Priyanka Communications India Pvt. Ltd. Vs State of Maharashtra & Ors. (Bombay High Court)
Bombay HC: MVAT refund cannot be adjusted against subsequent-year tax liability without notice or consent
Summary: The Petitioner, Priyanka Communications India Pvt. Ltd., challenged the order dated 27 June 2024 passed by the First Appellate Authority, Joint Commissioner of Sales Tax, Mumbai, City Division, Mumbai. The Petitioner contended that although it was entitled to refund for the assessment year 2014-2015, the refund had been declined on the ground that the amount was liable to be adjusted against a claim that might arise against it during financial years 2016-2017 and 2017-2018.
Relying upon the decision of the Bombay High Court in TML Business Services Ltd. vs. Deputy Commissioner of State Tax, Pune & Ors., reported at 2023 SCC Online Bom 2852, the Petitioner submitted that such recourse was impermissible. It was also contended that the impugned order had been passed without serving any prior notice upon the Petitioner or obtaining its consent, causing prejudice to its interests.
The Bombay High Court noted that, pursuant to the Court’s direction, the learned AGP obtained instructions from the Respondent-State. The State submitted that if the matter were remanded, a fresh decision would be taken after considering the Petitioner’s contentions and the applicable decisions of the Court.
In view of the consent of the parties, the High Court did not enter into a detailed adjudication regarding the validity of the impugned order. The order dated 27 June 2024 was set aside. Liberty was granted to the competent Respondent-Authority to pass a fresh order after hearing the Petitioner on the contentious issue. The Authority was directed to issue written notice intimating the date of hearing and appearance, and the proceedings were directed to be revived from the stage of hearing. All contentions of the parties were kept open.
Cases Discussed
TML Business Services Ltd. vs. Deputy Commissioner of State Tax, Pune & Ors. — 2023 SCC Online Bom 2852.
Argued by Adv. Bharat Raichandani i/b UBR Legal.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard Mr. Bharat Raichandani, learned Counsel appearing for the Petitioner. Also heard Mr. Amar Mishra, learned AGP appearing for the Respondent-State.
2. The order dated 27th June, 2024 passed by the First Appellate Authority, i.e., the Joint Commissioner of Sales Tax, Mumbai, City Division, Mumbai, has been assailed in this Writ Petition by taking several grounds. The primary contention of the Petitioner is that although, the Petitioner was entitled to refund for the assessment year 2014-2015, such refund has been declined by the Authorities on the ground that the amount is liable to be adjusted against the claim that may arise against the Petitioner during the financial year 2016-2017 and 2017-2018.
3. By referring to the decision of this Court rendered in the case of TML Business Services Ltd. vs. Deputy Commissioner of State Tax, Pune & Ors.1, Mr. Raichandani, submits that law is well settled that such a recourse would be impermissible under the law. Notwithstanding the same, without serving any prior notice to the Petitioner or obtaining its consent, the impugned order has been passed, thus, causing serious prejudice to the interest of the Petitioner.
4. According to Mr. Raichandani, unless the issue is properly adjudicated, the Appellate Authority would not have the jurisdiction to pass such an order. Hence, this Writ Petition.
5. Taking note of the nature of grievance expressed in this Writ Petition, yesterday, i.e., on 20th July, 2026, we requested Mr. Amar Mishra, the learned AGP appearing for the Respondent-State, to obtain instruction and appraise this Court, as to whether, the Appellate Authority would be willing to revisit the matter and pass an adjudicating order, after taking note of the contentions of the Petitioner as well as the decisions rendered by this Court, which are applicable in the matter.
6. Today, Mr. Amar Mishra submits, on oral instruction from the Departmental Authorities, that if the matter is remanded back, a fresh decision will be taken after considering the pros and cons of the projection made by the Petitioner.
7. In view of the above, it would not be necessary for this Court to enter into a detail process of adjudication as regards the validity of the impugned order dated 27th June, 2024.
8. By consent of parties, the order dated 27th June, 2024 stands set aside.
9. Liberty is, however, granted to the Respondent-Authority of competent jurisdiction to pass a fresh order, after hearing the Petitioner on the contentious issue, as noticed herein above. Facilitating the above, the Authority shall issue notice in writing, to the Petitioner intimating the date of hearing and appearance. The proceeding shall now be revived from the stage of hearing.
10. With the above observations, the Writ Petition stands disposed of.
11. All contentions of the parties are kept open.
Note:
1 2023 SCC Online Bom 2852
