2012 PLP (Trib (PTD)

The titled five appeals were, in the first round of proceedings, dismissed for non-prosecution by a Division Bench of this Tribunal vide order dated 10-11-2010. These were later on restored vide order dated 27-10-2011.

2. Facts of appeal bearing No.2144 are that the registered person, a manufacturer cum exporter of confectionary items, was charged with violation of section 73 of the Sales Tax Act, 1990 (The Act) and demand of Rs.173,257 was raised. Proceedings at adjudication level as well as the first appeal stage were finalized ex parte. Facts of appeal bearing No.214 are that, for the period March, 2007, as many as three issues were raised to refuse the claim of input tax/refund amounting to Rs.291,

551. It was alleged that the suppliers of the registered person were either non filer or invoice summary was not submitted, etc. At adjudication level the appellant was proceeded ex parte. The learned first appellate authority, however, rejected the appeal after affording the taxpayer an opportunity of being heard. The remaining three appeals bearing Nos.2146, 2147 and 2148 respectively pertain to periods August, 2005, October, 2007 and July, 2005. The only issue is statedly excess input tax claimed on packing material.

3. Learned representatives of the two parties have been heard. The learned counsel for the appellant vehemently denies the charges detaining to Appears Nos.2144 and 2145. He argues that provisions of the Act were honestly and diligently complied with wherever required. He submits that the charge of non-submission of invoice summary statement by the supplier unit is illegal and unlawful, since the appellant was not required to submit summary of purchases and sales of their suppliers. He asserts that appellant's refund claim was genuine and fully backed by supported documents. He is particularly critical of the proceedings having been finalized ex parte. According to the learned counsel neither the show cause notice nor the hearing notices were ever received by the appellant. He reiterates that as such the charges levelled were never confronted and the appellant was never afforded an opportunity of being heard. By and large, similar arguments are pressed into service for the appeal bearing No.2145 to which pertains to the period March, 2007. As to the non-filer suppliers, he submits that the monthly sales tax return for the period in question stands duly filed by the suppliers. He complains that same was produced before the appellate forum but it was simply overlooked. He states that rejection of refund claim on the charge of non-filing even after production of alleged sales tax returns is highly unjustified and illegal. The objection of "scrutiny for verification of input tax", as generated by STARR is complaint to be having no legal backing.

4. Coming to the claim of input tax on packing material, the learned counsel draws our attention to this Tribunal's judgment dated 16-4-2011 in S.T.A. No.960/LB/2009 and particularly its following paragraph:-- We have given due consideration to the arguments advanced by the learned AR of the company and the case-law cited at the Bar. In view of the settled legal position as per reported judgments quoted supra we feel inclined to agree with the assertions made by the learned AR and hold that the agreement between the sales tax department and the confectioner's association does not have binding force because it has not been enacted as a piece of legislation and therefore, does not have the force of law. Accordingly we accept the appeal of the registered person and direct that the claim of input tax on packing material used in the manufacturing and export of products of the registered person be allowed.

5. The learned departmental representative supports the impugned orders for the reasons recorded therein.

6. Having heard the learned representatives of the two parties, we are of the firm opinion that, as far as Appeals Nos. 2144 and 2145 are concerned, the appellant has been condemned unheard. The arguments presented for the appellant have persuasive value. Accordingly we deem it appropriate to vacate the impugned orders along with the orders in original and remand the issues to the adjudication authorities for de novo proceedings after affording the taxpayer a fair and proper opportunity of being heard. The issue of claim of input tax on packing material is by now settled by this Tribunal in view of the judgment of our learned brothers relied upon by the learned counsel. The appeals bearing Nos. 2146, 2147 and 2148 are, therefore, allowed.

17. Consequently, all the appeals are decided in above terms. C.M.A./66/Tax(Trib.) Order accordingly.