2010 (9) TMI 989 - HC - VAT and Sales Tax

Summary

Issues:
1. Grievance over recovery notice for differential tax on turnover from sale of goods to BESCOM.
2. Concessional rate of tax for sale of goods to KPTCL.
3. Pending consideration for extending similar concession to newly created companies.
4. Similarity between the present case and a previous case regarding differential tax recovery.
5. Direction regarding recovery of differential amounts from the petitioner.

Analysis:
1. The petitioner raised a grievance regarding the recovery notice demanding payment of differential tax on turnover from the sale of goods to BESCOM. The petitioner argued that a concessional rate of tax at five per cent was provided for the sale of goods to KPTCL, which was reorganized, and the newly created companies like BESCOM were not covered under the concessional rate due to the absence of necessary notification or circular.

2. The counsel for the petitioner highlighted a previous case where a similar issue was addressed favorably for the dealer, emphasizing that the government's stand should remain consistent when faced with similar facts across cases. It was noted that BESCOM is essentially a successor of KPTCL, and dealers supplying goods to KPTCL had indeed received the concessional rate of tax at five per cent. The court found the facts of the current case and the previous case to be identical.

3. The court acknowledged the pending representation before the Government for extending a similar concession to the newly created companies like BESCOM, GESCOM, and HESCOM. In light of this representation and the similarity between the cases, the court directed the respondents not to recover the differential amounts from the petitioner if the petitioner had already paid the five per cent tax on the supply of goods to BESCOM. The recovery of amounts was ordered to be deferred until the representation was disposed of by the Government.

4. Ultimately, the court allowed the petitions in part, directing that the recovery of differential amounts from the petitioner be deferred until the pending representation before the Government was resolved. The court emphasized the importance of consistency in the government's approach when faced with similar cases and found in favor of the petitioner based on the similarity between the facts of the current case and the previous case where a favorable decision was given to the dealer.

5. The petitions were disposed of with no order as to costs, providing relief to the petitioner regarding the recovery of differential tax amounts and emphasizing the need for uniformity in the government's actions in similar cases.