Reliance Petro Marketing (P.) Limited vs Commercial Tax Officer and Others

Goda Raghuram, J.—Heard Sri S. Krishna Murthy, the learned counsel for the petitioner and Sri B. Venkatadri, Special Standing Counsel for Commercial Taxes for the respondents. This assessee''s writ petition is against the order dated February 25, 2008 passed by the fourth respondent revising the order passed by the assessing authority. The relevant facts may be noticed. For the assessment year (AY) 2004-05, the petitioner was provisionally assessed by the order of assessment dated March 9, 2005. There against he preferred an appeal disputing the levy of tax on sale of HSD oil supplied for its rigs operating at the off shore oil exploration block situated at the continental shelf. The appellate authority allowed the appeal on September 13, 2006 and remanded the matter with directions, to pass an order of assessment de novo. Final assessment order was thereafter passed on December 12, 2006 granting exemption on the sale of HSD oil. On November 2, 2007, the Joint Commissioner revised the appellate order dated September 13, 2006, set aside the final assessment order dated December 12, 2006 and brought the first sales turnover of HSD oil also to tax. There against the petitioner preferred an appeal to the Sales Tax Appellate Tribunal (STAT) in T. A. No. 1208 of 2007. This appeal is pending.

For the assessment year 2003-04, the assessee sought an exemption on a turnover of Rs. 3,33,45,170 on the basis of the appellate order dated December 12, 2006 (pertaining to the subsequent year 2004-05) contending that as the exploration block in the continental shelf area it is beyond the territorial jurisdiction of the State. Following the directions in the appellate order dated September 13, 2006 (pertaining to the assessment year 2004-05), the first respondent passed the final order of assessment on December 12, 2006 (along with the final assessment order for the assessment year 2004-05), granting exemption.

The fourth respondent issued a show-cause notice on November 2, 2007 proposing to revise the final assessment order dated December 12, 2006 in respect of the assessment year 2003-04. The assessee lodged objections dated February 4, 2008, inter alia, contending that in view of the provisions of section 20(2A) of the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the Act"), the revisional power cannot be exercised since the very issue or question is the subject-matter of T. A. No. 1208 of 2007. The decision of a learned Division Bench of this court in Jyothi Dairy Pvt. Ltd., Hyderabad v. Commercial Tax Officer, Jeedimetla Circle, Hyderabad [2007] 44 APSTJ 87 was also referred to.

However, by the order impugned dated February 25, 2008, the fourth respondent allowed the revision confirming the proposals in the show-cause notice dated November 2, 2007; reviewed the exemption granted by the assessing authority; held that the transaction does not quality for exemption, u/s 38 read with section 5 of the Act since the transactions have taken place within the State of Andhra Pradesh; and consequently directed the assessing authority to give effect to the re-visional order withdrawing the exemption granted on the turnover pertaining to the alleged sale of HSD oil. Though the fourth respondent-revisional authority did extract the contention of the assessee/writ petitioner (as to the non-availability of the revisional power in view of the same issue pending before the STAT), the revisional authority neither dealt with this objection of the assessee nor did he record a finding thereon.

Section 20 of the Act sets out the contours of the revisional power conferred on the hierarchy of authorities specified therein. Sub-section (2A) enjoins that the power of revision under sub-section (1) or sub-section (2) shall not be exercised by the authority specified therein in respect of any issue or question which is the subject-matter of an appeal before, or which was decided on appeal by, the Appellate Tribunal u/s 21 of the Act, i.e., STAT.

Though there was some ambiguity as to whether the bar on the exercise of revisional jurisdiction (enjoined by section 20(2A) of the Act) is applicable in respect of matters pending before the STAT pertaining to a different assessment year, the controversy was set at rest by the decision of a Full Bench of this court in Indo National Limited Vs. Commissioner of Commercial Taxes, . The learned Full Bench while overruling the earlier decision of this court in The Minerals and Metals Trading Corporation of India Limited Vs. Deputy Commissioner, Commercial Taxes and Others, clearly and unequivocally declared the law that section 20(2A) of the Act circumscribes the revisional jurisdiction conferred u/s 20 and enacts a bar on the exercise of such revisional jurisdiction whenever any issue or question that arises for consideration in exercise of the revisional power is, inter alia, pending adjudication before the STAT; irrespective of whether the issue pertains to the same assessment year in question or otherwise. The decision of the Full Bench of this court in Indo National Limited Vs. Commissioner of Commercial Taxes, was subsequently reiterated in Vensa Biotek Ltd. Vs. Commissioner of Commercial Taxes, and Jyothi Dairy Pvt. Ltd. [2007] 44 APSTJ 87 (AP). In fact, as already noticed, the subsequent decision of this court in Jyothi Dairy Pvt. Ltd. [2007] 44 APSTJ 87 (AP) was specifically referred to in the objections presented by the writ petitioner-assessee to the fourth respondent''s show-cause notice proposing revision, vide petitioner''s representation dated February 4, 2008. Nevertheless the fourth respondent exercised the power of revision undaunted by the limitation enjoined by the provisions of section 20(2A) of the Act.

The learned Special Standing Counsel for Commercial Taxes very faintly tried to contend that since the principle of res judicata is inapplicable to orders of assessment pertaining to different assessment years the provisions of section 20(2A) of the Act must be restrictively construed. This contention however was not pressed in view of the overawing declaration of law by the learned Full Bench in Indo National Limited Vs. Commissioner of Commercial Taxes, Be that as it may, in view of the unambiguous trajectory of the clear provisions of section 20(2A) of the Act; the authoritative interpretation of the said provision in Indo National Limited Vs. Commissioner of Commercial Taxes, ; reiterated in Vensa Biotek Ltd. Vs. Commissioner of Commercial Taxes, and Jyothi Dairy Pvt. Ltd. [2007] 44 APSTJ 87 (AP); the revisional order dated February 25, 2008 passed by the fourth respondent must be held to be without jurisdiction and unsustainable. The impugned order is accordingly quashed.

On March 13, 2008, this court in W.P.M.P. No. 6997 of 2008, granted interim stay of collection of the disputed tax of Rs. 81,90,659 (arising consequent on the impugned revisional order dated February 25, 2008), on condition that the petitioner deposits half the disputed tax within the period stipulated in the order dated March 13, 2008. It is represented by the learned counsel for the petitioner that the petitioner has deposited Rs. 40,89,530 pursuant to the conditional interim order granted above. Since the revisional order dated February 25, 2008 is quashed, the petitioner shall be entitled to and shall forthwith be refunded the amount deposited pursuant to the interim order of this court dated March 13, 2008. Since the fourth respondent proceeded to pass the revisional order, (a) in violation of the bar enjoined by section 20(2A) of the Act; (b) despite being sensitized to the declaration of law on this aspect in Jyothi Dairy Pvt. Ltd. [2007] 44 APSTJ 87; (c) despite noticing the objections in the revisional order and without either discussing, analysing or dealing with these objections, we consider the revisional order to be perverse apart from being illegal and erroneous. We accordingly allow the writ petition with costs of Rs. 1,000 (rupees one thousand only) of which Rs. 500 shall be paid to the petitioner and. Rs. 500 to the Member Secretary, Andhra Pradesh State Legal Services Authority, Hyderabad, for the credit of the authority, within a period of one month from the date of receipt of a copy of this order. A copy of this order shall be marked to the Member Secretary, Andhra Pradesh State Legal Services Authority, Hyderabad, for information.