2005 (11) TMI 455 - HC - VAT and Sales Tax

Summary

Issues:
Legality of levy of tax under section 9-A of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994.

Analysis:
The case involves a petition challenging the levy of tax under section 9-A of the Act. The petitioner, a public limited company, was assessed and taxed for transferring the right to use motor vehicles during a specific period. The revisional authority upheld the tax levy but set aside the penalty. The court found no merit in the petition and dismissed it.

Legal Provisions:
Section 9-A of the Act, inserted in 1995, imposes tax on the transfer of the right to use specified goods. The tax is payable on the total amount realized during the year for such transfers. The provision is in accordance with article 366(29A)(d) of the Constitution of India.

Court's Decision:
The court held that tax liability under section 9-A is attracted when there is a transfer of the right to use coupled with payment realized during the year. The court rejected the argument that tax could not be levied because the possession of goods was transferred before a specific date. The petitioner failed to provide relevant material supporting their claim, and the court found reliance on certain documents to be insufficient.

Precedent and Dismissal:
The court distinguished a previous case cited by the petitioner, stating that it did not advance their case. The court emphasized that the legislative competence to tax transactions was not the issue in the present case. The petition was deemed frivolous, and costs were imposed. The court directed the security amount to be remitted for proper utilization.

In conclusion, the court upheld the levy of tax under section 9-A, finding no merit in the petitioner's arguments and dismissing the writ petition with costs.