GAIL INDIA PVT. LTD Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) This Writ Appeal has been filed by the appellant challenging the order of this Court dated 28.06.2016 passed in W.P.No.35782 of 2015.

(2.) Brief facts of the case of the appellant are as follows: 2.1. Appellant is a Central Public Sector Undertaking engaged in the business of transmission, distribution and marketing for Natural Gases and is registered with the respondent assessment circle under TNVAT Act, 2006 and CST Act, 1956. Appellant purchases Natural Gases from Oil and Natural Gas Commission (ONGC) and would re-sell the same to various customers. 2.2. VAT was introduced in Tamil Nadu w.e.f January 1, 2007 and Natural Gases attracted VAT at 4%. However, ONGC had erroneously charged VAT at 12.5% (instead of 4%) on sale of Natural Gases to the Appellant. 2.3. Out of the purchases made from ONGC, the appellant made local sale of natural gases totalling to Rs. 82.93 Crores during the period January 2007 to March 2007. Out of the total local sale of Rs. 82.93 Crores, sale to TNEB was Rs. 23.29 Crores and the appellant charged 4% VAT on this sale (as per GO of TN Govt). As regards the balance sale of Rs. 59.64 Crores (other than TNEB), the appellant charged VAT at 12.5% and remitted the amount of VAT so collected (12.5%) to the Government. 2.4. It is submitted that ONGC had committed an error in charging VAT at 12.5% (instead of 4%) on sale to the Appellant and thus, the Appellant also committed an error in charging VAT at 12.5% on their local sale. Similarly, the appellant wrongly reversed Input Tax Credit in each of their Inter-State sale transactions effected during the period January - March 2007. The total Inter-State sale value for the period January - March 2007 works out to Rs. 14.98 Crores and the appellant wrongly reversed ITC at 12.5% (paid Tax) to the tune of Rs. 1,52,01,304/-. 2.5. The appellant showed the above reversal of Input Tax Credit of 12.5% in each of the Inter-State Sale Invoices, collected the same from their buyers as part of sale price and remitted the same to the Government. Through a clarification letter of the Commissioner of Commercial Taxes, Tamil Nadu, the appellant realized that the rate of VAT for Natural Gases is only 4% and that they are eligible for availing entire amount of VAT charged by the seller (ONGC) (whether 4% or 12.5%) and further realized that they have reversed 12.5% of ITC wrongly. Therefore, the Appellant filed an Application dated 29.05.2008 seeking refund [8.5% representing 12.5% minus 4%] on local sales, which was originally remitted by the Appellant to the Department. This was done by the Appellant to enable the Appellant to refund the same to its customers. The Appellant also gave an undertaking to refund the differential tax amount to its customers within a period of 3 months from the date of receipt of refund amount. However, the Respondent did not consider the request and passed an order under Section 22(2) of the TNVAT Act, 2006 assessing the Appellant at 12.5% vide 0rder dated 25.06.2008. 2.6. Aggrieved by Order dated 25.06.2008 (VAT), the Appellant filed an Appeal before the First Appellate Authority and the First Appellate Authority vide its order dated 23.03.2009 dismissed the appeal. 2.7. Thereafter, the Appellant filed Second Appeal before the Sales Tax Appellate Tribunal. The Tribunal allowed Appeal T A No.23 of 2010 and passed an order dated 21.04.2011 holding that rate of VAT for Natural Gases is 4% and accordingly, ordered grant of refund to the Appellant. 2.8. Subsequent to the Tribunal's order dated 21.04.2011, the Appellant filed revised returns for January-March 2007 on 15.11.2011 under TNVAT Act, and carried forward the excess ITC of Rs. 1,52,01,304/- for the year 2006-2007. 2.9. Whereas, the Respondent passed an order dated 23.06.2014 for the year 2006-07 and assessed the transactions of Sale of Natural Gases at 12.5% by taking a new ground that the power producers are not entitled to issue Certificate under Rule 6(3)(b) of the TNVAT Rules, 2006, for purchase of industrial input. Against the order, the Appellant had already filed a Writ Petition in W.P.No.25147 of 2014 and this Hon'ble Court in W.P.No.25147 of 2014 was pleased to issue Notice to department and that Writ Petition is pending as on date. 2.10. In the aforesaid circumstances, the Respondent took up the assessment proceedings for 2006-07 under CST Act' 1956 by issuing Notice on 23.10.2014. The Appellant once again referred to order of the Tribunal dated 21.04.2011, wherein the Tribunal gave a specific direction to the Respondent to assess Natural Gases at 4% and refund the excess tax collected. Pursuant to the above order of the Tribunal, the Appellant also made a representation to the Respondent in Letter dated 03.11.2014 to consider the revised returns filed on 15.11.2011 and permit the Appellant to carry forward the ITC of Rs. 1,52,01,304/- to the next year. 2.11. The Respondent passed an order dated 26.06.2015 rejecting the Appellant's request for refund/carry forward of ITC of Rs. 1,52,01,304/- on the ground that the revised returns were filed on 15.11.2011 after a lapse of five years for the year 2006-07 and there is no provision in the Act and Rules to accept the revised returns filed after a period of nearly five years; and revised returns can be filed only within six months from the due date of a return as provided under Rule 7(9) of TNVAT Rules 2007 and Rule 5(1) of CST (Tamil Nadu) Rules 1957. 2.12. In the aforesaid order, the respondent had relied on Rule 7(9) of TNVAT Rules, 2007, inserted with effect from 6th May, 2010, which permits submission of revised returns within a period of six months in the event of noticing any omission or error. It is submitted that during 2006-2007, there was no provision restricting the submission of revised returns. It is submitted that Rule 7(9) of TNVAT Rules, 2007, inserted with effect from 6th May, 2010, would apply prospectively and therefore, it would not apply to the revised returns filed for the assessment year 2006-2007. This clear legal position now stands confirmed by this Court in the case of "Sri Mounika Traders v. Commercial Tax Officer, Perundurai reported in [2010] 035 VST 0277 (Mad)", wherein this Court held that revised returns could be filed by the assessee under the provisions of TNVAT Act, 2006. 2.13. The Appellant would, therefore, submit that the Appellant is entitled to get refund of Rs. 1,52,01,304/-. Rejection of refund is in violation of Article 265 of the Constitution, which mandates that no tax shall be levied or collected, except by authority of law. 2.14. Aggrieved by order dated 26.06.2015 passed by the Respondent, the Appellant filed Writ Petition No.35782 of 2015 before this Court, and the said Writ Petition has been dismissed by this Court on 28.06.2016 stating that Section 41 of the TNVAT Act, 2006 was not considered by the Tribunal and when an alternative remedy was available, the Appellant could pursue the matter, in appeal.

(3.) Aggrieved against the order passed by this Court in W.P.No.35782 of 2015 dated 28.06.2016, the appellant has preferred this Writ Appeal by raising various grounds.