2015 (12) TMI 525 - HC - VAT and Sales Tax

Whether for levy of exemption fee/composition fee in lieu of turnover tax under the extent Rajasthan Sales Tax Act, 1994, exempted goods notified by the State of Rajasthan under the Notification No. F.4(11) FD Group-4/95-86 dated March 27, 1995, i.e., cigarette and products of tobacco could be reckoned for computation of turnover tax - Held that - section 13A(2)(i) makes it amply evident that the taxable turnover shall not include the sale and purchase of exempted goods. Admittedly consequent to additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 vide notification dated March 27, 1995 by the State Government had declared cigarettes and products of tobacco exempted from purchase and sales tax under the Act of 1994. In these circumstances the sale of the respondent/assessee to the extent of ₹ 33,60,806 from its business in cigarette and products of tobacco could not have been reckoned for determination of taxable turnover and levy of exemption/composition fee in lieu thereof. The findings of the Deputy Commissioner (Appeals) as upheld by the Tax Board, are valid and legal. I find nothing perverse therein. No question of law as sought to be agitated in this revision petition is made out. In fact the revision petition has been mechanically filed as is evident from the generality of grounds agitated in support of the petition - Decided against Revenue.

Issues:
1. Interpretation of exemption fee/composition fee under Rajasthan Sales Tax Act, 1994.
2. Reckoning exempted goods for computation of turnover tax.
3. Validity of assessing officer's levy of composition fee.
4. Exclusion of sale/purchase of cigarettes for determination of taxable turnover.
5. Compliance with statutory provisions and notifications for levy of tax/exemption fee.

Analysis:

1. The main issue in this case was the interpretation of exemption fee/composition fee under the Rajasthan Sales Tax Act, 1994. The court examined whether exempted goods like cigarettes and products of tobacco, as notified by the State of Rajasthan, should be considered for the computation of turnover tax.

2. The court analyzed the provision of section 13A(2)(i) of the Act of 1994, which specifies that the taxable turnover shall not include the sale and purchase of exempted goods. The State Government had exempted cigarettes and tobacco products from purchase and sales tax under a specific notification. Therefore, the sale of these exempted goods by the assessee could not be included in the determination of taxable turnover for the levy of exemption/composition fee.

3. Another issue raised was the validity of the assessing officer's levy of a higher composition fee based on treating the assessee's turnover at a certain amount. The Tax Board found this levy to be illegal and set it aside, upholding the order of the Deputy Commissioner (Appeals) for a lower composition fee.

4. The court concluded that the exclusion of the sale/purchase of cigarettes from the taxable turnover calculation was in line with the statutory provisions and notifications issued by the State Government. The findings of the Deputy Commissioner (Appeals) and the Tax Board were deemed valid and legal, with no perversity found in their decisions.

5. The court dismissed the revision petition, noting that it lacked substance and was filed mechanically without critiquing the reasoning of the lower authorities. The petition failed to address the statutory provisions, government notifications, and earlier judgments relevant to the computation of taxable turnover for the levy of tax or exemption fee. The court emphasized the importance of complying with these legal aspects in tax matters.

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