Armstrong Infrastructure Through Director S.A.Kesarkar vs. The State Of Maharashtra Through Commissioner Of State Tax And Anr

Held

The Court held that the order dated 21st August 2019, rejecting the Petitioner's settlement application, was bad in law as it was passed mechanically without considering the Petitioner's contentions and without providing any reasons. The Court also found that the Deputy Commissioner acted without jurisdiction in issuing the refund adjustment order dated 25th July 2019, as he could not have assumed jurisdiction over the dues payable under the Maharashtra Purchase Tax on Sugarcane Act, 1962. The Court noted that it was not shown any provision allowing a Deputy Commissioner under the MVAT Act or CGST Act to exercise jurisdiction under the 1962 Act. Consequently, the impugned refund adjustment order was rendered bad and illegal. The Court quashed and set aside the impugned order dated 21st August 2019, directing that the refund application be restored to the Deputy Commissioner to be decided in accordance with law. The Petitioner was also permitted to make a fresh application under the subsequent enactment, the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2023, which would be decided independently. All contentions of the parties were expressly kept open.

Facts

The Petitioner, Armstrong Infrastructure, filed a writ petition challenging two orders passed by the Deputy Commissioner of State Tax. The first order, dated 25/07/2019, was a refund adjustment order. The second order, dated 21/08/2019, rejected the Petitioner's application for settlement of arrears of tax, interest, penalty, or late fee under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Ordinance, 2019. The Petitioner contended that the rejection order was passed mechanically without reasons and that the Deputy Commissioner lacked the authority to adjust dues under the Maharashtra Purchase Tax on Sugarcane Act, 1962, using provisions of the Bombay Sales Tax Rules, 1959. The Revenue opposed the petition by filing a reply affidavit.

Key Issues

1. Whether the order dated 21st August 2019, rejecting the Petitioner's application for settlement under Section 7 of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Ordinance, 2019, is bad in law for being passed mechanically without assigning reasons, as argued by the Petitioner. The Revenue did not record any specific arguments on this point in the judgment. 2. Whether the Deputy Commissioner of State Tax had the authority to adjust dues under the Maharashtra Purchase Tax on Sugarcane Act, 1962, for the period 2012-13, amounting to Rs. 20,04,467/-, by invoking Rule 51 of the Bombay Sales Tax Rules, 1959, as contended by the Petitioner. The Petitioner argued that there was an intermixing of jurisdiction and that authorities under the MVAT Act and CGST Act could not exercise jurisdiction under the 1962 Act. The Revenue's arguments are not explicitly detailed but were presented through a reply affidavit.