The Sales Tax Appellate Tribunal vs. M/S.Dr.Reddys Laboratories Limited

The brief facts of the case are that, the respo rdent/assessee, was on the rolls of the Assistant Commissi rner(CT) (LTU), Punjagutta Division, Hyderabad. The Deputy Co:.missioner (CT), Punjagutta, had submitted refund claim c I the assessee

Assailing the said order of the Joint Comlnissioner, the respondent/assessee filed an appeetl before the learned STAT in TA.No.428 of 2008. The learned STAT, a-fter appreciation of the facts and evidence on record, allowed the appeal by setting aside the orders of the Joint Comrnissioner, dt.O6.O4.2008 and directed the Assessing Authorily to grant the refund to the respondent/ assessee on the closing stock as on O1'04.2005, challenging the said order, the petitioner/ Revenue has frled the instant Tax Revision Case.

Heard Sri T.Chaitanya Kiran, learned Asstste nt Government Pieader for State Tax appea-r-ing for the petitioni r/Revenue, Sri Raghav Chadha, learned counsel representing Sn L ztrthik Ramana Puttam Reddy, learned counsel for the respondentT assessee

The iearned Assistant Goven-.ment Pleadcr ;eprcsenting thc petitioner/ State contended that the iealned STAT fai 3d to appreciate the fact that there was no violation of principles of r r tural justice. It was contended that although the Joint Commissionr,' , u,ho heard the revision proceedings namely Sri Dr.K.Ravindra, on 15. ).3.2007, \A'as not the officer, who has passed the irnpugned order, the sur:cessor Joint Commissioner, Sri K.Raghavaiah, passed the impugrr rrl order revising the order of the Deputy Commissioner, only after dul considering the facts-and material available on record. Thus, it is c:: rtended that the learned STAT grossly erred in reversing the well < rnsidered order, dt.06.04.2OO8, passed b5; the Joint-Commissioner.

The learned Assistant Government Pleader rr the respondent/ assessee has not furnished the det showing that they are purchased prior to 31.03.200: STAT has not appreciated the facts on proper persp( ( reversing the u,ell considered findings of the Joint (l so contends that uls ol the stock and the learned tive and erred in rmmissioner and 4 there is no violation of principles of natural justice as the incumbent Joint Commissioner, after perusing the material on record, passed the impugned order under appeal beforc the learncd STAT

Per contra, Iearned counsel for the responden t/assessee contended that the order of the Joint Commissioner was vitiated on the ground of violation of principles of natura-l justice, as the matter was heard by one Sri Dr.K.Ravindra, the then Joint Commissioncr on 15.O7.2OO7, the Sltccessor-in-Office i.c., Dr.K.Ragavaiah, without affording any opportunity, passed the impugned order revising arrd setting aside the orders passed by the Deputy Commissioner(CT), Punlagutta, and the learned STAT appreciated the said fact ancl held that there is viola.tion of principles of natural justice.

The other contention raised by the respondent/ assessee was that uncler Section 13 of the VAT Act, input ta-x credit is a-llou'able to a VAT dealer irr respect of tax paid on pu:chases of taxable goods used in the course of business, in terms of Sche<lu1e VI.(2)(a), which entitles a dcaler registered as a VAI dealer'on the date of commencement of VAT Act, to claim input tax credit fcr the r^)

It tvas further contended by the (1,) tnsel for the respondent/assessee that the learned STAT, aftc examining the evidence and statutory provisions, categorically ,leld that there was clear violation of principles of natural jr stice artd also misinterpretation of Seclion 13 of the VAT A r t b1, the Joint Commissioner u,hile refusing the input tax crec r for the goods, purchased from 01.04.2004 to 31.03.2005, ancl thus, contends that the learned STAT, on both counts, has ri11 rtly allowed the appeal and directed the Assessing Authority to qrant input tax credit to the respondent/assessee for the disprr ed stock period and prayed to dismiss the instant tax revision cas,

The main contention of the learned Assistant Government Pleader for the petitioner/ Revenue is that, even assuming that there rvas violation of the principles of natural justice as the ofhcer who heard the revision did not pass the revision order, the said ordcr ought to be sustained as it rvas passed by the incumbent offrcer after considering the facts and materials on record.

In the considered view of this Court, the said contention cannot be accepted, in the facts and circumstances of the case, as the affected party is the respondent/ assessee, who was denied the right of ar.tdience b), the successor Joint Commissioner and inasmuch as the respondent/ assessee challenged the said order before the learned STAT, which, after hearing both parties, recorded a categcrical finding that there was a violation of the principles of natural justice and, on that ground also, the order of the Joint Con:rmissioner was held to be uoid and non est in the eye of law.

Further, the learned STAT, upon proper appreciation of Section 13 of the VAT Act, held that a dealer registered as a VAT

As such, the findings recorded by the learr t cl STAT on both counts namely violation of principles of nat'-l -a-l justice and entitlement to input tax credit under Section 1li of the VAT Act, are well reasoned, justified and based on prop(,l appreciation of Iaw and facts, and needs no interference by this t) rurt

The substantial question of law is acco: Iingly answered against the petitioner/Revenue and in avour of the ( ( I t

In the result, the Tax Revlsion Case is dismissed confirming the order, dt.01.06.2009, passed by the learned STAT in TA.No.428 of 20O8. No order as to c,rsts. As a bequel thereto, miscellaneous petitions. if any, pending shall stand closed. D/- L. LAKSHMI BABU DEPUTY REGISTRA //// CTION OFFICER 1 . The Registrar, Sales Tax Appellate Tribunal, A hr Pradesh, Hyderabad (With Records) Z. bne CC to Sri'T.Chartanya Kiran, Advocate (OPUC

One CC to Sri Karthik Ramana, Advocate (OPUU)

Two CD CoPies Ks/PSL ) o \