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
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".
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
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
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
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
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
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
