2018 (12) TMI 483 - HC - VAT and Sales Tax

Levy of tax with interest - deemed sales of dyes, chemicals, consumable, machinery parts and packing materials involved in the job works of the third parties - Held that - Issue is decided in the case of M/S A.P. PROCESSORS 2018 (5) TMI 1797 - PUNJAB AND HARYANA HIGH COURT , where the matter is remanded to the Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabrics undertaken by the appellant. Since the issue has been decided against the revenue, at this stage, a prayer was made by the learned counsel for the appellant- revenue that as the appellant-revenue is in the process of challenging the judgment in M/s A. P. Processors's case before the Apex Court, liberty be granted to revive the appeals in case the judgment in the said case is varied or some contrary order is passed by the Supreme Court - petition dismissed.

Summary

Issues involved:
- Interpretation of the Haryana Value Added Tax Act, 2003 by the Haryana Tax Tribunal
- Validity of the Tribunal's decision on the prospectivity of legal principles
- Restriction of power of revenue authorities by the Tribunal
- Justification of restricting the power of Revisional Authority by the Tribunal

Analysis:

1. Interpretation of the Haryana Value Added Tax Act, 2003 by the Haryana Tax Tribunal: The case involved a dispute where the respondent company was assessed additional tax under the HVAT Act for deemed sales of various materials used in job works. The Tribunal held that all materials used were taxable, transferring their inherent property to the fabrics. The Tribunal also decided that the principle laid down would operate prospectively, not affecting previous tax assessments. The appellant-revenue challenged this decision, arguing that the Tribunal had no authority to make the principle prospective without a statutory provision. However, a previous case had already settled the issue against the appellant-revenue, determining that the chemicals used in job work were taxable, but the quantity of dyes/colors taxable depended on factual aspects to be determined by the Assessing Officer.

2. Validity of the Tribunal's decision on the prospectivity of legal principles: The Tribunal's decision to apply the principle prospectively was a key point of contention. The appellant-revenue argued that there was no legal basis for such a direction without statutory backing. However, the previous case had already established that the determination of taxable quantity of dyes/colors required factual assessment by the Assessing Officer. The Tribunal's decision to limit the application of the principle to future cases was upheld based on this legal precedent.

3. Restriction of power of revenue authorities by the Tribunal: The appellant-revenue questioned the Tribunal's restriction of the power of revenue authorities under Sections 15 and 17 of the HVAT Act. The Tribunal's decision to uphold its own findings and not allow revision of previous tax assessments was challenged. However, the previous case had clarified that the Assessing Officer needed to determine the actual loss of chemicals, dyes, and colors in the job work processes, indicating that the Tribunal's decision was in line with legal requirements.

4. Justification of restricting the power of Revisional Authority by the Tribunal: The Tribunal's decision to limit the power of the Revisional Authority was also contested by the appellant-revenue. The argument was based on Section 34 of the HVAT Act, which provides for revision in light of Tribunal orders in similar cases. However, the previous case had set a precedent that factual assessments were necessary for determining taxable quantities, aligning with the Tribunal's decision to remand the matter to the Assessing Officer for detailed evaluation. The Tribunal's decision to restrict the Revisional Authority's power was supported by legal principles established in the previous case.

In conclusion, the High Court dismissed the appeals, upholding the Tribunal's decision based on legal precedents and the necessity for factual assessments in determining taxable quantities. The issues raised by the appellant-revenue regarding the prospectivity of legal principles and the restriction of revenue authorities' and Revisional Authority's powers were addressed through the application of relevant legal provisions and established case law.