Case Law Details
Kalpataru Power Transmission Ltd Vs State of Maharashtra (Bombay High Court)
Conclusion: In present facts of the case, the Hon’ble High Court observed that writ under Article 226 would be maintainable if the Order has been passed beyond the Show Cause Notice as the action of an authority is wholly without jurisdiction and contrary to the principles of natural justice and in such case the Petitioners should not be relegated to an alternative remedy.
Facts: In present facts of the case, the petition under Article 226 was filed challenging review order dated 8th March 2021, passed by Respondent No.3 under Section 25 of the Maharashtra Value Added Tax Act, 2002 and order dated 6th July 2021, passed by Respondent No.3 on rectification application filed by the Petitioner, to rectify review order, under Section 24 of the MVAT Act for the financial year 2006-07.
During the FY 2006-07, the Petitioner executed two projects of electricity distribution line. With respect to it, the Petitioner claimed deduction from the contract price @ 25% as per Table prescribed in Rule 58 of the MVAT Rules for arriving at value of transfer of property in goods.
On 18.2.2013, a Notice was issued to the Petitioner for verification of books of accounts to examine discrepancies found in the course of the business audit conducted by the revenue. The said notice records discrepancies found by the revenue after verification of the books of accounts. The Reply was filed on 18.2.2013 and 18.3.2013. On 11.12.2015, an assessment order under S. 23(3) came to be passed by the Assistant Commissioner of Sales Tax, wherein it was observed that the Petitioner has claimed deduction under section 58 of the MVAT Act on actual basis aggregating to Rs.30,59,93,405/-. The assessment order records that the deduction is allowed after verification of books of accounts i.e., trial balance, expenses, ledger copies, contract copies, sample copies, etc. The assessment order, however, raises a demand of Rs.8,27,465/- on some other issue. On 22.10.2018, Respondent No.3 issued a notice u/s 25 of the MVAT Act to review the assessment order passed under Section 23(3) of the Act. The Petitioner replied on 02.11.2018, wherein Petitioner filed detailed submissions objecting to the notice issued under Section 25 of the MVAT Act. The Petitioner submitted that the issue raised in the show cause notice was also raised by Sales Tax Revenue Audit Team, which was duly replied by the Petitioner. The Petitioner further submitted that for a turnkey projects, there cannot be two separate agreements, one for sale of the goods and another for supply of labour and services. On 23.11.2020, the successor of Respondent No.3 issued a similar show cause notice to review the assessment order on the ground that deduction under Rule 58 amounting to Rs.9,41,22,626/- on profit of supply of labour and services has been wrongly allowed. On 26.11.2020, the Petitioner replied to the aforesaid notice and reiterated its detailed submissions made on earlier occasions.
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