2005 (11) TMI 454 - HC - VAT and Sales Tax

Issues:
1. Validity of circular instructions of the Commissioner of Commercial Taxes dated June 9, 2004.
2. Exemption eligibility of skimmed milk powder from sales tax under G. O. Ms. No. 1091 dated June 10, 1957.
3. Interpretation of G. O. Ms. No. 54 dated January 31, 2000 in relation to skimmed milk powder exemption.
4. Legality of notice of provisional monthly assessment and demand dated June 30, 2004.
5. Jurisdiction of the Commissioner of Commercial Taxes under section 42 of the Act.

Analysis:
1. The petitioner challenged the circular instructions of the Commissioner of Commercial Taxes dated June 9, 2004, invoking the court's jurisdiction under Article 226 of the Constitution of India. The petitioner sought a writ of mandamus to declare the circular as ultra vires G. O. Ms. No. 1091 dated June 10, 1957. The court held that the clarification by the Commissioner that skimmed milk powder cannot be granted exemption under G. O. Ms. No. 54 dated January 31, 2000 was untenable. The court quashed the impugned proceedings dated June 9, 2004, and declared the notice of provisional monthly assessment and demand as illegal and ultra vires.

2. The court analyzed the exemption eligibility of skimmed milk powder under G. O. Ms. No. 1091 dated June 10, 1957. Referring to past judgments, the court established that skimmed milk powder qualifies for exemption as it is considered a dehydrated form of pasteurized milk. The court emphasized that the skimmed milk powder is exempted from sales tax under the Act, and any contrary view is unsustainable in law. The court concluded that the petitioner is not liable to pay tax on skimmed milk powder.

3. Regarding the interpretation of G. O. Ms. No. 54 dated January 31, 2000, the court clarified that this notification does not modify the exemption granted under G. O. Ms. No. 1091 dated June 10, 1957. G. O. Ms. No. 54 pertains to pasteurized milk sales tax exemption and does not impact the exemption for fresh milk, including skimmed milk powder. The court dismissed the argument that the petitioner was liable for tax on skimmed milk powder under G. O. Ms. No. 54.

4. The court addressed the legality of the notice of provisional monthly assessment and demand dated June 30, 2004. It held that imposing or proposing to impose tax on skimmed milk powder was illegal and ultra vires. Consequently, the court quashed the impugned proceedings and declared the petitioner entitled to relief, allowing the writ petition with costs.

5. The court also discussed the jurisdiction of the Commissioner of Commercial Taxes under section 42 of the Act. It found the impugned proceedings issued under section 42 to be unsustainable in light of previous court judgments. The court emphasized that the petitioner was not liable to pay any tax on skimmed milk powder, leading to the quashing of the impugned proceedings and the relief granted to the petitioner.

← Previous Next →