2016 (11) TMI 1536 - HC - VAT and Sales Tax

Inter-state sales - stock transfer - Section 18A of the CST Act, 1956 - Held that - this Court requires the petitioner to approach the Central Sales Tax Appellate Tribunal - considering that the period of 15 days given by the Tax Board to pay the tax would come to an end today, this Court in the peculiar facts of this Court requires the respondents to refrain from making recovery of the tax amount for a period of another 15 days within which time, the petitioner may file appeal along with stay application before the Central Sales Tax Appellate Authority - petition disposed off.

Summary

Issues:
1. Quashing of order by Rajasthan Tax Board and pre-deposit requirement.
2. Determination of stock transfers as inter-state sales under CST Act.
3. Legality of time limit set by Tax Board for deposit of tax amount.

Analysis:
1. The petitioner, a registered dealer under RVAT Act and CST Act, sought to quash the Rajasthan Tax Board's order requiring pre-deposit before hearing the appeal. The petitioner engaged in manufacturing automotive parts and had a depot in Karnataka. The Tax Board stayed recovery of interest and penalty, mandating the petitioner to deposit tax within 15 days. The petitioner argued misinterpretation of transactions as inter-state sales, highlighting the CST Act's lower tax rate for such sales.

2. The issue revolved around the Commercial Tax Department's audit concluding stock transfers as predetermined inter-state sales, triggering tax, interest, and penalty. The petitioner contended that the Tax Board's time limit contradicted CST Act's Section 18A(5). The respondents argued for appeal under CST Act before the Central Sales Tax Appellate Authority, challenging the maintainability of the writ petition.

3. The Court, without delving into the case's merits, directed the petitioner to approach the Central Sales Tax Appellate Tribunal. However, considering the imminent tax payment deadline, the Court instructed a temporary stay on tax recovery for 15 days. The Court emphasized that its decision should not set a precedent for future cases. The petition and stay application were disposed of, granting a brief extension to file an appeal with the Appellate Authority.