RELIANCE INFRASTRUCTURE LTD Vs. COMMISSIONER OF TRADE TAXES

JUDGEMENT

(1.) Regard being had to the commonality of controversy, these writ petitions were heard analogously and are disposed of by a singular order. For the sake of clarity and convenience, the facts in WP(C) No. 3001/2010 are exposited herein.

(2.) Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner, a company incorporated under the Companies Act, 1956, has called in question the legality and validity of the initiation of the revisional proceedings against the petitioner by issuance of notice dated 08.04.2010 under Section 74A read with Section 106 of the Delhi Value Added Tax Act, 2004 (for brevity ,,the DVAT Act) by the Commissioner, Trade Taxes, Delhi, the first respondent herein, purporting to revise the orders of the Additional Commissioner dated 14.01.2008 and 25.01.2008 and to restore the order passed by the assessing authority on 03.03.2006. It is pleaded that orders of the assessing authority as well as that of the first appellate authority relate to assessment year 2004-05 to which Delhi Sales Tax Act, 1975 (for brevity ,,DST Act) was applicable and not the provisions of the DVAT Act which came into force with effect from 01.04.2005. It is contended that the initiation of the revisional proceedings against the petitioner is wholly without jurisdiction and without the authority of law inasmuch as the power of revision engrafted in Section 74A of the DVAT Act cannot be pressed into service in respect of orders passed under the provisions of the DST Act. That apart, the provision of Section 74A of the DVAT Act has no application at all to the year 2004-05 during which the the said provision had not come into force. It is urged that the issue is squarely covered in favour of the petitioners by the decisions rendered by this Court in International Metro Civil Contractors v. Commissioner of Sales Tax/VAT & Another, [2008] 16 VST 329 (Delhi) and LG Electronics (India) Ltd. v. Commissioner of Trade & Taxes, New Delhi [2008] 16 VST 361 (Delhi) and, therefore, the petitioner should not be compelled to face the proceedings which is fundamentally not sustainable being ab initio void.

(3.) It is averred that the petitioner had effected sales of electrical equipments to the various undertakings such as M/s BSES Yamuna Power Ltd. and M/s BSES Rajdhani Power Ltd., etc. which are engaged in generation/distribution of electricity in Delhi. The sales were made against exemption certificates issued by the said companies under Rule 11 of Delhi Sales Tax Rules, 1975. The petitioner had not collected any tax on its sale to the said companies. The claim of the petitioner not to be brought under the net of tax was denied by the Value Added Tax Officer, the third respondent herein, on the sole ground that the said two buyers were not licencees under the Indian Electricity Act, 1919. Being dissatisfied with the said orders, the petitioner preferred an appeal before the respondent No.2 and the first appellate authority, under Section 43 of the DST Act, entertained the appeal subject to deposit of Rs.10 crores vide order dated 06.09.2006. The said order was reviewed requiring the petitioner to deposit Rs.7.5 crores in cash and to furnish a bank guarantee for Rs.2.5 crores. The appeal was heard on merits and the first appellate authority remanded the matter to the original authority by order dated 14.1.2008. The assessing officer, on the initial date of hearing, took the view that the cases were only remanded without any clear guidelines to him. Thereafter, an application for review/rectification was filed before the appellate authority. The appellate authority, by order dated 25.11.2008, remanded the matter with specific direction that the exemption certificates issued by M/s BSES Yamuna Power Ltd. and M/s BSES Rajdhani Power Ltd. are valid for exemption on the ground that these companies were nothing but successors of Delhi Vidyut Board as all the assets and liabilities of Delhi Vidyut Board stood transferred to the said companies and, hence, they should be deemed to be licencees to issue certificates. Thereafter, the petitioner appeared before the Value Added Tax Officer who kept adjourning the matter and waited for instructions from his senior officers. The assessing officer did not pass any order on the basis of the remand order as a result of which it got time barred. At this juncture, the Sales Tax Department preferred an appeal before the appellate tribunal under Section 43(2) of the DST Act against the orders of the first appellate authority. Along with the appeal, an application for condonation of delay was filed. At that juncture, a preliminary objection was raised by the petitioner with regard to the maintainability of the appeal. Thereafter, the Department filed an application for withdrawal of the appeal which was allowed and the appeal was permitted to be withdrawn by the tribunal. Thereafter, as set forth, the first respondent, namely, the Commissioner of Trade Taxes, has issued notice under Section 74A read with Section 106 of the DVAT Act proposing to suo motu revise the orders dated 14.01.2008 and 25.11.2008.