Commissioner of Commercial Tax & Ors. Vs Vikaram Cement (Supreme Court of India)
Summary: Supreme Court dismissed the Revenue’s appeals involving a tax component of ₹25,47,448 on the ground that it was below the ₹2 crore monetary threshold prescribed for Supreme Court litigation under CBIC’s Circular No. 207/1/2024-GST dated 26.06.2024. The appeals arose from a Madhya Pradesh High Court Full Bench judgment which had quashed reassessment proceedings under Section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958 as time-barred. The State contended that by virtue of Section 174(2)(f), the pending appeal under the old enactment survived and the monetary-limit Circular was inapplicable.
Rejecting this contention, the Supreme Court held that the Circular expressly covers not only filing but also pursuing appeals and that the National Litigation Policy expression “Appeal should not be pursued” encompasses pending appeals. The Court further observed that the monetary limits apply to pending appeals relating to CGST, SGST/UTGST, IGST and Compensation Cess. Since the tax component in the appeals was substantially below the ₹2 crore Supreme Court threshold, the appeals were dismissed. Importantly, the Court expressly refrained from deciding the substantive question of law concerning limitation for reassessment and kept that question open for determination in an appropriate case.
FULL TEXT OF THE SUPREME COURT ORDER
1. Heard learned senior counsel appearing for the appellants and learned counsel appearing for the respondent-Assessee.
2. The appellant-Commissioner of Commercial Tax is challenging the impugned judgment and order dated 01.09.2010 rendered in W.P. No. 9506 of 2003 by the Full Bench of High Court of Madhya Pradesh at Indore whereby the entire proceedings of reassessment initiated under Section 19(1) of Madhya Pradesh General Sales Tax Act, 1958 (hereinafter “the Act”) was set aside as barred by limitation.
3. Though on the ground of the threshold bar created under the Circular dated 26.06.2024 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, bearing F. No. CBIC-20001/4/2024-GST, the present appeals require to be dismissed whereunder there is a bar to pursue the appeal before this court, if the tax effect is less than Rs. 2,00,00,000/- (Rs. Two Crore only) and the tax component undisputedly involved in the present appeals is Rs. 25,47,448/- (Rs. Twenty Five Lakh Forty Seven Thousand Four Hundred and Forty Eight only). However, few facts are being narrated herein below for the purposes of clarity:
(i) The respondent who is registered under the Act was assessed for the assessment year 01.04.1987 – 31.03.1988.
(ii) On 19.03.1991 an additional demand of Rs. 41,062/- (Rs. Forty One thousand Sixty Two only) was raised.
(iii) Being aggrieved the same, an appeal was preferred on the ground of violation of principles of Natural Justice contending that certain declarations in Form B-2 was not allowed to be tenderd at the time of assessment.
(iv) The Appellate Authority vide order dated 20.05.1992 set aside the order of assessment dated 19.03.1991 and remanded the matter to the Assessing Authority. A direction was issued thereunder that proper tax should be assessed after giving reasonable opportunity to the Assessee to submit Form B and declarative Form.
(v) Pursuant to the same fresh assessment order came to be passed on 26.10.1994 by the Assessing Authority considering the declaration made in the Form B-2.
(vi) After three years thereafter, on 26.03.1997 the said authorities in exercise of the power vested under Section 19 (1) of the Act issued notice for reassessment of the liability of the respondent Assessee and pursuant to the same, an order came to be passed on 26.12.1998 assessing the liability of the respondent to the extent of Rs. 25,47,448/- (Rs. Twenty Five Lakh Forty Seven thousand Four hundred Forty Eight only).
(vii) The appeal filed challenging the said order on the ground of the same being time barred was not accepted or in other words the appeal came to be dismissed vide order dated 09.09.2002.
(viii) The Revision Petition filed challenging the said Appellate Authority’s order also did not yield any fruitful result to the Assessee or in other words the Revision Petition came to be dismissed vide order dated 02.07.2003.
(ix) It is thereafter respondent filed the Writ Petition No. 9506 of 2003 which has been allowed by the full Bench in view of the two conflicting judgments and opining that reassessment initiated by way of notice dated 23.03.1997 was barred by limitation and hence it come to be quashed. It has been held that the original assessment order did not completely merge with the order dated 20.05.1992 passed by the Appellate Authority as it was limited to provide an opportunity to file declarations in Form B-2 and Appendix declarations. Hence, this Appeal.
(x) In view of the Circular dated 26.06.2024 referred to herein (supra) whereunder the competent Authority by virtue of the power conferred under Section 120 of the Central Goods and Services Tax Act r/w Section 168 has recommended for non filing of the appeals where the monetary limit has been fixed and based on the recommendations of GST Council and the monetary limit has been fixed for non filing of the appeal or application or Special Leave Petition. The monetary limit so fixed for non filing reads:
| Appellate forum | Monetary Limit (amount involved in Rs.) |
|---|---|
| GSTAT | 20,00,000/- |
| High Court | 1,00,00,000/- |
| Supreme Court | 2,00,00,000/- |
4. Learned senior counsel appearing for the appellant-State would vehemently contend that by virtue of the repealing section namely Section 174(2)(f), the pending appeal which has been pursued under the old Act would survive and the monetary limit fixed in the Circular would be inapplicable, is an attractive argument which requires to be considered for the purposes of outright rejection and we do so, in much as the Circular itself is explicit and clear namely it would clearly indicate that pursuing the pending appeal or for filing of the appeals the monetary limit fixed would be attracted and answer to the same can be found in Para 3(i) of the said Circular, which reads as under:
“(i) Where the disputes pertains to demand of tax (with or without penalty and/or interest), the aggregate of the amount of tax in dispute (including CGST, SGST/UTGST, IGST and Compensation cess) only shall be considered while applying the monetary limit for filing appeal.”
5. A plain reading of the above condition of the circular would make it explicitly clear that even in respect of pending appeals relating to CGST, SGST/UTGST, IGST and Compensation Cess, the monetary limit fixed would be applicable.
6. Though learned senior counsel appearing for the appellants would contend that it is not only in respect of filing of the appeal in future such bar would be attracted is an argument which is flawed as could be seen from the very Circular itself, which clearly indicate that the National Litigation Policy mandates that expression used therein is “Appeal should not be pursued” which also means pending appeals.
7. In that view of the matter, on the ground of present appeals tax component being less than the monetary limit fixed under the aforestated circular dated 26.06.2024, we are of the considered view the present appeals have to be dismissed on the ground of bar contained thereunder. We make it explicitly clear that we have not expressed any opinion with regard to the question of law that has been raised and it is kept open to be urged in any other appropriate case.
8. No orders as to costs.
9. Pending applications, if any, shall stand disposed of.
