1994 (7) TMI 317 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to penalty imposed under the Goa, Daman and Diu Sales Tax Act, 1964.
2. Jurisdiction of Sales Tax Officer in levying sales tax on a transaction in territorial waters.
3. Reassessment under section 18 of the Goa Sales Tax Act for the purpose of levying penalty.
4. Justification for maximum penalty imposed without cogent reasons.
5. Inclusion of customs duties in the turnover for calculating sales tax.
6. Compliance with the order of furnishing bank guarantee and security for appeal.
7. Interpretation of statutory provisions regarding the payment of tax for entertaining appeals.
8. Consideration of excise duty for turnover calculation.
9. Liability to pay sales tax on the sale price received minus deductions allowable.
10. Statutory provisions governing the entertainment of appeals without payment of tax or penalty.

Analysis:
1. The petitioner challenged the penalty imposed under the Goa, Daman and Diu Sales Tax Act, 1964, for purchasing a vessel for scrapping. The legality and propriety of the penalty were contested, questioning the reassessment procedures and the imposition of the penalty without sufficient reasons.

2. The petitioner argued that the Sales Tax Officer had no jurisdiction to levy sales tax on a transaction in territorial waters, contending that if applicable, the Central sales tax at 4% should be imposed. The petitioner also highlighted the assessment by octroi authorities in Bombay, supporting the 4% Central sales tax.

3. Concerns were raised regarding the reassessment under section 18 of the Goa Sales Tax Act for the purpose of levying the penalty. The petitioner argued that reassessment should be related to sales tax and not for penalty imposition, emphasizing the lack of justification for the maximum penalty without cogent reasons.

4. The inclusion of customs duties in the turnover for calculating sales tax was disputed by the petitioner, asserting that the customs duties paid should not be considered part of the turnover for taxation purposes.

5. Compliance with the order of furnishing a bank guarantee and security for the appeal was a crucial issue. The petitioner was directed to comply with the court's order, and the failure to do so led to the dismissal of the appeal by the Administrative Tribunal.

6. The interpretation of statutory provisions governing the payment of tax for entertaining appeals was extensively discussed, citing various legal authorities to support the requirement of compliance with orders for furnishing bank guarantees and security.

7. The judgment emphasized the statutory provisions regarding the entertainment of appeals without the payment of tax or penalty if the appellant furnishes security as directed by the Tribunal, highlighting the importance of adhering to procedural requirements for appeal remedies.

8. The court considered the liability to pay sales tax on the sale price received minus deductions allowable, emphasizing the need for a comprehensive assessment of the turnover for taxation purposes.

9. Ultimately, the court accepted the petitioner's offer to furnish a bank guarantee and execute a personal bond, directing the Tribunal to hear the appeal on its merits. The writ petition was partly allowed, granting relief to the petitioner while emphasizing the importance of compliance with procedural requirements for appeal remedies.