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2023 (2) TMI 62 - HC - VAT and Sales TaxLevy of local body tax - Dealer or Commission Agent or Importer? - it is submitted that the Petitioner is not liable under the provisions of Local Body Tax Rules and as such is not required to register himself under these rules to pay any local body tax - Maharashtra Municipal Corporation (Local Body Tax) Rules, 2015, r/w. relevant provisions of the Municipal Corporation Act, 1888 - HELD THAT - In the present case, the goods which are brought from outside by the Petitioner into the limits of Pune Municipal Corporation, as can be seen from the operations carried out by the Petitioner, are not for his own use or for earning commission or sale, but are for the purpose of being delivered at the door step of the individual buyer. In other words, what the Petitioner is doing here is import of goods for the purpose of delivery to some other person and for this purpose, the Petitioner acts like a courier or postman or delivery person. Thus, activity of the Petitioner would not be covered by the definition of the word importer . If the Petitioner cannot be called to be a person who imports goods into the city limits for use or consumption or sale and if the Petitioner is also not the person who is alleged to be selling or buying goods for commission or remuneration or otherwise in the city, the Petitioner would not be a dealer within the contemplation of Section 2(16A). If this is so, then the Petitioner would not be liable for any registration for the purpose of LBT under rule 3 of the LBT Rules. In the present case, the Petitioner is not a dealer within the contemplation of the Maharashtra Municipal Corporation Act and therefore would not be a dealer as envisaged under Rule 3 of LBT Rules. As regards commission agent, or any other agent, we must say that the impugned order considers the Petitioner as a commission agent but, having regard to activity carried out by the Petitioner and service rendered by it, we have already found that the Petitioner, is a person who brings goods within the limits of the Corporation for the purpose of their delivery to the buyer who buys the goods independently from different seller by using internet platform provided by Flipkart and thus, the Petitioner acts like courier or a postman or a delivery person. Therefore, the Petitioner could not be said to be an agent, either of the seller or the buyer much less a commission agent. All these aspects of the matter which are very critical for the purpose of assessment and levy of local body tax have not been considered by the Municipal Commissioner, Pune. The impugned order is illegal and bad-in-law. Such an order cannot be sustained in the eyes of law and deserves to be quashed and set aside - Petition allowed.
Issues Involved:
1. Legality and correctness of the order dated 03.12.2017. 2. Definition and applicability of "Dealer," "Commission Agent," and "Importer" under the Maharashtra Municipal Corporation (Local Body Tax) Rules, 2015, and the Municipal Corporation Act, 1888. 3. Requirement for registration under the Local Body Tax (LBT) Rules. 4. Assessment and levy of Local Body Tax (LBT). Detailed Analysis: 1. Legality and Correctness of the Order Dated 03.12.2017: The Petitioner challenged the legality and correctness of the order dated 03.12.2017 issued by the Respondent - Corporation through its Commissioner. The order rejected the Petitioner's challenge to the show cause notice that required the Petitioner to register as a "Dealer/Importer" for the purpose of assessment and levy of local body tax (LBT). The Commissioner reasoned that the Petitioner, acting as a "commission agent," imported goods from outside and delivered them to buyers within the Municipal Corporation limits, thus making the Petitioner an importer of goods sold as a Commission Agent through the internet platform "Flipkart Internet Pvt. Ltd." 2. Definition and Applicability of "Dealer," "Commission Agent," and "Importer": The Petitioner's counsel argued that the Petitioner, being a Preferred Logistics Service Provider for goods purchased through Flipkart, could not be classified as a "Dealer," "Commission Agent," or "Importer" within the meaning of the relevant provisions of The Maharashtra Municipal Corporation (Local Body Tax) Rules, 2015, and the Municipal Corporation Act, 1888. The Petitioner merely facilitated the delivery of goods purchased by buyers from sellers listed on Flipkart's platform and did not engage in buying, selling, or importing goods for its own use or for commission. 3. Requirement for Registration under the Local Body Tax (LBT) Rules: The Corporation's counsel submitted that no assessment of LBT had been made yet and that the Petitioner was only required to register for the purposes of assessment and levy of LBT. The relevant provisions of the LBT Rules and the Municipal Corporation Act were examined, specifically Sections 2(16A) and 2(28A), which define "Dealer" and "Importer" respectively. The court found that the Petitioner's activities did not meet the statutory definitions of "Dealer" or "Importer," as the Petitioner did not import goods for its own use, consumption, or sale but merely delivered goods to buyers. 4. Assessment and Levy of Local Body Tax (LBT): The court examined Rules 3 and 7 of the Maharashtra Local Body Tax Rules. Rule 3 prescribes the limits for registration based on the value of imported goods or turnover of sales or purchases. Rule 7 deals with the liability of commission agents or other agents who import goods on behalf of their principals. The court concluded that the Petitioner, acting as a logistics service provider and not as a dealer or commission agent, was not liable for registration under the LBT Rules. The Petitioner's activities were akin to those of a courier or delivery person, not an importer or dealer. Conclusion: The court held that the Petitioner was not liable for registration or payment of LBT under the relevant provisions of the LBT Rules and the Municipal Corporation Act. The impugned order dated 03.12.2017 was deemed illegal and set aside. The Petition was allowed, and the Bank guarantee, if valid, was discharged. The rule was made absolute, and the Petition was disposed of accordingly.
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