Andreas Stihl Private Limited Vs Joint Commissioner of State Tax (Bombay High Court)
Conclusion: Since there was no order u/s 50 of the MVAT Act for adjustment of refund of the F.Y 2016-17 against dues of F.Ys 2013-14, 2015-16 & 2017-18, therefore, the authorities under the Settlement Act may also be the authorities under the MVAT Act but while exercising powers under the Settlement Act, they could not invoke provisions of Section 50 of the MVAT and that too in review proceedings under the Settlement Act. Therefore, adjustment of refund of one year against demand of another year was not justified.
Held: Assessee-company was engaged in the business of manufacturing & sale of machineries, was served an appeal order under the MVAT Act demanding tax payable of Rs.1,01,51,134/-. Later, an assessment order was passed by the Revenue under the MVAT Act and a demand of Rs.30,40,559/- was raised against assessee. Meanwhile, the Settlement Act was passed for settlement of arrears of tax, interest, penalty or late fee which were levied, payable or imposed under various Acts administered by the State. Thereafter, an appeal order under the MVAT Act came to be passed, pursuant to which sum of Rs.2,72,08,381/- was determined as refundable to the assessee. Further, in reference application filed under the Settlement Act, the Dy CST passed an order of settlement u/s 13(1) and arrived at the same figure of the settlement amount which were calculated by the assessee in its application. Thereafter, an order under MVAT Act came to be passed whereby sum of Rs.1,41,86,978/- was determined as payable by assessee, who immediately, filed settlement application, which was accepted and payment as per the Settlement Act was made by assessee. Again, the Joint CST issued a show cause notice u/s 15, for review of the orders passed u/s 13(1) of the Settlement Act, proposing to adjust refund against demand for three years and recompute the settlement amount. Thereafter, provisions of Section 50 of the MVAT Act were invoked and the amount outstanding, after adjustment of refund, was arrived at. Assessee challenged review orders passed u/s 15 of the Settlement Act, whereby the Dy CST proposed to adjust the refund against the demand. It was held that action of Revenue to recalculate outstanding arrears after passing settlement order by invoking Sec 15 of Settlement Act without there being an order u/s 50 of MVAT Act, was without jurisdiction. Unless assessee desired for adjustment of refund of one year against demand of another year, Commissioner u/s 50 of MVAT Act, could not adjust the same on its own. The Settlement Act was a separate Act which was enacted for settlement of outstanding dues under various State Acts, each of which have separate and distinct authorities under their respective Acts for their administration. Although the Commissioner of State Tax was a Commissioner under the MVAT Act, he wears a different hat as a “designated authority” under the Settlement Act. In the present case, there was no order u/s 50 of the MVAT Act for adjustment of refund of the F.Y 2016-17 against dues of F.Ys 2013-14, 2015-16 & 2017-18, therefore, the authorities under the Settlement Act may also be the authorities under the MVAT Act but while exercising powers under the Settlement Act, they could not invoke provisions of Section 50 of the MVAT and that too in review proceedings under the Settlement Act. The Settlement Act nowhere provided or empowered the authorities under the said Act to import the provisions of the MVAT Act and more particularly provisions of Section 50 of the MVAT Act for determination of the requisite amount to be paid under the Settlement Act. On conjoint reading of Section 50 and Rule 60, the Bench opined that unless an assessee desired for adjustment of refund of one year against demand of another year, the Commissioner could not, u/s 50 adjust the same on its own volition and even if he proposed to do so he had to do so by giving an opportunity of hearing. In the instant case, admittedly there was neither such desire expressed by assessee nor shown any order u/s 50 which was passed for adjusting the refund against demand. Hence, High Court allowed assessee’s petition.
