ITC BHADRACHALAM PAPER BOARDS LIMITED Vs. STATE OF ANDHRA PRADESH
SALES TAX TRIBUNAL
Itc Bhadrachalam Paper Boards Limited
STATE OF ANDHRA PRADESH
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N. Ratna Raju, Member (D) -
(1.) THE appellant herein prefers this appeal challenging the revision proceedings of the Additional Commissioner (CT), Legal, Office of the Commissioner of Commercial Taxes, Hyderabad passed in exercise of revisional power under Section 20(2) of APGST Act, '57. An overview of the facts leading to this appeal is sequentially set out hereunder:
(2.) M /s. ITC Bhadrachalam Paper Boards Limited, Sarapaka (rechristened as ITC Limited) a Limited Company, (for short, 'the appellant company') incorporated under the provisions of Companies Act, '56 is engaged in manufacture of Paper and Paper Boards in its manufacturing unit at Sarapaka village near Bhadrachalam in Khammam District in Andhra Pradesh. M/s. ITC Bhadrachalam Paper Boards Limited was a subsidiary company of the holding company namely ITC Limited M/s. ITC Bhadrachalam Paper Boards Limited was amalgamated with M/s. ITC Limited with effect from 1 -4 -2001 by virtue of the orders of two Company Courts namely the Hon'ble High Court of Judicature at Kolkota in West Bengal and the Hon'ble High Court of Andhra Pradesh at Hyderabad. The appellant company's assessment for the year 2001 -02 under CST Act, '56 was finalized by the Assistant Commissioner (CT), Int., LTU, Warangal Division, Warangal (for short, 'the assessing authority') by proceedings dated 31.3.2005. The assessing authority allowed exemption treating the turnovers between Erstwhile Bhadrachalam Paper Boards Limited and other inter -State Divisions/Units of M/s. ITC Limited as stock transfers following the decision of the Sales Tax Appellate Tribunal in the case of M/s. Jindal Strips Ltd., vs. State of Andhra Pradesh : (2003) 36 APSTJ 33, but forfeited the CST collected purportedly under Section 30 -C of the APGST Act, '57 read with Section 9(2) of the CST Act. On appeal before the Appellate Deputy Commissioner (CT), Punjagutta, (for short, 'the appellate authority') the said authority set aside the orders of forfeiture passed by the assessing authority following this Tribunal's decision in the case of M/s. Hindustan Cables Limited : (1999) 28 APSTJ 137 and allowed the appeal by proceedings dated 26 -06 -2007 on the ground that there is no substantive provision for forfeiture of tax under the CST Act. However, the Additional Commissioner (CT), Legal/Office of the Commissioner of Commercial Taxes, Hyderabad in exercise of revisional power under Section 20(2) of the APGST Act revised the appellate order relying on the Apex Court's decision in the case of Shiv Dutt Rai Fateh Chand vs. Union of India and Another : (1983) 53 STC 289. The revisional order is dated 29 -09 -2008 which triggers the controversy; hence this appeal. Heard both sides.
(3.) THE learned Advocate for the appellants referring to the written affidavit contended mainly on five grounds. They are these:
Firstly, he stated that the appellants were denied personal hearing though specifically urged in writing while filing the objections on 28 -09 -2007 to the pre -revision show cause notice. There was non compliance of the doctrine of audi alteram partem; thereby the appellants were prevented from urging submissions on facts and law to convince the revisional authority.
Secondly, he contended that there is no substantive provision for forfeiture of sales tax under CST Act as held by the Tribunal in the case of M/s. Hindustan Cables Limited : (1999) 28 APSTJ 137 following the law laid down by the Apex Court in the case of M/s. India Carbon Ltd., reported in : (1997) 106 STC 460 and this decision is indisputably after the decision in the case of Shiv Dutt Rai Fateh Chand vs. Union of India and Another : (1983) 53 STC 289 relied on by the revisional authority.
Thirdly, the learned Advocate contended that the Tribunal on the basis of the law laid down by the Apex Court in the case of M/s. India Carbon Ltd., reported in : (1997) 106 STC 460 and hence the embargo placed in sub -section 2A of Section 20 of APGST Act, '57 squarely operates barring the revisional authority to proceed with the revision. The facts of the case of M/s. Jindal Strips Ltd., vs. State of Andhra Pradesh : (2003) 36 APSTJ 33 which was upheld by the Hon'ble High Court of Andhra Pradesh in TRC filed by State reported in State of Andhra Pradesh & Another vs. Jindal Strips (Limited) (Previously M/s. Jindal Ferro Alloys Limited) Jindalnagar, Kothavalasa & Others, : 43 APSTJ p. 1 are akin. Hence, the issue must have been considered to have been concluded by the Tribunal with the approval of the Hon'ble High Court of Andhra Pradesh by which the hands of the revisional authority are stayed.
Fourthly, the learned Advocate contended that the assessment year is 2001 -02 and forfeiture by proceeding dated 31 -03 -2005 is beyond three years from the date of collection of the taxes is barred by limitation. He stated that M/s. ITC Bhadrachalam Paper Boards Ltd., ceased to exist with effect from 1 -4 -2001 and the transferee company M/s. ITC Ltd., remaining on the statute book, there is no buyer -seller relationship and the question of collection of one unit of the company from the inter -State unit of the self same company does not amount to collection of tax towards the value of stock transfer and the principle of undue enrichment does not arise. That apart, the forfeiture beyond three years by proceedings dated 31 -03 -2005 does not sustain in law.
Fifthly, the learned Advocate contended that the impugned order is based on the judgment in the case of Shiv Dutt Rai Fateh Chand vs. Union of India and Another : (1983) 53 STC 289 not put on notice to the appellant; hence it is vitiated in law as held by the A.P. High Court in : (1995) 20 APSTJ 130 in the case of State of Andhra Pradesh vs. Loharu Steel Industries Limited; and
Finally, it is contended that the revisional authority having noted that the appellant had taken various grounds including limitation, authority to forfeit in the light of the binding orders of the Tribunal incorrectly stated that the only objection raised by the appellant was that there was no substantive provision for forfeiture under the CST Act and set aside the appellate order. The learned Advocate filed a spiral paper book contending papers material for adjudication. In the circumstances, it is urged that the appeal be allowed.;
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