2014 (2) TMI 1146 - HC - VAT and Sales Tax

Refusal to adjust the additional security/penalty/composition money collected at the check-gate on excess load of coal or limestone in all the pending and future assessment - Held that - what is not answered by the respondents is that how additional security paid by the dealers at the check-posts in respect of excess coal loaded/transported can be left accounted. It is admitted fact that the additional security as mentioned above is realized by the tax authorities at the check-posts. This court is of the considered view that if the dealer is made to pay the entire tax and penalty as per assessment finally made, if the security is not adjusted, the same is either liable to be refunded or to be carried forward for the next assessment year. - writ petition is deserved to be disposed of with the observation that if the assessee is made to pay separately entire tax/penalty/composition money in terms of the final assessment without adjusting the additional security paid by the petitioner at the check-post on the excess load of coal, such security shall be refundable to the concerned dealer under section 9(2) of the CST Act, 1956 as amended by Act 61 of 1972 read with section 49 of the Meghalaya Value Added Tax Act, 2003. - Writ disposed of.

Summary

Issues:
Challenge to tax authorities' direction not to adjust additional security/penalty/composition money collected at check-gate on excess load of coal or limestone.

Analysis:
The petitioner, engaged in wholesale coal trade, challenged tax authorities' letters directing not to adjust additional security/penalty/composition money on excess load. The petitioner procures coal from miners, transports it outside the State, and is a registered dealer under the CST Act and Meghalaya VAT Act. The issue arose when excess load of coal required additional security payment under the CST Act. Initially, the additional security was allowed to be adjusted against tax payable. However, subsequent letters canceled this adjustment, leading to the petitioner's challenge.

The petitioner argued against double taxation, emphasizing the need to account for the additional security paid at the check-post. The respondents cited VAT Act provisions on excess coal transportation as an offense and their right to assess and collect tax. However, they failed to address how the additional security should be treated. The court noted that the security, if not adjusted, should be refundable or carried forward for the next assessment.

Considering the submissions, the court disposed of the writ petition, observing that if the assessee pays tax/penalty without adjusting the additional security, the security should be refundable under the CST Act and Meghalaya VAT Act. This judgment ensures fairness in tax assessment and prevents undue financial burden on the dealer due to non-adjustment of security on excess coal load.