Case Law Details
Tarapore & Company Vs State of Jharkhand (Jharkhand High Court)
We find that the petitioner firm had acted absolutely in a bona fide manner, as is also apparent from the impugned order dated 20.11 .2017, as contained in Annexure-5 to the writ application, and had discharged its tax liability by paying the VAT amount to the selling dealer and had filed its return within time, claiming the applicable ITC, but it was solely due to the laches on the part of the selling dealer, that the return had not been filed by the selling dealer, and the tax amount was not deposited in the Government Treasury. As such, it is apparent that the amount of tax and interest has been saddled upon the petitioner firm and has also been realised by way of garnishee order, which have been challenged in the other writ application, for no fault on part of the petitioner, but solely due to the fault of the selling dealer. We are satisfied that the petitioner had discharged its liability under the VAT Act, and there being no mechanism under the JVAT Act, by which, the petitioner could compel the seller also to discharge their duty, it was not within the competency of the petitioner to compel the selling dealer to file the return within the stipulated time, and deposit the tax collected from the petitioner in the Government Treasury.
In the backdrop of these facts, we do not intend to enter into the challenge to the vires of Section 18(8) sub-clause (xvii) brought by way of amendment, or into the questions of limitation, or defect in the notice, if any, as we are satisfied that due to the bona fides on part of the petitioner, no punitive action was required to be taken, or warranted against the petitioner. We are also at a loss, upon going through the impugned order dated 20.11.2017 passed by the respondent Assistant Commissioner of Commercial Taxes, Jamshedpur, as to when he was satisfied upon the documents, produced by the petitioner firm that it was the selling dealer, which had defaulted in filing its return or depositing the tax collected from the petitioner in the Government Treasury, how the punitive action could be taken against the petitioner firm, only for the reason that the JVAT Act provided for such action against both the dealers. We are not entering into the questions of vires etc., as in appropriate cases, it may be necessary for the State authorities to invoke the provision of Section 18(8) sub-Section (xvii) with respect to the defaulting dealers, who may be either the purchasers or the sellers, but certainly any punitive action is warranted only against the defaulting dealer, and not against the dealer acting in bona fide manner. The intent of the Legislature cannot be to punish the dealer acting in bona fide manner. We are also at a loss as to how, in the facts of this case, no action was taken at the appropriate time against the selling dealer under Section 40(2) of the JVAT Act, though, it is the contention of learned counsel for the State, that belatedly such action has been taken against the selling dealer also. Since the action taken against the petitioner was absolutely uncalled for, unwarranted and cannot be sustained in the eyes of law, we are of the considered view that the availability of the alternative remedy cannot be treated as a bar for maintaining this writ application.
For the foregoing reasons, we hereby quash the order dated 20.11.2017 passed by the respondent Assistant Commissioner, Commercial Taxes, Urban Circle, Jamshedpur, denying ITC to the petitioner and imposing the interest, and also the demand notice, as contained in Annexures-5 and 6 to the writ application, and further direct that the total amount of Rs.20,21,801/- realised from the petitioner by way of garnishee order, be refunded to the petitioner within a period of three months from the date of production / communication of this order. We give the liberty to the respondent authorities to realize the tax with admissible interest / penalty from the respondent No. 5, in view of the admission of the respondent No. 5 in paragraphs 7, 8 and 11 of the counter affidavit filed by them, in which, the respondent No. 5 has stated that they are still ready and willing to pay the tax, if the portal is reopened by the State Government for making the payment.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
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