While granting the relief to GAIL India, the Andhra Pradesh High Court ruled that any dealer affected by the ruling of the Authority of Advance Ruling (AAR) is entitled to seek review, amendment, or revocation of such a ruling.
The petitioner, M/s GAIL India Ltd. is a Government of India Enterprise dealing with natural gas i.e., buying and selling of natural gas as per the directives of the Government of India from time to time. It obtained VAT registration. In the matter of purchasing of natural gas during the period as per the guidelines issued by the Ministry of Petroleum and Natural Gas (MOPNG), GOI, the petitioner claimed Input Tax Credit (ITC) of Rs.16,70,84,426/- against the tax payable for the month of November 2016 and disclosed in the Form VAT-200 for that month and paid the balance tax. The petitioner wanted to clarify the correctness of its claim of ITC and thus submitted an application seeking clarification through the advance ruling. Since no order was passed, the petitioner filed another application seeking advance ruling, and finally, an order was passed by ACAR and served to vide letter of the Additional Commissioner (ST) DMU, VAT which was received by the petitioner.
The ACAR in its order held that the clarification application was filed with a design to avoid the payment of tax due to the State of Andhra Pradesh and on that ground alone the clarification application was liable to be rejected. On merits also, it held that the natural gas and relevant tax invoices were received at least two years earlier to the month of November 2016 and therefore, the claim of ITC made in the month of November 2016 was belated one in violation of Section 13(1) of AP VAT Act. The Authority observed, the ITC claim is legally impermissible and unsustainable.
Mr. A. Sarsweswara Row, counsel for the petitioner submitted that due to vacancy of the post of Chairman of the Tribunal, learned Principal District and Sessions Judge, Visakhapatnam has been officiating as Full Additional Charge of the post of Chairman, A.P. VAT Appellate Tribunal and taking up the matters only half a day on every Friday and in those circumstances his appeal could not be taken up and hence in order to get speedy justice, the petitioner filed review application and submitted a request letter to the respondent to direct the ACAR to hear the petitioner on a priority basis.
On the other hand, Government Pleader for Commercial Taxes argued that the review petition is not maintainable since the petitioner has already filed an appeal against the order of the ACAR and the same is pending.
The division bench of Justice Durga Prasad Rao and Justice Uma Devi relied on the decision of the Division Bench of High Court of Andhra Pradesh in Tirupati Chemicals and Ors. V. The Deputy Commercial Tax Officer and Ors wherein it was held that On a literal construction thereof, it cannot be said that the power of review under Section 67(5) can only be exercised by the ARA suo motu or at the instance of the applicant-dealer, for the words used therein are “affected parties”. Any dealer who is affected by the ruling/ clarification of the ARA would also be entitled to seek review, amendment or revocation of such a ruling. As Section 67(4)(ii) also binds dealers, other than the applicant, they would fall within the ambit of “affected parties” under Section 67(5) of the Act.
The court held that it is clear that the review petition is maintainable at the instance of the dealer who is affected by the ruling of ACAR.
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