Telangana High Court
M/S. Knr Constructions Limited vs Additional Commissioner Of State Tax on 22 February, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
W.P. No.30217 of 2023
ORDER:
(per Hon'ble Sri Justice P.SAM KOSHY) Heard Mr. Naga Deepak, learned counsel for the petitioner and Mr. K. Bhaskar Reddy, learned special standing counsel for Commercial Taxes appearing for respondent Nos.1 to 4. Perused the entire record.
2. The challenge in the present writ petition is to the Revisional order dated 26.06.2023 under Section 32(2) of the Telangana VAT Act, 2005. Vide the said impugned order, the Revisional Authority/Respondent No.1 has revised the Assessment order passed by respondent No.3 on 03.04.2018. In the order of assessment passed by respondent No.3 on 03.04.2018, there was a specific finding that there is an excess tax credited in favour of the petitioner to the tune of Rs.1,76,65,657/-. This excess tax credit collected from the petitioner which he has sought for a refund vide his application dated 01.07.2019 which till date is pending consideration without an outcome. Meanwhile, impugned order was passed revising the order dated 03.04.2018 and further ordering for forfeiture of excess tax credit to the tune of Rs.1,18,01,526/-, which is under challenge in the 2 present writ petition. In terms of Section 32 of the Telangana VAT Act, 2005, the Revisional authority has the power to revise the order of assessment within an outer limit of four years. The Revisional order seems to have been passed taking into consideration the amendment that was brought to the Telangana Value Added Tax by way of Second Amendment in the year 2017.
3. The Telangana VAT (Second Amendment) Act, 2017 was subjected to challenge in a bunch of writ petitions before the High Court. The lead case being that of Sri Sri Engineering Works and others Vs Deputy Commissioner (CT) in W.P.No.7893 of 2021 and batch. The bunch of Writ petitions challenging the Second Amendment Act, 2017 stood allowed on 05.07.2022 and the Division Bench while allowing the Writ Petitions in paragraph 145 held as under:
"145. Thus, upon thorough consideration of all aspects of the matter, we have no hesitation in holding that the Second Amendment Act is unconstitutional being devoid of legislative competence. It is accordingly declared as such. Consequently, the notices issued and orders passed under Section 32(3) of the VAT Act which have been impugned in the present batch of writ petitions are hereby set aside and quashed".3
4. In addition, the subsequent assessment orders which were passed by respondent No.3 in respect of the petitioner herein was subjected to challenge in yet another Writ Petition i.e., W.P.No.13634 of 2021, which too stood allowed in terms of the order passed by the Division Bench in Sri Sri Engineering's case (Supra) and while allowing the writ petition, the Division Bench of this Court made the following observations.
"5. In consequence, if the petitioner seeks any refund of tax collected on the strength of the impugned assessment order which now stands quashed, it would be open to the petitioner to file appropriate application before the assessing authority for refund. If such application is filed, assessing authority shall do the needful in accordance with law".
5. In the light of the aforesaid observation made by the Division Bench in its order dated 14.07.2022 in W.P.No.13634 of 2021, the petitioner has approached the respondent authorities for the refund of excess tax collected in terms of its application that he has already filed on 01.07.2019. It is in that context that the authorities concerned appears to have passed the Revisional order under challenge in the present writ petition that is dated 26.06.2023. The primary challenge to the order of the Revisional authority is two fold. Firstly, the Revisional order could not have been passed beyond a period of four years i.e. within four years 4 from 03.04.2018 in the instant case, particularly in the light of the judgment of the Division Bench in the case of Sri Sri Engineering's case (Supra). Secondly, it was contended that in the Revisional order, an order of forfeiture has been passed and forfeiture under Section 57 of the Telangana VAT Act could not have been made beyond a period of six years from the date of collection of the amount which is ordered to be forfeited.
6. Countering the submissions made by the learned counsel for the petitioner, learned standing counsel for the Department opposing the petition submits that if the Revisional order is held to be beyond limitation which is otherwise prescribed under the Telangana VAT Act, the Original order of assessment dated 03.04.2018 also would be bad as the same was also passed beyond a period of four years. It was contended by the learned counsel for the Department that if the judgment passed by the Division Bench in the case of Sri Sri Engineering's case (Supra) has to be universally accepted, then all orders passed beyond a period of four years under the Telangana VAT Act has to be considered null and void. The petitioner cannot be permitted to rely upon an order which has otherwise been passed beyond a period of 5 limitation. It was also the contention of the learned standing counsel for the Department that the petitioner cannot be permitted to only assail the Revisional order on the ground of limitation when the Original order of assessment also was under the very same Amended law and therefore, under the very same judgment i.e. Sri Sri Engineering's case (Supra), it has to be treated as null and void. It was also the contention of the learned counsel for the Department that in the instant case, Section 57 dealing with forfeiture would not be applicable as would be evident from the order of Revisional authority itself where the order of forfeiture has been passed invoking the provisions under Section 22(3-A) of the Telangana VAT Act r/w Rule 18(3)(a) and 18(3)(b) of the Rules of the said Act.
7. Having heard the contentions put forth on either side and on perusal of the record, what is particularly to be considered in the instant writ petition is the challenge made by the petitioner. The challenge particularly is to the Revisional order under Section 32(2) of the Telangana VAT Act dated 26.06.2023. The Revisional authority vide impugned order admittedly has revised the order dated 03.04.2018 passed by respondent No.3. Under Section 32(2) of the Telangana VAT 6 Act deals with the power to revise an order and the prescribed period of limitation is four years. The four years period in the instant case comes to an end on 03.04.2022. The Revisional order under challenge in the present writ petition is one which is dated 26.06.2023. Apparently, it is beyond a period of four years.
8. The contention of the learned counsel for the petitioner so far as applying the Second Amendment to the Telangana VAT Act, 2017, Act no longer survives in the light of the judgment of the Division Bench in the case of Sri Sri Engineering's case (Supra), which subsequently also has been confirmed by the Hon'ble Supreme Court in Civil Appeal No.1628 of 2023 with batch of writ petitions travelling from across the country from various States where similar amendments were brought by the States to their respective VAT Act. It is also worth mentioning at this juncture that along with the Civil Appeals decided by the Hon'ble Supreme Court, the order passed by the Division Bench of this Court in the case of the petitioners in W.P.Nos.13634 and 13635 of 2021, both decided on 14.07.2022 were also subjected to challenge vide Civil Appeal No.1655 of 2023 and 1678 of 2023 and stood decided along with Sri Sri Engineering's case (Supra). Accordingly, the order passed in respect of 7 the petitioner itself for the subsequent period by the Division Bench stands affirmed. In the said order of the Division Bench decided on 14.07.2022, there is a specific observation made by the Division Bench holding that if the petitioner seeks any refund of the tax collected on the strength of the assessment order, it would be open for the petitioner to file an appropriate application before the assessing authority for refund of the same.
9. In the light of the decision of the Hon'ble Supreme Court in the batch of writ petitions which stood decided vide order dated 20.10.2023, the two orders passed by the Division Bench of this Court in respect of the very present writ petitioners has also attained finality. In terms of the order, the petitioner is required to approach the respondent authorities by filing an appropriate application for the refund. In the instant case, the petitioner contends that his application for refund was already filed on 01.07.2019 and it is pending consideration before the authorities concerned. In the teeth of the two orders passed by this Court on 14.07.2022 and also keeping in view the decision of the Division Bench of this Court in the Division Bench in the case of Sri Sri Engineering's case (Supra), which has been confirmed by the Hon'ble Supreme Court as 8 well, we are of the firm view that the order of respondent No.1 in passing the Revisional order dated 26.06.2023 and the Effectual order passed thereafter on 13.07.2023 would not be sustainable as it would be hit by the decision of the Division Bench of this High Court in the case of Sri Sri Engineering's case (Supra) and the said observation, accordingly is set aside/quashed.
10. The respondent authorities meanwhile are directed to pass appropriate orders on Ex.P4, letter dated 01.07.2019 where the petitioner has moved an appropriate application for refund. Let the said application for refund be processed in accordance with law at the earliest within an outer time limit of (60) days.
11. The Writ Petition accordingly stands allowed. Consequently, miscellaneous petitions pending, if any, shall stand closed. No order as to costs.
___________________ P.SAM KOSHY, J __________________ N.TUKARAMJI, J Dated: 22.02.2024 gvl