2012 (9) TMI 906 - HC - VAT and Sales Tax

Whether upon a correct interpretation of section 15-1A, the Tribunal was justified in holding that additional tax was exigible on the sale of goods covered by entry 18 of Schedule C, Part I? - Held that - sales in question are goods covered under entry 18, Part I, Schedule C. The second proviso to section 15-1A specifically provides that in calculating the additional tax payable by the dealer, the tax payable on sales covered by entry 18, Part I, Schedule C shall not be taken into consideration. Therefore, the Tribunal committed an error in including the sales covered under entry 18, Part I, Schedule C, while computing the additional tax payable under section 15-1A of the Bombay Sales Tax Act - decided in favor of the assessee and against the Revenue.

Summary

Issues Involved:
1. Calculation of notional sales tax liability under the Package Scheme of Incentives, 1983.
2. Interpretation of entry 136 of the notification under the Package Scheme of Incentives, 1983.
3. Exigibility of additional tax on sales covered by entry 18 of Schedule C, Part I.
4. Consideration of set-off under rule 42AC in the Package Scheme of Incentives, 1983.

Analysis:

Issue 1: Calculation of Notional Sales Tax Liability
The Tribunal had to determine whether purchases on form BC should be considered for calculating notional sales tax liability (N.S.T.L.) at four per cent under the Package Scheme of Incentives, 1983. The court referred to a previous decision in favor of the assessee, establishing that purchases on form BC are to be considered for calculating N.S.T.L. The Tribunal's decision was upheld in favor of the assessee and against the Revenue.

Issue 2: Interpretation of Entry 136 and Turnover Tax
The question arose regarding the interpretation of entry 136 of the notification issued under the law and the Package Scheme of Incentives, 1983, concerning the inclusion of turnover tax while calculating N.S.T.L. The court referred to the earlier decision that favored the assessee, concluding that turnover tax was not required to be added while calculating N.S.T.L. under the Package Scheme of Incentives, 1983.

Issue 3: Exigibility of Additional Tax on Sales Covered by Entry 18
The dispute centered on whether additional tax was exigible on the sale of goods covered by entry 18 of Schedule C, Part I, under section 15-1A. The assessing officer initially held that the sales tax payable on certain sales should be considered for computing additional tax. However, the court clarified that sales covered under entry 18, Part I, Schedule C should not be taken into consideration while calculating additional tax under section 15-1A. Thus, the Tribunal erred in including such sales, and the issue was resolved in favor of the assessee.

Issue 4: Consideration of Set-Off under Rule 42AC
The final issue revolved around whether the set-off under rule 42AC in the Package Scheme of Incentives, 1983, should be added as a benefit enjoyed by the applicant. The court did not delve into this matter as the previous decisions already favored the assessee on questions (i), (ii), and (iv), thereby disposing of the reference without any costs.

In conclusion, the High Court of Bombay ruled in favor of the assessee on all the issues referred to, based on previous decisions and interpretations of relevant laws and schemes.