Read :- 1. An
application dt. 6th August, 2006 is received from
M/s. Vinod Stainless Steel Works.
Heard:- Shri G. S.
Jetly, Sr. Advocate alongwith Shri Rajiv S. Jetly, C.A.
attended on 17/08/2006.
PROCEEDINGS
(Under section 24 of
the Maharashtra Value Added Tax Act, 2002)
No.
DDQ-11-2005/Adm-5/65/B-01
Mumbai,dt.11.09.2006
An
application dated 6th June, 2005 is received from
M/s. Vinod Stainless Steel Works requesting for
rectification of the determination order DDQ Order No.
DDQ-11-2005/Adm-5/65/B-3 dt. 10th April, 2006.
BACKGROUND OF
THE CASE
02.
The applicant had applied to this office earlier for
determination of the tax rate applicable to his products
1]Deluxe Hot Tiffin,
2] Hot Casserole,
3] Hot Pot
The
applicant had applied under the Bombay Sales Tax, 1959 as
well as the Maharashtra Value Added Tax Act, 2002. Both the
cases were kept for hearing on a common date. The
determination orders under both the Acts were passed by
orders as follows :-
[1] No.DDQ-11-2005/Adm-5/17/B-1 Mumbai, dt. 13/03/2006 under
the
Bombay
Sales Tax, 1959
[2]
No.DDQ-11-2005/Adm-5/65/B-3 Mumbai, dt.
10/04/2006
under the
Maharashtra Value Added Tax Act, 2002
In both
the above orders, the prayer of prospective effect to the
determination, if held otherwise, was considered.
Under the
Bombay Sales
Tax, 1959, the liability of the applicant as regards the
products, Hot Pot, Hot Casserole and Deluxe Hot Tiffin, was
protected for the period starting from 1/1/1996 and ending
upto 23/11/2004.
Under the
Maharashtra Value Added Tax Act, 2002, the applicant's
prayer being not supported by convincing reasons, the same
was not accepted.
DETAILS
SUBMITTED ALONGWITH THE APPLICATION
03.
The applicant has submitted the following documents in
connection with the present application
for rectification :-
i) A copy
of the Trade Circular issued by the Gujarat Sales Tax
Department.
ii)
A copy
of the judgment in the case of Stovekraft Pvt. Ltd. v. State
of Karnataka [2006] – [147 STC 329 (Karnataka High Court)].
iii)
A copy
of the relevant portion from the Schedule ‘C’ of the Gujarat
Sales Tax Act.
CONTENTION AND
HEARING
04.
The case was fixed for hearing on 17/08/2006 when Shri G. S.
Jetly, Sr. Advocate alongwith Shri Rajiv S. Jetly,
C.A. attended.
It is stated that at
the time of hearing of both his applications, i.e., under
the
Bombay Sales
Tax, 1959 as well as the Maharashtra Value Added Tax Act,
2002, he had argued on the point of prospective effect under
the Bombay Sales Tax Act, 1959 as well as under the
Maharashtra Value Added Tax Act,2002. However, the
Commissioner adjudicated upon the prospective effect in his
determination order under the Maharashtra Value Added Tax
Act, 2002 without considering his arguments of prospective
effect. He reiterated the same arguments again.
He further stated
that in other States in India where the entry is similar,
the States have clarified that the products of similar
nature as his, are covered by the schedule entry for
utensils. To support his argument, he has even furnished a
copy of the Trade Circular issued by the Gujarat Sales Tax
Department wherein a list of the items covered by the
schedule entry for utensils are mentioned, one of them being
“dabba meant for keeping food hot”.
Another argument put
forth by the applicant is that, the applicant received the
determination orders under the
Bombay Sales
Tax, 1959 as well as the Maharashtra Value Added Tax Act,
2002 almost simultaneously. Hence, there was no occasion for
him to place his arguments as above in favour of the plea
for prospective effect to the determination order under the
Maharashtra Value Added Tax Act, 2002.
He has placed
reliance upon the Karnataka High Court Judgment in the case
of Stovekraft Pvt. Ltd. v. State of Karnataka [ 2006 ] –
[147 STC 329 (Karnataka High Court)] in support of his plea
for prospective effect to the determination order under the
Maharashtra Value Added Tax Act, 2002.
He stated that Trade
Parlance is the only test that should be the criteria for
the decision in his case as regards whether his products Hot
Pot, Hot Casserole and Deluxe Hot Tiffin are covered by the
schedule entry for utensils or not.
It is stated that
over the years, his classification under the Bombay Sales
Tax Act,1959 is accepted by the department. Also, there is
no occasion for him to know any contrary view being taken by
the Commissioner or any other competent authority or court.
In view of this, he
deserves a case for prospective effect. It is stated that
these arguments which were made during the hearing are
inadvertently not considered while adjudicating the issue
and hence, it is requested to rectify the said order.
Hence,
the applicant has made this application to expunge the
relevant paras adjudicating upon prospective effect in the
determination order dt. 10/04/2006
under the
Maharashtra Value Added Tax Act, 2002 and consider his
submissions as made in the present hearing in favour of the
plea for prospective effect.
OBSERVATIONS
05.
I
have carefully gone through all the facts placed before me.
The issue involved
is the determination given as regards prospective effect to
the rate of tax applicable under the Maharashtra Value Added
Tax Act, 2002 to the products of the applicant, viz, Hot
Pot, Hot Casserole and Deluxe Hot Tiffin.
06.
M/s. Vinod
Stainless Steel Works, had applied for determination under
the Bombay Sales Tax Act, 1959 and the Maharashtra Value
Added Tax Act, 2002 as regards the tax rate applicable to
his products 1] Deluxe Hot Tiffin, 2] Hot Casserole, 3]
Hot Pot. The cases were fixed for hearing on a common
date. It was pleaded during the hearing of the above
mentioned two applications that, in case the determination
is held otherwise prospective effect be given to the
determination order. It was specifically emphasised that
unlike under the Bombay Sales Tax Act,1959 where many
specific entries relating to related but distinct items like
utensils, cutlery, hot cases/casseroles etc. existed, under
the Maharashtra Value Added Tax Act,2002 there is a single
entry in the Schedule ‘C’ on ferrous/non-ferrous domestic
utensils (entry C-33), and hence, they were under the
bonafide impression that all such items under different
entries of the Bombay Sales Tax Act,1959 Schedule are
subsumed under entry C-33 of the Maharashtra Value Added Tax
Act,2002. Now in the present hearing, it is the stand of
Shri Rajiv S. Jetly, C. A. that his arguments for
prospective effect were not considered while determining the
issue.
As regards
prospective effect in respect of his application under the
Maharashtra Value Added Tax Act, 2002, he has submitted that
he had made elaborate arguments for prospective effect under
VAT also. His products were held as taxable at a higher
rate in both the determination orders. He has laid stress on
the point that both the determination orders were received
by the applicant within a span of short time owing to which
the applicant could not take a stand in the matter of
application under the Maharashtra Value Added Tax Act, 2002.
What can
be gathered from the above is that this is a perfect case of
mutual misunderstanding as regards the facts of the case.
The applicant was making his submissions for prospective
effect in respect of the application under the
Bombay Sales
Tax, 1959 and had a bonafide belief that his contention
would be understood as being so. While passing the order,
inadvertently the applicant's arguments were not considered
while passing the determination order dt. 10/04/2006
under the Maharashtra Value Added Tax Act, 2002.
Since on
the similar facts, the prospective effect is granted under
the Bombay Sales Tax Act,1959, it should have also been
granted under the Maharashtra Value Added Tax Act,2002.
Since
hearing for both the cases was on a common date it appears
that his arguments for prospective effect under the
Maharashtra Value Added Tax Act remain to be considered.
The mistake is thus apparent and hence, it is sought to
rectify it.
I am
satisfied that an apparent mistake is committed while
deciding the issue by considering the appellants arguments
during the joint hearing, a fresh look at the adjudication
as regards the issue of prospective effect dealt with by me
in the determination order dt. 10th April, 2006
is required. This would thereby render it necessary to pass
a fresh order as regards the issue in question under the
Maharashtra Value Added Tax Act,2002 and therefore the need
for these rectification proceedings
08.
In view of the
deliberations put herein above, I pass an order of
rectification as follows:-
ORDER
(Under section 24 of
the Maharashtra Value Added Tax Act, 2002)
No.
DDQ-11-2005/Adm-5/B-
Mumbai, dt.
The para
No. 08 of the “proceedings” as well as the
last para forming part of the “order” from the
determination order DDQ Order No. DDQ-11-2005/Adm-5/65/B-3
dt. 10th April, 2006 are herewith ordered as
being deleted from the said determination order.
The request of the
applicant for prospective effect has been accepted for the
reasons as discussed at length in the para Nos. 06. and 07.
in the “proceedings” of this present “order”.
(B. C. KHATUA)
Commissioner
of Sales Tax,
Maharashtra State, Mumbai.
