9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 39 - HC - VAT and Sales TaxLevy of VAT on pea-gravel - Exempted goods or goods falling in residuary entry - Recall of order in 2010 (9) TMI 979 - GAUHATI HIGH COURT - assesse petitioner submits that there was an error apparent on the face of the record. According to him, Entry No. 193 of Schedule II(b) of the Tripura Value Added Tax Act, 2004 does not entitle the State Government to levy tax on each and every item and it cannot be read in the manner in which it has been interpreted by the learned Division Bench - Held that - Apex court in 1990 (1) TMI 70 - SUPREME COURT OF INDIA in no uncertain terms held that only such goods which are not covered by various specific entries in the tariff could be brought under the residuary entry. This leaves no manner of doubt that if any goods are mentioned in any of the Schedules then they cannot be covered by the residuary entry. However, if the goods are not mentioned in any of the Schedules than they would fall within the ambit of the residuary entry. Therefore, we are in total agreement with the findings arrived at by the learned Division Bench that since pea-gravel is not included in the list of exempted goods and also not covered by any other item in any of the other Schedules, the same would fall under entry No. 193 of Schedule II(b) of the TVAT Act. Excessive delegation of power - The Legislature in its wisdom decided to frame the statute in such a fashion that the exempted items are specifically mentioned in Schedule III. The necessary corollary is that all items not mentioned in Schedule III would be taxable. The rates of tax as already pointed out above are mentioned in the different Schedules. Schedule II(b) levies the highest rate of tax and the Legislature in its wisdom decided that all items which do not find mention in any other Schedule would be part of entry No. 193 of Schedule II(b) and tax would be levied at the highest rate. Therefore, there is no excessive delegation because it is Legislature which has fixed the rate of tax and no discretion has been left with the authorities as to which items are to be included in which Schedule. Any item not forming part of Schedule II(a), II(c), II(c)(i) and II(d) will be exigible to tax at the rate mentioned in Schedule II(b). - no merit in the review petition or the writ petition - Decided against Petitioner.
Issues Involved:
1. Interpretation of Entry No. 193 of Schedule II(b) of the Tripura Value Added Tax Act, 2004 (TVAT Act). 2. Legality of the levy of tax on pea-gravel under the TVAT Act. 3. Allegation of excessive delegation of authority by the Legislature. 4. Allegation of violation of Article 285 of the Constitution of India. Issue-Wise Detailed Analysis: 1. Interpretation of Entry No. 193 of Schedule II(b) of the TVAT Act: The court examined whether Entry No. 193 of Schedule II(b) allows the State Government to levy tax on items not specifically mentioned in other Schedules. The Division Bench of the Gauhati High Court had previously ruled that "all goods, other than the goods specifically exempted under Schedule III, are taxable under the TVAT Act." Entry 193 of Schedule II(b) is a residuary entry that taxes items not covered in any other Schedule at 12.5%. The court upheld this interpretation, stating that the wording of the section and Schedule is clear and unambiguous, and the Legislature intended to impose tax on every item sold, except those specifically exempted. 2. Legality of the Levy of Tax on Pea-Gravel: The court reviewed the history of taxation on pea-gravel under the Tripura General Sales Tax Act, 1976 (TST Act) and its subsequent inclusion under the TVAT Act. Initially, pea-gravel was not covered under the TST Act, leading to legal challenges. The TST Act was later amended to include gravel, but the petitioner argued that pea-gravel and gravel are different items. The Single Judge ruled that pea-gravel was taxable under the TST Act but not under the TVAT Act. However, the Division Bench later ruled that pea-gravel falls under the residuary entry No. 193 of Schedule II(b) of the TVAT Act, making it taxable. The court agreed with this interpretation, noting that since pea-gravel is not mentioned in any other Schedule, it falls under the residuary entry and is taxable at 12.5% (later 13.5%). 3. Allegation of Excessive Delegation of Authority by the Legislature: The petitioner contended that Entry No. 193 of Schedule II(b) is vague and amounts to excessive delegation of authority by the Legislature. The court rejected this argument, stating that the Legislature had explicitly decided to tax all items not mentioned in Schedule III and had fixed the tax rate. There is no excessive delegation as the Legislature itself determined the rate of tax and the items to be included in various Schedules. The court emphasized that the statute is clear in its intention and does not leave any discretion to the authorities. 4. Allegation of Violation of Article 285 of the Constitution of India: The petitioner argued that Entry No. 193 of Schedule II(b) violates Article 285 of the Constitution, which exempts certain properties from State taxation. The court dismissed this contention, stating that the statute aims to tax items sold within Tripura, which is within the legislative competence of the State. The court noted that if any specific item is believed to be non-exigible to State tax, that issue should be decided on a case-by-case basis. The statute itself is not ultra vires the Constitution merely because it taxes residuary items sold within the State. Conclusion: The court dismissed both the review petition and the writ petition, upholding the legality of taxing pea-gravel under Entry No. 193 of Schedule II(b) of the TVAT Act. The court found no merit in the arguments of excessive delegation or violation of Article 285, affirming the legislative competence and clarity of the statute. Both petitions were dismissed with costs assessed at Rs. 10,000.
|
