HINDUSTAN PETROLEUM CORPORATION LTD. V. DEPUTY COMMISSIONER and ORS.

WPT/8/2012

AI Insights

In this case, Hindustan Petroleum Corporation Limited challenged the legality and validity of a reassessment notice and subsequent reassessment orders issued by the Deputy Commissioner of Commercial Tax, Chhattisgarh. The petitioner argued that the reassessment was based on a mere change of opinion regarding the tax rates applicable to Light Diesel Oil (LDO) and Furnace Oil (FO), which are distinct commodities. The State contended that the reassessment was justified due to under-assessment and escaping assessment. The court examined whether the reassessment was based on a change of opinion or justified under the law. Ultimately, the court concluded that the reassessment was based on under-assessment and not a change of opinion, thus the petitioner should pursue the matter through the appellate process rather than through writ jurisdiction.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 726309 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 01-06-2012
• Assessment Year: misc
• Other Referred Cases: Calcutta Discount Company v. Income Tax Officer, M.P. Industries Limited v. Income Tax Officer, Foramer v. CRT and others, CIT and another vs. Foramar France, Techspan India Private Ltd. v. ITO, Whirlpool Corporation vs. Registrar of Trade Marks Mumbai and others, S3RF Ltd; v. Commissioner of Commercial Tax, Bangalore, Binani Industries Limited, Kerala vs. Assistant Commissioner of Commercial Taxes, Anna Transport Corporation Ltd. v. State of Tamilnadu, Singh Saw Mills vs. Addl. Sales Tax Officer, Tata Export Limited vs. Commissioner of Sales Tax, M.P.
• Laws Referred To: Article 226/227 of the Constitution of India, C.G. Commercial Tax Act 1994
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SUMESH BAJAJ
• Assessee Lawyers: NEELABH DUBEY
• Keywords: Jurisdiction; Reassessment notice; Tax rate; Under-assessment; Escaping assessment; Change in opinion; Distinct commodities
• Section: 68; 28; 61

Judgement Text

"in IN THE HON'BLE HIGH COURT OF JUDICATURE FOR CHHATTISGARH AT BILASPUR WRIT PETITION (T) No. -^ of 2012 In the matter of: Petitioners ^^^. ^^t^ ^\"^^' y-\" Hindustan Petroleum Corporation Limited,Petroleum hlouse,17, Jamshedji Tata Road, Mumbai 400020 Maharastra, India through Tameezuddin Ahmed Kirmani, S/o Late Z. A. Kirmani, aged about 56 years, C/o Hindustan Petroleum Corporation Limited, 2nd Floor, Madina Manzil, Medical College Road.-CbbattisgaFh, Raipur Cc'^^ Versus Respondents (1) Deputy Commissioner, Commercial Tax, Vanijyik Kar Bhavan, Civil Lines Raipur(C.G.) (2) Commissioner of Commercial Tax, Vanijyik Kar Bhavan, Civil Lines, Raipur(C.G.) (3) State of Chhattisgarh through Secretary Department of Commercial Taxes, D.K.S. Mantralaya Bhavan, Raipur(C.G.) Before : Hon'ble The Chief Justice and his companion iudfles of the Hon'ble High Court of Judicature for Chhattisaarh at Bilasg.yi:. ^f ^ HIGH^OURT OF CHHATTISGARH, BILASPUR SB: HON'BLE SHRI PRASHANT KUMAR MISHRA, J WRIT PETITION (Tl. No. 08 of 2012 The Hindustan Petroleum Corpn. Ltd. Vs. Dy. Commissioner, Commercial Tax and others JUDGMENT/ORDER Postfor (Aune,2012 Sd//- PrasSiant Kumar Mishra Judge /• %f .ay js HIGH COURT OF CHHATTISGARH, BILASPUR //^0^ SB: HQN'BLE SHRI PRASHANT KUMAR MISHRA, J WRITPETITIONLTl.iip.8 of20l2 Vs. WRIT PETITION UNDER ARTICLE 226/227 OF THE CONSTITUTION OF INDIA Appearance: Shri Neelabh Dubey, counsel for the petitioner. Shri Sumesh Bajaj, Govt. Advocate for the State. JUDGMENT/ORDER (1^06.20l2) 1. In this writ petition filed under Article 226/227 of the Constitution of India, the petitioner has called in question the legality and validity of the reassessment notice dated 28.11.2011 (Annexure P-4) issued by respondent No.l, Deputy / Commissioner, Commercial Tax (Headquarter), Chhattisgarh, Raipur as also for quashing the assessment orders dated 26.12.2011 passed by the said Deputy Commissioner vide Annexure P-6. The petitioner has also prayed for declaration fo the effect that product 'Light Diesel Oil' (in short 'LDO') and Purnace Oil (FO) are two separate and distinct commodities and the rate of tax applicable is to be separated @ 12% and 8% as also for a declaration that the reassessraent notices for the year 2002-2003 and 2003-2004 dated 28.11.2011 are barred PETITIONER Hindustan Petroleuin Corporation Ltd. RESPONDENTS Deputy Commissioner, Commercial Tax and others \"'^^T^*?'. '\"wai. fi: % ^' J 's p -9-- by time and thus consequent reassessment orders are bad in law. This writ petition was heard on the question of maintainability in view of the availability of alternative remedy of filing an appeal to challenge the reassessraent orders. Learned counsel for the petitioner would argue that the reassessment notice and subsequent proceedings initiated u/s 28 ofthe Commercial Tax Act is without jurisdiction as the same has been issued on the basis of mere 'change in opinion' and reference to escapement or under-assessment by the Revehue in the impugned proceedings is withoyt any basis. Relying on the judgment of Calcutta Discount Company v. Jncome Tcix Offlcer, 1961 Volume 41 ITR 91; M.P. Industries Limlted v. Income Tax Officer (1965) Vol.57 ITR 637; Foramer v. CRT and others 2001 Vol. 247 ITR 436, Allahabad, (which has been upheld by the Supreme Court in CIT and another vs. Foramar France (2003) Vol. 264 ITR 566 SC) Techspan India Private Ltd., and another vs. ITO, (2006) Vol. 283 ITR 212, Delhi; Whirlpool Corporation vs. Registrar of Trade Mwks Mumbai and others AIR 1999 SC 22, it has been argued that where facts which invest the Income Tax Officer/Revenue with jurisdiction to issue notice do not exist, the assessee may approach the High Court under Article 227 of the Constitution of India. Similarly, it has been urged that where existence of pre-condition required for initiating reassessnient is not available, a writ petition under Article 226 can be entertained and availability of alternative remedy is not a bar. ^'\"lir'-'A 1 .^t. ^..l^ y \"'o11^ '! l;'^iB^z^5 -5- '^3'' -^ ^ 5. Learned counsel for the petitioner as well as learned counsel for the State have also taken this Court to the merits of the case to buttress their respective submissions. The petitioner has tried to establish that LDO and FO are distinct products whereas the State Government has submitted that both the products are one and the same and they would fall under one single entry. However, this Court would refrain from making any opinion on merits of the case as the same would ultimately prejudice the case of either of the parties in the event this writ petition is found to be not maintainable in view of existence of alternative remedy. 6. Admittedly, notice Annexure P-4 has been issued u/s 28 of the C.G. Commercial Tax Act 1994 (henceforth the Act) specifically mentioning therein that during the relevant assessment year, the subject tax has been under-assessed or has escaped assessment or has been assessed at a lower rate. Therefore, the assessment made for the relevant year is required to be reassessed. The petitioner subraitted his reply Annexure P-5 and contested the reassessment proceedings on merits. No where in the reply the/petitioner has raised any objection on the ground that it is based on change of opinion or, notice is barred by limitation. The Deputy Commissioner passed final order on 26.12.2011 (Annexure P-6). The Deputy Commissioner observed that the entries in various schedules to describe different kinds of goods for prescribing different rates of tax should be construed not in any technical or scientific sense but as understood in common parlance and the words must therefore be construed according to their popular sense rfieaning that sense which people conversant with the subject 1 ^ \"%•. ;ri.;.s-\". \".< -5- ^S matter with which the statute is dealing would attribute to it. The Deputy Commissioner has referred to various judgments of the Supreme Court and different High Courts and on the basis of elaborate discussion and reasoning as meritioned in internal page 5 of the order has held that LDO and FO are one and the same product. 7. It appears that the Commissioner, Cominercial Tax, in exercise of its powers under section 68 of the Act has deterrnined the question with regard to the product.C-9 Furnace Oil to hold that the said product and LDO are one and the same product and in-spite of the said determination, the initial assessment was made by applying a lower rate of interest. Therefore, it prima facie appears to be a case of under-assessment and invocation of section 28 of the Act cannot be said to be without any justification or substance. The Deputy Commissioner has not issued the notice and has not made the order of consequent reassessment merely on the basis of change of opinion but it is a case of under-assessment. It is also to be noted that the assessing authority has not issued the notice on the basis of any new circsular or decision, but the reassessment order has been' passed on the ground that inspite of there being a determination by the Commissioner u/s 68 of the Act in the matter of Sarath Chandra Tiwari, Jabalpur holding that LDO and FO are one and the same product, assessment was made at a lower rate and it is a case of under-assessment and thus there is no change of opinion in the matter. 8. In view of the above, this Court is of the considered opinion that since the reassessment order has already been passed on ^•VKl fc'.. ¥ fc '^u I :, 'l / -6- ^ merits and the proceedings are not based on aecount of change in opinion, the petitioner has alternative remedy of filing an appeal u/s 61 of the Act. 9. Accordingly, this writ petition is dismissed as hot maintainable. The petitioner may avail the alternative remedy of preferring an appeal within a period of 30 days from today. Mishra ¥t^aBt?BInar Judge Rao - (Wi "