9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (4) TMI 1041 - HC - VAT and Sales TaxScope of State taxation - whether the departmental catering service being a property of the Union of India through General Manager, Western Railway, it squarely falls within the exemption provision and particularly carved out by Article 285 of the Constitution of India? - Held that - reliance placed in the decision in the case of KARYA PALAK ENGINEER, CPWD. Versus RAJASTHAN TAXATION BOARD, AJMER 2004 (8) TMI 114 - SUPREME COURT OF INDIA , where it was held that Union is not exempted from the levy of indirect tax under Article 285 of the Constitution. Whether Central Public Works Department can safely be termed as a dealer? - Held that - again reliance was placed in the case of KARYA PALAK ENGINEER, CPWD. Versus RAJASTHAN TAXATION BOARD, AJMER, where it was held that the argument that in terms of the language of the definition of the dealer under Section 2(14) of the Rajasthan Act appellants can not be a dealer , will also have to be rejected. Petition dismissed - decided against petitioner and in favor of Revenue.
Issues Involved:
1. Whether the departmental catering service of the Union of India through General Manager, Western Railway, falls within the exemption provision under Article 285 of the Constitution of India. 2. Whether the definition of "dealer" includes the Railway or the Union of India, and if the amendment to include it is beyond the competence of the State legislature. 3. Whether the Tribunal was justified in holding the applicant as a dealer under the Bombay Sales Tax Act, 1959, and in upholding the levy of purchase tax and interest. Detailed Analysis: Issue 1: Exemption under Article 285 of the Constitution of India The petitioner argued that the departmental catering service being a property of the Union of India should be exempt from state taxation under Article 285 of the Constitution of India. However, the court referred to a previous judgment in Sales Tax Application No. 4 of 2002, where a similar contention had been rejected. The court emphasized that the exemption under Article 285 does not apply to indirect taxes such as sales tax. The court cited the Hon'ble Supreme Court's judgment in Kayra Palak Engineer, CPWD, Bikaner vs. Rajasthan Taxation Board, Ajmer and Ors., which clarified that Article 285 envisaged immunity from direct taxes and not from indirect taxes like sales tax. Therefore, the court concluded that the exemption under Article 285 is not applicable to the petitioner's case. Issue 2: Definition of "Dealer" and Competence of State Legislature The petitioner contended that the definition of "dealer" should not include the Railway or the Union of India, and any amendment to include it is beyond the competence of the State legislature. The court referred to the Hon'ble Supreme Court's judgment, which held that the Central Public Works Department could be termed as a dealer. The court cited the Supreme Court's decision in M/s N.M. Goel & Co. vs. Sales Tax Officer, Rajnandgaon and Anr., which established that the transfer of property in goods during the execution of a contract constitutes a sale. The court also referred to the case of Rashtriya Ispat Nigam Ltd. vs. State of A.P., where it was held that the supply of materials by the contractee to the contractor and the adjustment of their value in bills constituted a sale. Thus, the court concluded that the petitioner could be considered a dealer under the Bombay Sales Tax Act, 1959. Issue 3: Justification of Tribunal's Decision The court examined whether the Tribunal was justified in its decision to hold the applicant as a dealer and uphold the levy of purchase tax and interest. The Tribunal had refused to make a reference to the court except for the question relating to the levy of purchase tax. The court noted that the Tribunal's decision was based on the explanation to section 2(11) of the Bombay Sales Tax Act, which was amended to include all goods sold by specified organizations. The court found that the Tribunal had correctly interpreted the law and that no legal question warranted a reference to the court. The court also referred to the Hon'ble Supreme Court's judgment in the case of Collector of Customs vs. State of West Bengal, which held that Article 285 does not exempt the Union from indirect taxes. Therefore, the court upheld the Tribunal's decision and dismissed the writ petition. Conclusion The court concluded that both contentions raised by the petitioner were clearly answered in favor of the Revenue and against the petitioner. The writ petition was dismissed, and the rule was discharged with no order as to costs.
|
