Bombay Tarpaulin Merchants Association vs State of Maharashtra

Rule. Rule is made returnable forthwith and heard finally. The petitioners, in effect, seek the implementation of an order and judgment dated August 7, 2009, Bombay Tarpaulin Merchants'' Association and Another Vs. State of Maharashtra and Another, in Writ Petition No. 1015 of 2008. The operative part of the order and judgment reads as under:

"8. For the foregoing reasons, in our opinion, this petition can be disposed of by giving the following directions (page 48 in 26 VST):

(i) If the communication dated October 1, 2001 was passed after approval of the Commissioner, then the Commissioner has to comply with the procedure u/s 52(2A) of the Bombay Sales Tax Act.

(ii) If the order was not passed by the Commissioner in terms of section 52(2), the question of complying with section 52(2A) of the Bombay Sales Tax Act would not arise. The Commissioner is then to inform the petitioners about the same. Petitioner No. 1 and its members would then be free to take recourse to law for whatever relief they are entitled to.

(iii) Rule is made absolute as above. No order as to costs."

The reference in paragraph 8(ii) to section 52(2) is a typographical error. It ought to have been section 52(1).

The issue in Writ Petition No. 1015 of 2008 Bombay Tarpaulin Merchants'' Association and Another Vs. State of Maharashtra and Another, arose in this manner. The petitioners relied upon a communication dated October 1, 2001, addressed by the Assistant Commissioner of Sales Tax to the Secretary of the first petitioner which reads as under:

"From your above referred letter, it is gathered that members of your association are involved in the activity of providing temporary sheds to industrial units. It is stated that the materials as such are not handed over or delivered to the hirer but your members provide materials for the shed as well as services for erection and maintaining the shed for given period. The charges are quantified per square feet and they are not qua materials. You have further claimed that in the similar circumstances the verdict given by the West Bengal Taxation Tribunal in (1990) 77 STC 470 is applicable to your case.

Your application has been duly examined in this office. Accordingly, I am to inform you that your members do not lease out the materials used for erecting the shed but use the materials for the erection of the sheds and charge for erection and use of shed so erected and therefore there will be no liability to pay tax under the Lease Act.

With this communication your application stands disposed of."

Mr. Sharma, the learned Assistant Government Pleader, appearing on behalf of the respondent states that the communication was addressed after obtaining the approval of the Commissioner. He, however, contends that the communication is not an order u/s 52(1) of the Bombay Sales Tax Act, 1959. We are afraid, it is not possible for us to entertain this contention. From a reading of the order and judgment of the Division Bench and especially paragraphs 5, 6 and 7 thereof, it is clear that it was held that the communication was one u/s 52(1). The only question was whether it was addressed with the approval of the Commissioner. It is not necessary to consider the contention that the communication was not an order u/s 52(1). This aspect can only be considered if the order and judgment of the Division Bench is reviewed. Mr. Sharma states that the respondents intend filing a review petition. Needless to add that the review petition, if filed, will be decided on its own merits.

The order of the Division Bench requires the Commissioner to comply with the procedure u/s 52(2A) if the communication dated October 1, 2001, was passed after the approval of the Commissioner. We cannot compel the Commissioner to review the communication dated October 1, 2001. If he does so it must, in view of the judgment of the Division Bench, be in accordance with section 52(2A). If the Commissioner does not do so, it would have its own consequences upon the liability of the assessees.

Mr. Sharma submitted in the alternative that merely by virtue of being a member of the petitioner, an assessee would not get the benefit of what is stated in the communication dated October 1, 2001.

Prima facie, at least, the submission is well founded. It is only a member whose activities conformed to those mentioned in the communication dated October 1, 2001 who would be entitled to the benefit mentioned therein. We hasten to add that this observation is on the basis that the communication dated October 1, 2001, is an order u/s 52(1). If the order and judgment dated August 7, 2009 Bombay Tarpaulin Merchants'' Association and Another Vs. State of Maharashtra and Another, is reviewed, the situation may be entirely different. The writ petition is, accordingly, disposed off.