9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 1254 - HC - VAT and Sales TaxWhether on the facts and circumstances of the case, the Gujarat Value Added Tax Tribunal was justified in law in holding that under Section 62 of the Act, where there are two determination orders; the first will not hold the field till the second order? Held that - the subsequent determination order shall not be applicable and/or affect the transaction/sale which had taken place prior to the second determination order, as, at the time when the transaction/sale had taken place, the first determination order was in force and in existence which was binding to all - appeal allowed - decided in favor of appellant-assessee.
Issues Involved:
1. Validity and applicability of two determination orders under Section 62 of the Gujarat Sales Tax Act, 1969. 2. Binding nature of determination orders on the department and assessee. 3. Retrospective application of subsequent determination orders. Issue-wise Detailed Analysis: 1. Validity and Applicability of Two Determination Orders: The core issue revolves around whether the first determination order under Section 62 of the Gujarat Sales Tax Act, 1969, remains valid until a second determination order is passed. The appellant argued that the first order dated 22.3.1985 should prevail for transactions in 1996-97, while the department contended that the subsequent order dated 24.3.1999 should be applied retrospectively. 2. Binding Nature of Determination Orders: The appellant emphasized that the determination order dated 22.3.1985 was binding on both the assessee and the department at the time of the transaction in 1996-97. The argument was supported by precedents from the Division Bench of the Gujarat High Court in the case of State of Gujarat v. Mahavir Engineering and Electric Stores and the Bombay High Court in Kulko Engineering Works Limited v. The State of Maharashtra. Both cases held that such orders bind the concerned traders and the State Sales Tax Department. 3. Retrospective Application of Subsequent Determination Orders: The appellant contended that applying the subsequent determination order dated 24.3.1999 retrospectively to transactions that occurred in 1996-97 would cause undue hardship, as the tax liability should be based on the prevailing determination order at the time of the transaction. The department argued that the subsequent determination order was binding on the Assessing Officer when the assessment was made in 2000. However, the court noted that the liability to pay sales tax arises at the time of the transaction, and the determination order in force at that time should apply. Judgment Analysis: The court held that the first determination order dated 22.3.1985 was in force and binding at the time of the transactions in 1996-97. The subsequent determination order dated 24.3.1999 could not be applied retrospectively to affect transactions that took place before its issuance. The court emphasized that applying the subsequent order retrospectively would cause undue hardship to the trader/assessee, as it would be difficult to recover the difference in sales tax from consumers after the fact. The court also referred to sub-section (2) of Section 62, which allows the Commissioner to direct that a determination shall not affect the liability for sales effected prior to the determination. This provision aims to prevent such hardships and ensure fairness. Conclusion: The Tribunal erred in holding that the first determination order would not hold the field until the second order. The court ruled in favor of the assessee, stating that the subsequent determination order should not apply to transactions that occurred before its issuance. Consequently, the orders passed by the Assessing Officer, the first appellate authority, and the Tribunal were quashed and set aside. The appeal was allowed, with no order as to costs.
|
