2013 (9) TMI 1023 - HC - VAT and Sales Tax

if exemption fees is paid and exemption certificate is issued by the competent authority, there remains no question of payment of any tax by the assessee during the period which is covered by the exemption certificate.

Summary

Issues:
- Whether surcharge is leviable on the exemption fee paid by the respondent-assessee for obtaining an exemption certificate as a works contractor.

Analysis:
The petitioner, dissatisfied with the imposition of surcharge on the exemption fee paid by the respondent-assessee, filed a revision petition against the judgment of the Rajasthan Tax Board. The respondent-assessee, a contractor, paid an exemption fee to obtain an exemption certificate as per the Act. The assessing officer levied a surcharge of 12% on the exemption fee, which was contested by the respondent. The Deputy Commissioner (Appeals) and the Tax Board both upheld the deletion of the surcharge, leading to the revision petition.

The petitioner argued that the respondent was liable for surcharge as per the provisions of the Act, citing section 2(41) and referring to judgments by the Supreme Court and the Kerala High Court. However, the court noted a previous judgment where it was established that exemption fees paid in lieu of tax do not attract surcharge. The court emphasized the distinction between fees and taxes, stating that once the exemption fee is paid and the certificate is issued, no further tax is payable during the covered period. The surcharge, on the other hand, is linked to the happening of a taxable event and the payment of tax, which does not apply to exemption fees.

Given the precedent set by the previous judgment, the court found no justification for levying surcharge on the exemption fee paid by the works contractor. The court dismissed the revision petition, stating that no deviation from the established judgment was warranted. Consequently, the petitioner's claim was deemed meritless, and the petition was dismissed without any costs being imposed.