Lupin LTD vs. State Of Gujarat

Held

The Court held that the impugned notices for revision were unsustainable as they were issued beyond the period of limitation prescribed under Section 75 of the VAT Act. The Court referred to its previous judgments in Reliance Industries Ltd. vs. State of Gujarat, Om Metals & Minerals Ltd. v. Assistant Commissioner of Sales Tax (Appeals), M/s Tiger Steel Engineering (I) Pvt. Ltd. v. State of Gujarat, and S.K.Industries v. State of Gujarat, which consistently held that the Commissioner's suo motu power to call for and examine records for revision must be exercised within three years from the date of the order. In this case, the assessment orders were passed on March 30, 2013, and the revision notices were issued on December 11, 2017. The Supreme Court judgment, delivered on September 22, 2017, did not extend the limitation period for initiating revision proceedings. Therefore, the action of the Additional Commissioner in calling for the record and issuing the revision notice was beyond the prescribed limitation. The ratio decidendi is that revisional powers must be exercised within the statutory time limits, and subsequent events or judgments do not revive time-barred powers unless explicitly provided by law. The Court quashed the respective notices in each petition.

Facts

The petitioner, Lupin Ltd., engaged in the manufacture and sale of drugs, claimed input tax credit (ITC) on raw materials, including fuel, for its VAT liabilities. The department contended that the petitioner should suffer a reduction in ITC twice, based on specific clauses of Section 11 of the VAT Act. This issue was previously decided by the High Court in favour of the assessee, but the Supreme Court reversed this decision in State of Gujarat vs. Reliance Industries Limited. Following the Supreme Court's judgment, the Commissioner issued notices for suo motu revision of the petitioner's assessments. The petitioner challenged these notices, arguing they were issued beyond the prescribed limitation period. The assessment orders were passed on March 30, 2013, and the Supreme Court judgment was delivered on September 22, 2017. The Commissioner initiated revision proceedings by issuing notices on December 11, 2017.

Key Issues

1. Whether the notices for suo motu revision issued by the Commissioner are barred by limitation under Section 75 of the VAT Act, considering the assessment orders were passed on March 30, 2013, and the revision notices were issued on December 11, 2017. Petitioner's contention: The petitioner argued that the Commissioner's suo motu revisional powers are limited to three years from the date of the assessment order. Since the revision notices were issued on December 11, 2017, which is more than three years after the assessment orders dated March 30, 2013, the notices are beyond the period of limitation. Revenue's contention: The judgment does not record any specific contention from the revenue regarding the limitation period. However, the issuance of the notices implies a belief that they were within the permissible time frame or that the Supreme Court judgment provided a basis for revision even if time-barred.