In M/s Lalit Hans Protein Pvt Ltd vs. The Commercial Taxes Officer, a single bench of Rajasthan High Court held that, Rajasthan Tax Board can direct petitioners to appear before the Commissioner, Commercial Taxes by invoking provisions of Section 85 of the Rajasthan Value Added Tax Act, 2003.
Justice Jainendra Kumar Ranka was answering the question, “Whether Rajasthan Tax Board has not exceeded its jurisdiction in giving directions to the petitioners to appear before the Commissioner, Commercial Taxes, Rajasthan, Jaipur by invoking provisions of Section 85 of the Rajasthan Value Added Tax Act, 2003”.
The assessee, who is carrying on the business of manufacturing Mustard Oil and Solvent Oil and is not only effecting sales within the State but also inter-State sale in the course of business.
On verification/examination of the returns for the second and third quarters of 2006-07 which was furnished in form VAT-10, it was noticed by the Assessing Officer that on purchase of Mustard seed and De Oiled cake, the assessee has claimed input tax credit after extraction of Solvent Oil Whereas under Section 18 of the RVAT Act, the input tax credit can be claimed on sale of taxable goods only and not on exempted goods and accordingly being not satisfied with the claim of the assessee, a show cause notice was given by the Assessing Officer as to why input tax credit be not disallowed.
The assessee contended that not only the Tax Board in utter violation of the legislative intent even directed the Commissioner to take action u/Sec. 85 of the VAT Act to take appropriate action in accordance with law but also directed both the sides to appear before the Commissioner.
The assessee also contended that the Board had no authority to give directions to the Commissioner u/Sec.85 of the Rajasthan VAT Act.
While rejecting the assessees contentions, Justice Jainendra Kumar Ranka observed that, “the powers of the Tax Board are wide enough. On perusal of section 83 Rajasthan VAT Act before and sub-section (10) of section 83 states that the Tax Board after opportunity of being heard shall pass such order “as it thinks fit” which in my view, gives power to the Tax Board even to direct the Commissioner u/Sec. 85 to revise an order”.
The Court also observed that, “even the inherent power is available with the Tax Board to pass an appropriate order “as it thinks fit” which would mean even directing the Commissioner under Section 85 of the Rajasthan VAT Act to pass an appropriate order. Admittedly, the Commissioner is an Authority subordinate to the Tax Board and the Tax Board can certainly give directions to correct a wrong undone in the matter”.
“Even under Section 85, the Commissioner may “suo-moto or otherwise”……, would mean that the Commissioner can on his own or on receiving certain information from any source that is even Tax Board can take recourse of invoking provisions of section 85 and certainly, the Commissioner is duty bound to grant opportunity of being heard to the aggrieved person i.e. to the dealer/assessee and shall pass such order or issue such directions as it deems fit, just & proper under the circumstances of the case”, the Court said.
“The directions given by the Tax Board to the Commissioner cannot be said to be contrary to the provisions of the Act and the Tax Board was within its competence to give certain directions”, Justice Jainendra Kumar Ranka also added.
Read the full text of the Judgment below.
