Gennex Laboratories Limited vs Commercial Tax Officer, Somajiguda Circle and Others

R. Subhash Reddy, J.—In this Writ Petition, petitioner has questioned the validity of the order dated 18.11.2013 passed in RR No. 43/2011-12, by the 2nd respondent-Deputy Commissioner (CT), Punjagutta Division, Hyderabad, the revisional authority, in exercise of powers under Section 9(2) of Central Sales Tax Act, 1956, read with Section 20(2) of the A.P. General Sales Tax Act, 1957 and consequential effectual order dated 25.11.2013 passed by the 1st respondent vide Proc. No. /2345/2001-02 (CST). Petitioner, a company registered under the Companies Act, 1956, is engaged in the business of manufacture and export of bulk drugs. It is a registered dealer and assessee on the rolls of the Commercial Tax Officer, Somajiguda Circle. It was assessed to central sales tax, by original assessment order dated 26.02.2005 for the year 2001-02, by the 1st respondent. Aggrieved by the said order, petitioner preferred an appeal before the Appellate Deputy Commissioner, Punjagutta Division. The appellate authority has disposed of the appeal, by allowing it in part and dismissing in part, vide Appeal Order in AO No. P/221/07-08, dated 26.03.2008.

While remanding the matter, the appellate authority directed the 1st respondent to verify the statutory forms and other documentary evidence that was already produced by the petitioner or that would be produced and take steps in accordance with law. Pursuant to the order of the appellate authority, the 1st respondent passed effectual order on 20.10.2009 and the same was served on the petitioner on 20.11.2009. Thereafter, on the representation submitted by the petitioner, that it is entitled for deferment facility, the effectual order dated 20.10.2009 was rectified by further order dated 04.01.2010. It is the case of the petitioner, that pursuant to such effectual order, as rectified by the assessing authority by order dated 04.01.2010, it is entitled for refund of Rs. 11,26,211/-. And letter dated 19.01.2010 was also addressed for refund of the amount in proper format, i.e. in Form XXIII, which is stated to be pending before the authorities.

Subsequently, revised show-cause notice was issued on 10.02.2011 to review the original assessment dated 26.02.2005, as per which the 1st respondent has claimed tax of Rs. 1,21,26,051/-. Questioning the revised show-cause notice issued by the assessing authority, W.P. No. 14809 of 2011 is filed before this Court. The same was disposed of by order dated 08.07.2011, with a direction to the 1st respondent to return defective statutory forms to the petitioner and permit it, to rectify the defects and resubmit the same, keeping open to the authorities to take further action thereafter, and pass appropriate orders. Directions were also issued not to take coercive steps, till the period granted in the aforesaid order expires, for resubmission of defective forms.

Subsequently, the 2nd respondent, who is the revisional authority, in exercise of powers under Section 9(2) of Central Sales Tax Act, 1956, read with section 20(2) of the A.P. General Sales Tax Act, 1957, has initiated proceedings to revise the effectual order dated 20.10.2009, passed by the assessing authority, on the ground that, on scrutiny of the assessment record and from a combined reading of the appeal orders and effectual orders passed by the assessing authority, certain irregularities are noticed. The irregularities, which are noticed and stated to be the grounds for revising the order, read as under:

"1. ''C'' form bearing No. TCK 111152 issued by M/s. Kemwell Pvt. Ltd. covering (4) transactions amounting to Rs. 24,05,520/- is an invalid ''C'' form since the issuing dealer''s registration under the CST Act, 1956 is valid with effect from 16-1-2002 only whereas the sales transactions covered by this ''C'' form are anterior to the effective date of registration. Hence, the concessional rate of tax allowed on the turnover covered by ''C'' form is irregular.

A turnover of Rs. 1,13,83,834/- was allowed exemption towards consignment sales based on the production of ''F'' forms. Except for ''F'' forms, the dealer has not filed any other documents evidencing actual transport/movement of goods.

A turnover of Rs. 49,16,426/- was allowed exemption towards Deemed export sales based on the production of ''H'' forms. Except for ''H'' forms and a document filed before the Central excise authorities for a turnover of Rs. 51,840/-, the dealer has not filed any other documents evidencing actual export of goods. The dealers also failed to file orders placed by the foreign buyers on the exporters and the consequential orders placed by the exporters on the dealer, which are essential for examination of the correctness of the claim of exemption towards deemed exports.

A turnover of Rs. 9,60,40,045/- was allowed exemption towards export sales based on the production of photocopies of sale invoices, Bank appendix-25 of certificate of export and realization in form No. 1, photocopies of shipping bills of the dealer and photocopies of 12 bills of lading (as against 31 bills of lading mentioned in list of direct export sales). The details or photocopies of purchase orders of the foreign buyers are not furnished to examine whether the export of goods has taken place in pursuance of the purchase orders or the foreign buyers or not."

In the notice of revision, it is alleged that the assessing authority has allowed concessional rate of tax and exemption on certain turnovers without verifying or obtaining the statutory forms/required documents, as such, it is noticed that such action on the part of the assessing authority is prejudicial to the interest of revenue. Pursuant to notice issued in the revision proceedings, Manager of the petitioner-company appeared and sought time to file objections and documentary evidence. The same was granted; however, the petitioner-company neither filed any objections nor any documents, as such, the revisional authority passed order dated 18.11.2013, finding that an amount of Rs. 1,15,17,266/- is due from the petitioner. Consequential effectual order dated 25.11.2013 was passed by the 1st respondent vide Proc. No. /2345/2001-02 (CST), demanding an amount of Rs. 96,47,114/-, after deducting tax paid and the tax covered by deferment.

We have heard Sri Milind G. Gokhale, learned counsel for the petitioner and Sri P. Balaji Varma, learned Special Standing Counsel for Commercial Taxes appearing for the respondents.

It is submitted by the learned counsel for the petitioner that, the order dated 18.11.2013 passed in RR No. 43/2011-12, by the 2nd respondent-Deputy Commissioner and consequential effectual order dated 25.11.2013 passed by the 1st respondent vide Proc. No. /2345/2001-02 (CST) are without jurisdiction. It is further submitted that, as much as earlier orders of the assessing authority were passed consequent to allowing of the appeal preferred by the petitioner before the Appellate Deputy Commissioner, as such, 2nd respondent, who is a coordinate officer, is not empowered to revise such orders and he cannot sit over the order of the Appellate Deputy Commissioner and pass a fresh order. In support thereof, he relied on a decision of the Hon''ble Supreme Court in State of A.P., Vs. Lamina Suspension Products Pvt. Ltd. 2000 (119) STC 344, and an unreported common order 16.08.2011, passed by a Division Bench of this Court in W.P. Nos. 9342 and 9343 of 2009.

On the other hand, it is submitted by the learned Special Standing Counsel appearing for the respondents, that, earlier, no findings were recorded by the appellate authority on merits and as the appellate authority has remanded the matter, keeping open to the assessing authority to verify the forms and pass appropriate orders, therefore, in view of the effectual order passed by the 1st respondent, which was sought to be revised by the 2nd respondent-revisional authority, in exercise of powers under Section 9(2) of Central Sales Tax Act, 1956, read with Section 20(2) of the A.P. General Sales Tax Act, 1957, it cannot be said that the 2nd respondent is not having any jurisdiction. Counter-affidavit is also filed by the 1st respondent-assessing authority, controverting the allegations made by the petitioner with regard to jurisdiction of the 2nd respondent-Deputy Commissioner and it is further stated that the order passed by the 2nd respondent-Deputy Commissioner is not barred by limitation.

At first instance, when orders are passed by the assessing authority, i.e. the 1st respondent herein, matter was carried in appeal before the Appellate Deputy Commissioner. Before the appellate authority, mainly, it was the case of the petitioner that it could not file statutory forms as the same could not be procured before orders were passed by the assessing authority. It was also pleaded that, statutory forms were procured and accordingly (13) ''G'' forms, (13) ''C'' forms, (10) ''F'' forms and (7) ''H'' forms and other documentary evidence were filed and condonation of delay was sought. Further case of the petitioner was that, assessing authority erred in levying tax on the sales of DEPB licences within the State and in the course of inter-state trade, on the ground that DEPB cannot be treated as goods. The appellate authority has disposed of the appeal, partly allowing and partly dismissing the appeal, not accepting the plea of the petitioner that DEPB cannot be considered as goods. With regard to statutory forms, the appellate authority remitted the matter back to the assessing authority, with a direction to verify the correctness of turnovers covered by statutory forms that would be filed by the petitioner and grant relief to the extent it is eligible, in accordance with the provisions of law. It is true that, consequent to the order passed by the appellate authority, giving benefit of statutory forms, effectual orders are passed, which are also rectified on the representation filed by the petitioner, accepting deferment facility for payment of tax. But, at the same time, when it is noticed by the revisional authority, that certain irregularities are committed by the assessing authority while passing effectual orders, pursuant to the order dated 26.03.2008 passed by the appellate authority, 2nd respondent has invoked powers under Section 9(2) of Central Sales Tax Act, 1956, read with Section 20(2) of the A.P. General Sales Tax Act, 1957. From a perusal of the orders passed by the revisional authority, it is clear that concessional rate on the tax allowed on the turnover of Rs. 24,05,520/- was irregular, inasmuch as ''C'' forms, which are issued, are anterior to the effective date of registration. Similarly, for turnover of Rs. 1,13,83,834/-, it is alleged that except filing of ''F'' forms, petitioner has not filed any other documents, evidencing actual transport/movement of goods and on turnover of Rs. 49,16,426/- which is covered by ''H'' forms, it is alleged that petitioner has not filed any other documents evidencing actual export of goods and also failed to file orders placed by foreign buyers on the exports. Lastly, it is alleged that, on turnover of Rs. 9,60,40,045/-, which is allowed for exemption towards export sales, based on production of photocopies of sale invoices, petitioner has not furnished details of the purchase orders of the foreign buyers, so as to examine whether export of goods has taken place pursuant to purchase orders, or not. Instead of responding to such notice issued by the 2nd respondent, on initiation of proceedings under Section 9(2) of Central Sales Tax Act, 1956, read with Section 20(2) of the A.P. General Sales Tax Act, 1957, petitioner, in spite of opportunity, has not chosen to file either any material or objections before such authority. As there was no finding on certain turnovers, on which petitioner has claimed exemption of concessional tax, in the order passed by the appellate authority, it cannot be said that the 2nd respondent has sat over the earlier order passed by the appellate authority and passed the impugned order without any jurisdiction. The earlier order of the appellate authority is in the nature of a remand order with regard to certain disputed turnovers, on which appellate authority directed to receive statutory forms which were not filed earlier and to pass appropriate orders, by examining various claims made by the petitioner. Even with regard to the allegation of limitation, it is to be noticed that, as the revisional authority has revised the order dated 20.10.2009, which was rectified on 04.01.2010 only, as such, it cannot also be said that suo motu revisional power that was exercised by the 2nd respondent is beyond the period of limitation. Except the allegation of maintainability and jurisdiction of the 2nd respondent, petitioner has not controverted any of the findings recorded by the 2nd respondent in the impugned order. Even learned counsel for the petitioner, except the submission on the point of jurisdiction, has not urged any other point. In that view of the matter, we are of the view that the 2nd respondent has rightly exercised suo motu powers, in revising the order dated 20.10.2009, which was rectified on 04.01.2010. We have perused the decisions relied on by the learned counsel for the petitioner, referred to above. The case in Lamina Suspension Products Pvt. Ltd. (1st cited) was a case of suo motu revision for the second time by the same authority contrary to the decision made by him earlier. Similarly, when coordinate authority to the rank of Deputy Commissioner has passed orders contrary to the earlier order, the Division Bench, in W.P. Nos. 9342 and 9343 of 2009, by common order dated 16.08.2011, has held that subsequent order was passed without any jurisdiction. Coming to the case on hand, on the earlier occasion, as the appellate authority remanded the matter and on fresh submission of statutory forms, effectual order was passed by the 1st respondent, which was found to be irregular by the revisional authority in the impugned order, the said judgments would not render any assistance to the case of the petitioner. Further, it is to be noticed that though there is statutory remedy of appeal before the Appellate Tribunal, petitioner, has approached this Court without availing the same.

For the aforesaid reasons, we do not find any merit in this Writ Petition and accordingly hold that the order dated 18.11.2013 passed in RR No. 43/2011-12, by the 2nd respondent-Deputy Commissioner (CT), Punjagutta Division, Hyderabad, and consequential effectual order dated 25.11.2013 passed by the 1st respondent vide Proc. No. /2345/2001-02 (CST), are valid and legal and it cannot be said that such orders are passed without jurisdiction. Writ Petition is accordingly dismissed. As a sequel, miscellaneous petitions, if any pending, stand closed. No order as to costs.