Cause title — parties, addresses and appearances
HON'BLE SRI JUSTICE U. DURGA PRASAD RAO
AND
HON’BLE MS JUSTICE J. UMA DEVI
Writ Petition No.3312 of 2021
ORDER: (Per UDPR,J)
The short but important question involved in this writ petition is,
whether a review contemplated under Section 67(5) of Andhra Pradesh
Value Added Tax, 2005 (for short “AP VAT Act”) can be undertaken
only by the Authority for Clarification and Advance Ruling ( for short
‘ACAR’) by exercising suo motu power or whether a dealer who
invited clarification and advance ruling from ACAR can also seek for
review being not satisfied with its order?
2.
The factual matrix of the case shorn of unnecessary details are thus:
(a)
The petitioner is a Government of India Enterprise dealing with
natural gas i.e., buying and selling of natural gas as per the directives of the
Government of India from time to time. It obtained VAT registration. In
the matter of purchasing of natural gas from Ravva-1 and Ravva Satellite of
Cairn India Limited during the period from 01.12.2008 to 31.10.2014 as per
the guidelines issued by the Ministry of Petroleum and Natural Gas
(MOPNG), GOI, the petitioner claimed Input Tax Credit (ITC) of
Rs.16,70,84,426/- against the tax payable for the month of November, 2016
and disclosed in the Form VAT-200 for that month and paid the balance tax.
The petitioner wanted to clarify the correctness of its claim of ITC and thus
submitted an application dated 20.12.2016 seeking clarification through
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advance ruling. Since no order was passed, the petitioner filed another
application dated 30.04.2019 seeking advance ruling and finally an order
dated 15.02.2018 was passed by ACAR and served vide letter of the
Additional Commissioner (ST) DMU, VAT which was received by the
petitioner on 25.09.2020. The ACAR in its order held that the clarification
application was filed with a design to avoid the payment of tax due to the
State of Andhra Pradesh and on that ground alone the clarification
application was liable to be rejected. On merits also, it held that the natural
gas and relevant tax invoices were received at least two years earlier to the
month of November, 2016 and therefore, the claim of ITC made in the
month of November, 2016 was belated one in violation of Section 13(1) of
AP VAT Act. The Authority observed, the ITC claim is legally
impermissible and unsustainable.
(b)
Aggrieved by the said order, the petitioner preferred an appeal
(TA.02/2021) before the A.P. VAT Appellate Tribunal, Visakhapatnam
dated 19.10.2020 and the same is pending.
(c)
Pending appeal, the 1st respondent issued notice of Assessment of
VAT dated 12.11.2020 proposing to reject the claim of ITC of
Rs.16,70,84,426/- which was claimed through the VAT returns for the
month of November, 2016. The petitioner filed objections against the said
notice vide its letters dated 04.12.2020 and 15.12.2020. The 1st respondent
issued another revised notice. As there was an urgency involved for the
disposal of the appeal pending before the Tribunal, the petitioner vide memo
dated 17.12.2020 approached the Tribunal seeking hearing of the appeal on
out of turn basis. Since the Tribunal was functioning only half a day for a
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week i.e., on every Friday and as the Chairman of the Tribunal is
functioning as Full Additional Charge and holding regular post of Principal
District & Sessions Judge, Visakhapatnam and also due to lack of quorum,
the Tribunal could not take up the appeal. In those circumstances as there
was no possibility of immediate disposal of the appeal (TA.02/2021) by the
Tribunal, the petitioner filed review petition dated 14.12.2020 seeking
review of the order of the ACAR dated 15.02.2018 mentioning certain
reasons in its review application. In view of the urgency involved in the
matter, the petitioner vide letter dated 22.12.2020 approached the 3rd
respondent and requested to direct the ACAR to hear the review petition on
priority basis. However, the 3rd respondent issued an endorsement in CCT’s
Ref.No.AR.Com 432 of 2016 dated 31.12.2020 stating that the review
envisaged under Section 67(5) of AP VAT Act is at the instance of the
Authority for Clarification and Advance Ruling but not on an application by
the petitioner and hence the application for review of advance
ruling/clarification issued cannot be entertained.
Hence, the writ petition.
3.
Heard Sri A. Sarsweswara Row, learned counsel for petitioner and
learned
Government
Pleader
for
Commercial
Taxes
representing
respondents.
4.
While admitting that against the impugned ruling of the ACAR, the
petitioner filed appeal before A.P. VAT Appellate Tribunal, Visakhapatnam
and the same is pending, learned counsel for petitioner, however, submits
that due to vacancy of the post of Chairman of the Tribunal, learned
Principal District and Sessions Judge, Visakhapatnam has been officiating as
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Full Additional Charge of the post of Chairman, A.P. VAT Appellate
Tribunal and taking up the matters only half a day on every Friday and in
those circumstances his appeal could not be taken up and hence in order to
get speedy justice, the petitioner filed review application and submitted
request letter to 3rd respondent to direct the ACAR to hear the petitioner on
priority basis. However, the 3rd respondent on misconception of law, made
endorsement as if the review at the instance of the applicant is not
entertainable and review can be taken up suo motu by the ACAR only. He
would submit that in a number of matters, the ACAR has taken up the
review applications filed by the concerned applicants. He filed copies of the
orders in A.R.Com/92/2013 dated 08.06.2016 and A.R.Com/116/2007,
dated 28.04.2010. He thus prayed to set aside the impugned endorsement of
the 3rd respondent and direct the respondent 2 and 3 to take up the review
petition at the earliest.
5.
Per contra, learned Government Pleader for Commercial Taxes would
argue that the review petition is not maintainable since the petitioner has
already filed an appeal against the order of the ACAR and the same is
pending.
6.
We gave our anxious consideration. The first and foremost question
that engages with us is:
(1) Whether a review petition maintainable at the instance of the
dealer or it is maintainable only under the suo motu power of the
ACAR?
7.
Section 67 deals with the clarification and advance rulings. The
Section reads thus:
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“67. Clarification and Advance Rulings:-(1)The Commissioner may
constitute a State level ‘Authority for Clarification and Advance Rulings’
comprising of 3 officers not below the rank of Joint Commissioner to
clarify, in the manner prescribed any aspect of the implementation of the
Act.
(2) No application shall be entertained where the question raised in the
application:-
(i) is already pending before any officer or authority of the
Department or Appellate Tribunal or any Court;
(ii) relates to a transaction or issue which is designed apparently
for the avoidance of tax:
Provided that no application shall be rejected under this sub-section
unless an opportunity has been given to the applicant of being heard and
where the application is rejected, reasons for such rejections shall be
recorded in the order.
(3) No officer or any other authority of the Department shall proceed to decide any issue in respect of which an application has been made by an applicant under this Section and is pending.
(4) The order of the authority shall be binding:-
(i) on the applicant who had sought clarification; (ii) in respect of the goods or transaction in relation to which a clarification was sought; and (iii) on all the officers other than the Commissioner:
Provided the dealer does not file an appeal before Sales Tax Appellate Tribunal within 30 days of the Ruling in the manner prescribed.
(5) The authority for clarifications shall have power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties.
An order giving effect to such review or amendment or revocation shall not be subject to the period of limitation.
(6) The Commissioner may also refer any matter for opinion of the Authority for clarification without prejudice to his authority.”
Sub-Section (5) pellucidly tells that authority for clarifications shall have the power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties. It says that an order giving affect to such review or amendment or revocation shall not be subject to the period of limitation. What all Rule-5 pronounces is the power of ACAR to review, amend or revoke its ruling. A plain reading of this provision does not in restricted terms say that the aforesaid power is
6 only a suo motu power i.e., exercisable by ACAR on its own proposition and not by the application of the dealer or other affected parties. Thus, in our considered view, the review can be taken up also on the application by the dealer and other affected parties. This aspect has been dealt by a Division Bench of Common High Court of Andhra Pradesh in Tirupati Chemicals and Ors. V. The Deputy Commercial Tax Officer and Ors1, it was observed thus:
“44. The submission that it is only the applicant who can seek review of the ruling of the ARA under Section 67(5) of the Act is not tenable. On a literal construction thereof, it cannot be said that the power of review under Section 67(5) can only be exercised by the ARA suo motu or at the instance of the applicant-dealer, for the words used therein are "affected parties". Any dealer who is affected by the ruling/ clarification of the ARA would also be entitled to seek review, amendment or revocation of such a ruling. As Section 67(4)(ii) also binds dealers, other than the applicant, they would fall within the ambit of "affected parties" under Section 67(5) of the Act [emphasis supplied]. Unlike the proviso to Section 67(4) where a time limit of 30 days is prescribed for the applicant-dealer to prefer an appeal before the STAT against the ruling of the ARA, Section 67(5), by the use of the words 'at any time', does not prescribe any period of limitation for invoking the ARA's power to review, amend or revoke its earlier ruling. All that is required of an affected dealer, to invoke the said provision, is to show "good and sufficient cause" for seeking review, amendment or revocation of the earlier ruling
(a) Further, order in A.R.Com/92/2013 dated 08.06.2016 and other order in A.R.Com/116/2007, dated 28.04.2010, copies of which are filed along with the material papers by the petitioner, would also show that earlier the ACAR has taken up the review proceedings on the application of concerned dealers and answered them. In the light of above law, the impugned
1 (2011) 52 APSTJ 48 = MANU/AP/0890/2010
7 endorsement dated 31.12.2020 passed by the 3rd respondent is not sustainable.
8.Hence, it is clear that the review petition is maintainable at the instance of the dealer who is affected by the ruling of ACAR.
Then coming to the argument of the learned Government Pleader that since the petitioner has already filed the appeal and the same is pending and therefore, the review petition is not maintainable is concerned, we do not find force in the said argument in view of the peculiar facts and circumstances. It is true that the petitioner filed the appeal before the VAT Tribunal. However, since the regular Chairman of the Tribunal is not functioning and as the Principle District & Sessions Judge, Visakhapatnam is holding the functions of the Tribunal as a Full Additional Charge only half-a-day for a week and in the meanwhile the notice of assessment of VAT dated 12.11.2020 was issued by 1st respondent, the petitioner has no other go except filing a review petition before ACAR. However, we direct that upon review petition being numbered by virtue of this order, the petitioner shall withdraw the appeal pending before the VAT Tribunal and then only proceed with the review petition.
9.Accordingly, the writ petition is allowed and the endorsement in CCT’s Ref.No.AR.Com 432 of 2016 dated 31.12.2020 issued by the 3rd respondent is hereby set aside and consequently, the 2nd respondent is directed to consider the review petition dated 14.12.2020 filed by the petitioner and afford personal hearing to the petitioner and pass appropriate
8 orders therein expeditiously but not later than eight (8) weeks from the date of receipt of a copy of this order. No costs. As a sequel, interlocutory applications, if any, pending for consideration shall stand closed.
_________________________ U. DURGA PRASAD RAO, J
______________ J. UMA DEVI, J 21st June, 2021 krk
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THE HON'BLE SRI JUSTICE U.DURGA PRASAD RAO AND HON'BLE MS. JUSTICE J. UMA DEVI
Writ Petition No. No.3312 of 2021
21st June, 2021 krk
