2007 (3) TMI 688 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Competence of IOC to entertain an application under section 47(1)(b)(i) of the Assam Value Added Tax Act, 2003.
2. Applicability of tax relief under section 47(1)(b)(i) versus the composition scheme under section 20 of the Act.
3. Estoppel of the petitioner from invoking section 47(1)(b)(i) after opting for the composition scheme.
4. Validity of the original judgment and order dated September 20, 2006.

Detailed Analysis:

Competence of IOC to Entertain an Application under Section 47(1)(b)(i)
The Court examined whether the Indian Oil Corporation (IOC) had the authority to entertain an application under section 47(1)(b)(i) of the Assam Value Added Tax Act, 2003. The term "Prescribed Authority" as defined in section 2(37) of the Act refers to any person appointed to assist the Commissioner of Taxes to whom powers have been delegated. The Court concluded that IOC is not the prescribed authority and thus has no competence to entertain such an application.

Applicability of Tax Relief under Section 47(1)(b)(i) versus Composition Scheme under Section 20
The petitioner had opted for the composition scheme under section 20 of the Act, which allows for the payment of tax by a lump sum in lieu of the tax payable under the Act. Section 47(1)(b)(i) allows for reduced or no deduction of tax if the works contract involves both transfer of property in goods and labor/services. The Court noted that these two provisions are mutually exclusive and serve as alternatives to each other. The petitioner cannot simultaneously seek benefits under both sections.

Estoppel from Invoking Section 47(1)(b)(i) after Opting for Composition Scheme
The Court held that once the petitioner opted for the composition scheme under section 20, they are estopped from invoking section 47(1)(b)(i). This is because opting for the composition scheme implies a voluntary and informed decision to pay a computed amount of tax, which precludes the petitioner from seeking further tax relief under section 47(1)(b)(i). This interpretation was supported by the Karnataka High Court's decision in T.H. Venkate Gowda v. Commissioner of Commercial Taxes in Karnataka, Bangalore [2007] 5 VST 553.

Validity of the Original Judgment and Order Dated September 20, 2006
The original judgment directed IOC to consider the petitioner's application under section 47(1)(b)(i). However, given that IOC is not the prescribed authority, this direction was found to be erroneous. The review applicants argued that the petitioners had already opted for the composition scheme, making them ineligible for relief under section 47(1)(b)(i). The Court agreed with this contention and found that the original judgment and order needed reconsideration.

Conclusion:
The review application was allowed, and the judgment and order dated September 20, 2006, were recalled. The Court adjudged the petition to be devoid of merit and dismissed it, emphasizing that the respondent authorities should conform to the provisions of the Act and the Rules while exacting the tax payable by the petitioner. No costs were awarded.