Lucknow: The Reliance Industries Limited (RIL) and five other companies on Friday got relief from the Allahabad High Court when it allowed their writ petition in the matter of realizing VAT on the basis of payment of central sales tax.

The Lucknow bench of the court quashed the June 11, 2010 order of Additional Commissioner, Commercial tax, Lucknow in this regard.

The court also directed the state government to refund the tax (VAT) realised in pursuance of the impugned order forthwith to the assessees expeditiously.

A division bench comprising Justices Devi Prasad Singh and DK Upadhyay pronounced a 206 page order while allowing six writ petitions of similar nature including RIL and five other companies.

The court observed that Central and state governments must exercise their taxing power in a just and fair manner bonafidely and within four corners of law to avoid tax evasion.

The leading petitioner RIL had challenged the orders of Additional Commissioner, Commercial Taxes, Lucknow, by which liability with regard to VAT was fixed on it.

RIL contended that it was bad in the eyes of law.

The petitioners' counsel submitted before the court that from April 2, 2009 to Mar 2010 the petitioner had paid Central Sales Tax to the tune of Rs 14.21 crore.

The petitioner received a notice on Jan 18, 2010 and after it and before final decision, ex party provisional assessment was made on Jan 25, 2010 fixing liability with regard to VAT.

The appeal to Additional Commissioner, Commercial tax, was dismissed on July 7, 2010.

Against it the petitioner preferred second appeal at the Trade Tax Tribunal Lucknow which was admitted on May 13, 2010.

The tribunal remanded the matter to assessing authority with due opportunity of hearing.

Thereafter the assessing authority heard the case on June 11, 2010 and had passed the impugned assessment order of June 11, 2010 which was challenged by the petitioner in the writ petition.

Besides RIL, five companies--Kribhco Shyam Fertiliser Limited, Tata Chemicals Limited, Indogulf Fertilisers, NTPC Limited Dadri and Auraiya had filed similar nature petitions, which were disposed of by this common judgement.


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