Kar Salahakar Sangh vs State of M.P.

Heard. The petitioner in this petition has challenged the vires of newly amended rule 54 of the Madhya Pradesh Value Added Tax Rules, 2006 and also insertion of new form No. 41A made by the State Government vide Gazette Notification dated May 8, 2012 issued in exercise of powers conferred by section 71 of the Madhya Pradesh Value Added Tax Act, 2002. By the aforesaid notification, the following amendments have been carried out:

In the said Rules,-- (i) in rule 54,--

(a) for sub-rule (1), the following sub-rule shall be substituted, namely:--

(1) Every dealer required to furnish audit report under sub-section (2) of section 39 shall furnish the audit report prepared by a chartered accountant in form 41A, to the appropriate Commercial Tax Officer or any other officer authorised by the Commissioner in this behalf by 31st October of the succeeding year: Provided that,--

(i) a dealer having annual turnover of ten crore rupees or less may furnish the audit report prepared, for the purpose of income tax. Separate details pertaining to the business done in the State of Madhya Pradesh shall be included in the audit report;

(ii) a dealer who. is an industrial unit having annual turnover of ten crore rupees or less may furnish the audit report prepared by a member of Institute of Cost, and Works Accountants of India;

(iii) the audit report can be furnished up to 31st December of the succeeding year with a late fee, of rupees 100 per day.

(b) Sub-rule (2) shall be renumbered as sub-rule (3) and before the sub-rule (3) so renumbered, the following sub-rule, shall be inserted, namely:--

(2) Notwithstanding anything to the contrary contained in sub-rule (1), a dealer having annual turnover of ten crore rupees or less and dealing in the goods as may be notified by the State Government, shall furnish the audit report in form 41A.

The main ground of challenge by the petitioner in this petition is that by the aforesaid amendments a class of lawyers and legal practitioners have been excluded in regard to verification of accounts and mandatory order of statement by resorting to the provisions of section 39 or section 18 has been made. Due to the aforesaid amendments, legal practitioners and tax practitioners could not submit any statement as it has to be certified by the chartered accountant. Similarly form No. 41A has also been prescribed.

The aforesaid point has already been decided by the Bombay High Court in Writ petition No. 2000 of 2007 ( The Sales Tax Practitioners'' Association of Maharashtra and Tushar P. Joshi Vs. The State of Maharashtra and The Institute of Chartered Accountants of India, where similar amendments were introduced. The dispute before the Bombay High Court in the aforesaid writ petition as mentioned in the order is as under:

All these petitions are being disposed of by this common judgment as the main challenge in all the petitions is to the constitutional validity of section 61(1) and the Explanation thereto, of the Maharashtra Value Added Tax Act, 2002 (hereinafter referred to as, ''the Act'') on the ground that it infringes the equality clause as enshrined in article 14, the right to carry on profession under article 19(1)(g) as also under article 254, as the provisions for ''audit'' would not fall within the competence of the State Legislature under entry 54 of List II of the Seventh Schedule to the Constitution of India. In the alternative to read down section 61, so as to empower advocates and sales tax practitioners to audit and give report in form No. 704. There are some other incidental challenges in Writ Petition No. 1777 of 2007 to contend that the Explanation also be declared void as being violative of article 265 which provides that no tax shall be levied or collected except by the authority of law and article 301 as it infringes the freedom to carry on trade, commerce and intercourse throughout the territory of India.

The Bombay High Court considered in detail the points which are also involved in the petition and dismissed the writ petition. Against the aforesaid order, SLP (Civil) No. 11880 of 2008 was filed before the honourable Supreme Court. The honourable Supreme Court has dismissed the aforesaid SLP vide its order dated May 13, 2008.

In this view of the matter, in our opinion, the controversy raised by the petitioner in the present petition has already been decided by the Bombay High Court in W.P. No. 2000 of 2007 ( The Sales Tax Practitioners'' Association of Maharashtra and Tushar P. Joshi Vs. The State of Maharashtra and The Institute of Chartered Accountants of India, and SLP against which has been dismissed by the honourable Supreme Court. Hence, in our opinion, there is no merit in this petition. It is hereby dismissed. No order as to costs.