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2013 (12) TMI 331 - HC - VAT and Sales TaxWaiver of pre deposit of tax, interest and penalty - Set off of VAT paid on purchase of gold for subsequent yeras - Set off available when sales is less than 50% of the total receipts - Interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005 - Held that - The orders impugned in the petition viz. order dated 29 July 2013 of the Maharashtra Sales Tax Tribunal and order dated 3 September 2013 have been passed on application to stay the order of the Assessing Officer pending disposal of the appeal by the first appellate authority. Therefore the merits of the controversy and the interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules 2005 would be gone into in depth by the Appellate Authority at the final hearing. However, as the issue involved is one of interpretation of law, no deposit of amounts attributable to penalty should be insisted upon for the purpose of stay - Order modified - Decided partly in favour of assessee.
Issues:
Challenge of orders by the Petitioner regarding deposit amounts for staying assessment orders by the Deputy Commissioner of Sales Tax for the years 2007-08 and 2008-09 pending appeals before the Joint Commissioner of Sales Tax (Appeals). Interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005 regarding set off of VAT paid on the purchase of gold by the Petitioner. Analysis: 1. The Petitioner contested orders from the Maharashtra Sales Tax Tribunal and the Joint Commissioner of Sales Tax (Appeals) requiring deposits to stay assessment orders for the years 2007-08 and 2008-09. The Petitioner runs a mutual fund scheme involving gold purchases subject to VAT. The issue arose when the Deputy Commissioner of Sales Tax denied the Petitioner's claim for Input Tax Credit on the VAT paid for gold purchases under Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005. 2. The core issue in this case revolves around the interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005. The Petitioner argued that the receipts for set off should only relate to gold purchases, while the Revenue contended that receipts should encompass all business activities. The dispute centers on whether the Explanation to the rule includes receipts from all business activities or solely those related to gold/commodities. 3. The High Court acknowledged that the controversy primarily concerns the interpretation of Rule 53(6)(b) and directed the Petitioner to deposit 25% of the disputed tax amount pending appeal before the Joint Commissioner of Sales Tax (Appeals). The Court emphasized that as the issue involves a legal interpretation, no deposit for penalties should be required for the stay. The Joint Commissioner was instructed to decide on the appeals within four months upon the Petitioner's deposit of Rs. 15 lacs. 4. Consequently, the High Court modified the orders of the Maharashtra Sales Tax Tribunal and the Joint Commissioner of Sales Tax (Appeals) to allow the Petitioner to proceed with the appeals for the years 2007-08 and 2008-09 without the need for full deposit amounts. The modified order remains effective until the appeals are resolved. The petition was disposed of without costs, and the parties were instructed to act on the court's authenticated copy of the order.
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