Saint Gobain Glass India Ltd., v. The Appellate Joint Commissioner (Ct),

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Date : 01.09.2021

CORAM:

THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP W.A.No.2139 of 2021 and C.M.P.Nos.13538 of 2021 M/s. Saint Gobain Glass India Ltd., (Now known as Saint Gobain India Private Ltd.) Plot A-1, SIPCOT Industrial Park, Irrungattukottai, Sriperumbudur, Kancheepuram - 602 105.

...Appellant Vs.

1. The Appellate Joint Commissioner (CT), CT Annexe Building, III Floor, Greams Road, Chennai-600 006.

2. The Deputy Commissioner (CT)-IV, Large Taxpayers Unit, No.34, (Old No.123), "Dugar Towers", 5th Floor, Marshal Road, Egmore, Chennai - 600 008.

...Respondents

PRAYER: Appeal filed under Clause 15 of the Letters Patent Act, praying to set aside the order dated 29.03.2021 passed in W.P. No.18071/2013.

Prayer in W.P. No.18071/2013: Writ petition filed under Article 226 of the Constitution of India praying for issuance of a writ of Certiorari to call for the records of the first respondent in the impugned order dated 17.05.2013 in A.P.No.39/2012, quash the same and the same is passed without jurisdiction and in violation of the provisions of Section 3 of the Central Sales Tax Act, 1956 and other settled principles of law . For Appellant : Mr.AR.L.Sundaresan Senior Standing Counsel for V.S. Manoj For Respondents : Mr.M.Venkateswaran Government Counsel

JUDGMENT

This appeal filed by the writ petitioner is directed against the order dated 29.03.2021 in W.P.No.18071 of 2013. The appellant filed the said writ petition challenging an order passed by the first respondent herein, the Appellate Joint Commissioner dated 17.05.2013 in A.P.No.39 of 2012 in an appeal filed by the appellant against the order of assessment dated 30.08.2012 under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as "the TNVAT Act").

2. Heard Mr.AR.L.Sundaresan, learned Senior Standing Counsel for Mr.V.S.Manoj, learned counsel for the appellant and Mr.M.Venkateswaran, learned Government Counsel for the respondents.

3. The short ground on which the writ petition was filed challenging the order passed by the First Appellate Authority is by contending that the First Appellate Authority, though accepted the stand of the appellant that freight charges cannot be added to the value of the sale, came to the conclusion that the transaction, which according to the appellant, was an interstate sale should be treated as a local sale.

The appellant contended that this finding of the First Appellate Authority is wholly without jurisdiction as he has no power to change the character of the transaction and while deciding the appeal in terms of Section 52 of the TNVAT Act, the First Appellate Authority can either confirm, reduce, enhance or annul the assessment or the penalty or both; set aside the assessment and direct the Assessing Officer to make a fresh assessment after such further inquiry as may be directed; or pass such other orders as he may think fit; or in the case of any other order, confirm, cancel or vary such order. The appellant contended that in terms of Section 52(3) of the TNVAT Act, the powers exercisable by the Appellate Authority qua the Assessment Order cannot travel beyond the same.

The learned Single Bench did not agree with the appellant by pointing out that in terms of Clause (b) of Section 52(3), the Appellate Authority in case of any other order, confirm, cancel or vary such order. In our considered view, Clause (b) cannot read in isolation, but it is relatable to Clause (a) in Section 52(3). The Appellate Authority, while considering an appeal filed by Assessee/Dealer does not exercise his suo motu power, which is exercisable in terms of the provisions, by an Officer of the Joint Commissioner. The procedure for such suo motu revision are entirely different and distinct for normal appellate powers conferred on the Appellate Joint Commissioner.

construction has to be given, bearing in mind the legal principle that the Appellate Authority cannot travel beyond the subject matter of the assessment. The Appellate Authority, in the case on hand has precisely done so and while accepting the case of the appellant that the freight charges cannot be included in the value of the sale transaction, erroneously came to the conclusion that the transaction should be treated as a legal sale which was neither the case of the Assessee nor has decided by the Assessing Officer. In this regard, we are guided by the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax (Central), Calcutta Vs. Rai Bahadur Hardutroy Motilal Chamaria, AIR 1968 SC 153, wherein the Court held that the power of enhancement conferred under Section 31(3) of the Income Tax Act is restricted to the subject matter of assessment or the sources of income which have been considered expressly or by clear implication by the Income Tax Officer from the point of view of the taxability of the assessee.

4. In the instant case, the first respondent, the Appellate Authority has ignored the settled legal principle and issued directions to the Assessing Officer to treat the transaction as a legal sale, for which, he had no jurisdiction to do so. Thus, we are of the view that the correct interpretation to be given to clause (b) of Section 52(3) is to mean that the power is exercisable in the case of any other order which can be confirmed, canceled or varied, provided it does not change the character of the transaction nor the subject matter which was the issue before the Assessing Officer. Thus, the order passed by the first respondent / Appellate Authority dated 17.05.2013 in the writ petition is without jurisdiction.

5. In the result, the Writ Appeal is allowed and the order passed in the writ petition is set aside and consequently, the writ petition is allowed and the order passed by the first respondent dated 17.05.2013 in A.P.No.39 of 2012 is quashed. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar Sgl

To

1. The Appellate Joint Commissioner (CT), CT Annexe Building, III Floor, Greams Road, Chennai-600 006.

2. The Deputy Commissioner (CT)-IV, Large Taxpayers Unit, No.34, (Old No.123), "Dugar Towers", 5th Floor, Marshal Road, Egmore, Chennai - 600 008.

+1cc to Mr.K.Vaitheeswaran, Advocate, S.R.No.43771 +1cc to the Government Pleader, S.R.No.44653 +1cc to the special Government Pleader(Taxes),S.R.No.44653 W.A.No.2139 of 2021 LN[co] NSK 22/09/2021