2017 (5) TMI 855 - HC - VAT and Sales Tax

Liability of tax - Assessment Year 2009-2010 - business of supari - stock transfer - levy of tax u/s 12 of the Act on the purchase value of supari dispatched outside the State of Assam - petitioner claim that since the tax on supari was leviable u/s 10 of the Act on its sale price, the petitioner was not liable to pay tax u/s 12 of the Act - Held that - u/s 10 tax is leviable on supari and u/s 12 tax can be levied only when the purchase is made from any person in the circumstances, in which, no tax u/s 10 is leviable on the sale price on such taxable goods - Admittedly, when the petitioner purchased supari , tax under Section 10 was leviable on its sale price. Therefore, the pre-condition for the applicability of Section 12 was wholly absent in the case at hand. Merely because the Department for some reason could not collect tax on the sale of supari u/s 10 would not mean absence of levy or liability conferring right to levy tax u/s 12. Revision allowed - decided in favor of assessee.

Summary

Issues:
1. Dismissal of petitioner's case by Assam Board of Revenue.
2. Interpretation of Sections 10 and 12 of the Assam Value Added Tax Act, 2003.
3. Liability of the petitioner for tax on 'supari' dispatched outside the State of Assam.
4. Distinction between 'leviable' and 'payable' tax.
5. Applicability of Section 12 in the case at hand.

Analysis:
The judgment pertains to a revision against the dismissal of the petitioner's case by the Assam Board of Revenue. The petitioner, a registered dealer under the Assam Value Added Tax Act, 2003, was in dispute regarding tax liability for the Assessment Year 2009-2010. The petitioner purchased 'supari' within Assam and dispatched it outside the state without paying tax on the purchase value under Section 12 of the Act. The tax authorities levied tax under Section 12, which was challenged by the petitioner through appeals. The petitioner argued that since tax was leviable on 'supari' under Section 10 on its sale price, they were not liable to pay tax under Section 12. The learned senior counsel relied on the Supreme Court's decision in Peekay Re-Rolling Mills case to support this argument.

The High Court analyzed Sections 10 and 12 of the Act, emphasizing that tax under Section 12 can only be levied when no tax under Section 10 is leviable on the sale price of the goods. As tax was leviable on 'supari' under Section 10, the pre-condition for applying Section 12 was absent. The Court noted the distinction between 'levy' and 'collection' of tax, citing the Peekay Re-Rolling Mills case. It held that the tax authorities did not interpret the provisions of Sections 10 and 12 correctly.

Furthermore, the Court distinguished cases cited by the Advocate General, stating they were not relevant to the present case. It quashed the orders of the tax authorities and the Assam Board of Revenue, allowing the revision petition with costs payable to the petitioner. The judgment clarified the interpretation of Sections 10 and 12, highlighting the importance of understanding the distinction between 'leviable' and 'payable' tax in tax assessments.