2015 (2) TMI 1152 - HC - VAT and Sales Tax

Entitlement to get exemption from payment of entry tax for the period from April 1, 2001 to March 31, 2002 - Notification No. A-3-8-95-STV (69) dated August 7, 1995 - Neither a registered dealer under the Central Sales Tax Act, 1956 nor purchased any goods from outside M. P. - held that - as per certificate issued by the Department, it is clear that the petitioner is a registered dealer under the Central Sales Tax Act, 1956. The Department has issued C form to the petitioner from time to time right from October 16, 1986 to December 25, 2003. As per photocopies of the C form register, the petitioner is purchasing the goods from outside the State of Madhya Pradesh and, therefore, liable to pay the entry tax. From the record, it is also clear that prior to relevant order and after the relevant order, the petitioner has already purchased the goods from outside the State of Madhya Pradesh for which C forms were issued to the petitioner from time to time. The petitioner after its registration under the Central Sales Tax Act, 1956 purchased the goods from outside the State of Madhya Pradesh and therefore, is liable to pay the tax as per the Act and is not entitled to take the benefit of notification. - Decided against the petitioner

Summary

Issues:
Challenge to order dated September 6, 2005 and assessment order dated November 23, 2004 under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 for exemption from entry tax.

Analysis:
The petitioner contested the order dated September 6, 2005 and the assessment order dated November 23, 2004, claiming exemption from entry tax under Notification No. A-3-8-95-STV (69) dated August 7, 1995, as they were not a registered dealer under the Central Sales Tax Act, 1956 and did not purchase goods from outside Madhya Pradesh. The petitioner argued that the order was based on a statement by their representative, which was later rectified under section 71(1)(ii) of the Madhya Pradesh Commercial Tax Act, 1994. The petitioner also highlighted the issuance of a C form for the first time in the return, indicating the need for a fresh decision by the authorities.

The respondent countered by stating that handloom and powerloom weavers were exempted from certain tax sections subject to conditions, including purchasing raw materials from registered dealers. The respondent emphasized that unless these conditions were met, immunity from tax liability was not granted. The court heard both parties' arguments extensively.

The court referred to the Madhya Pradesh Commercial Tax Act, 1994, which mandates tax payment for dealers exceeding turnover limits. It explained that unregistered dealers could be assessed for up to five years preceding detection if they did not register despite exceeding turnover limits. The court clarified the process for assessing unregistered dealers and the liability for purchase tax under section 10 of the Act. It emphasized that the exemption provided by the notification only applied to specific tax sections, not all taxes.

In a related case, deductions claimed for raw material purchases made from specific areas were disallowed for entry tax. The court ruled that purchasing goods from certain areas would attract entry tax unless exempted from commercial tax. The court analyzed the petitioner's purchases from dealers in Ahmedabad and the issuance of C forms, concluding that the petitioner was liable for entry tax due to purchasing goods from outside Madhya Pradesh.

The court examined certificates showing the petitioner's registration under the Central Sales Tax Act, 1956 and the issuance of C forms for purchases outside Madhya Pradesh. It determined that the petitioner was liable to pay entry tax and not entitled to exemption based on the notification. Consequently, both writ petitions were dismissed for lacking merit, without costs being awarded.