2023 (12) TMI 431 - HC - VAT and Sales Tax

Levy of tax on 25% of chemicals used as consumables in the process of job work of dyeing of fabric by assuming that property in the goods has passed on to the principals - levy of tax on the entire value of dyes used by the appellant in the job work process of dyeing of fabric ignoring the quantity of dyes which are wasted during the process in which property is not transferred to the principals - dyes and chemicals is transferred to the principals in the job work of dyeing the fabric - HELD THAT - The issue having already been decided against the State and the matter being covered by the judgment of the Apex Court in THE STATE OF HARYANA ANR. VERSUS M/S. A.P. PROCESSORS 2023 (7) TMI 942 - SC ORDER , order passed by the Tribunal and the Authorities below are not sustainable. The matter is remanded to the Assessing Officer to conduct the factual enquiry by giving liberty to the parties to take all the pleas in support of their respective case as observed in M/s. A.P. Processors case. Appeal allowed by way of remand.

Summary

Issues involved:
- Application for listing main case for hearing after conversion to Civil Appeal
- Appeal under Central Sales Tax Act against order of Haryana Tax Tribunal for assessment year 2004-05

Application for listing main case:
An application was filed to list the main case for hearing in the regular motion list following the decision in SLP (Civil)-8673-2019, which was converted into Civil Appeal No. 1311-2020 on 10.07.2023. The application was allowed, and the main case was listed in the motion list.

Appeal under Central Sales Tax Act:
The appeal was filed under Section 9(2) of The Central Sales Tax Act, 1956 read with Section 36 of the Haryana Value Added Tax Act, 2003 against the order dated 06.09.2019 passed by the Haryana Tax Tribunal for the assessment year 2004-05. The substantial questions of law raised included the justification of tax levy on chemicals and dyes used in the job work process of dyeing fabric, focusing on the transfer of property to the principals. The Tribunal had upheld the tax levy on a portion of chemicals and the entire value of dyes used by the appellant, leading to the dismissal of the appeal. However, the matter was remanded to the Assessing Officer for a fresh order considering the observations made in a previous judgment. The co-ordinate Bench set aside the order passed by the authorities, emphasizing the need for a factual inquiry to determine the quantity of chemicals, dyes, and colors that get washed out in the process of dyeing and printing fabrics. The appeal was allowed, and the matter was remanded to the Assessing Officer for a factual inquiry, allowing parties to present evidence in support of their contentions.