2013 (5) TMI 594 - HC - VAT and Sales Tax

Rate of tax on the sale of Copper Wire Bars and Copper Cathods - whether would be charged and retained @ 4% or 1% - Held that - It is noticed that the Notification of Rajasthan, bearing No. F-5(25)FD/CT/72-29 dated December 31,1975 was already in force and on the basis of it, the petitioner was liable to pay the tax @ 1% only though inadvertently, the tax was collected @ 4% and the same in entirety was deposited in the Government Treasury. Refund of differential amount - As the petitioner accepted and conceded that neither the petitioner made any claim of refund nor he would make any claim in furtherance thereof, the tribunal mentioned about allowing of the appeal of the Respondent inadvertently Accepting Tax Rate @ 4% could not have been the intention of petitioner before the Tribunal nor the intention of the Tribunal as all throughout the issue of charging rate of tax of 4% was challenged, was allowed by the DC(A) and it was the respondent, who was in appeal before the Tribunal.

Summary

Issues Involved:
1. Interpretation of applicable tax rates on Copper Wire Bars and Copper Cathods.
2. Entitlement of the Commercial Taxes Department to retain excess tax collected.

Analysis:

Issue 1: Interpretation of applicable tax rates on Copper Wire Bars and Copper Cathods
The revision petition was filed against the order passed by the Rajasthan Sales Tax Tribunal, which modified the assessment order for the year 1976-1977. The petitioner argued that the sales tax should have been levied at 1% as per the government notification, but inadvertently, they collected it at 4%. The Deputy Commissioner (Appeals) accepted the petitioner's contention and directed the tax to be applied at 1%. Both parties appealed to the Tribunal, where the petitioner admitted to collecting tax at 4% but did not claim a refund of the excess amount. The Tribunal partially accepted the appeal of the Commercial Taxes Department, leading to the petitioner challenging this decision. The High Court noted that the petitioner consistently paid tax at 1% as per the notification, and the issue was already settled in a previous judgment involving the same petitioner. The Court found in favor of the petitioner on this issue.

Issue 2: Entitlement of the Commercial Taxes Department to retain excess tax collected
The respondent argued that the petitioner's concession before the Tribunal regarding the refund and tax rate precluded the revision petition. The respondent contended that since the petitioner collected tax at 4%, they cannot now claim it should have been 1%. The Court, however, observed that the Tribunal's decision to accept the appeal of the department was not based on a concession that tax at 4% was correct. The Court reiterated that the petitioner consistently paid tax at 1% and did not press for a refund of the excess amount. The Court found that the issue was already settled in a previous judgment and ruled in favor of the petitioner on the first question, leaving the second question unanswered. Consequently, the revision petition was allowed without costs.