2015 (5) TMI 294 - HC - VAT and Sales Tax

Demand of interest under Section 47(4A) - Levy of purchase tax - Held that - Tribunal has relied upon its earlier judgment in the case of M/s. T.J. Agro Fertilizers Pvt. Ltd. and the decision of the learned Tribunal in the case of M/s. T.J. Agro Fertilizers Pvt. Ltd. has been confirmed by the Division Bench of this Court vide judgment and order 2015 (4) TMI 964 - GUJARAT HIGH COURT . Under the circumstances, following the decision of the Division Bench of this Court - Decided against Revenue. Assessing Officer levied the purchase tax of ₹ 7,84,672/-. However, the same has been deleted by the learned Tribunal by the impugned judgment and order by observing that the dealer was holding exemption, being the manufacture of paints, and, therefore, was not required to pay any tax on sale of the goods while holding exemption certificate. Considering the definition of taxable goods under Section 2(33) of the Act, the learned Tribunal has rightly held that the dealer was not liable to pay purchase tax while holding the exemption certificate. Under the circumstances, no error has been committed by the learned Tribunal in deleting the levy of purchase tax of ₹ 7,84,672/- as during the relevant period, the dealer was holding the exemption certificate. - no question of law, much less substantial question of law, arises in the present Tax Appeal - Decided against Revenue.

Summary

Issues:
1. Interpretation of interest under Section 47(4A) of the Gujarat Value Added Tax Act, 2003.
2. Reduction of penalty under Section 45(6) of the Act.
3. Deletion of levy of purchase tax under Section 15B of the Act.

Analysis:

1. The High Court addressed the first issue concerning the interpretation of interest under Section 47(4A) of the Gujarat Value Added Tax Act, 2003. The Tribunal had held that interest was not leviable until the date of the assessment order. The Court noted that the Tribunal had based its decision on a previous judgment in a similar case. This decision had been confirmed by the Division Bench of the Court. Consequently, the Court answered the question in the negative and against the revenue.

2. Moving on to the second issue regarding the reduction of penalty under Section 45(6) of the Act, the Court reiterated the Tribunal's reliance on its earlier judgment, which had been upheld by the Division Bench. Following this precedent, the Court also ruled against the revenue on this issue, answering it in the negative.

3. Finally, the Court examined the third issue related to the deletion of the levy of purchase tax under Section 15B of the Act. The Assessing Officer had imposed a purchase tax, which was subsequently deleted by the Tribunal. The Tribunal's decision was based on the dealer's exemption status as a manufacturer of paints, exempting them from paying tax on the sale of goods. The Court agreed with the Tribunal's interpretation, stating that the dealer was not liable to pay purchase tax while holding an exemption certificate. Therefore, the Court found no error in the Tribunal's deletion of the purchase tax levy.

In conclusion, the Court determined that no substantial question of law arose in the present Tax Appeal. Consequently, the appeal was dismissed. Additionally, a Civil Application related to the appeal was also disposed of in light of the dismissal of the Tax Appeal.