M/S.Jmg Automobiles vs. Sales Tax Officer

Facts

The Petitioner, M/s. JMG Automobiles, challenged an order dated February 17, 2017, passed by the Deputy Commissioner of Commercial Taxes, Cuttack-I Central Circle, Cuttack. This order re-computed the surcharge payable by the Petitioner for the periods 1999-2000 to 2001-2002. The re-computation was based on the Supreme Court's decision in CCT, Odisha v. M/s. Bajaj Auto Limited. The Petitioner argued that the present case was covered by a previous decision of the High Court in M/s. Neelam Motors v. Deputy Commissioner of Sales Tax, Sambalpur-II Circle. The Department attempted to distinguish the Neelam Motors decision by arguing it did not consider the Supreme Court's ruling in M/s. Shenoy and Co. v. Commercial Tax Officer. The re-computation in the present case occurred after a significant time gap of over fifteen years.

Held

The Court held that the Supreme Court's decision in M/s. Shenoy and Co. v. Commercial Tax Officer, Bangalore, was distinguishable from the facts of the present case. The Court noted that in many similar cases, orders passed by Sales Tax Officers or the Tribunal, following the law declared by the High Court in M/s. Bajaj Auto Ltd. v. State of Odisha, had attained finality as they were not challenged by the Department. Refunds had also been paid to the Petitioners on that basis. Crucially, the Court observed that even in the Supreme Court's decision in Commissioner of Commercial Taxes v. M/s. Bajaj Auto Ltd., the Department had not sought leave to reopen the assessments of all other assessees and raise fresh demands through re-computation, irrespective of the time gap. In the present case, the re-computation was made after a delay of over fifteen years. Consequently, the Court quashed the impugned order of re-computation and the consequential demand raised against the Petitioner.

Key Issues

1. Whether the re-computation of surcharge for the periods 1999-2000 to 2001-2002, based on the Supreme Court's decision in CCT, Odisha v. M/s. Bajaj Auto Limited, is valid, considering the time elapsed and previous High Court decisions. Petitioner's arguments: The Petitioner contended that the matter was covered by the High Court's decision in M/s. Neelam Motors v. Deputy Commissioner of Sales Tax, Sambalpur-II Circle, which had already addressed similar issues. They also relied on the principle that orders passed by authorities following the law declared by the High Court in M/s. Bajaj Auto Ltd. v. State of Odisha, which were not challenged by the Department, and on which refunds were paid, should not be reopened after a long delay. The Petitioner highlighted that even the Supreme Court in its Bajaj Auto Ltd. decision did not seek to reopen assessments of all assessees. Revenue's arguments: The Revenue (Opposite Parties) argued that the High Court's decision in M/s. Neelam Motors had not considered the Supreme Court's judgment in M/s. Shenoy and Co. v. Commercial Tax Officer, Bangalore, and therefore, the Neelam Motors decision was distinguishable.