February 2012
(2011) 40 VST 81 (AP) Tirupati Chemicals v. Dy. Commercial Tax Officer and Others, and ABC Constructions v. Commercial Tax Officer, Vijay Wada
By C. B. Thakar | Advocate
G. G. Goyal, Janak Vaghani | Chartered Accountants
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Advance Ruling — Binding on applicant as well as on others — Provisions not arbitrary — Not unconstitutional — Sections 32(2), 33(1)(c), 47(d) and 67(4) of Andhra Pradesh Value Added Tax Act, 2005 and rr. 17(4) and 66 of Andhra Pradesh Value Added Tax Rules, 2005.
Facts:
The petitioners filed two separate writ petitions before the AP High Court challenging the constitutional validity of section 67(4) of the Andhra Pradesh Value Added Tax Act, 2005 providing for binding effect of order passed by the Advance Ruling Authority (ARA), on the applicant, in respect of goods and/or transactions for which the clarification is sought and also binding on to all the officers other than the Commissioner.
According to petitioners the order of ARA was not binding on other dealers.
Held:
(1) U/s.67(4), the order of the ARA is binding on the applicant who sought clarification, in respect of the goods and transactions in relation to which it was sought and it is binding on all the officers other than the Commissioner. If the order of the ARA is to bind only the applicant and not to other dealers, in respect of goods or transactions in relation to which clarification was sought, then clauses (i) and (ii) of the said sub-sections would overlap , thereby rendering either clause (i) or (ii) inapposite surplusage.
(2) It is true that such ruling would bind other dealers who had not sought a clarification, without their being heard by ARA. That, by itself, would not necessitate the Court reading words ‘the applicant’ in to clause (ii) of section 67(4). It is no doubt harsh that the ruling of the ARA would bind other dealers. This however is matter essentially for the Legislature.
(3) Section 67(4)(iii) makes it clear that the order of the ARA would not bind the STAT, or Court in the exercise of its jurisdiction u/s.34 of the Act.
(4) The remedy of an appeal is provided under the Act u/s.33(1)(c) of the Act to other dealers in whose case the orders are passed following the order of the ARA.
Accordingly, the High Court dismissed the writ and upheld the constitutional validity of provisions of section 67(4) of the Act.
