2011 (8) TMI 997 - HC - VAT and Sales Tax

Whether the petitioner s registration as dealer to deal in sale and purchase of goods indicated in the registration certificates, would include it to have been registered for executing a works contract to render services in terms of the turnkey agreement entered into by it with the Union of India? Held that - No merit in the case set up by the petitioner that it was a registered dealer and was not liable to imposition of security in terms of section 15A(9) of the Act. The challenge thrown by the petitionercompany to the statutory notices and orders passed by the assessing authority, Commercial Taxes check-post, Lakhanpur under section 15A(9) of the Jammu and Kashmir General Sales Tax Act, 1962, therefore, fails. Appeal dismissed.

Summary

Issues:
1. Liability of the petitioner to deposit security under section 15A(9) of the Jammu and Kashmir General Sales Tax Act, 1962.

Analysis:
The judgment involves the case of a petitioner, a company incorporated under the Indian Companies Act, 1956, whose two C.T. scanners were seized at a check-post. The assessing authority imposed security on the petitioner for tax liability as the goods were imported by an unregistered dealer. The petitioner challenged the notices and orders imposing security through writ petitions. The central question was whether the petitioner, registered as a dealer, was liable to deposit security under section 15A(9) of the Act for the imported goods.

The petitioner argued that its registration as a dealer covered services as a works contractor, thus exempting it from the security requirement. The State contended that the petitioner, registered for resale purposes only, was liable for tax and security as an unregistered dealer for works contracts. The court examined the registration certificates, the turnkey agreement with the Union of India, and the assessing authority's orders. The court found that the petitioner's registration was limited to resale and did not include registration as a works contractor for services under the Act.

The court noted that while the services provided by the petitioner fell under the definition of goods and sale, its registration did not extend to works contracts for services. The assessing authority's determination that the petitioner was an unregistered dealer transporting taxable goods was upheld based on the terms of the contract agreement. The court concluded that the petitioner's challenge to the notices and orders imposing security failed as it was not registered as a dealer for works contracts under the Act.

In the final analysis, the court dismissed the writ petitions, finding them without merit. The judgment reaffirmed the assessing authority's decision to impose security on the petitioner for tax liability under section 15A(9) of the Jammu and Kashmir General Sales Tax Act, 1962.