1 mgj IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Sales Tax Reference No. 3 of 2001 in Reference Application No.21 of 1999 Commissioner of Sales Tax Maharashtra State,Mumbai ..Applicant vs. M/s Ashish Enterprises ..Respondent Mr.S.K.Nair, A Panel Counsel for applicant. Mr.P.C.Joshi for respondent. CORAM: V.C.DAGA AND K.K.TATED JJ 16th April ,2010 P.C. Perused Reference made by the Tribunal. 1 Heard the learned Counsel for the Revenue and the learned Counsel for the Assessee-respondent. 2 The Tribunal by its, order dated 7th July 2000 passed in Reference Application No. 21 of 1999 in exercise of powers under section 61(1) of the Bombay Sales Tax Act, has referred the following questions for the 2 opinion of this Court. (i) Whether on the facts and circumstances of the case and on a true and correct interpretation of sub-section (2) of section 52 of the Bombay Sales Tax Act, 1959 was the Tribunal justified in holding that the application dated 9.1.1998 made by the respondent to the Additional Commissioner of Sales Tax, Maharashtra State, Mumbai seeking directions from him under the said sub-section after the passing of the determination order i.e. after 8.9.1993 in his own case was maintainable? ii) The necessary statement of facts and copies of relevant documents are being forwarded as required by the aforesaid section 61(1) of the Bombay Act? SUBMISSIONS: 3 Mr.Joshi, learned Counsel appearing for the Respondent, at the out set, has raised a preliminary objection contending that in view of the Administrative decision taken by the State of Maharashtra, as contained in Government Notification bearing Reference No.VKA-2004/PraKra.74/Karadhan-2 dated 7th August, 2004, wherein administrative relief has been granted to all the assessees to the extent of unpaid and 3 uncollected amount of tax for the period ending upto 31st March, 2004 under the Bombay Sales Tax Act, 1959. The back ground leading to grant of administrative relief is to be found in the Administrative Circular No.23-T of 2004, the contents of which are given hereinbelow. No. WC/2002/72/Adm-12 Mumbai, Dt.1st September, 2004 Cir. No. 23-T of 2004. Sub Administrative Relief to Textile Processors, Photo Developers, printers, etc. Ref Government Resolution No - VKA-2004/PraKra.74/Karadhan-2, dt. 7.8.2004 Gentlemen/Sir /Madam, In the budget proposals for the Financial Year 2004-2005, the Hon. Finance Minister has announced grant of administrative relief to Textile Processors, Photo developers, printers including printers printing on metal & plastic etc. Consequently, Government Resolution, dated 7.8.2004 has been issued to give effect to, the budget announcement. 2. Background: The brief background of the case is as under: - The Honorable Bombay High Court has 4 delivered a judgment under the Maharashtra Sales Tax on the Transfer of Property in Goods Involved in the execution of Works Contract (Re- enacted) Act, 1989 (hereinafter referred to as the "Works, Contract Act"), in case of M/s. Matushree Textiles Ltd. The decision of the Court in respect of the liability of the processing houses undertaking the process of dyeing and printing of textile is important and so is the declaration that the ratio earlier laid down by the Hon. High Court in case of M/s. R.M.D.C Press Pvt. Ltd. (112 STC 307) has no precedential value in view of the decision of the Supreme Court in case of M/s. Sarvodaya Printing Press (114 STC 342) and the Constitutional Bench judgment in case of M/s. ACC Ltd (124 STC 59). A detailed Circular No. 21T of 2003 dated 8th October 2003 on the above issue has already been issued. 3. Under the above judgment, the Hon. Bombay High Court has upheld the tax liability of the Textile Processors, Photo developers & printers. While delivering the judgment the Hon. Bombay High Court reversed its earlier judgment in case of M/s. RMDC Press (112 STC 307). 4. As there were some earlier judgment wherein the textile processors and the photo developers were not required to pay the tax under the Works Contract Act, the sudden retrospective imposition of liability on these dealers would have affected the future of the entire trade in Maharashtra. Considering the hardship likely to be 5 faced by these dealers, the Finance Minister in his budget proposals has announced Administrative Relief and subsequently, Government had issued a GR dt. 7th Aug. 2004 granting administrative relief to these dealers. 5. Administrative relief granted by Government:- The contents of the Government resolution are as follows: (1). The textile processors in whose cases the tax liability has arisen due to the judgment in the case of M/s. Matushree Textiles Ltd., the said tax along with the interest and penalty shall not be recovered for the period ending on 31-3-2004 or earlier. However if the dealer has made any payment for any period ending prior to 31.3.2004 in respect of tax, interest and penalty or has made any part payment in appeal, the same shall not be refunded. (2). Conditions as at Sr No. (1) above shall also be applicable for grant of administrative relief to Photo Developers. (3) In case of printers, including printers printing on metals or plastic etc., all such cases which were decided prior to 11th August, 1998 relying upon the judgement of the Bombay High Court in the case of M/s. RMDC Press shall not be reopened. However, if an order is passed (including an order passed in appeal) after 11th August, 1998 relying upon the judgment of RMDC Press, then such orders are required to be modified in 6 view of the judgment of the Court in the case of M/s. Matushree Textiles Ltd. The relief in such case is limited to not reopening the cases that may have been finally decided prior to 11th August 1998 relying on the judgement of Hon. Bombay High Court in the case of M/s RMDC Press. 6. The conditions & procedure for availing the benefit of administrative relief is as follows: (i) All the cases wherein the assessment orders are passed or an appeal is pending are eligible for administrative relief. (ii) The withdrawal of an appeal is a pre-condition to claim the benefit of the administrative relief. (iii) The powers for grant of administrative relief are hereby delegated to the respective assessing officers. (iv) The assessing authorities that are in charge of the respective case or cases shall receive application form for administrative relief from the dealers in an enclosed format. (v). In his application to the assessing officer the dealer should mention clearly the amount of tax, interest and penalty for each period 7 separately in respect of which administrative relief is sought. (vi). On receipt of the said application, the assessing authorities shall scrutinise the same and if it is found in consonance with the Government resolution, shall pass an order within 15 days. (vii) It is possible that many of the Textile Processors and Photo developers have obtained the registration number only after the Judgment of M/s. Matushree Textiles Ltd. In such cases it will not be necessary to assess these dealers for unregistered period prior to and upto 31.3.2004 for granting the administrative relief. Similarly in case of dealers registered under Works Contract Act, there is no need to take up the assessment for periods ending on or before 31-3-2004. However, the assessing officer should confirm that the dealer has obtained the registration under the Works Contract Tax Act and is not engaged in any other works contract activity other than the Textile Processing and Photo developing for which administrative relief is being granted. 7. If any dealer has any doubts in the matter, he may refer the same to this office on email address acadm12@yahoo.co.in for further clarification. 8 8. You are requested to bring the contents of this Circular to the notice of the members of your Association. Yours faithfully, Sd/- (Vijay Kumar Aggarwal) Commissioner of Sales Tax, Maharashtra State, Mumbai." 4 In the above view of the matter, Mr.Joshi submits that there is no financial liability against the present assessee. 5 Mr. Joshi further submits that under section 61 of the Bombay Sales Tax Act, a Reference can only survive if the order passed in appeal affects the liability of any person to pay tax or penalty or interest or results in forfeiture of any sum which affects the recovery from any person. In view of grant of administrative relief, Mr. Joshi submits that the question referred does not survive and need not be answered by this Court since the judicial verdict of this Court will be nothing but an academic exercise. PER CONTRA: 5 Mr.Nair learned Counsel appearing 9 for the Revenue did not agree with the submission raised and urged that unless the conditions mentioned in the Circular are complied with and it is pointed out to the Court that no liability exists against the assessee, the said order of the State Government dated 7th August, 2004 or the Trade Circular No.23-T of 2004 will not be applicable to case in hand. CONSIDERATION: 6 Having heard both the parties, we are satisfied that the present respondent/assessee shall be covered by the order issued by the State Government granting administrative relief vide their order dated 7th August, 2004 and trade circular no.23-T of 2004 dated 1st September, 2004. There was no assessment in the case of the respondent/assessee in the case in hand. Under these circumstances, the question of any liability standing against the assessee/respondent does not arise. 7 The submission made by Mr. Joshi deserves to be accepted in toto on the text 10 of section 61 of Bombay Sales Tax Act, itself. In this view of the matter, the question referred is required to be returned unanswered leaving the said questions open for being considered in the appropriate matter as and when occasion arises. 8 In the result, reference stands disposed of in terms of this order with no order as to costs. (K.K.TATED J.) (V.C.DAGA J.)