The Nagpur Bench of Bombay High Court has held that Section 26(5)(a) of MVAT Act (Maharashtra Value Added Tax Act) prevails over Rule 36(2) of the Maharashtra Value Added Tax Rules.
The bench of Justice Avinash G. Gharote and Justice M.S. Jawalkar has observed that between a statute and a Rule, it is the Statute, which has primacy and therefore, prevails upon the Rule. In that view of the matter, while deciding the appeal, the Authority will have to be governed by the mandate of Section 26(1)(a) of the Maharashtra Value Added Tax Act and decide the appeal in the manner as indicated therein, the Rule being subservient to it.
Table of Contents
Background
The petitioner has challenged the order passed by the Joint Commissioner of Sales Tax (Appeals) in an appeal under Section 26 of the Maharashtra Value Added Tax Act, 2002. The appeal filed by the petitioners was rejected for non-attendance, on account of which, the assessment order passed by the Deputy Commissioner of Sales Tax was confirmed.
Argument
The petitioner contended that though Rule 36(2) of the Maharashtra Value Added Tax Rules, 2005 provides for the Appellate Authority to dismiss the appeal in case the appellant does not appear before the Authority either in person or through an agent, the same has to be read in the context of what is stated in Section 26(5)(a) of the Maharashtra Value Added Tax Act, which enjoins upon the Appellate Authority, when an appeal is presented before it against the order of assessment, to confirm, reduce, enhance, or annul the assessment.
The petitioner submitted that the Rule would not override what the Statute provides and in case of a conflict, it is the Statute, which would prevail over the Rule. It is his contention that since the Statute contemplates a particular course of action, such an action has to have primacy over the Rules.
The petitioner contended that the Appellate Authority could not have dismissed the appeal for non-attendance of the petitioners and in such circumstances, ought to have decided the appeal on merits in the mode as indicated by Section 26(5)(a) of the Maharashtra Value Added Tax Act.
The petitioner submitted that though the petitioners had filed and participated in the appeal, however, though the order impugned in the appeal was communicated to the authorized representative of the petitioners, the same was not communicated to the petitioners, which has resulted in the delay in filing the present petition on account of the fact that the limitation for the purpose of filing further appeal has since expired.
The petitioner submitted that even otherwise, the petitioners are ready to pay costs of Rs.1,00,000/- in order to show their bona fides regarding the delay which has occasioned, on account of which, the delay ought not to come in the way of the statutory mandate as reflected by section 26(5)(a) of the Maharashtra Value Added Tax Act.
The department contended that since there is a provision as contained in the Rules, which is reflected from Rule 36(2) of the Maharashtra Value Added Tax Rules, 2005, the power therefore would be there in the Appellate Authority to dismiss the appeal for non-attendance of the appellant.
The department contended that there is further appeal provided under Section 26(1)(c) of the Maharashtra Value Added Tax Act, 2002 which can be availed of by the petitioners on account of which the petition ought not to be entertained.
Relevant Provisions
Section 26(5)(a) of MVAT Act
The provisions of Section 26(5)(a) of the Maharashtra Value Added Tax Act, 2002 states that every appellate authority (both in the first appeal and the second appeal) shall have the various powers, namely in an appeal against an order of assessment, it may confirm, reduce, enhance or annual the assessment.
However, where the appeal is filed before the Tribunal, the Tribunal may set aside the assessment and refer the case back to the assessing authority for making a fresh assessment in accordance with the direction given by it and after making such further inquiry as may be necessary. The assessing authority shall proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of fresh assessment.
Rule 36(2) of the Maharashtra Value Added Tax Rules, 2005 provides for the Appellate Authority to dismiss the appeal in case the appellant does not appear before the Authority either in person or through an agent.
Conclusion
The court allowed the petition held that the petitioners shall appear before the respondent/department on 11/11/2024 at 10.30 am without any notice being required to be issued in that regard, who shall decide the appeal within a period of 30 days there from. This however shall be subject to payment of costs of Rs.1,00,000 as a condition precedent to Association of Friends of Astronomy, Goa.
Case Details
Case Title: M/s. National Building Construction, Nagpur and anr. -Vs.- State of Maharashtra and others
Case No.: Writ Petition No. 6371 Of 2024
Date: 23/10/2024
Counsel For Petitioner: A.S.Naik
Counsel For Respondent: A.J.Gohokar
