1997 (3) TMI 574 - AT - VAT and Sales Tax

Summary

Issues:
1. Liability to pay interest under section 11B of the Rajasthan Sales Tax Act, 1954.
2. Classification of high speed diesel (HSD) as a raw material for generation of electricity under section 5C of the RST Act.

Analysis:

Issue 1: Liability to pay interest under section 11B
The case involved a registered dealer (referred to as 10C) in petroleum products who filed revised returns and paid tax on the difference in turnover after the final price determination. The assessing authority charged interest under section 11B of the RST Act on the additional tax amount deposited. The Tribunal referred to the Supreme Court's ruling in J.K. Synthetics Ltd. v. Commercial Taxes Officer, which clarified that interest is not chargeable if the tax is paid based on the return before final assessment. The Tribunal held that since the additional tax became due only upon final price determination, there was no delayed payment, and thus, no interest was chargeable under section 11B.

Issue 2: Classification of HSD as raw material under section 5C
The second question pertained to whether high speed diesel (HSD) could be considered a raw material for the generation of electricity and qualify for a concessional tax rate under section 5C of the RST Act. The Tribunal referenced a Supreme Court case involving the M.P. Electricity Board, where electrical energy was considered "goods" under sales tax laws. The Tribunal noted that HSD, being fuel, would qualify as a raw material under the definition provided in the RST Act. Additionally, the Tribunal highlighted the provisions of section 5C, which allowed for a concessional tax rate on the sale of raw materials for manufacturing goods. As the purchase of HSD by the Rajasthan State Electricity Board for electricity generation fell within the ambit of section 5C, the Tribunal concluded that HSD could be classified as a raw material for the purpose of the Act.

In conclusion, the Tribunal ruled in favor of the applicant on both issues, holding that no interest was chargeable under section 11B and that HSD could be considered a raw material under section 5C of the RST Act. The revision was disposed of accordingly, with no order as to costs.