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2016 (8) TMI 475 - HC - VAT and Sales TaxExemption under section 5A of the VAT Act - work contract service - SEZ - identical issue decided earlier - futile to relegate the petitioner to appellate authority which involve pre-deposit or waiver - Held that - there is no reason to relegate the petitioner to the appellate remedy. Even the assessing authority in the impugned order after referring to the petitioner s contention that the issue is covered by the judgment of the High Court in case of Shandong Tiejun Electric Power Engineering Company Ltd 2015 (11) TMI 1496 - GUJARAT HIGH COURT observed that against such judgment, the department has decided to file Special Leave Petition and therefore in case of the present assessee, the works executed within SEZ area are treated to be taxable. Writ petition allowed. Direction to the assessing authority to modify his order of assessment in terms of the ratio laid down by the High Court in the case of Shandong Tiejun Electric Power Engineering Company Ltd 2015 (11) TMI 1496 - GUJARAT HIGH COURT. The decision to treat the works contract of the petitioner executed in SEZ area as dutiable is set aside - petitioner s tax liability to be computed - writ petition disposed off.
Issues:
Challenge to assessment order under Gujarat Value Added Tax Act, 2003 - Entitlement to exemption under section 5A despite lack of customs authority endorsement on bills/invoices. Analysis: The petitioner challenged an assessment order under the Gujarat Value Added Tax Act, 2003, contending that the issue decided by the competent authority was covered by a previous High Court judgment. The key issue was whether a dealer could claim exemption under section 5A of the VAT Act without obtaining endorsement from the customs authority on bills/invoices as required by Rule 42 of the VAT Rules. The High Court had previously addressed a similar issue in the case of Shandong Tiejun Electric Power Engineering Company Ltd., where it was held that the endorsement of the customs authority on purchase bills was sufficient compliance with the rules, despite the adamant approach of the State authorities insisting on endorsement on invoices themselves. The petitioner argued that since the issue was already decided by the High Court, it would be futile to pursue statutory appeals. The assessing authority had computed the tax without considering the High Court judgment, as the department had filed an appeal before the Tribunal against the High Court's decision in the previous case. However, the Court noted that the assessing authority should have applied the High Court's decision and directed the authority to modify the assessment order in line with the judgment in the previous case. The Court emphasized that the assessing authority's decision to treat the works contract executed in the Special Economic Zone (SEZ) area as dutiable was incorrect based on the precedent set by the previous judgment. The assessing authority was instructed to recompute the petitioner's tax liability, including interest and penalties, based on the High Court's ruling. The Court acknowledged that the department had filed an appeal against the previous judgment, but held that the assessing authority should have applied the existing legal position until the appeal was decided. The petition was disposed of with directions for the authority to pass consequential orders and recalculate the petitioner's tax liability accordingly.
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