has also pointed out that a Heat Exchanger Unit is not a Heater. Eventhough there are technical similarities between the different machines pointed out in the opinion of the Technical expert, the HSN code based classification followed to s....
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....ssing authority, even when we hold the second question against the petitioner-assessee. 19. The last issue arising for consideration is with reference to the prospective operation of Annexure-D order dated 07.04.2016. The revision petitioner-assessee contends that the afore order can only apply prospectively with reference to the provisions of Section 94(2) of the Act. Section 94 (2) of the Act provides as under: "94(2) The Authority shall decide the question after giving the parties to the dispute a reasonable opportunity to put forward their case and produce evidence and after considering such evidence and hearing the parties pass orders within three months or within such time as may be extended by the Commissioner. Commissioner may considering the fact in issue decide whether such orders have prospective operation only." (Underlining supplied) Thus, with reference to the power to issue clarification under Section 94 of the Act, the Commissioner has been empowered to hold that clarificatory orders would only have prospective operation. In other words, the exercise of the power by the Commissioner under Section 94(2) of the Act is independent of the power o....
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....clarification before the statutory authority and common orders were issued rejecting the contention that the product is an ayurvedic medicament, only few are contesting the same orders in appeal before this Court and the remaining manufacturers/dealers are paying tax at 12.5% on the same product. We have also noticed that the items are high value items which only the rich can afford and so much so, the principle of classification classifying luxury items at high rate of tax applies here also." Similarly, the Apex Court also considered the same issue in Reckitt Benckiser (India) Ltd. v. Commissioner, Commercial Taxes and Others [(2008) 15 VST 10 (SC)], holding that: "We may also clarify that under the Act, the transactions which have taken place prior to April 7, 2006 will not be taken into account and the advance clarification will only apply for the period April 7, 2006 onwards." Therefore, there can be no doubt that the clarification can only apply prospectively. 21. In the case at hand, we notice that the clarificatory order was issued only on 07.04.2016, as evidenced by Annexure D. Under Section 30 of the Act, an assessee is entitled to collect the tax payable....