Sojitz India Pvt. Ltd. Vs. Commercial Tax Officer (Enforcement), Vellore – 2021 (50) G.S.T.L. 280 (High Court – Madras)

A revisional power cannot be akin to appellate power and at best, the Revisional Authority can consider as to whether there was any procedural error committed by the Lower Authority.

Facts-The appellant filed the said writ petition challenging an order passed by the second respondent in R.T. No. 82/2016, dated 6-2-2017. The said revision petition was filed by the appellant before the second respondent against the order passed by the first respondent herein dated 13-3-2016 detaining the goods, which were transported from Maharashtra to Tamil Nadu and imposing a compounding fee. The second respondent disposed of the said revision petition by remanding the matter to the first respondent to fix the correct compounding fee as per the provisions of the Statute namely Section 72(1)(a) of the Tamil Nadu Value Added Tax Act, 2006 (for short, the Act). The Learned Single Judge, who heard the said writ petition, held that as against the order passed by the second respondent dated 6-2-2017, a second revision lies before the Additional Commissioner (CT) (RP), office of the Commissioner of Commercial Taxes, Chepauk, Chennai-5 and the time limit for filing the second revision was 30 days. the Learned Single Judge held that the High Court, in exercise of powers under Article 226 of the Constitution of India, ought not to entertain a writ petition assailing the order passed by a statutory authority which was not appealed against within the maximum period of limitation before the concerned Appellate Authority and accordingly dismissed the said writ petition.

Held- The Hon’ble High Court held that the first respondent has not recorded as to why the documents produced by the appellant cannot be accepted. If any clarification is required, the same could have been called for. Therefore, it is clear that the compounding notice dated 13-3-2016 is not only a non-speaking notice, but a notice in violation of the principles of natural justice, as the grounds raised by the appellant have not been considered by the first respondent.

The same mistake was committed by the second respondent – the Revisional Authority, who is in the cadre of Joint Commissioner. We have observed that the order is devoid of any reasons. Therefore, not only the compounding notice, but also the detention order are arbitrary, unreasonable and in violation of the principles of natural justice. Further, this Court is not denuded of its jurisdiction to interfere with the same.

A revisional power cannot be akin to appellate power and at best, the Revisional Authority can consider as to whether there was any procedural error committed by the Lower Authority, but would not be justified in re-appreciating the entire facts. The remedy provided under Section 57 of the Act, in so far as the appellant’s case is concerned, is not an effective remedy because the First Revisional Authority failed to record any reasons nor there was any fairness in the approach of the second respondent apart from violating the principles of natural justice. This issue can never be set right by the Second Revisional Authority, who appears to be an officer in the cadre of Additional Commissioner.

For the foregoing reasons, the writ appeal is allowed and the impugned order passed by the Learned Single Judge is set aside. Consequently, the order passed by the second respondent dated 6-2-2017 in R.P. No. 82/2016 and the demand notice dated 3-3-2017 issued by the first respondent are set aside. The first respondent is directed to refund the sum of Rs. 6,50,000/- (Rupees six lakhs and fifty thousand only) paid by the appellant dealer at the time of release of goods. The said amount shall be refunded to the appellant-dealer within a period two months from date of receipt of a copy of this judgment with an option to adjust the same against any other tax liability that may arise in respect of the appellant.

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