Section 67(5) of Andhra Pradesh Value Added Tax, 2005 pellucidly tells that authority for clarifications shall have the power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties. It says that an order giving affect to such review or amendment or revocation shall not be subject to the period of limitation. What all Rule-5 pronounces is the power of ACAR to review, amend or revoke its ruling. A plain reading of this provision does not in restricted terms say that the aforesaid power is only a suo motu power i.e., exercisable by ACAR on its own proposition and not by the application of the dealer or other affected parties. Thus, in our considered view, the review can be taken up also on the application by the dealer and other affected parties.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The short but important question involved in this writ petition is, whether a review contemplated under Section 67(5) of Andhra Pradesh Value Added Tax, 2005 (for short “AP VAT Act”) can be undertaken only by the Authority for Clarification and Advance Ruling ( for short ‘ACAR’) by exercising suo motu power or whether a dealer who invited clarification and advance ruling from ACAR can also seek for review being not satisfied with its order?
2. The factual matrix of the case shorn of unnecessary details are thus:
(a) The petitioner is a Government of India Enterprise dealing with natural gas i.e., buying and selling of natural gas as per the directives of the Government of India from time to time. It obtained VAT registration. In the matter of purchasing of natural gas from Ravva- 1 and Ravva Satellite of Cairn India Limited during the period from 01.12.2008 to 31.10.2014 as per the guidelines issued by the Ministry of Petroleum and Natural Gas (MOPNG), GOI, the petitioner claimed Input Tax Credit (ITC) of Rs.16,70,84,426/- against the tax payable for the month of November, 2016 and disclosed in the Form VAT-200 for that month and paid the balance tax. The petitioner wanted to clarify the correctness of its claim of ITC and thus submitted an application dated 20.12.2016 seeking clarification through advance ruling. Since no order was passed, the petitioner filed another application dated 30.04.2019 seeking advance ruling and finally an order dated 15.02.2018 was passed by ACAR and served vide letter of the Additional Commissioner (ST) DMU, VAT which was received by the petitioner on 25.09.2020. The ACAR in its order held that the clarification application was filed with a design to avoid the payment of tax due to the State of Andhra Pradesh and on that ground alone the clarification application was liable to be rejected. On merits also, it held that the natural gas and relevant tax invoices were received at least two years earlier to the month of November, 2016 and therefore, the claim of ITC made in the month of November, 2016 was belated one in violation of Section 13(1) of AP VAT Act. The Authority observed, the ITC claim is legally impermissible and unsustainable.
(b) Aggrieved by the said order, the petitioner preferred an appeal (TA.02/2021) before the A.P. VAT Appellate Tribunal, Visakhapatnam dated 19.10.2020 and the same is pending.
(c) Pending appeal, the 1st respondent issued notice of Assessment of VAT dated 12.11.2020 proposing to reject the claim of ITC of Rs. 16,70,84,426/- which was claimed through the VAT returns for the month of November, 2016. The petitioner filed objections against the said notice vide its letters dated 04.12.2020 and 15.12.2020. The 1st respondent issued another revised notice. As there was an urgency involved for the disposal of the appeal pending before the Tribunal, the petitioner vide memo dated 17.12.2020 approached the Tribunal seeking hearing of the appeal on out of turn basis. Since the Tribunal was functioning only half a day for a week i.e., on every Friday and as the Chairman of the Tribunal is functioning as Full Additional Charge and holding regular post of Principal District & Sessions Judge, Visakhapatnam and also due to lack of quorum, the Tribunal could not take up the appeal. In those circumstances as there was no possibility of immediate disposal of the appeal (TA.02/2021) by the Tribunal, the petitioner filed review petition dated 14.12.2020 seeking review of the order of the ACAR dated 15.02.2018 mentioning certain reasons in its review application. In view of the urgency involved in the matter, the petitioner vide letter dated 22.12.2020 approached the 3rd respondent and requested to direct the ACAR to hear the review petition on priority basis. However, the 3rd respondent issued an endorsement in CCT’s Ref.No.AR.Com 432 of 2016 dated 31.12.2020 stating that the review envisaged under Section 67(5) of AP VAT Act is at the instance of the Authority for Clarification and Advance Ruling but not on an application by the petitioner and hence the application for review of advance ruling/clarification issued cannot be entertained.
Hence, the writ petition.
3. Heard Sri A. Sarsweswara Row, learned counsel for petitioner and learned Government Pleader for Commercial Taxes representing respondents.
4. While admitting that against the impugned ruling of the ACAR, the petitioner filed appeal before A.P. VAT Appellate Tribunal, Visakhapatnam and the same is pending, learned counsel for petitioner, however, submits that due to vacancy of the post of Chairman of the Tribunal, learned Principal District and Sessions Judge, Visakhapatnam has been officiating as Full Additional Charge of the post of Chairman, A.P. VAT Appellate Tribunal and taking up the matters only half a day on every Friday and in those circumstances his appeal could not be taken up and hence in order to get speedy justice, the petitioner filed review application and submitted request letter to 3rd respondent to direct the ACAR to hear the petitioner on priority basis. However, the 3rd respondent on misconception of law, made endorsement as if the review at the instance of the applicant is not entertainable and review can be taken up suo motu by the ACAR only. He would submit that in a number of matters, the ACAR has taken up the review applications filed by the concerned applicants. He filed copies of the orders in A.R.Com/92/2013 dated 08.06.2016 and A.R.Com/116/2007, dated 28.04.2010. He thus prayed to set aside the impugned endorsement of the 3rd respondent and direct the respondent 2 and 3 to take up the review petition at the earliest.
5. Per contra, learned Government Pleader for Commercial Taxes would argue that the review petition is not maintainable since the petitioner has already filed an appeal against the order of the ACAR and the same is pending.
6. We gave our anxious consideration. The first and foremost question that engages with us is:
(1) Whether a review petition maintainable at the instance of the dealer or it is maintainable only under the suo motu power of the ACAR?
7. Section 67 deals with the clarification and advance rulings. The Section reads thus:
“67. Clarification and Advance Rulings:-(1) The Commissioner may constitute a State level ‘Authority for Clarification and Advance Rulings’ comprising of 3 officers not below the rank of Joint Commissioner to clarify, in the manner prescribed any aspect of the implementation of the Act.
(2) No application shall be entertained where the question raised in the application:-
(i) is already pending before any officer or authority of the Department or Appellate Tribunal or any Court;
(ii) relates to a transaction or issue which is designed apparently for the avoidance of tax:
Provided that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard and where the application is rejected, reasons for such rejections shall be recorded in the order.
(3) No officer or any other authority of the Department shall proceed to decide any issue in respect of which an application has been made by an applicant under this Section and is pending.
(4) The order of the authority shall be binding:-
(i) on the applicant who had sought clarification;
(ii) in respect of the goods or transaction in relation to which a clarification was sought; and
(iii) on all the officers other than the Commissioner:
Provided the dealer does not file an appeal before Sales Tax Appellate Tribunal within 30 days of the Ruling in the manner prescribed.
(5) The authority for clarifications shall have power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties.
An order giving effect to such review or amendment or revocation shall not be subject to the period of limitation.
(6) The Commissioner may also refer any matter for opinion of the Authority for clarification without prejudice to his authority.”
Sub-Section (5) pellucidly tells that authority for clarifications shall have the power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties. It says that an order giving affect to such review or amendment or revocation shall not be subject to the period of limitation. What all Rule-5 pronounces is the power of ACAR to review, amend or revoke its ruling. A plain reading of this provision does not in restricted terms say that the aforesaid power is only a suo motu power i.e., exercisable by ACAR on its own proposition and not by the application of the dealer or other affected parties. Thus, in our considered view, the review can be taken up also on the application by the dealer and other affected parties. This aspect has been dealt by a Division Bench of Common High Court of Andhra Pradesh in Tirupati Chemicals and Ors. V. The Deputy Commercial Tax Officer and Ors1, it was observed thus:
“44. The submission that it is only the applicant who can seek review of the ruling of the ARA under Section 67(5) of the Act is not tenable. On a literal construction thereof, it cannot be said that the power of review under Section 67(5) can only be exercised by the ARA suo motu or at the instance of the applicant-dealer, for the words used therein are “affected parties”. Any dealer who is affected by the ruling/ clarification of the ARA would also be entitled to seek review, amendment or revocation of such a ruling. As Section 67(4)(ii) also binds dealers, other than the applicant, they would fall within the ambit of “affected parties” under Section 67(5) of the Act [emphasis supplied]. Unlike the proviso to Section 67(4) where a time limit of 30 days is prescribed for the applicant-dealer to prefer an appeal before the STAT against the ruling of the ARA, Section 67(5), by the use of the words ‘at any time’, does not prescribe any period of limitation for invoking the ARA’s power to review, amend or revoke its earlier ruling. All that is required of an affected dealer, to invoke the said provision, is to show “good and sufficient cause” for seeking review, amendment or revocation of the earlier ruling
(a) Further, order in A.R.Com/92/2013 dated 08.06.2016 and other order in A.R.Com/116/2007, dated 28.04.2010, copies of which are filed along with the material papers by the petitioner, would also show that earlier the ACAR has taken up the review proceedings on the application of concerned dealers and answered them. In the light of above law, the impugned endorsement dated 31.12.2020 passed by the 3rd respondent is not sustainable.
8. Hence, it is clear that the review petition is maintainable at the instance of the dealer who is affected by the ruling of ACAR.
Then coming to the argument of the learned Government Pleader that since the petitioner has already filed the appeal and the same is pending and therefore, the review petition is not maintainable is concerned, we do not find force in the said argument in view of the peculiar facts and circumstances. It is true that the petitioner filed the appeal before the VAT Tribunal. However, since the regular Chairman of the Tribunal is not functioning and as the Principle District & Sessions Judge, Visakhapatnam is holding the functions of the Tribunal as a Full Additional Charge only half-a-day for a week and in the meanwhile the notice of assessment of VAT dated 12.11.2020 was issued by 1st respondent, the petitioner has no other go except filing a review petition before ACAR. However, we direct that upon review petition being numbered by virtue of this order, the petitioner shall withdraw the appeal pending before the VAT Tribunal and then only proceed with the review petition.
9. Accordingly, the writ petition is allowed and the endorsement in CCT’s Ref.No.AR.Com 432 of 2016 dated 31.12.2020 issued by the 3rd respondent is hereby set aside and consequently, the 2nd respondent is directed to consider the review petition dated 14.12.2020 filed by the petitioner and afford personal hearing to the petitioner and pass appropriate orders therein expeditiously but not later than eight (8) weeks from the date of receipt of a copy of this order. No costs.
As a sequel, interlocutory applications, if any, pending for consideration shall stand closed.