2021 (10) TMI 985 - HC - VAT and Sales Tax

Grant of exemption on second sale - sale of food and drinks to the canteen as claimed by the assessee - whether the sale will fall under Entry 6(a) of the Fifth Schedule to the KST Act - reimbursement of ESI, PF, Bonus is taxable under the KST Act or not - competency of the Advance Ruling Authority in issuing the clarification when the matter was pending before the Revisional Authority - HELD THAT - It is ex-facie apparent that the Tribunal having given a finding on the sales of food and drinks made by the assessee to the canteens would not fall under Entry 6(a) of Fifth Schedule, remanded the matter to the revisional authority only to examine the exemption of second sales with respect to bakery products sold by the assessee. The review petition was filed by the assessee against the order of the Tribunal which also came to be dismissed and the same has attained finality. The said finding having attained finality, after passing of the order by the revisional authority on the aspect of the second sales, now while challenging the said order before the Tribunal again re-adjudicating the issue already concluded amounts to rehearing the decided issue which is wholly impermissible under law. The Tribunal has rightly held that the issue now raised by the assessee having attained finality, no further re-adjudication is required and dismissed the appeal - no questions of law arises for our consideration in this revision petition - revision petition dismissed.

Issues Involved:
1. Taxability of food sales in the canteen under Entry 6(a) of the Fifth Schedule to the KST Act.
2. Finality of the earlier Tribunal order.
3. Nature of the remand by the Tribunal (open or restricted).
4. Validity of the assessing authority's order in light of a High Court judgment.
5. Tribunal's omission to discuss other issues raised before the KAT.
6. Reliance on the Advance Ruling Authority order by the revisional authority.
7. Prospective or retrospective nature of the Advance Ruling Authority order.
8. Conformity of the Tribunal's order with the First Appellate Authority (FAA) and Assessing Authority (AA).
9. Taxability of transactions where basic facilities are provided by the contractee.
10. Taxability of reimbursements for ESI, PF, and Bonus under the KST Act.

Detailed Analysis:

1. Taxability of Food Sales in the Canteen:
The Tribunal concluded that the sale of food and drinks by the assessee to the canteen does not fall under Entry 6(a) of the Fifth Schedule and is subject to tax under Section 5 of the KST Act. This decision was based on the agreement between the assessee and the employers, which did not indicate that sales were made on a no-profit basis.

2. Finality of the Earlier Tribunal Order:
The Tribunal's earlier order, which examined the case on merits and concluded that the assessee's sales did not fall under Entry 6(a), had attained finality. Therefore, no further adjudication on this issue was warranted.

3. Nature of the Remand:
The remand by the Tribunal was restricted to examining the exemption of second sales concerning bakery products sold by the assessee. It was not an open remand.

4. Validity of the Assessing Authority's Order:
The revisional authority exercised suo-moto revisional powers, which was challenged by the assessee. However, the Tribunal found this exercise of power tenable and maintained that the revisional authority's order was not merely based on the Advance Ruling Authority’s clarification but was independently examined on merits.

5. Tribunal's Omission to Discuss Other Issues:
The Tribunal dismissed the appeal, stating that all issues raised by the assessee were considered and answered in the first round of litigation, which had reached finality.

6. Reliance on the Advance Ruling Authority Order:
The assessee argued that the Advance Ruling Authority had no competency to issue a ruling when the matter was pending before the revisional authority. However, the Tribunal found that the revisional authority's proceedings were not based solely on the Advance Ruling Authority's clarification but were independently examined.

7. Prospective or Retrospective Nature of the Advance Ruling Authority Order:
The Tribunal deemed the argument about the prospective or retrospective application of the Advance Ruling Authority’s order as academic, given that the revisional proceedings were initiated before the clarification was issued.

8. Conformity with FAA and AA Orders:
The Tribunal confirmed the order of the First Appellate Authority and the Assessing Authority, finding no exception with their findings.

9. Taxability of Transactions with Provided Facilities:
The Tribunal did not specifically address this issue in the detailed judgment, implying that it was not central to the case's resolution.

10. Taxability of Reimbursements for ESI, PF, and Bonus:
The Tribunal did not find merit in the argument that the inclusion of expenses like Bonus, PF, and ESI in the invoices was unjustifiable for tax computation.

Conclusion:
The Tribunal dismissed the revision petition, holding that no questions of law arose for consideration. The Tribunal's findings were upheld, and the revision petition was dismissed.

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