2024 (3) TMI 445 - HC - VAT and Sales Tax

Exemption granted on turnovers relating to Bottle breakage charges and Levy of Rental Charges at 5% on bottles and craters - HELD THAT - When the bottles travels from the manufacturer to wholesaler and the retailer, the active possession of bottles and crates are in the hands of sellers. The Tribunal found fault with the revisional authority analysis that generally all lease transactions will be for a specified period. However, Section 5-E of the Act provides for unspecified period and the appeal was allowed to that extent. There is no question of law framed by the petitioner for entertaining the Tax Revision Case. An order of remand for re-assessing the factual possession cannot be considered as an erroneous decision on the question of law. As seen from the order of the Tribunal, the Tribunal has not decided on any issue on the question of law. It has fairly considered the issues before it and passed the orders partly allowing the appeal and remanding back to the Revisional Authority. There is no question of law framed by the petitioner for entertaining the Tax Revision Case. An order of remand for re-assessing the factual possession cannot be considered as an erroneous decision on the question of law. As seen from the order of the Tribunal, the Tribunal has not decided on any issue on the question of law. It has fairly considered the issues before it and passed the orders partly allowing the appeal and remanding back to the Revisional Authority. The Tax Revision Cases are dismissed.

Summary

Issues involved:
The judgment involves issues related to tax revision cases filed against a common order passed by the Sales Tax Appellate Tribunal, focusing on the exemption of turnovers, bottle breakage charges, levy of rental charges, and lease transactions.

Bottle Breakage Charges and Rental Charges:
The case involves an assessment by the Deputy Commissioner noting wrongful exemption on bottle breakage charges and rental charges. The revisional authority observed discrepancies in the procedure followed by the dealer company regarding the collection of breakage charges and the cost of bottles. The Tribunal remanded the matter to the revisional authority for further investigation into these charges.

Publicity Charges and Pre-sale Expenditure:
Regarding publicity charges, the Revisional Authority's conclusion was disputed as there was no material to support it. It was found that the amounts incurred by the appellant were later reimbursed, indicating they did not represent pre-sale expenditure. The Tribunal allowed the appeal on this count.

Lease Transactions and Tax Liability:
The Revisional Authority's error in interpreting Section 5-E of the AP General Sales Tax Act was highlighted, emphasizing that lease transactions need not have a specified period. The Tribunal found fault with the analysis and allowed the appeal on this ground.

Legal Considerations and Precedents:
The judgment discussed various legal precedents, including Hindustan COCO Cola Beverages Pvt. Ltd. vs. State of Andhra Pradesh and State of Andhra Pradesh vs. Business Forms Limited. The Tribunal's decision to remand the matter for factual assessment was deemed appropriate, with reference to M/s. K P Mozika vs. Oil and Natural Gas Corporation Ltd & Others.

Conclusion:
The Tax Revision Cases were dismissed without costs, with the Court finding no infirmity in the Tribunal's orders. The judgment highlights the importance of factual assessments in tax matters and the need for a thorough investigation into various charges and transactions to determine tax liability accurately.