Shree Cement Limited vs State Of Uttarakhand & Others

Sudhanshu Dhulia, J

The petitioner before this Court has come against the order dated 10.07.2019 passed by the Deputy Commissioner, Roorkee, by which the concessional rate of diesel which was claimed by the petitioner as per the notification dated 29.12.2017 has been held to be wrong as the said diesel could only be used in the manufacturing process inside the factory, whereas it was being used by the petitioner for transportation purposes, which is not an integral part of the manufacturing process as held by the Assessing Officer.

Learned counsel for the petitioner would argue that it is a view which is dehors the settled law on the subject. He has relied upon a number of judgments of the Hon'ble Apex Court, such as, J.K. Cotton SPG. & WVG. Mills Co. Ltd. Versus Sales Tax Officer, Kanpur, reported in 1997 (91) E.L.T. 34 (S.C.), etc in order to buttress his argument that even the diesel which is used for transporting the raw material will be a part of the manufacturing process.

However, the Assessing Authority held it differently and has said that the transporting of raw material to the factory premises from Rajasthan to Uttarakhand would not be an integral part of the manufacturing process.

Learned counsel for the petitioner submits that this view is totally wrong and is liable to be set aside. Hence he has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.

There is only one difficulty before this Court which is that in the earlier round of litigation where the petitioner had challenged the show cause notice of the Assessing Authority, where he was being asked to give Value Added Tax at the rate of 17.5 percent and not at the rate of 5 percent which was claimed by the petitioner, a learned Single Judge of this Court vide its order dated 18.03.2019 had directed the petitioner to go before the Deputy Commissioner and avail the statutory remedy. This order dated 18.03.2019 of the learned Single Judge directing the petitioner to avail the statutory remedy was challenged by the petitioner in a special appeal being SPA No.395 of 2019, which was dismissed by the Division Bench of this Court.

The apprehension at that time raised by the learned counsel for the petitioner was that the Assessing Authority has already made up its mind and it will be a futile exercise. To this the Division Bench has said as follows:-

"24. The other contention, urged by Mr. M.P. Devanath, learned counsel for the appellant-writ petitioner, is that the Assessing Authority has already made up his mind and no useful purpose would, therefore, be served in submitting a reply to the show-cause notice. All that the Assessing Authority has observed, in the show-cause notice, is that the assessee had used Form-D in procuring diesel which is also used as fuel in transportation of raw material, though Para 12 of the Circular dated 02.01.2018 stipulates that diesel used in the manufacture, and as fuel in generators used in manufacture, would alone be entitled for a concessional rate of tax @5%. It is only if the Assessing Authority indicates his mind, would the assessee be is a position to submit its reply thereto. Since the Deputy Commissioner has asked the assessee to show-cause, and submit his explanation as to why the facilities of Form-D should not be discontinued, it is evident that the opinion expressed by him is only tentative, and it is always open to the assessee to show-cause and satisfy the Deputy Commissioner that his tentative opinion, in the show-cause notice dated 28.04.2018, is not justified; and the appellant-writ petitioner's use of diesel oil would also fall within the ambit of the notification dated 29.12.2017.

The learned Single Judge has relegated the assessee to file its reply to the show-cause notice issued by the Deputy Commissioner. In an intracourt appeal, the jurisdiction which the Appellate Court exercises is extremely limited. As the learned Single Judge is not a court subordinate, interference by a Division Bench, in an intra-court appeal, would be justified 12 only if the order under appeal suffers from a patent illegality. The order passed by the learned Single Judge, in our opinion, does not suffer from any such infirmity warranting interference in an intra-court appeal.

With the above observation, the special appeal of the petitioner was dismissed by the Division Bench of this Court vide its order dated 02.05.2019. Towards the end of its judgment, the Division Bench of this Court made the following observations:-

"28. Needless to state that it is always open to the appellant herein to avail its judicial remedies, after an order is passed by the Deputy Commissioner. No costs."

Learned counsel for the petitioner now relies on the said observation made by the Division Bench of this Court in paragraph no.28 and would argue that a judicial remedy as observed by the Division Bench would also include a remedy under the writ jurisdiction of this Court, and therefore, the present writ petition against the order of the Assessing Authority.

To the contrary, however, in my opinion in case this order is heard on its merit, it would not only be going against the observations made by the Division Bench of this Court which only speaks of "judicial remedy", which strictly speaking would be a statutory remedy available to the petitioner. The second reason would also be that in case observations are made by this Court while deciding the writ petition as to whether the use of diesel is actually in a manufacturing process or not, then the statutory remedy available to the petitioner under Section 51 of the Uttarakhand Value Added Tax Act, 2005 before the Joint Commissioner Appeals would be a mere formality, or rather it would become redundant.

For this reason, this Court refrains to say anything on the merit of the case.

In view of the above, the writ petition stands dismissed in view of the statutory appeal available to the petitioner under Section 51 of the Uttarakhand Value Added Tax Act, 2005.