Additional Commissioner of Sales Tax, Vat III, Mumbai vs Desan Agro Tech Ltd.

In this application, the Revenue seeks to challenge the correctness of an order dated November 22, 2010, passed by the Sales Tax Tribunal dismissing an application for reference u/s 61 of the Bombay Sales Tax Act, 1959. The assessee, aggrieved by an order of assessment dated August 31, 1998, passed by the Assistant Commissioner of Sales Tax, filed an appeal which was dismissed by the Deputy Commissioner of Sales Tax on January 28, 2004. The second appeal filed by the assessee was partly allowed by the Tribunal on December 8, 2006 and the proceedings were remitted to the first appellate authority for recomputing the liability of the assessee u/s 13AA in terms of the observations contained in the decision. The Tribunal held that the assessee was entitled to relief towards purchase tax u/s 13AA and to consequential reliefs towards additional tax up to September 30, 1995 and towards interest u/s 36(3)(b). From the record it appears that the assessee filed an application for rectification u/s 62 which was disposed of on January 2, 2007. While allowing the rectification application, the Tribunal issued certain directions. The assessee moved a second application for rectification upon which the Tribunal passed an order dated March 6, 2007. In pursuance of the order of remand, the first appellate authority passed an order on May 24, 2007. Thereupon the Revenue filed an application for rectification which was dismissed on August 12, 2009. A second application for rectification was filed by the Revenue which was dismissed on August 6, 2010. Upon the dismissal of the rectification application the Revenue filed an application for reference u/s 61 which has been dismissed by the order of the Tribunal dated November 22, 2010. Section 61(1) postulates certain requirements before a reference application can be allowed. The requirements are (i) The order of the Tribunal must be passed in appeal; (ii) The order must be such as would affect the liability of any person to pay tax or penalty or interest or to forfeiture of any sum which affects the recovery from any person of any amount u/s 39; (iii) A question of law must arise out of the order; and (iv) The application must be filed within a period of ninety days from the date of communication of the order.

The order which has been passed by the Tribunal upon which a reference application was filed was on an application for rectification moved by the Revenue. The order passed by the Tribunal does not fall within the description of an order which affects the liability of any person to pay tax, penalty or interest. In a decision of a Division Bench of this court consisting of Mr. Justice D. P. Madon and Mr. Justice M. H. Kania (as their Lordships then were) in Commissioner of Sales Tax v. S. K. Manekia [1975] 36 STC 249 (Bom), the Division Bench had held, while construing the provisions of section 23(1) of the Bombay Sales Tax Act, 1946 that an order on an application for rectification would not fulfil the description of an order which affects the liability of any person to pay tax, penalty or interest. A similar view has been taken by a Division Bench of this court consisting of Mr. Justice B. G. Gadgil and Mr. Justice A. A. Ginwala in Santoshi Tel Utpadak Kendra v. Deputy Commissioner [1979] 43 STC 307 (Bom).

In the circumstances, we are of the view that the application for reference u/s 61 was misconceived. However, while we dismiss the application on that ground, we leave it open to the Revenue to pursue the available remedy in accordance with law. There shall be no order as to costs.