M/S DOZCO INDIA PVT. LTD. V. COMMISSIONER OF COMMERCIAL TAX,

TAXC/87/2023

AI Insights

The case involves M/s Dozco India Pvt. Ltd., which appealed against an ex parte order directing it to deposit tax, penalty, and interest. The appeal was dismissed at various levels, including the Tribunal, which found no sufficient evidence to substantiate the petitioner's claims. The petitioner sought a reference to the High Court under Section 55(1) of the Act, which was refused by the Tribunal. The High Court's jurisdiction in this context is advisory, and it does not exercise appellate or supervisory powers over the Tribunal's decisions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 745613 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 26-09-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd., Petlad Turkey Red Dye Works Co. Ltd. v. Commissioner of Income-tax, Bombay North, Commissioner of Income-tax, Delhi v. Bansi Dhar and Sons, Securities and Exchange Board of India v. Mega Corporation Limited
• Laws Referred To: Chhattisgarh Value Added Sales Tax Act, 2005
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAHUL TAMASKAR
• Assessee Lawyers: VIVEK CHOPDA
• Keywords: Appeal; Appellate Authority; Best judgment; Ex parte order; High Court; Interest; Jurisdiction; Penalty; Reference; Tax; Tribunal
• Section: 55(1); 55(2)(b); 48(1); 21(5); 21(5); 48(2)

Judgement Text

"Page 1 of 13 (Tax Case No.87/2023) 2024:CGHC:38041-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 87 of 2023 M/s Dozco India Pvt. Ltd., Through its Director/Authorized Signatory Mr M.J. Rao, Aged about 56 years, Having its office at Tifra Industrial Area, Tifra, Bilaspur, Chhattisgarh. ... Petitioner versus Commissioner of Commercial Tax, Behind Raj Bhavan, Civil Lines, Raipur. ... Respondent For Petitioner : Mr. Vivek Chopda, Advocate. For Respondent/State : Mr. Rahul Tamaskar, Govt. Advocate. Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Amitendra Kishore Prasad, JJ. Order on Board (26/09/2024) Sanjay K. Agrawal, J. 1. In an appeal preferred under Section 55(2)(b) of the Chhattisgarh Value Added Sales Tax Act, 2005 (for short, ‘the Act of 2005’), the short question involved is to the scope and ambit of the jurisdiction of this Court under Section 55(2)(b) of the Act of 2005 to require the Board / Tribunal to make a reference on refusal of the Chhattisgarh SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2024.10.04 14:32:12 +0530 Page 2 of 13 (Tax Case No.87/2023) Commercial Tax Tribunal, Raipur (for short, ‘the Tribunal’) to make a reference under Section 55(1) of the Act of 2005 finding no question of law arises out of the order of the Tribunal, in the instant case, dated 28-10-2022? 2. In order to consider the plea raised at the Bar, it would be appropriate to notice the relevant facts which would be absolutely necessary to decide the question. 3. The petitioner herein is registered under the provisions of the Act of 2005 and held TIN No.22824205936 and engaged in the business of purchase and sale of Heavy Earth Moving Machines (HEMM). This dispute relates to the financial year commencing from 1-4-2015 to 31-3-2016 and the petitioner was subjected to ex parte order dated 26- 2-2020 based on best judgment by the assessing authority in terms of Section 21(5) of the Act of 2005 directing the petitioner herein to deposit an amount of 1,39,042/- ₹ towards tax, penalty and interest as well. Feeling aggrieved against the said ex parte order, the petitioner herein has preferred an appeal under Section 48(1) of the Act of 2005 before the appellate authority which was dismissed finding no sufficient evidence produced by the petitioner to substantiate his point raised in the appeal which was subjected to second appeal before the appellate authority Page 3 of 13 (Tax Case No.87/2023) under Section 48(2) of the Act of 2005 which was also dismissed by order dated 28-10-2022 passed by the Chhattisgarh Commercial Tax Tribunal, Raipur holding that the petitioner has failed to produce books of accounts to the authority to its satisfaction and the order passed by the assessing authority affirmed by the appellate authority is in accordance with law. The petitioner finding that the ex parte order of the assessing authority dated 26-2-2020 passed by the Assistant Commissioner, Commercial Tax, Bilaspur Division No.1 was affirmed by the appellate authority by order dated 2-8-2021 passed by the Additional Commissioner, Commercial Tax, Chhattisgarh, and that his further appeal under Section 48(2) of the Act of 2005 was also dismissed by the Tribunal by order dated 28-10-2022, invoked the reference jurisdiction of the Tribunal and power to be exercised by the Tribunal under Section 55(1) of the Act of 2005 requiring the Board / Tribunal to refer the matter to the High Court, as question of law arises out of the order dated 28-10-2022 passed by the Tribunal. However, by the impugned order dated 12-4-2023, the Tribunal has refused to make reference to this Court and in view of that, the petitioner has filed application under Section 55(2) of the Act of 2005 to require the Tribunal to make reference. This is how the matter is before us to Page 4 of 13 (Tax Case No.87/2023) consider as to whether appropriate order can be passed requiring the Board / Tribunal to make reference. 4. Mr. Vivek Chopda, learned counsel appearing for the petitioner, would submit that from the order dated 28-10- 2022 passed by the Tribunal, question of law has arisen which was set out by the petitioner in the application under Section 55(1) of the Act of 2005 and which has not been considered and the application for making reference has been refused though there was sufficient ground to make reference. 5. Mr. Rahul Tamaskar, learned Government Advocate appearing for the respondent / Revenue, would submit that the Tribunal has clearly recorded a finding that question of law does not arise for consideration out of the order dated 28-10-2022 and therefore the Board / Tribunal has rightly declined jurisdiction under Section 55(1) of the Act of 2005 and as such, the present tax case deserves to be rejected, as the reference jurisdiction is advisory jurisdiction and sufficient ground has been recorded by the Tribunal to reject the application for reference filed under Section 55(1) of the Act of 2005. Page 5 of 13 (Tax Case No.87/2023) 6. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection. 7. In order to consider the plea raised at the Bar, it would be appropriate to notice Section 55 of the Act of 2005, which states as under: - “55. (1) With in sixty days from the date of communication by the Board of any order to as dealer or to the commissioner under section 48 or section 49 or section 56 the dealer or the commissioner may, by application in writing accompanied, where the application is made by a dealer by a fee of one hundred rupees, require the Board to refer to High Court any question of law arising out of such order and where the Board decides to make a reference to the High Court, it shall draw up statement of the case and refer it accordingly. (2) If for reasons to be recorded in writing, the Board refuses to make a reference, the applicant may within sixty days from the date of communication of such refusal- (a) withdraw his application and if he does so, the fee paid shall be refunded, or (b) apply to the High Court to require the Board to make a reference. (3) If upon the receipt of an application under clause (b) of sub-section (2) the High Court is satisfied that the refusal was not justified, it may require the Board to state case and refer it, and on receipt of such requisition, the Board shall act accordingly. (4) If the High Court is satisfied that the case stated is not sufficient to enable it to determine the question of law raised, it may call upon the Board to Page 6 of 13 (Tax Case No.87/2023) make such additions of alterations as the Court may direct in that behalf. (5) The High Court upon the hearing of a reference under this section shall decide the question of law raised therein and shall deliver judgment thereon containing the grounds of decision and shall send to the Board a copy of the judgment under the seal of the Court and the signature of the Registrar, and the Board shall dispose of the case accordingly. (6) to (9) xxx xxx xxx” 8. A careful perusal of Section 55(1) of the Act of 2005 would show that power of the Board (in this case, the Tribunal) to make reference to the High Court must arise from the subject order, in this case, the order of the Tribunal / Board dated 28-10-2022. 9. Reference jurisdiction is consultative / advisory jurisdiction of the High Court which he renders on opinion being asked and it is purely advisory in nature. The High Court in the reference jurisdiction is to extend its advise in its jurisdiction which is advisory in nature and purely consultative in nature to enable the referring Tribunal to dispose of the matter, as the case may be, on the basis of opinion given by the High Court. The law in this regard is very well settled. 10. Way back in the year 1961, in the matter of Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Page 7 of 13 (Tax Case No.87/2023) Ltd.1, a Constitution Bench of the Supreme Court has held in no uncertain terms that reference jurisdiction or special jurisdiction is different from appellate or supervisory jurisdiction. The Supreme Court while considering jurisdiction of the High Court in a reference under Section 66 of the Indian Income-tax Act, 1922 has held that the High Court hearing a reference under that section did not exercise any appellate or revisional or supervisory jurisdiction over the Tribunal. It acted purely in an advisory capacity on a reference which properly came before it under Section 66(1) and (2) of the 1922 Act. Their Lordships have also held that the High Court gives the Tribunal advice, but ultimately it is for the Tribunal to give effect to that advice. Their Lordships further held that it was the essence of such a jurisdiction that the Court shall decide only questions which were referred to it and not any other questions. Similar is the proposition of law laid down in the matter of Petlad Turkey Red Dye Works Co. Ltd. v. Commissioner of Income-tax, Bombay North2 in which their Lordships have observed that the jurisdiction of the High Court was confined to giving an opinion. It was purely advisory and the High Court had no jurisdiction to direct the Tribunal to take fresh evidence. 1 AIR 1961 SC 1633 2 AIR 1963 SC 1484 Page 8 of 13 (Tax Case No.87/2023) 11. The decision in aforesaid two cases i.e. Scindia Steam Navigation's case (supra) and Petlad Turkey Red Dye Works (supra) has been followed with approval by the Supreme Court in the matter of Commissioner of Income- tax, Delhi v. Bansi Dhar and Sons3. 12. The jurisdiction of the Tribunal under Section 55(1) of the Act of 2005 for making reference is confined only to the question of law which arises out of the order of the Tribunal / Board. 13. On a ‘textual’ interpretation, the expression ‘question of law’ is defined in the Black’s Law Dictionary4 as under: - “1. An issue to be decided by the judge, concerning the application or interpretation of the law; 2. A question that the law itself has authoritatively answered, so that the Court may not answer it as a matter of discretion; 3. An issue about what the law is on a particular point; an issue in which parties argue about, and the court must decide what the true rule of law is; 4. An issue that, although it may turn on a factual point, is reserved for the court and excluded from the jury; an issue that is exclusively within the province of the judge and not the jury.” 14. The Supreme Court in the matter of Shakuntala Chandrakant Shreshti v. Prabhakar Maruti Garvali and another5 has also held that a question of law would arise 3 AIR 1986 SC 421 4 Black's Law Dictionary, 10th Edition p. 1442 5 (2007) 11 SCC 668 Page 9 of 13 (Tax Case No.87/2023) when the same is not dependent upon examination of evidence, which may not require any fresh investigation of fact, and observed as under: - “42. A question of law would arise when the same is not dependent upon examination of evidence, which may not require any fresh investigation of fact. A question of law would, however, arise when the finding is perverse in the sense that no legal evidence was brought on record or jurisdictional facts were not brought on record.” 15.The expression “any question of law arising out of such order” employed in Section 55(1) of the Act of 2005 has been used by the competent legislature in various statutes. Section 15Z of the Securities and Exchange Board of India Act, 1992 also uses the expression “any question of law arising out of such order”. Dealing with the said expression “any question of law arising out of such order” employed in Section 15Z of the SEBI Act, the Supreme Court in the matter of Videocon International Ltd. v. Securities Exchange Board of India6 held that the said provision curtailed and restricted the scope of the appeal against an order passed by the Securities Appellate Tribunal, and observed as under: - “38. … A right of appeal may be absolute i.e. without any limitations. Or, it may be a limited right. The above position is understandable, from a perusal of the unamended and amended Section 15- Z of the SEBI Act. Under the unamended Section 6 (2015) 4 SCC 33 Page 10 of 13 (Tax Case No.87/2023) 15-Z, the appellate remedy to the High Court, against an order passed by the Securities Appellate Tribunal, was circumscribed by the words “… on any question of fact or law arising out of such order”. The amended Section 15-Z, while altering the appellate forum from the High Court to the Supreme Court, curtailed and restricted the scope of the appeal, against an order passed by the Securities Appellate Tribunal, by expressing that the remedy could be availed of “… on any question of law arising out of such order”. It is, therefore apparent, that the right to appeal, is available in different packages, and that, the amendment to Section 15-Z, varied the scope of the second appeal provided under the SEBI Act.” 16.Recently, their Lordships of the Supreme Court in the matter of Securities and Exchange Board of India v. Mega Corporation Limited7 relying upon their earlier decision in Videocon International Ltd. (supra) considering the expression ‘question of law’ held as under: - “16. Phrases such as, ‘question of law’, are open textual expressions, used in statutes to convey a certain meaning which the legislature would not have intended to be read in a pedantic manner. When words of the Sections allow narrow as well as wide interpretations, courts of law have developed the art and technique of finding the correct meaning by looking at the words in their context. In Reserve Bank of India v. Peerless General Finance Investment Company Ltd.8, Justice O. Chinnappa Reddy, observed: “33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. 7 2022 SCC OnLine SC 361 8 (1987) 1 SCC 424 Page 11 of 13 (Tax Case No.87/2023) That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the stature is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place……” 17.In light of the aforesaid interpretation of the expression “any question of law arising out of such order” employed in Section 55(1) of the Act of 2005, it appears that power and jurisdiction of the Board / Tribunal to make reference to this Court is restricted and confined to any question of law arising out of such order and furthermore, power and jurisdiction under Section 55(1) of the Act of 2005 is not the appellate or revisional power, rather power and jurisdiction of the Board / Tribunal is to seek advise on any question of law which the Board / Tribunal finds it unanswered and feels it expedient to make a reference and therefore in order to have an authoritative pronouncement Page 12 of 13 (Tax Case No.87/2023) on the issue, the Board / Tribunal invoking its advisory jurisdiction can seek an opinion from this Court under Section 55(1) of the Act of 2005. 18.Reverting to the facts of the case in light of the aforesaid decisions of the Supreme Court, it has to be ascertained as to whether any question of law is involved in the order of the Tribunal dated 28-10-2022 against which reference was sought by this Court and which the Tribunal has refused. A careful perusal of the order dated 28-10-2022 would show that factual issues with regard to concessional rate of tax and interest on delayed payment of tax are raised which the Tribunal while considering the application under Section 55(1) of the Act of 2005 held to be a pure and simple finding of fact, and observed as under: - “3. All the issues are factual. The applicant is raising factual controversy in the reference application which is already decided as per factual matrix and legal aspect of the matter. Reopening of factual controversy is not permissible in reference application. No case is made out for referring the question mentioned in the application.” 19.In that view of the matter, the Tribunal has rejected the application under Section 55(1) of the Act of 2005. In our considered opinion, no question of law has arisen for reference by the Tribunal and in that view of the matter, the Tribunal is justified in rejecting the application for Page 13 of 13 (Tax Case No.87/2023) making reference to this Court and therefore we decline to invoke the jurisdiction of this Court under Section 55(3) of the Act of 2005 by holding that the refusal was justified. Accordingly, the application under Section 55(2)(b) of the Act of 2005 is hereby dismissed. Sd/- Sd/- (Sanjay K. Agrawal) (Amitendra Kishore Prasad) Judge Judge Soma "