APPEAL U/S 2 OF THE CHHATTISGARH HIGH COURT (APPEAL TQ v. State of Chhattisgarh & Ors.

APPEAL U/S 2 OF THE CHHATTISGARH HIGH COURT (APPEAL TQ ^ DIVISION BENCH) ACT, 2006. Bfii]au;E'"" r HIGH COURT OF CHHATTISGARH AT BILASPUR DIVISION BENCH CORAIVI: HON'BLE SHRI YATINDRA SINGH, C.J. HON'BLE SHRI SUNIL KUMAR SINHA, J Writ Appeal No.1096 of 2012 Appellants (Petitioners) M/s Bhawani Moulders (P) Limited and another VERSUS Respondents State of Chhattisgarh and others Writ ADRealNo.1097of2012 Appellants (Petitioners) M/s Bhawani Moulders (P) Limited and another VERSUS Respondents State ofChhattisgarh and others Writ Appeals under Section 2 of the Chhattisaarh Hiah Court (ApReal toj3ivision Bench) Act. 2006 Appearance: Shri PN Mishra and Shri CD Sharma, counsel the Appellants. Shri Kishore Bhaduri, Additional Advocate General for the State/ respondents. JUDGEMENT (28thJanuary,2013)

1. M/s Bhawani Moulders (P) Limited (the Appellant) prepares Sponge Iron Bars. The order for assessment of commercial tax for the assessment year 2002-03 was passed on 19.09.2005, whereas order for assessment year 2003-04 was passed on 30.12.2006. No further appeal was taken against these orders and they became final. A proceeding against the Appellant was initiated under the Central 2. Excise Act for clandestine removal of goods. An order was passed by the Commissioner, Central Excise, Raipur (the CCE) on 07.10.2008 »s ,^t7 imposing appropriate central excise duty and penalty upon the Appellant for removing 7758.200 MT of goods.

3. In view of the proceeding under Central Excise Act, the Assistant Commissioner, Commercial Tax, Raipur (the ACCT) issued notices on 31.12.2008 for reassessment under Section 28 of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 (the Act).

4. Act, During the pendency of the reassessment proceedings under the the Appellant also fited an appeal against the order dated

07.10.2008 passed by the CCE, before the Customs, Excise & Service (the Tribunal) and obtained a Tax Appellate Tribunal, New Delhi interim order on 28.01.2009 staying operation of the or;der conditional subject to deposit of some amount. Later on, this interim order was confirmed on 18.09.2009.

5. The Appellant filed copies of the aforesaid orders before the ACCT and initially the ACCT by order dated 16.11.2010 stayed the further proceedings till However, the disposal of the appeal by the Tribunal. the ACCT issued fresh notices on 20.12.2010 requiring the Appellant to show-cause as the period for limitation for reassessment proceeding was expiring on 31.12.2010.

6. According to the Appellant, it never received copies of these notices, however, it received orders dated 31.12.2010 on 17.08.2012 assessing tax of: • • ?23,96,000/- and double the amount, namely, ?47,92,000/- as penalty for the assessment year 2002-03 and total amount of ?71,88,000/- was demanded; ?24,09,200/- and penalty of ?48,00,000/- for the assessment year 2003-04 and total amount of?72,09,200/- was demanded. Against the aforesaid orders,

7. (T) No.66 of 2012 and 67 of 2012. Both these writ petitions have been dismissed by the Single Judge on the ground that the Appellant should file statutory appeal under theAct. Hence, the present writ appeals. filed Writ Petitions the Appellant -3r

9. We have heard counsel for the parties. The counsel for the Appellant submits that: Under Rule 48 of the Chhattisgarh Commercial Tax (i) Rules, 1995 notice of 30 days should have been given, whereas only notice of 10 days was given; No reasonable opportunity was given to the (ii) Appellant before passing the impugned order; (iii) Section 29 of the Act, 1994 grants power of in certain cases to the taxing authority, reassessment in case any assessment is rendered erroneous and prejudicial to the interest of revenue consequent to orde^ of It means the last order passed in the the Court or Tribunal. proceedings after exhausting appeals efo and not the order passed at the first stage; The proceedings are barred by time as the limitation (iv) for the proceedings was three years; Under Article 265 of the Constitution, tax can only be (v) imposed by authority of The penalty should be imposed equal to the tax amount, but in one case double law. and in other case approximately double the amount has been imposed as penalty. This is illegal.

10. So far as the first four submissions are concerned, the Additional Advocate General submits that: • The writ petitions were filed against the orders of the ACCT, who judicial authority and the writ has passed the orders as quasi petitions were filed for quashing of the orders passed by the quasi judicial authority; • The writ petitions were under Article 227 of the Constitution and is maintainable against the order of the Single no writ appeal Judge under proviso to sub-section (1) of section 2 of Chhattisgarh High Court (Appeal to Division Bench) Act, 2006; EH '^, '^J&- Ks^s^ |i!»l|" :], "T^. s'.^. ^^- • The notices for reassessment were issued on 31.12.2008 and at that time 30 days notice was given and 30 days notice was not necessary in the notice of 20.12.2010; • It was necessary to pass the order otherwise the case would have become barred by time; • All points raised by the counsel for the Appellants can very well be taken in appeal against the order passed by the ACCT and can be decided therein; • In tax matters the Court should not short-circuit the procedure provided under the Act and entertain a writ petition.

11. So far as the fifth submission of the counsel for the Appellant is concerned, the Additional Advocate General was granted time on 16.01.2013 to obtain instructions or file counter affidavit on the following points: • Whether the Assistant Commissioner, Commercial Tax, Raipur Division was entitled to impose penalty twice the amount of the tax as has been done in the case; and • In case, he had no such jurisdiction, then what may be done.

12. After obtaining instructions, the Additional Advocate General has madethe statement that: • Penalty of double the amount of tax was wrongly imposed and at ifa, the most it could be equal to the amount oftax imposed; • The penalty may be reduced to the amount of tax, namely, ?23,96,000/- and ?24,09,200/- for the assessment years 2002-03, 2003-04, respectively; • The order may be treated as so modified and the Appellant may file appeal against these modified orders regarding imposition of tax or this penalty. The ACCT decides a case as a quasi judicial authority. The writ 13. petitions were filed to quash the order that can be done under Article 227 that the appeals are maintainable of the Constitution. is doubtful It ornot. _-———-- ,]l!]rii[-sn'i-'i, 'p- ^

14. Apart from above, the writ petitions have filed against the order passed in a taxing statutes. An appeal is provided against the same. The first four points can well be taken in appeal. The Single Judge has also dismissed the appeal on this ground. There is no justification to short circuit the remedy of appeal provided under the Act.

15. Nevertheless, in view of the concession made by theAdditional Advocate General, we reduce the penalty in the orders dated 31.12.2010 equal to tax namely, ?23,96,000/- and ?24,09,200/- for assessment years 2002-03 and 2003-04 respectively and grant liberty to the Appellant to In case appeals are filed, file appeal against the order to be so modified. the assessment year 2002-03, will be taken to be penalty for ?23,96,000/- and for the assessment year 2003-04 will be taken to be ?24,09,200/- and it will be subject to any further modification/ reduction by the appellate/ revisional authorities.

16. We further clarify that: • In case, the appeals are filed within 30 days from day after excluding the time for obtaining certified copy ofthis order as well as certified copy of order dated 31.12.2010, then the appeals will not be treated to be barred by time and will be decided on merits in accordance with law; • The penalty so modified by us are not final but subject to further reduction in case it is so warranted on merits. The modification/ appeals will be decided without being influenced by any of the observations made by us except to the extent indicated herein.

17. With the aforesaid observations, the writ appeals are decided. S&l- Chief Jusoce Judge Sd/- Sunil Kumar Sinha Judge ^•s^^ss^-sy lll-]!isl!';T-|