IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION
(SPECIAL ORIGINAL JURISDICTION)
WRIT PETITION NO. 475 OF 2007
IN THE MATTER OF:
An application under Article 102(2) of the Constitution of the People’s Republic of Bangladesh
And
IN THE MATTER OF:
K. Rahman & Company
.... Petitioner
-Vs-
Customs, Excise and VAT Appellate Tribunal, Dhaka and others.
....Respondents. Mr. Munshi Moniruzzaman with Md.
Minhaduzzaman Leeton, Ms. Shuchira Hossain, Mr. Yousuf Khan Rajib, Ms. Nahid Sultana Jenny, Mr. Shakib Rejowan Rejowan Kabir, Ms. Shamima Binte Habib, Mr. S.M Shamsur Rahman and Ms. Mosammat Suraiya Khatun, Advocates
...... For the Appellant.
Ms. Nasima K. Hakim, Deputy Attorney General, Mr. Md. Hafizur Rahman, Mr. Md. Ali Akbor Khan, Mr. Elin Imon Saha, and Mr. Ziaul Hakim, Assistant Attorney Generals
........ For the Appellant-government.
Heard on 11.02.2024 Judgment on 20.02.2024
Present:
Mr. Justice Md. Iqbal Kabir
and
Mr. Justice S.M. Maniruzzaman
S.M. Maniruzzaman, J:
In this Rule Nisi, issued under Article 102 of the Constitution of the People’s Republic of Bangladesh, the respondents have been called
1
upon to show cause as to why the order dated 16.11.2006 passed by the respondent No. 1 under Nothi No. CEVT/CASE(VAT)-Dhaka-243/2005 (Annexure-E) affirming the order dated 03.10.2005 passed by the respondent No. 2 under Nothi No. 4/LTU(Musak)/4/Komol Panio/K Rahman/2005/794(1) (Annexure-D) by which the order dated 17.08.2005 passed by the respondent No.3 under Nothi No.4/ LTU(Musak)/4/Komol Panio/K Rahman/ Bivag /05/652(1) (Annexure- B) approved the price of the petitioner's product by enhancing the declared price with retrospective effect from the date of declaration should not be declared to have been passed without lawful authority and is of no legal effect and/or such other or further order or orders passed as to this court may seem fit and proper.
At the time of issuance of the Rule, the operation of the impugned order dated 16.11.2006 passed by the respondent No. 1 (Annexure-F) was stayed by this Court for a prescribed period.
Facts, relevant for disposal of the Rules, in short, are that the petitioner is an enterprise of Abdul Monem Limited which is a Private Limited Company incorporated under the Companies Act, 1994 and is engaged in the business of producer of soft drinks namely “Coca Cola, Fanta, Sprite”. In course of business, the petitioner obtained VAT registration certificate from the concerned VAT office under the Value Added Tax Act, 1991 (in short, the Act, 1991) for the purpose of payment VAT and since then it has been paying VAT regularly.
For the purpose of payment VAT, the petitioner submitted price declaration by Mushak Form-1 under Section 5 of the Act, 1991 read with Rule 5 of the Value Added Tax Rules, 1991 (in short, the Rules, 1991) to the respondent No. 3, Assistant Commissioner, Large Taxpayer Unit (VAT), Dhaka which was received by the said respondent on 04.08.2005. On received thereto, the respondent rejected the price declaration and thereby altered the declaration and approved the altered version of the declaration by giving retrospective effect by his order dated 17.08.2005 without taking into consideration of the market price as well as comparing value of the similar products.
Challenging the said order, the petitioner filed appeal before the respondent No. 2, Commissioner, Customs Excise and VAT (LTU) on 15.09.2005 stating inter alia that the petitioner has declared the price on the basis of correct value of its products and on the basis of said declared price the petitioner has been paying VAT and there is no reason to enhance the price so declared by the petitioner. However, the Commission without considering the materials on record and hearing the petitioner rejected the appeal and thereby affirmed the order of the respondent No. 3 by his order dated 03.10.2005.
Against the said order, the petitioner preferred appeal before the respondent No. 1 Customs, Excise and VAT Appellate Tribunal (in short, the Tribunal) on 18.11.2005. The Tribunal after hearing the contending parties rejected the appeal and thereby upheld the price approved the Divisional Officer.
Feeling aggrieved by and dissatisfied with the order of the Tribunal, the petitioner moved this application and obtained the present Rule Nisi along with interim order of stay.
Mr. Munshi Moniruzzaman, appearing with Mr. S.M. Shamsur Rahman, learned Advocates for the petitioner mainly submits that the Divisional Officer most illegally approved the value by enhancing the declared price of the petitioner and the Divisional Officer failed to take notice of the provision of Section 5 (2) of the Act, 1991 and Rule 3 (3) of the Rules, 1991. The petitioner declared the correct value of its goods but the respondents has illegally rejected the same. Moreover, the Divisional Officer without considering the cost factor and other relevant things and without giving opportunity of meaningful hearing at the time of fixing the price and without holding any enquiry illegally approved the price and the respondent No. 1 affirmed the order of the respondents Nos. 2 and 3 and as such the same is liable to be declared to have been passed without lawful authority and is of no legal effect. Mr. Munshi next submits that Rule 3(3) of the Rules, 1991, the Divisional Officer of VAT may fix price after making an inquiry on similar other products available in the market, whereas the respondent No. 3 fixed the price of the product of the petitioner’s company on the basis of the retail market value of the products of the petitioner's company which is contrary to Rule 3(3) of the Rules, 1991. However, the VAT Authority cannot fix any price on the basis of the retail market value. The price has to be fixed on the basis of market survey or enquiry of the value of similar products of other concerns. In the instant case, there was never any such market survey or enquiry nor there was any attempt to see the inconsistency of price between the products of the petitioner's company and similar other products available in the market. The respondent No.3 under complete misconception of law disallowed the price declaration of the petitioner's company and fixed the price of the product of the petitioner's company by order dated 17.08.2005 and as such the respondent No. 1 acted illegally in affirming such orders and thus the impugned orders are liable to be declared to have been passed without lawful authority and is of no legal effect. Mr. Munshi further submits that the respondent Nos. 1 and 2 acted illegally in dismissing the appeal filed by the petitioner the appeal order of the respondent Nos. 1 and 2 without proper appreciation of law and as such same are liable to be declared to have been passed without lawful authority and is of no legal effect. In view of the above, the learned Advocate prays for making the Rule absolute.
Per contra, Ms. Tahmina Polly, the learned Assistant Attorney General appearing on behalf of the respondent No. 2 submits that the Divisional Officer following the provision of Rule 3(3) of the Rules, 1991 conducting market survey and considering the value of the products approved the price of the petitioner’s items namely “Coca Cola”, “Fanta” and “Sprite” of Tk. 271.26 (6 bottles). Both the authorities below by concurrent findings of the said facts affirmed the value so fixed by the Divisional Officer and as such there is no illegality in the impugned order.
We have considered the submissions so advanced by learned Advocate for the petitioner and learned Assistant Attorney General for the respondent No. 2 and gone through the writ petition, relevant materials on record so been appended thereto.
In the present case, the moot contention of learned Advocate for the appellant is that the Divisional Officer without following the provision under Rule 3(3) of the Rules, 1991 determined the value of the appellant manufacturer items and which was affirmed by the 2(two) appellant authorities. In order to appreciate the said argument let us first have a look at the relevant provision of VAT Rules i.e. Rule 3 of Rules for cursory glance:
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Thus, from a plain reading of Rule 3(3) it appears that from
investigation or survey after declaration of value bare in accordance with Sub Rule (1) or (2) or Rule 36 carried on for the purpose by the Divisional Officer, Circle Revenue officer or any other VAT Officer authorized by the Commissioner or from investigation or survey carried out and based on the amount of value addition and division of similar goods, actual cost, value declared and approved or information related to market value, maintained at the Circle, Division or Commissioner's office, if it appears, value base declaration of the goods is incompatible to Section 5 of the Act, or value base declared for the goods is significantly lower than that the goods of similar nature and quality, or the amount of value addition shown in form "Mushak-I" or "Mushak-I kha" is substantially low, or declared value base is substantially lower because of any special relationship between supplier and receiver of the goods, and for this reason, less VAT or VAT and Supplementary Duty where applicable, was or may have been paid, Divisional Office then after giving the registered person reasonable opportunity of being heard can determine reasonable value base, based on information collected or received and from the date of declaration all tax payable shall be determined and paid in accordance with that base value.
In the instant case, the petitioner submitted price declaration on 03.08.2005 by Mushak Form-1 proposing the base value of the item per case (6 bottles) of Tk. 206.05. The Divisional Officer considering the relevant provision of law and conducting survey of the market price fixed the per case of the item to the tune of Tk. 271.26 holding inter alia;
“Na 17/03/2005 Cw a¡¢l−M L¢jne¡l j−q¡c−ul ¢cL ¢e−cÑne¡ ®j¡a¡−hL B−m¡QÉ fZÉ ®L¡L¡−L¡m¡/ØfСCV/g¡¾V¡ 2.25 ¢mV¡l ¢fC¢V ®h¡a−ml j§pL B−l¡f−k¡NÉ j§mÉ 271.26 V¡L¡/−LCp (fË¢a ®Lq~p= 06 ¢fC¢V ®h¡am) ¢edÑ¡le Ll¡ q−m¡z”
Challenging the said order, the petitioner preferred first appeal
before the respondent No. 2, Commissioner, Customs, Excise and VAT (LTU) and the Commissioner considering the materials on record and the relevant provisions of law dismissed the appeal and thereby
upholding the order of the Divisional Officer holding inter alia;
“j§mÉ ¢i¢š f§e¢hÑ−hQe¡l SeÉ c¡¢MmL«a Bfe¡−cl B−hcefœ Hhw pqL¡l£ L¢jne¡l (LTU) Hl j§mÉ Ae¤−j¡cefœ fkÑ¡−m¡Qe¡ L−l ®cM¡ k¡u ®k, pjS¡a£u fZÉ Evf¡ceL¡l£ AeÉ¡eÉ fË¢aàå£ fË¢aù¡−el
SeÉ Ae¤−j¡¢ca j§−mÉl p¡−b B−m¡QÉ fË¢aù¡−el ®r−œ pqL¡l£ L¢jne¡l (LTU) La«ÑL a¡yl fœ e¢b ew- 4/(LTU)(j§pL)/4/−L¡jm f¡e£u/−L lq ¢hi¡N/05/652(1) a¡¢lMx 17-08-2005 Hl j¡dÉ−j Ae¤−j¡¢ca j¤−mÉl p¡j”pÉa¡ l−u−Rz a¡R¡s¡, pw¢nÔø pjS¡a£u fZÉpj§−ql End Price (M¤Ql¡ fkÑ¡−ul
j§mÉ) Hl p¡−b a¥me¡ Ll−mJ Ae¤−j¡¢ca j§mÉ p¢WL B−R h−m ®cM¡ k¡uz AeÉ¡eÉ ¢nÒf fË¢aù¡−el Evf¡¢ca pjS¡a£u f−ZÉl Ae¤−j¡¢ca j§−mÉl p¡−b B−m¡QÉ f−ZÉl Ae¤−j¡¢ca j§−mÉl p¡j”pÉa¡ ¢hd¡−el j¡dÉ−j pw¢nÔø fË¢aàå£ fË¢aù¡epj§−ql j−dÉ p¤oj fË¢a−k¡¢Na¡l fb p¤Nj q−u−R h−m j−e L¢lz”
Feeling aggrieved the said order, the present petitioner as
appellant preferred 2nd appeal before the Tribunal and the Tribunal upon hearing the contending parties and considering the evidences on record dismissed the appeal and thereby affirmed the value so fixed by the Divisional Officer by its order dated 21.01.2007 holding;
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Since, the order passed by the Tribunal was final under the Act, 1991 at that time hence, the petitioner had no other alternative filed the instant writ petition invoking under Article 102 of the Constitution of the People’s Republic of Bangladesh.
In the instant case, the moot contention of the petitioner is that both the authorities below without considering the provision of Rules- 3(3) of the Act, 1991 fixed the value of the petitioner’s item. It, however, appears from order of the Tribunal that wherein the Tribunal categorically stated that the Divisional Officer conducting market survey found that the similar item of the another company i.e. M/s. Transcom Beverage Limited and base value of its item namely “Pepsi Cola”, “Seven up” and “Sprit” of 200 M.L. was fixed as value of Tk. 239.80 per bottle of Tk. 40.00. Considering the said value of Tk. 239.80 the petitioner’s item i.e. 250 M.L. “Coca cola” one case (6 bottles) was fixed at the rate of Tk. 271.26. In the said order, the Tribunal categorically stated that the base value of the petitioner’s item was fixed by the Divisional Officer less of Tk. 45.00 of the items of M/s. Transcom Beverage. In view of the above context we have no manner of doubt to hold that the Divisional Officer considering the provision of Rule 3(3) of the Rules, 1991 and after conducting market survey and comparing the value of the similar products supplied by M/s. Transcom Beverage Limited fixed by base value of the petitioner’s item.
In view of the above facts and circumstances of the case we do not find any legal infirmity in the impugned order.
Accordingly, the Rule is discharged, however, without any order as to costs.
Communicate a copy of the judgment and order to the concerned respondent forthwith.
Md. Iqbal Kabir, J:
I agree.
M.A. Hossain-B.O.