Jharkhand High Court
Steel Authority Of India Ltd. ... vs The State Of Jharkhand on 1 May, 2023
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (T) No. 666 of 2023
with
W.P. (T) No. 556 of 2023
with
W.P. (T) No. 667 of 2023
with
W.P. (T) No. 668 of 2023
with
W.P. (T) No. 728 of 2023
with
W.P. (T) No. 736 of 2023
with
W.P. (T) No. 789 of 2023
with
W.P. (T) No. 790 of 2023
with
W.P.(T) No. 809 of 2023
with
W.P.(T) No. 1134 of 2023
with
W.P.(T) No. 1149 of 2023
......
Steel Authority of India Ltd. (Bokaro Steel Plant), through its Authorized
signatory-cum-Deputy General Manager (F&A-S&IT), Rajeev Gupta.
........ Petitioner (in all cases)
Versus
1. The State of Jharkhand, through the Commissioner of Commercial Taxes,
having its office at Utpad Bhawan, Kanke Road, P.O. Ranchi University, P.S.
Gonda, District-Ranchi.
2. The Additional Commissioner of Commercial Taxes (Appeal), Dhanbad
Division, Dhanbad, having its office at Lubi Circular Road, Opposite Court
Compound, P.O. & P.S. Dhanbad, District-Dhanbad.
3. Joint Commissioner of Commercial Taxes (Appeal), Dhanbad Division,
Dhanbad, having its office at Lubi Circular Road, Opposite Court Compound, P.O.
& P.S. Dhanbad, District-Dhanbad.
4. Deputy Commissioner of Commercial Taxes, Bokaro Circle, Bokaro, having its
office at Bokaro, P.O. & P.S. Bokaro, District-Bokaro.
5. Assistant Commissioner of Commercial Taxes, Bokaro Circle, Bokaro, having
its office at Bokaro, P.O. & P.S. Bokaro, District-Bokaro.
6. Commercial Taxes Officer, Bokaro, Circle, Bokaro, having its office at Bokaro,
P.O. & P.S. Bokaro, District-Bokaro. ......... Respondents (in all cases)
......
CORAM: Hon'ble Mr. Justice Rongon Mukhopadhyay
Hon'ble Mr. Justice Deepak Roshan
......
For the Petitioner : Mr. Sumeet Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Mr. Ranjeet Kushwaha, Advocate
Mrs. Akansha Mittal, Advocate
For the Respondents : Mr. Sachin Kumar, AAG-II
Mr. Ashok Yadav, GA
Mr. Rahul Saboo, G.P.-II
......
07/01.05.2023 The present batch of writ petitions involve common questions of law
and with the consent of the parties, the same were heard together and are being
disposed of by the instant order.
2. Common issues involved in the writ petitions are "Whether initiation of
review proceedings against the Petitioner-company was void ab initio and nonest
in the eye of law in absence of requisite sanction being obtained by Commissioner
of Commercial Taxes, Jharkhand in terms of the provisions contained under
Section 9A(4) of the Bihar Electricity Duty Act, 1948 (as adopted) read with Rules
14(10) and 14(11) of the Bihar Electricity Duty Rules, 1949"? Other incidental
issue involved is "Whether the order passed by the Appellate Authority remanding
the matter back to the Assessing Authority for de-novo adjudication is required to
be interfered with by this Court on the ground that when the very initiation of the
proceeding for review was void ab initio and nonest; no jurisdiction could have
been conferred by the Appellate Authority to the Assessing Authority by passing
order of remand"?
3. Petitioner-company is primarily engaged in the business of manufacture of
Iron and Steel and the present batch of writ applications pertain to its Bokaro Steel
Plant situated in the District of Bokaro. Assessment years involved in the batch of
the writ petitions pertain to 2012-13 to 2016-17.
4. Petitioner, in respect of the aforesaid assessment years, purchased
electricity from Damodar Valley Corporation primarily for its manufacturing
activity and also supplied electricity to residential colonies, commercial
complexes, government premises and offices/hospitals/ malls/hotels, school, etc.
and there was liability towards payment of electricity duty by the Petitioner-
company on electricity consumed and supplied by it, in terms of the provisions of
the Bihar Electricity Duty Act (as adopted) including its amendment by Jharkhand
Electricity Duty (Amendment) Act, 2011. Consumption of electricity by the
Petitioner was categorized into three heads, namely; (1) Construction/Industrial
Consumption, (2) Domestic Consumption, and (3) Non-Domestic/ Commercial
Consumption.
5. For the period in dispute, Petitioner-company duly discharged its electricity
duty liability and assessment orders were passed in respect of each financial year
accepting Returns of the Petitioner and the discharge of electricity duty made by it.
6. However, after passing of the assessment orders, an audit objection was
raised by the office of the Accountant General, Jharkhand, and, in the audit
objection, primarily it was alleged that Petitioner has discharged the liability of
electricity duty towards Domestic Consumption as well as Non-
Domestic/Commercial Consumption at incorrect rate of duty. It was also indicated
in the audit objection that on certain purchases of electricity, Petitioner has not
paid electricity duty and has, thus, not accounted for the said charges in its books
of accounts.
7. On the basis of the aforesaid audit objection, review proceeding under
Section 9A(4) of the Electricity Duty Act was initiated by the Assessing Authority
against the Petitioner-company. Although assessment years pertained to the
periods 2012-13 to 2016-17, the audit objection was categorized by the Assessing
Authority under three different heads i.e. (1) Domestic Consumption of electricity,
(2) Non-Domestic Consumption of electricity, and (3) Incorrect accounting of
charges of electricity. Thus, separate review proceedings were initiated in respect
of all the aforesaid categories.
8. Details of the assessment orders including initiation of review proceedings
and passing of the review orders have been captured in the following tabulated
chart in respect of all the writ petitions:-
(i) Details of Proceeding related to Domestic Consumption of Electricity
Sl. Period Case No. Date of Original Date of initiation Date of
Nos. Assessment of Review Review
order Proceeding Order
1. 2012-13 W.P.(T) No. 22.03.2016 20.07.2020 31.08.2020
556 of 2023 An. 2, Pg.52 An.3, Pg.55 An.8, Pg.65
2. 2013-14 W.P.(T) No. 31.03.2017 20.07.2020 31.08.2020
667 of 2023 An.2, Pg.52 An.3, Pg.55 An.8, Pg.66
3. 2014-15 W.P.(T) No. 21.03.2018 20.07.2020 31.08.2020
1149 of 2023 An.2, Pg.52 An.3, Pg.55 An.8, Pg.65
4. 2015-16 W.P.(T) No. 20.02.2019 20.07.2020 31.08.2020
728 of 2023 An.2, Pg.51 An.3, Pg.52 An.7, Pg.62
(ii) Details of Proceeding related to Non-Domestic Consumption of Electricity
Sl. Period Case No. Date of Original Date of initiation Date of
Nos. Assessment of Review Review
order Proceeding Order
1. 2012-13 W.P.(T) No. 22.03.2016 20.07.2020 31.08.2020
736 of 2023 An. 2, Pg.54 An.3, Pg.55 An.8, Pg.66
2. 2013-14 W.P.(T) No. 31.03.2017 20.07.2020 31.08.2020
666 of 2023 An.2, Pg.52 An.3, Pg.55 An.8, Pg.66
3. 2014-15 W.P.(T) No. 31.03.2018 20.07.2020 31.08.2020
1134 of 2023 An.2, Pg.51 An.3, Pg.54 An.8, Pg.65
4. 2015-16 W.P.(T) No. 20.02.2019 20.07.2020 31.08.2020
790 of 2023 An.2, Pg.51 An.3, Pg.52 An.7, Pg.62
(iii) Details of Proceeding related to Purchase of Electricity:-
Sl. Period Case No. Date of Original Date of initiation Date of
Nos. Assessment of Review Review
order Proceeding Order
1. 2013-14 W.P.(T) No. 31.03.2017 17.07.2020 12.09.2020
668 of 2023 An.1, Pg.35 An.2, Pg.38 An.6, Pg.48
2. 2014-15 W.P.(T) No. 21.03.2018 17.07.2020 12.09.2020
809 of 2023 An.1, Pg.35 An.2, Pg.38 An.6, Pg.48
3. 2016-17 W.P.(T) No. 03.02.2020 17.07.2020 12.09.2020
789 of 2023 An.1, Pg.34 An.2, Pg.35 An.6, Pg.45
9. The case of the Petitioner is that the very initiation of the review
proceedings against the Petitioner by its Assessing Officer is contrary to the
provisions of Section 9A(4) of the Electricity Duty Act read with Rules 14(10) and
14(11) of the Electricity Duty Rules, as the proceedings have been initiated by the
successor in office of the original Assessing Officer without obtaining previous
sanction in writing of Commissioner of Commercial Taxes, and, except for the
Assessment Year 2016-17, review proceedings have been initiated beyond the
period of limitation of twelve months without obtaining sanction of the
Commissioner of Commercial Taxes.
10. The Petitioner challenged separate review orders passed by the Assessing
Authority before the first Appellate Court and specifically contended, inter alia,
that initiation of re-assessment proceedings in absence of sanction order of
Commissioner of Commercial Taxes was void ab initio. Reliance was also placed
by the Petitioner upon a decision of the Coordinate Bench of this Court in the case
of Tata Steel Ltd., Jamshedpur Vs. State of Jharkhand decided on 04.12.2019,
wherein, under identical facts and circumstances of the case, this Court set aside
the order passed in review proceedings which was initiated in violation of Section
9A(4) of the Electricity Duty Act and Rules 14(10) and 14(11) of the Electricity
Duty Rules.
However, learned Appellate Authority, despite such objection being raised
by the Petitioner, merely remanded the matter back to the Assessing Authority for
fresh adjudication of the review proceedings.
11. Mr. Sumeet Gadodia, Advocate, assisted by Mr. Ranjeet Kushwaha,
Advocate for the Petitioner, while advancing arguments, assailed the order passed
by the Appellate Authority in all the writ petitions by contending, inter alia, that
once plea has been raised before the Appellate Court that the very initiation of
review proceedings was void ab initio and nonest in the eye of law for want of
sanction from the Commissioner of Commercial Taxes, it was not open for the
Appellate Authority to remand the matters back to the Assessing Authority for
proceeding de-novo afresh.
12. It has been submitted that, in fact, the order of remand passed by the
Appellate Authority has an effect of conferring jurisdiction upon the Assessing
Authority to initiate a fresh review proceeding which, otherwise, was not
maintainable in view of statutory bar contained under section 9A(4) of the
Electricity Duty Act read with Rules 14(10) and 14(11) of the Electricity Duty
Rules.
13. Learned counsel for the petitioner further invited our attention to the
provisions of the Act and the Rules and contended, inter alia, that the Act contains
substantive provisions for initiation of review proceeding by the authority passing
the order or by its successor in office, which is subject to the rule as may be
prescribed. Under the Rules, specific provisions have been incorporated providing,
inter alia, that an order shall not be reviewed after more than twelve months of
passing of the order except with the previous sanction of the Commissioner
recorded in writing. Further reliance has been placed upon the Rules to contend
that the review order passed by the predecessor in office cannot be reviewed by an
authority being successor in office except with the previous sanction of the
Commissioner.
It has been contended that the review orders passed for the assessment
years 2012-13 to 2015-16 were not only barred by limitation as the said orders
were passed beyond twelve months of passing of the original assessment orders,
but also in respect of the said orders which were passed by the successor in office,
no previous sanction of the Commissioner was obtained. For the assessment year,
2016-17, it was submitted that the review order was passed within a period of
twelve months and was within limitation, but since the said order was passed by
the successor-in-office, previous sanction of the Commissioner was required in
terms of Rule 14(11) of the Rules, which was not obtained, and, under the said
circumstances, review order was not sustainable in the eye of law.
Reliance has been placed upon the Judgment passed by Coordinate Bench
of this Court in the case of Tata Steel Ltd., Jamshedpur vs. State of Jharkhand
dated 04.12.2019, wherein this Court, by considering the provisions of Section
9A(4) of the Act read with Rules 14(10) and 14(11) of the Rules, has held that if
orders of review are passed beyond twelve months and/or by an officer being
successor-in-office, sanction of the Commissioner of Commercial Taxes is
required and, in absence of the sanction by the Commissioner, review orders are
not sustainable in the eye of law.
Further reliance was placed upon the order dated 29.06.2021 passed in
Special Leave Petition (Civil) Diary No. 24435 of 2020 (State of Jharkhand Vs.
Tata Steel Ltd.) and it was contended that the Special Leave Petition filed by the
State of Jharkhand against the order decided in the case of Tata Steel Ltd. (supra)
was dismissed by the Hon'ble Apex Court.
Reference was also made to the Counter Affidavit filed on behalf of
Respondent-State of Jharkhand in all the writ petitions and it has been contended
that in the Counter Affidavit, there is no denial of the fact that review order has
been passed without obtaining sanction of the Commissioner of Commercial
Taxes.
14. Per contra, Mr. Sachin Kumar, learned AAG-II advanced arguments on
behalf of Respondent-State of Jharkhand and opposed the prayer made in the writ
applications for quashing/setting aside the Appellate Orders passed by the
Appellate Authority. By placing reliance upon the Appellate Order, it has been
contended, inter alia, that Appellate Authority, after taking into consideration the
submissions of the Petitioner, has merely remanded the matters back to the
Assessing Authority to decide the matters afresh and to also consider the Judgment
delivered in the case of Tata Steel Ltd. (supra) while passing fresh review orders.
It has been intensely argued by Mr. Sachin Kumar that the Appellate
Authority has already looked into grievances of the Petitioner, and, after recording
the submissions of the Petitioner, remanded the matter back to the Assessing
Authority to pass fresh adjudication order after taking into consideration the order
passed by Coordinate Bench of this Court in the case of Tata Steel Ltd., and hence,
there is no occasion for the Petitioner for being aggrieved by the said order and,
accordingly, it has been submitted that present writ applications are not
maintainable at the behest of the Petitioner.
However, during the course of argument, it was not disputed that review
order has been passed without obtaining sanction of the Commissioner in writing,
however, on the contrary, it was contended that in the earlier order passed by this
Court in the case of Tata Steel Ltd. (supra) also, the matter has been remanded
back to the Assessing Authority and, hence, the Appellate Court has not
committed any illegality in remanding the matter back to the Assessing Authority.
15. We have considered rival submissions of the parties and have carefully
perused the records of the case including provisions of Section 9A(4) of the
Electricity Duty Act and Rules 14(10) and 14(11) of the Excise Duty Rules.
Section 9A of the Act reads as under:-
"9A. Appeal;-- (1) Any licensee or other person objecting to an
order or assessment with or without penalty passed under this Act,
or the rules made thereunder may, within a prescribed period and
in the prescribed manner, appeal to the prescribed authority
against such order of assessment or penalty or both:
Provided that no appeal shall be entertained by such
authority unless it is satisfied that twenty percentum of the duty
assessed or such amount of duty as the appellant may admit to be
due from him, whichever is greater has been paid.
Provided further that where the prescribed authority revises
any order of its motion, no proceeding for such revision shall be
initiated at any time except before the expiry of two years from the
date of the said order.
(2) Subject to such rules as may be prescribed, the appellate
authority may, in disposing of an appeal under sub-section (1)--
(a) confirm, reduce, enhance or annual the assessment
or penalty; or both; or
(b) set aside the assessment or penalty, or both, and
direct the assessing authority to make a fresh
assessment after making such further inquiry as may
be directed by the appellate authority;
(3) Subject to such rules as my be prescribed and for reasons to
be recorded in writing the prescribed authority may, upon
application or of its own motion, revise any order passed under this
Act or the rules made thereunder:
Provided that no order of assessment shall be revised upon
application on the assessee, unless an order under sub-section (2)
has been previously passed in respect of such order.--
Provided further that where the prescribed authority revises
any order of its own motion, no proceeding for such revision shall
be initiated at any time before the expiry of two years from the date
of the said order.
(4) Subject to such rules as may be prescribed, any order passed
under this Act or the rules made thereunder may be reviewed by
the authority passing it or by its successor-in-office."
16. Rule 14 of the Rules reads as under:-
"14. Appeal, revision and review.--(1) An appeal against an
order of assessment, with or without penalty shall lie to the Joint
Commissioner or the Deputy Commissioner specially authorized in
this behalf.
(2) An application for the revision of an appellate order passed
by the Joint Commissioner or Deputy Commissioner specially
authorized in this behalf shall lie to the tribunal.
(3) Omitted.
(4) The application for the revision of any order passed under
the Act or these rules, other than an order of assessment with or
without penalty or any order passed under sub-rules (1) or (2) of
this rule shall be presented--
(a) to the Joint Commissioner, if the order sought to be
revised is one passed by the Deputy Commissioner.
(b) to the Commissioner, if the order sought to be revised
is one passed by the Joint Commissioner.
(c) to the Tribunal, if the order sought to be revised is
one passed by the Commissioner.
xxx xxx xxx
(10) Save with the previous sanction of the Commissioner
recorded, in writing an order, other than order passed by the
Commissioner, shall not be reviewed more than twelve months
after the date of passing of the order which is sought to be
reviewed.
(11) No authority below the rank of Commissioner, shall review
an order which has been passed by its predecessors in office,
except with the previous sanction of the Commissioner."
17. According to Section 9A(4), the prescribed authority, to review an order,
would be the officer who has passed the order or its successor in office. Section
9A(4) of the Electricity Duty Act is to be read with Rules 14(10) and 14(11) of the
Electricity Duty Rules, which clearly prescribe that for reviewing any order other
than the order passed by the Commissioner, sanction of the Commissioner in
writing is required and such review cannot be made beyond the period of 12
months from the date of passing of the order sought to be reviewed, and, an order
can be reviewed by the officer who is successor in office of the officer who has
passed the order sought to be reviewed only with previous sanction of the
Commissioner even if the order is sought to be reviewed within a period of twelve
months.
18. Aforesaid proposition of law has been authoritatively laid down by the
Coordinate Bench of this court in the case of Tata Steel Ltd. (supra) and the said
decision was challenged by the State of Jharkhand before the Hon'ble Apex Court
and their S.L.P. has also been dismissed.
19. We are in respectful agreement with the ratio laid down in the aforesaid
Judgment of Tata Steel Ltd. (supra) and we find no reason to disagree with the
same.
20. We further find that there is no substance in the contention of the
Respondent-State that in the case of Tata Steel Ltd. (supra), this Court remanded
the matter back to the Assessing Authority for passing fresh review order. On the
contrary, a bare perusal of the said order would reveal that penalty orders were set
aside and it was merely recorded that this court has not stopped any authority to
exercise his powers permitted under the law.
21. It is a trite law that an order, which is bad from its inception itself, cannot
be cured by subsequent action. In the present case, before the Appellate Authority,
the Judgment of this Court in the case of Tata Steel Ltd. was duly placed on
record, but despite the said fact, the Appellate Authority, instead of setting aside
the order of review as not sustainable in the eye of law, has remanded the matter
back to the Assessing Authority for reconsideration. This, in our view, cannot be
endorsed, as reviewing authority cannot be clothed with jurisdiction which it,
otherwise, did not have at the time of initiation of review proceedings.
22. In view of the foregoing reasons, the review orders dated 31.08.2020 and
12.09.2020 as well as the Appellate Orders dated 23.12.2022 in respect of the
Period 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17 are set aside.
Consequently, penalty amount deposited/recovered from the Petitioner-company,
if any, is directed to be refunded/adjusted in future bills towards Electricity Duty.
23. We make it clear that we have not stopped any authority to exercise its
powers permitted under the law.
24. Accordingly, all the writ applications are allowed with aforesaid directions
and observations. All Interlocutory applications also stand disposed of.
(Rongon Mukhopadhyay, J)
(Deepak Roshan, J)
Amardeep/-
