Jharkhand High Court
M/S. Tata Iron & Steel Company Ltd. ... vs The State Of Jharkhand on 3 October, 2023
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 1764 of 2023
&
W.P.(T) No. 1765 of 2023
M/s. Tata Iron & Steel Company Ltd. (Now, M/s.Tata Steel
Limited), a Company incorporated under the Companies Act,
1956/2013, having its Registered Office at Bombay House, 24 Homi
Mody Street, Mumbai 400001; having its Colliery at Jharia Colliery,
Jamadoba, P.O. and P.S. Jamadoba, District Dhanbad, through its
Chief Legal Counsel-Indirect Taxation, namely, Vikash Mittal, aged
about 52 years, son of Shri H.K. Mittal, resident of 103, K.D. Flats,
Road No.4, Circuit House Area, P.O. & P.S. Bistupur, Town Jamshedpur,
District East Singhbhum. ....... Petitioner (in both cases)
Versus
1. The State of Jharkhand, through the Secretary, Commercial Taxes
Department, having its office at Jharkhand Mantralaya (Project Building),
P.O. Dhurwa, P.O. P.S. Jagannathpur, District Ranchi 834 004 (Jharkhand).
2. The Commissioner of Commercial Taxes, having its Office at Utpad
Bhawan, Kanke Road, P.O. Ranchi University, P.S. Gonda, District Ranchi,
PIN 824008 (Jharkhand).
3. Joint Commissioner of Commercial Taxes (Administration, Dhanbad
Division, Dhanbad, P.O. and P.S. Dhanbad, Town Dhanbad, District
Dhanbad, PIN 826001 (Jharkhand).
4. Deputy Commissioner of Commercial Taxes, Jharia Circle, Dhanbad,
having its office at Jharia, P.O. and P.S. Jharia, District Dhanbad
(Jharkhand). ...... Respondents (in both cases)
CORAM: Hon'ble Mr. Justice Rongon Mukhopadhyay
Hon'ble Mr. Justice Deepak Roshan
For the Petitioner : Mr. Kavin Gulati, Sr. Advocate
Mr. Sumeet Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Mr. Ranjit Kushwaha, Advocate
For the Respondents : Mr. Ashok Yadav, Sr. S.C.-1.
Reserved on 21.06.2023 Delivered on 03.10.2023
JUDGMENT
Per Deepak Roshan, J: Heard learned counsel for the parties.
2. Since facts of both the writ petitions are identical; with the consent
of the parties, both the matters were heard together and have been disposed
of by this common order.
3. Petitioner-Tata Iron and Steel Company Ltd. (now known as, Tata
Steel Ltd.) has filed the above writ petitions praying therein for the following
reliefs:-
W.P.(T) No. 1764 of 2023
"(i) For issuance of an appropriate writ/order/direction, for quashing/setting aside
the Review Order allegedly dated 27.09.2012 and communicated to Petitioner on
29.06.2020, passed in alleged exercise of power under Section 47 of the Bihar
Finance Act, 1981 by Respondent No. 4 (Annexure-8), wherein pursuant to Audit
Objection, additional tax liability of Rs. 8,69,37,888/- has been determined
against the Petitioner-company without following due procedure of law,
especially in view of the fact that the said review order has been served to
Petitioner after a lapse of a period of eight years.
(ii) For issuance of further appropriate writ/order/direction, for quashing/setting
aside the notice issued vide Memo No. 830 dated 04.01.2011 issued by
Respondent No.4 (Annexure-2) wherein Respondent No.4 has initiated review
proceeding against Petitioner without recording any satisfaction which is
contrary to statutory provisions of Section 47 of Bihar Finance Act, 1981.
(iii) For issuance of further appropriate writ/order/direction, for quashing/setting
aside the Sanction Letter contained in No. 1485 dated 27th December, 2010
issued by Respondent No.3 (Annexure-5) wherein sanction for initiation of
review proceedings under Section 47 of the Bihar Finance Act, 1981 against
Petitioner has been granted without recording reasons or without forming an
opinion for which review proceedings were sought to be initiated against
Petitioner.
(iv) For issuance of further appropriate writ/order/direction, including Writ of
Declaration, declaring that the review proceeding against the petitioner is void
ab initio, especially in view of the fact that review order allegedly dated
27.09.2012 has been communicated to Petitioner on 29.06.2020 i.e. after a
prolonged delay of eight years without assigning explanation/reasons to it."
W.P.(T) No. 1765 of 2023
"(i) For issuance of an appropriate writ/order/direction, for quashing/setting aside
the Review Order allegedly dated 27.09.2012 and communicated to Petitioner on
29.06.2020, passed in alleged exercise of power under Section 47 of the Bihar
Finance Act, 1981 by Respondent No. 4 (Annexure-8), wherein pursuant to Audit
Objection, additional tax liability of Rs. 5,46,05,818/- has been determined
against the Petitioner-company without following due procedure of law,
especially in view of the fact that the said review order has been served to
Petitioner after a lapse of a period of eight years.
(ii) For issuance of further appropriate writ/order/direction, for quashing/setting
aside the notice issued vide Memo No. 830 dated 04.01.2011 issued by
Respondent No.4 (Annexure-2) wherein Respondent No.4 has initiated review
proceeding against Petitioner without recording any satisfaction which is
contrary to statutory provisions of Section 47 of Bihar Finance Act, 1981.
(iii) For issuance of further appropriate writ/order/direction, for quashing/setting
aside the Sanction Letter contained in No. 1485 dated 27th December, 2010
issued by Respondent No.3 (Annexure-5) wherein sanction for initiation of
review proceedings under Section 47 of the Bihar Finance Act, 1981 against
Petitioner has been granted without recording reasons or without forming an
opinion for which review proceedings were sought to be initiated against
Petitioner.
(iv) For issuance of further appropriate writ/order/direction, including Writ of
Declaration, declaring that the review proceeding against the petitioner is void
ab initio, especially in view of the fact that review order allegedly dated
27.09.2012 has been communicated to Petitioner on 29.06.2020 i.e., after a
prolonged delay of eight years without assigning explanation/reasons to it."
4. Writ Petition being W.P.(T) No. 1764 of 2023 pertains to financial
year 2005-06 and the Writ Petition being W.P.(T) No. 1765 of 2023 pertains
to financial year 2004-05. For the sake of brevity, facts pertaining to
financial year 2004-05 are enumerated hereinafter.
5. The Petitioner-Company is a manufacturer of Iron and Steel and is
having its Industrial Unit at Jamshedpur and is also having its Collieries in
various Districts of the State of Jharkhand including the District of Dhanbad,
where Petitioner has its Colliery popularly known as 'Jamadova Colliery'.
The dispute in the instant writ applications pertains to Jamadova Colliery,
which is engaged in the business of mining i.e. extraction of coal primarily
for captive consumption in its Industrial Unit situated at Jamshedpur.
6. For the period in dispute, original assessment proceeding of the
petitioner was completed on 06.12.2008 and gross turnover reflected by
petitioner in its return was duly accepted. However, subsequently, an audit
objection being SRA-145/2009-10, Para 1(A) was raised wherein the Auditor
raised an objection with respect to intra-state stock transfer of goods made by
petitioner-unit at Jamadova to its Jamshedpur Unit by contending, inter alia,
that said transfer was not supported by Declaration Form IX-D as required
under the provisions of the Bihar Finance Act, 1981 and, accordingly,
suggestion was made to reject the claim of intra-state stock transfer made by
one unit of Tata Steel Ltd. to its another unit and levy tax thereupon. Exactly
similar objection was raised with respect to financial year 2005-06.
7. Pursuant to the said audit objection, Respondent No.4 i.e. Deputy
Commissioner of Commercial Taxes, Jharia Circle, Dhanbad passed an order
contained in Memo No. 591 dated 13.08.2010, wherein for both the financial
years i.e., FY 2004-05 and FY 2005-06, audit objection was examined by the
said officer including provisions contained under Section 21(1A) of the Bihar
Finance Act, 1981 and the audit objection was dropped by specifically
recording, inter alia, that on perusal of Section 21(1A) and relevant Rules
and Forms, it is apparent that statutory Form IX-D will be required in the
case where goods are stock transferred within the State for Sale, but since,
admittedly, in the instant case, goods were not transferred for sale but for
captive consumption, therefore, there is no requirement of Form IX-D.
The case of the petitioner is that notwithstanding such specific order
being passed dropping the audit objection, the same said authority vide
Notice contained in Memo No. 830 dated 04.01.2011, gave notice to the
petitioner for initiation of review proceedings under Section 47 of the Bihar
Finance Act. Further case of the petitioner is that in the Notice initiating
review proceedings, no reason whatsoever was assigned for initiation of
review proceedings and only reference was given to Sanction Order issued
by Joint Commissioner of Commercial Taxes (Administration) Dhanbad vide
Memo No. 1485 dated 27.12.2010 wherein sanction was accorded for
initiation of review proceedings.
8. Consequent upon initiation of review proceedings, petitioner
appeared before Respondent No.4 and specifically demanded the reasons for
initiation of review proceedings including copy of sanction letter contained
in Memo No. 1485 dated 27.12.2010 by which Joint Commissioner of
Commercial Taxes (Administration), Dhanbad Division, Dhanbad accorded
sanction for initiating review proceedings. Despite repeated requests made by
the petitioner, the petitioner was not supplied any reason for initiation of
review proceedings including copy of the Sanction Order.
However, subsequently, the petitioner obtained certified copy of the
Sanction Order contained in Letter No. 1485 dated 27th December 2010
(Annexure-5) which further reveals that prior to granting sanction for review,
no reason whatsoever was assigned by the sanctioning authority for
according sanction. Further, in the Sanction Order, reference was made to
Letter No. 820 dated 23.12.2010 issued by Respondent No.4 to Respondent
No.2 requesting for grant of sanction. However, copy of the said letter was
not furnished to the petitioner.
9. According to the petitioner, it repeatedly, for the period from
19.07.2012 to 28.08.2012, pursuant to Notice issued for initiation of review
proceeding, demanded the grounds on which review proceedings were
initiated as well as copy of Letter No. 820 dated 23.12.2010 by which
reviewing authority sought sanction from Respondent No.2. However,
neither the grounds nor the copy of the letter dated 23.12.2010 were supplied
to the petitioner. As a matter of fact, thereafter, even no notice was issued to
the petitioner.
10. However, one fine morning, the petitioner received a Demand
Notice bearing No. 81 dated 09.06.2020 for the Assessment Year 2004-05
(Annexure-7), wherein petitioner was demanded tax on intra-state stock
transfer made by Jamadova Colliery of the petitioner to its Industrial Unit at
Jamshedpur. Thereafter, the petitioner applied for certified copy of the
Review Order and, for the first time, received copy of the Review Order
dated 27.09.2012 on 29.06.2020, which was an ex parte order passed against
the petitioner, wherein on the transaction of intrastate stock transfer from
Jamadova Colliery to its Jamshedpur Unit, tax was levied on the sole ground
that the petitioner failed to produce statutory Form IX-D against the said
intrastate stock transfer made by it.
11. Assailing the order of review passed by Respondent No.4, Mr. Kavin
Gulati, Senior Advocate appearing in W.P.(T) No. 1765 of 2023 and Mr.
Sumeet Gadodia, Advocate appearing in W.P.(T) No. 1764 of 2023,
primarily contended, inter alia, as under:-
(a) It has been contended that show cause notices issued for initiating
review proceedings did not contain any reasons and/or grounds for
which review proceedings were initiated and it was submitted that
vague show cause notices lacking details amount to violation of
principles of natural justice. Reliance in this regard was made upon
the following decisions:-
(i) Food Corporation of India v. State of Punjab, reported in (2001) 1SCC
291 (Paras 12, 13 and 15).
(ii) CCE, Bangalore v. Brindavan Beverages (P) Ltd. reported in (2007) 5
SCC 388 (Paras 13, 14).
(iii) Shri B.D. Gupta v. State of Haryana, reported in (1973) 3 SCC 149
(Paras 9, 10).
(b) It has been further submitted that non-supply of documents along
with show cause notice amounts to violation of principles of natural
justice and it was submitted that despite repeated requests, neither
reasons for initiation of review proceedings were supplied, nor copy
of Letter No. 820 dated 23.12.2010 written by Respondent No.4 to
Respondent No.2 seeking sanction for review was supplied to the
Petitioner. In this regard, reliance has been placed upon the
following decisions:-
(i) Kumaon Mandal Vikas Nigam Ltd. v. Girija Shankar Pant & Ors.,
reported in (2001) 1 SCC 182 (Paras 5, 19, 20);
(ii) Kothari Filaments & Anr. V. Commissioner of Customs (Port) Kolkara,
reported in (2009) 2 SCC 192 (Para 15);
(iii) Sona Builders v. Union of India, reported in (2001) 10 SCC 280 (Paras
5, 6, 7);
(iv) Ayaaubkhan Noorkhan Pathan v. State of Maharashtra & Ors.,
reported in (2013) 4 SCC 465 (Paras 28, 30);
(v) Oryx Fisheries Pvt. Ltd. v. Union of India, reported in (2010) 13 SCC
427 (Paras 24, 27, 40, 41).
(c) It has been submitted that once, on the same cause of action pursuant
to audit objection, re-assessment order has been passed by
Respondent No.4, no fresh proceeding can be initiated in respect of
the proceeding which has been dropped earlier. Reliance in this
regard was placed upon decision of Hon'ble Apex Court in the
following case:-
(i) CCE, Meerut v. Prince Gutka Ltd., reported in (2015) 15 SCC 775
(Para 3).
(d) It has been further submitted that once the Assessing Authority itself
rejected the audit objection, then the same said audit objection
cannot be used for initiating review proceeding and reliance in this
regard was placed upon following decision of the Hon'ble Apex
Court:-
(i) Larsen and Toubro Limited v. State of Jharkhand & Ors, reported in
(2017) 13 SCC 780 (Paras 3 to 6, 11 to 13, 33, 34, 35).
(e) Assailing the order of sanction, it was also submitted that the order
of sanction does not reflect any application of mind by the
sanctioning authority and on mere asking of the Assessing
Authority, sanction has been accorded, which is contrary to settled
principles of law that sanction/approval ought not to be granted
mechanically. In this regard following decisions of the Hon'ble
Apex Court has been referred:-
(i) Rajesh Kumar & Ors v. DCIT & Ors, reported in (2007) 2 SCC 181
(Paras 27, 42, 58);
(ii) Sahara India (Firm) Lucknow v. CIT, Central, reported in (2008) 14
SCC 151 (Para - 8);
(iii) M/s. Chhugamal Rajpal v. S.P. Chaliha & ors., reported in (1971) 1
SCC 453 (Para 4).
(f) Lastly, by referring to provisions of Section 21(1A) of the Bihar
Finance Act, 1981 and the earlier order dated 13.08.2010 passed by
Respondent No.4 on the same said audit objection, it was submitted
that bare perusal of Section 21(1A) of the Act would reveal that
statutory Form IX-D is required for intra-state stock transfer of
goods which are meant for 'sale' and not for 'captive consumption'.
It was further submitted that it is an admitted fact that Jamadova
Colliery of the petitioner is a captive mines catering to the needs of
coal required by the Industrial Unit of the petitioner situated at
Jamshedpur and intra-state stock transfer has been made for the
purpose of captive consumption of coal by the Jamshedpur Unit and,
hence, there was no requirement of statutory Form IX-D. Extensive
reliance has been placed upon the order passed by Respondent No.4
dated 13.08.2010, wherein Respondent No.4, on the same issue
pursuant to audit objection, categorically held earlier that there was
no requirement of Form IX-D. It has been submitted that despite
such categorical finding given by Respondent No.4 itself,
Respondent No.4, without assigning any reason and taking a
contrary view, proceeded to pass the impugned review orders, which
is clearly without authority of law and are liable to be quashed and
set aside.
12. Per contra, Mr. Ashok Yadav, learned S.C.-1 supported the
impugned orders and has firstly contended that the petitioner approached this
Court directly challenging the order of review, which is appealable under the
provisions of the Bihar Finance Act, 1981. Hence, in view of availability of
effective alternative remedy of appeal, writ petitions should be dismissed in
limine.
13. It has been further submitted that review order was passed on
27.09.2012, but present writ applications have been filed in the year 2023
i.e., after delay of more than 11 years and, thus, on the ground of delay and
latches itself, writ petitions are liable to be dismissed.
14. Lastly, it has been submitted that although Respondent No.4 earlier
passed order dated 13.08.2010 pursuant to audit objection not agreeing with
the audit objection and dropping the proceeding, but the said authority was
well within its jurisdiction to initiate review proceeding under Section 47 of
the Bihar Finance Act for reviewing its order, being an order, which was
erroneous and contrary to law. Hence, no illegality can be attributed for
passing the review order by Respondent No.4.
15. Having heard learned counsel for the parties and after going through
the documents annexed with the respective affidavits and the averments
made therein it transpires that Petitioner-Tata Steel Ltd. is having its
industrial unit at Jamshedpur wherein it is engaged in manufacturing of Iron
and Steel. It has its colliery in the District of Dhanbad known as 'Jamadova
Colliery' and from the said colliery, coal is being extracted and stock
transferred to its unit at Jamshedpur in the District of East Singhbhum for
captive consumption, which is 'intra-state stock transfer'.
Original assessment proceedings of the petitioner were completed
and its gross turnover was accepted and no dispute was raised with respect to
intra-state stock transfer of goods. Thereafter, office of the Accountant
General raised audit objection vide Audit Objection No. SRA 145/2009-10
Para 1(A), and following objections were raised:-
"Audit Objection:- On scrutiny of assessment order and other records, it was
noticed that dealer claimed intra-state stock transfer of Rs. 1365145160.00 and
Rs. 2173447211.00 during the period 2004-05 and 2005-06 respectively which
was not supported by declaration form IX-D. In support of claim dealer
furnished a letter of Joint Commissioner of Commercial Taxes (Administration),
Jamshedpur, bearing Memo No. 1174 dated 18.12.2008 addressed to Asst.
Manager (admn.) TISCO Ltd. Jamshedpur. In said letter it is stated that the
requirements of Form IX-D will be attracted only in case of claim of the dealer
for deduction in gross turnover which is related to sale price of goods. Therefore,
form IX-D is not required in case of non-sale/purchase transaction of purely
intra organizational nature such as stock transfers from your captive mines,
collieries etc. for the purpose of internal consumption. Further, form IX-D is also
not required to the intra state stock transfer to your conversion agents. On the
basis of this, assessing Officer allowed claim of stock transfer and deducted the
same amount from gross turnover as non taxable transaction.
In the instant case
(i) TISCO Jamadova, Dhanbad and TISCO Jamshedpur has separate entity
and separate registration.
(ii) The dealer claimed deduction in gross turnover.
(iii) Form IX-D is mandatory under Section 21(1A) of BF Act, 1981.
Hence, the allowance of exemption from tax on stock transfer in absence of
supporting evident or required declaration form was irregular. Under-
assessment worked out as below:-
Value of intra state stock transfer Rs. 1365145460.00 + Rs. 2173447211.00 =
Rs. 3538502671.00 Tax @ 4% on Rs. 3538592671, Rs. 141543706.84.
On this being point out DCCT Jharia Circle, Dhanbad stated that "The case will
be reviewed under intimation to audit."
16. A perusal of the audit objection would transpire that primary
objection raised by the Auditor was that Tata Steel Ltd. stock transferred its
goods from Jamadova Colliery to its Jamshedpur Unit, but did not file
statutory Declaration Form IX-D as mandated under Section 21 (1A) of the
Bihar Finance Act. For the sake of brevity, Section 21(1A) of the Bihar
Finance Act is quoted herein-below:-
"21. Taxable turnover.--(1) For the purpose of this part of the taxable turnover of
the dealer shall be that part of his gross turnover which remains after deducting
therefrom--
Xxx xxxx xxx
(1A) Where any dealer claims that he is not liable to pay tax on any part of his
gross turnover in respect of any goods by reason of transfer of such goods by
him to any other dealer or to his agent or principal, as the case may be, for
sale, the burden of proving this claim shall be on the dealer and for this
purpose along with other evidences he shall furnish before the prescribed
authority a declaration in the form and in the manner prescribed."
17. A bare perusal of Section 21(1A) of the Bihar Finance Act would
reveal that if any dealer claims that he is not liable to pay any tax on the part
of his turnover by reason of transfer of such goods to any other dealer or
agent or principal 'for sale' the burden of proving this claim shall be on the
dealer and the dealer would furnish before the prescribed authority a
declaration in the form and in the manner prescribed. Under the Rules, the
declaration prescribed is Form IX-D.
In the instant case, admittedly, the dealer-Tata Steel Ltd. stock
transferred its goods to its Jamshedpur Unit for 'captive consumption' and
not for 'sale' and, thus, on a bare reading of Section 21(1A), it would be
evident that there was no requirement of furnishing of statutory Form IX-D.
18. In fact, the Assessing Officer itself, vide its order dated 13.08.2010,
after considering provisions of Section 21(1A) held as under:-
"That it is stated that form IX-D is prescribed form for the purpose of section
21(1A).
That it is stated that from the perusal of section 21 (1A) and the relevant rules
and forms it is apparent that statutory form IX-D will be required in case when
the goods are stock transferred within state for sale. Since in the instant case,
admittedly, the goods are not being stock transferred for sale therefore there is
no9 requirement of form IX-D.
That it is stated that although the assesse claimed deduction on gross turnover
but such deduction was not claimed u/s 21(1A) under the aforesaid
circumstances.
That it is stated under the aforesaid circumstances the audit observation is fit to
be rejected and the stock transfer to Jamshedpur for internal Consumption by the
assesse be not taxed as such transfer was not for sand and in fact admittedly the
same has no9t been sold but the same was for internal consumption."
19. In our opinion, finding given by the Assessing Officer vide its order
dated 13.08.2010 was in consonance with the statutory provision of Section
21(1A) of the Bihar Finance Act.
20. However, interestingly, despite such finding given by Assessing
Authority itself, review proceeding under Section 47 of the Bihar Finance
Act, 1981 was initiated vide Notice contained in Memo No. 830 dated
04.01.2011 and from bare perusal of the said review notice, it would be
evident that said notice was completely vague and no reason, whatsoever,
was assigned for initiation of the review proceeding. Even the order of
sanction granted by Joint Commissioner of Commercial Taxes
(Administration), Dhanbad Division, Dhanbad, contained in Letter No. 1485
dated 27th December, 2010 does not record any application of mind and/or
any discussion before granting sanction for review. In fact, a perusal of the
said letter would reveal that sanction was granted on mere asking of the
Assessing Authority without recording any satisfaction and/or without due
application of mind.
21. At this stage, we feel it appropriate to quote Section 47 of the Bihar
Finance Act, 1981 which contains provision for review. Section 47 of Bihar
Finance Act reads as under:-
"47. Reviews. - Subject to such rules as may be made by the State Government
under this part any authority appointed under Section 9 or the Tribunal may
review any order passed by it, if such review is, in the opinion of the said
authority or Tribunal, as the case may be, necessary on account of a mistake
which is apparent from the record.
Provided that no such review, if it has the effect of enhancing the tax or penalty
or both, or of reducing a refund shall be made unless the said authority or the
Tribunal, as the case may be, has given the dealer, or the person concerned a
reasonable opportunity of being heard."
A bare perusal of the aforesaid section would reveal that review
proceedings are limited to correcting mistake/error apparent on the face of
the record. A perusal of the review order would demonstrate that the review
order has been passed not for correcting any mistake or error apparent on the
face of record, but review order has been passed to change alleged erroneous
decision which is not permissible in the eye of law. Reference in this regard
may be made to numerous decisions of Hon'ble Apex Court, wherein it has
been clearly held that power of review is limited to correcting 'mistake/error
apparent on the face of record' and not to change an 'erroneous decision'.
Some of the decisions of Hon'ble Apex Court are as under:-
(i) Parsion Devi v. Sumitri Devi, reported in (1997) 8 SCC 715 (Paras 9,
10);
(ii) S. Madhusudan Reddy v. V.Narayan Reddy, reported in (2022) SCC
Online SC 1034, (Paras 20 to 29, 31);
(iii) Surendra Koli v. State of U.P. & Ors., reported in (2014) 16 SCC 718
(Para 8);
(iv) CCE, Belapur v. RDC Concrete (India) P. Ltd., reported in (2011) 12
SCC 166 (Para 21);
(v) Deva Metal Powders P. Ltd. v. CTT, U.P., reported in (2008) 2 SCC 439
(Paras 12 to 15);
(vi) ACIT, Rajkot v. Saurashtra Kutch Stock Exchange Ltd., reported in
(2008) 14 SCC 171 (Paras 26 to 30); and
(vi) ACTO v. Makkad Plastic Agencies, reported in (2011) 4 SCC 750 (Para
18).
22. That apart, in the instant cases, although review orders were passed
on 27.09.2012, but, for the first time, demand was issued on 09.06.2020 i.e.,
after a lapse of about eight years. Petitioner, in the writ applications, has
specifically pleaded that ex parte review order was never communicated to it,
and, for the first time, review order has been communicated by way of
Demand Notice in the year 2020. Although in the Counter Affidavit, it has
been stated that review order was communicated to the Petitioner, but neither
any document has been annexed showing communication of the review order
nor any attempt has been made to indicate the mode and manner of
communication of the review order.
23. It is trite law that an order passed by an authority does not take effect
unless it is communicated to the affected party and the said issue stand
settled by following decisions of the Hon'ble Supreme Court of India,
namely:-
(i) Bachhittar Singh v. State of Punjab, reported in (1962) Supp 3 SCR 713
(Paras 4, 9, 10);
(ii) Bipromasz Bipron Trading SA v. Bharat Electronics Limited (BEL), reported
in (2012) 6 SCC 384 (Paras 31 to 35).
24. We are not satisfied with the contention made by Mr. Yadav, learned
counsel for the State that the petitioner has approached this Court after an
inordinate delay of eleven years from the date of passing of the review order,
inasmuch as, the review order was never communicated to the petitioner and,
for the first time, it was communicated in the year 2020 and even, thereafter,
this petitioner repeatedly approached the Respondent-authorities for supply
of records pertaining to review proceedings which was supplied belatedly to
the petitioner. Hence, we are of the opinion that there is no delay and latches
on the part of the petitioner in approaching this Court for quashing of the ex
parte review order, which was not even communicated to the petitioner.
25. That apart, we are further not convinced with the arguments
advanced by the State of Jharkhand that the petitioner should be relegated to
avail the alternative remedy of appeal for assailing the review orders, as in
our opinion, the very initiation of the review proceedings pursuant to Show
Cause Notice dated 04.01.2011 was void ab initio, as neither any satisfaction
was recorded by the Assessing Authority nor any reason was assigned for
initiation of review proceedings.
26. It is a settled law that vague show cause notice lacking details
amounts to violation of the principles of natural justice and in that view of
the matter, we are inclined to entertain the present writ applications.
27. In any event, we have analyzed the provisions of Section 21(1A) of
the Bihar Finance Act and we are of the opinion that there is no statutory
requirement of furnishing Form IX-D by the petitioner in respect of
transactions pertaining to intra-state stock transfer from its Jamadova
Colliery to its Industrial Unit at Jamshedpur for captive consumption and we
see no reason to unnecessarily relegate the petitioner to the forum of appeal
prescribed under the Statute. In fact, the issue raised by the petitioner in the
instant writ applications is a pure question of law. In view of the admitted
facts of the case regarding intra-state stock transfer for captive consumption,
the writ petitions raising pure question of law can be entertained even against
the Assessment Orders.
28. In view of cumulative facts and circumstances mentioned
hereinabove, Review Orders dated 27.09.2012, as contained in Annexure-8
in both the writ petitions i.e., W.P.(T) No. 1764 of 2023 and W.P.(T) No.
1765 of 2023, are hereby, quashed and set aside.
29. Consequently, both the writ petitions are disposed of. Pending I.As.,
if any, also stand disposed of and there shall be no order as to cost.
(Rongon Mukhopadhyay, J)
(Deepak Roshan, J)
Jharkhand High Court
Dated/3 /10 /2023
Amardeep/AFR
