Pidilite Industries Limited vs The State Of Bihar
2021 Latest Caselaw 5022 Patna

         IN THE HIGH COURT OF JUDICATURE AT PATNA
                    Civil Writ Jurisdiction Case No.18547 of 2021

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Pidilite Industries Limited a company incorporated under the provisions of the Companies Act and having its office at Plot no. 413 and 425, Near Rajdhani Petrol Pump, Sabalpur, PO Madhav Mills, P.S. Didarganj, Patna City, Patna, through its Authorised Signatory, Sunil Kumar Poddar, aged about 45 years (Male), Son of Shankar Lal Poddar, resident of 75 Ashok Palace, A Block, P.S. GPO, District - Patna.

... ... Petitioner/s

Versus

1. The State of Bihar through the Commissioner, Commercial Taxes Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna - 800001.

2. The Commissioner, Commercial Taxes Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna - 800001.

3. The Additional Commissioner, Commercial Taxes Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna - 800001.

4. The Joint Commissioner of Commercial Taxes, Central Division, Bihar.

5. The Assistant Commissioner of Commercial Taxes, Patna Special Circle, Patna.

6. The Deputy Commissioner, State Tax, Special Circle Patna.

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : Mr.Suraj Samdarshi, Advocate For the Respondent/s : Mr.Vikash Kumar, SC 11 ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE A. M. BADAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

Date : 27-10-2021

Petitioner has prayed for the following relief(s):-

i) To issue an appropriate writ, order or direction in the nature of certiorari for quashing the order dated 26.03.2021 (Annexure 12) passed by the Deputy Commissioner State Tax, Special Circle Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

Patna, pertaining to the year 2009-2010, whereby and where under upon remand of the matter from Joint Commissioner, the Deputy Commissioner has rejected the classification of goods by the petitioner and disallowed the deduction for sale returns and imposed a tax liability of Rs. 23,28,853.86/- and also levied interest of Rs.20,61,035.67/-, on wholly erroneous grounds.

ii) To issue an appropriate writ, order or direction in the nature of certiorari for quashing the demand notice dated 26.03.2021 (Annexure 13 ) issued to the Petitioner in Form N-VIll by the Assistant Commissioner State Tax, Special Circle Patna.

iii) To issue an appropriate writ order or direction in the nature of certiorari for quashing the second assessment order dated 14.02.2015 passed by the Assistant Commissioner State Tax, Special Circle Patna under section 31 of the Bihar VAT Act.

iv) To issue an appropriate writ order or direction in the nature of mandamus for commanding the Respondents to refund the amount of Rs.39,89,402/- deposited by the petitioner before the appellate authority in seeking stay of second assessment order dated 14.02.2015 passed by the Assistant Commissioner State Tax, Special Circle Patna under section 31 of the Bihar VAT Act.

v) To issue an appropriate writ, order or direction in the nature of mandamus commanding the Respondent to bring on record the audit objection of the Accountant General (Audit), Bihar pursuant to which order dated 08.11.2012 was passed under section 33 of the Bihar VAT Act 2005 and thereafter to quash on the ground that the same is sans any legal authority.

vi) During the pendency of this writ application to issue an appropriate writ, order or direction in the nature of mandamus commanding the Respondents not to take any coercive steps against the petitioner for the recovery of disputed tax amount, and interest.

vii) This Hon'ble Court may adjudicate and hold that second assessment order cannot be passed under section 31 of the Bihar Value Added Tax Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

Act 2005.

viii) This Hon'ble Court may further adjudicate and hold that the action of Respondents in initiating a second assessment proceeding under section 31 of the Bihar Value Added Tax Act 2005 is completely dehors the enactment.

ix) This Hon'ble Court may further adjudicate and hold that the respondents cannot shrug off their responsibility to decide the classification related dispute concerning the products of the petitioner conclusively.

x)This Hon'ble Court may further adjudicate and hold that levy of interest in a demand arising out of change in opinion is arbitrary, illegal and void, that too when there is neither any shortfall in payment of tax admitted nor any concealment of sale or purchase in return.

xi) This Hon'ble Court may further adjudicate and hold that the order of Deputy Commissioner State Tax, Special Circle Patna, imposing interest upon the petitioner is completely unjust, illegal and de-hors the provisions of the Bihar Value Added Tax Act, 2005 as the case of the petitioner is not covered under section 39(4) of the Bihar Value Added Tax, 2005.

xii) This Hon'ble Court may further adjudicate and hold that interest under section 39(4) of the Bihar Value Added Tax, 2005 can only be levied when a dealer has a) wrongly claimed either the whole or part of his turnover as not taxable and, has consequently, paid lesser amount of tax than payable by him; or (ii) wrongly declared his turnover or any particulars thereof and thereby has reduced the amount of tax payable under this Act; or (iii) wrongly claimed input tax credit in excess of what he is entitled to under this Act.

xii) This Hon'ble Court may further adjudicate and hold that since the petitioner has not concealed any particulars of sale/purchase, or wrongly declared its turnover, or wrongly claimed input tax credit, the levy of penalty and interest is not justified.

xiv) This Hon'ble Court may further adjudicate and hold that since the department has accepted the classification of goods by the Petitioner in its returns, the assessing officer cannot take different opinion with regard to the same merely on the basis of an Audit Objection and treating Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

the same to be sacrosanct.

xv) This Hon'ble Court may further adjudicate and hold that from the facts and circumstances of the case, it is evident that the intention of the Respondents is not to decide the matter on merits but elongate the life of the litigation without serving the cause of justice. xvi) To grant any other relief or reliefs for which the petitioner is found entitled in the facts and the circumstances of the case.

On a pointed a query as to why the petitioner has

not preferred the statutory appeal, Shri Suraj Samdarshi, learned

counsel for the petitioner states that the appellate authority, in all

likelihood, as was so done earlier, would remand the matter to

the Assessing Authority, and not decide the issue itself. He

further points out that the issue is purely legal and that the

appellate authority is competent to take a view with regard to

the same. Also, all issues of fact are and can be decided by the

appellate authority.

Looking into the record as placed before us, we

are in agreement with the submission made on behalf of the

petitioner. The matter pertains to the year 2009-10 and parties

cannot be allowed to litigate, more so when the issue can be

resolved by the authority.

At this stage, Shri Suraj Samdarsi states that the

petitioner does not press the present petition on merits reserving

liberty to file an appeal within a period of four weeks from Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

today. However direction be issued for expeditious disposal of

appeal.

Shri Vikash Kumar, learned S.C.-11 states that if

the appeal is preferred within the said period, the issue of

limitation would not come in the way of the petitioner and the

appeal would positively be heard and decided on merits, in

accordance with law.

Statement accepted and taken on record.

As such, we dispose of the present petition on the

following terms:-

(a) Petitioner shall file appeal, if not already filed,

within a period of four weeks from today;

(b) Petitioner shall comply with the condition of pre-

deposit for hearing of the appeal. If that were so, the appeal

shall be decided on merits. However, if the amount is not

deposited for whatever reason(s), same shall be done before

the next date;

(c) This deposit shall be without prejudice to the

respective rights and contention of the parties and subject to

the order passed by the Appellate Authority. However, if it

is ultimately found that the petitioner's deposit is in excess,

the same shall be refunded within two months from the date Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

of passing of the order;

(d) We also direct for de-freezing/de-attaching of the

bank account(s) of the writ-petitioner, if attached in reference

to the proceedings, subject matter of present petition. This

shall be done immediately.

(e) Petitioner undertakes to appear before the Appellate

Authority on 15th November, 2021 at 10:30 A.M., if possible

through digital mode;

(f) The Appellate Authority shall condone the delay

in filing the appeal and decide the appeal on merits after

complying with the principles of natural justice and not

remand the matter to the Assessing Authority;

(g) Opportunity of hearing shall be afforded to the

parties to place on record all essential documents and

materials, if so required and desired;

(h) During pendency of the appeal, no coercive

steps shall be taken against the petitioner.

(i) The Appellate Authority shall pass a fresh order

only after affording adequate opportunity to all concerned,

including the writ petitioner;

(j) Petitioner through learned counsel undertakes to

fully cooperate in such proceedings and not take Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

unnecessary adjournment;

(k) The Appellate Authority shall decide the appeal

on merits expeditiously, preferably within a period of three

months from the date of appearance of the petitioner;

(l) The Appellate Authority shall pass a speaking

order assigning reasons, copy whereof shall be supplied to

the parties;

(m) Liberty reserved to the petitioner to challenge

the order, if required and desired;

(n) Equally, liberty reserved to the parties to take

recourse to such other remedies as are otherwise available

in accordance with law;

(o) We are hopeful that as and when petitioner takes

recourse to such remedies, before the appropriate forum,

the same shall be dealt with, in accordance with law, with a

reasonable dispatch;

(p) We have not expressed any opinion on merits

and all issues are left open;

(q) If possible, proceedings during the time of

current Pandemic [Covid-19] be conducted through digital

mode;

We are constrained to pass such an order, as already Patna High Court CWJC No.18547 of 2021 dt.27-10-2021

observed supra that the matter pertains to the year 2009-10

as such appeal be positively decided within a period of

three months from the date of its filing along with a copy of

this order.

The instant petition sands disposed of in the

aforesaid terms.

Interlocutory Application(s), if any, also stands

disposed of.

Learned counsel for the respondents undertakes to

communicate the order to the appropriate authority through

electronic mode.

(Sanjay Karol, CJ)

( A. M. Badar, J) Sujit/-Ashwini AFR/NAFR CAV DATE Uploading Date 03.11.2021 Transmission Date