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VAT / Sales Tax - Case Laws
Showing 301 to 320 of 629 Records
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2020 (6) TMI 497
Works Contract - validity of pre-assessment notice - disallowance of exemption claimed by the petitioner under Rule 10 - disallowance of minor portion of input tax credit - petitioner has made a specific case that the pre-assessment notice does not disclose grounds which has actually been now relied on in the impugned Ext.P-5 assessment order - HELD THAT:- Going by the data and facts and figures now projected in Ext.P-6 application for rectification would indicate that the petitioner has made out a very strong case that even parametres like land cost, corpus fund, electrical and water charges, etc. has already been reckoned by the 1st respondent, while determining the issue of value added tax, as per the impugned Ext.P-5 assessment order. Such an aspect would certainly termed as “wednesbury unreasonableness” in the decision making process, which led to the impugned Ext.P-5 assessment order. Since that is the specific case of the petitioner, it is only to be held that the plea for rectification made by the petitioner as per Ext.P-6 would require serious re-consideration at the hands of the 1st respondent. In that view of the matter, it is ordered that the impugned Ext.P-7 order rejecting the plea for rectification made out as per Ext.P-6 application will stand set aside.
This Court has not entered into the merits of the controversy in any manner and has only examined the decision making process on the part of the 1st respondent and has only noted the abovesaid contentions of the petitioner and the adjudication of all those issues on merits would be falling within the exclusive zone and domain of the 1st respondent Assessing Officer - Petition disposed off.
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2020 (6) TMI 496
Refund of Excess payment made towards excess IPT - grant of interest on refund - Section 89(4) of the KVAT Act - HELD THAT:- It is ordered that the respondents will immediately take up the plea for refund made by the petitioner in Ext.P4 and after affording reasonable opportunity of being heard to the petitioner, will take considerable decision thereon, passing orders in the matter of grant of refund due to the petitioner, within a period of 4 weeks from the date of production of the certified copy of this judgment and depending on the orders so passed, the consequential steps for disbursing the new refund amounts should also be duly completed by the respondents or the competent official concerned within 4 weeks thereafter.
Grant of interest on the refund - HELD THAT:- The said claim for interest should also be duly considered and orders passed thereon by the respondent officer in the light of the mandatory provisions contained in Sec.89(4) of the KVAT Act. So that the due admissible interest amounts should also be duly disbursed to the petitioner along with the principal amount of the refund amounts.
Petition disposed off.
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2020 (6) TMI 390
Taxability - sale of loose liquor - case of petitioner is that though the petitioner is also selling alcohol (in loose form), petitioner is not liable to pay VAT as the liability was already discharged at the time of the first sale by the Telangana Beverages Corporation Limited and the sale of loose liquor is not taxable as per Explanation III to Section 2 (38) of the Act - opportunity of hearing not provided - principles of natural justice - Lockdown due to COVID pandemic situation - HELD THAT:- The petitioner had made a request in his letter dt.26.03.2020 which was acknowledged by the 1st respondent on 27.03.2020 that the petitioner was disabled from furnishing readily all the documents in support of the petitioner’s contentions in view of the lockdown situation prevailing in the State and in the country on account of outbreak of COVID-19 and if the 1st respondent were to grant time till the lockdown restrictions for movement were relaxed, the petitioner would furnish the same. The petitioner also requested in the said letter dt.26.03.2020 for an opportunity of personal hearing - The existence of the lockdown prohibiting movement of people on roads on account of outbreak of COVID-19 is an admitted fact. In these circumstances, the 1st respondent cannot reasonably expect the petitioner to furnish all the requisite documents for the petitioner to defend itself, that too for a period of (5) years within the (1) week time granted by the 1st respondent.
There has been a gross violation of principles of natural justice and fair opportunity was denied to the petitioner by the 1st respondent to defend itself - notwithstanding the existence of an effective alternative remedy by way of an Appeal under Section 31 of the Act, these Writ Petitions is entertained on the ground that there has been a violation of principles of natural justice vitiating the impugned assessment orders.
Matters remitted to the 1st respondent to pass fresh Assessment Orders for each of the Assessment Years in question, after affording reasonable time to the petitioner to submit all the documents and also after affording a personal hearing to the petitioner to put forth its objections before the 1st respondent - petition allowed by way of remand.
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2020 (6) TMI 389
Maintainability of petition - existence of alternative remedy - Levy of CST on entire turnover - taxable, export as well as exempted sales - petitioner contends that the 1st respondent adopted the gross turnover as ₹ 9475,63,11,243/- and proposed to levy tax at 14.5% on the entire turnover without considering the exemptions claimed towards direct exports, branch transfer and CST collections under the CST Act - Personal hearing not attended - HELD THAT:- The petitioner’s Representative could not be blamed for not attending the personal hearing given by the 1st respondent due to such lockdown, more particularly when the online response also could not be submitted due to technical glitches on the portal of the 1st respondent - However, since the time fixed for making the assessment was to expire on 31.03.2020, without providing a personal hearing as sought by the petitioner on the phone on 31.03.2020, the impugned order was passed.
It appears that on account of lack of time in view of the impending lapsing of limitation for making the assessment, not only was the petitioner denied proper opportunity to personally represent its case before the 1st respondent but also errors might have crept into the order of the 1st respondent passed on 31.03.2020 - a proper opportunity was denied to the petitioner to represent its case and there has been violation of principles of natural justice inasmuch as personal hearings were fixed on 16.03.2020 for the first time during lockdown period disabling the petitioner and causing serious prejudice to the petitioner.
The existence of alternative remedy of appeal available to the petitioner to challenge the impugned order of Assessment dt.31.03.2020 cannot be a bar for the petitioner to avail the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India - the matter is remitted back to the 1st respondent to consider the matter afresh after giving personal hearing to the petitioner and to decide within a period of two (2) months from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2020 (6) TMI 388
Stay of collection of the disputed tax - Section 31(3)(c) of the A.P. VAT Act, 2005 - It is contended that pending disposal of the appeal by the Tribunal, the respondents are insisting the petitioner on paying the balance disputed tax dues and that is why the petitioner has approached this Court by filing the present Writ Petition - HELD THAT:- Since it is not disputed by the learned Special Counsel for Commercial Tax that petitioner had already deposited 2/3rds of the disputed tax, and since admittedly appeal filed by petitioner before the Telangana VAT Tribunal is still pending and if the balance tax is also permitted to be receoved, the very appeal would become infructuous, we deem it appropriate to dispose of this Writ Petition by directing stay of recovery of balance of the disputed tax pending disposal of T.A.No.98 of 2019 by the Telangana VAT Appellate Tribunal, Hyderabad.
Petition disposed off.
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2020 (6) TMI 358
Principles of Natural Justice - demand of Luxury Tax - petitioner was not served with the order of the appellate court despite the fact that he had approached the office of the 2nd respondent to ascertain the fate of the appeal - HELD THAT:- Since, there is no repealment of Act 23 of 1999 introduced Section 5A for charging of a luxury tax on the building having a specified plinth area or more with effect from on or after 1st April 1999, the action of the respondents in charging the tax and raising the demand cannot be said to be without jurisdiction or lack of competency.
There is no justification warranting any interference under Article 226 of the Constitution of India to bring the case within the realm of jurisdiction - petition dismissed.
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2020 (6) TMI 357
Input Tax Credit - wrongful disclosure of purchase and sales turnover to pass on input tax credit unauthorisedly to various buyers/dealers - HELD THAT:- Though the petitioner has alleged connivance between the officers of the Commercial Tax Department and the third person who had allegedly accessed the login ID of the petitioner, the issue would be best left to the respondents to cause a proper and through investigation into the allegation with the help of the economic offences and cybercrime Wing of the state to find out whether indeed there was a misuse of the petitioner's login ID or whether the petitioner was himself/herself masquerading as unknown person to make it seem as if the petitioner's login Id was being misused.
The pre-assessment notice as has been prayed for by the petitioner is not quashed - Suffice to state that the respondents shall take appropriate measures and cause an investigation into the complaint of the petitioner and seek help of the specialised investigation wings of the State concerned with cyber crime - This exercise shall be completed within a period of 12 months from date of receipt of this order. During the pendency of the aforesaid investigation, the impugned pre-assessment notice shall be kept in abeyance.
Petition disposed off.
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2020 (6) TMI 328
Transfer of property in goods involved in the execution of the works contract - Taxability - consumable goods - purchase of ink for printing polythene rolls - exemption under Section 3-B(2)(e) of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- The judgment in State of Tamil Nadu Vs. Premier Litho Works and another, [2009 (7) TMI 1159 - MADRAS HIGH COURT], examined the question whether a particular transaction is an inter-state sale or a works contract. In the instant case, there is no quarrel that the appellants are involved in works contract. The judgment is distinguishable on facts and on law and reliance placed by the appellant on the said judgment is totally misconceived. The 46th Amendment to the Constitution of India and the insertion of Clause 29-A in Article 366 and Section 3-B(2)(e) of the Tamil Nadu General Sales Tax, 1959, were not brought to the attention of the Division Bench, since the issue involved was entirely different.
The correct position of law as repeatedly and consistently pointed out by the Hon'ble Supreme Court, finally in STATE OF KARNATAKA ETC. VERSUS M/S PRO LAB & ORS. ETC. [2015 (2) TMI 388 - SUPREME COURT] is “to sum up, it follows from the reading of the aforesaid judgment that after insertion of clause 29-A in Article 366, the Works Contract which was indivisible one by legal fiction, altered into a contract, is permitted to be bifurcated into two: one for "sale of goods" and other for "services", thereby making goods component of the contract exigible to sales tax.
Further, while going into this exercise of divisibility, dominant intention behind such a contract, namely, whether it was for sale of goods or for services, is rendered otiose or immaterial. It follows, as a sequitur, that by virtue of clause 29-A of Article 366, the State Legislature is now empowered to segregate the goods part of the Works Contract and impose sales tax thereupon. It may be noted that Entry 54, List II of the Constitution of India empowers the State Legislature to enact a law taxing sale of goods. Sales tax, being a subject-matter into the State List, the State Legislature has the competency to legislate over the subject.
Since the question of law has been resolved on the basis of authoritative pronouncements of the Hon'ble Supreme Court, it would be a fruitless exercise to refer the Writ Appeal once again to the Division Bench.
Appeal dismissed.
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2020 (6) TMI 327
Jurisdiction - powers of the competent authority to initiate the revision of the assessment as per Section 25(1) after lapse of six years - HELD THAT:- The issue is decided by the judgment of this Court in BAIJU A.A. AND OTHERS VERSUS STATE TAX OFFICER, STATE OF KERALA AND OTHERS [2019 (12) TMI 469 - KERALA HIGH COURT]. In Para 21, the amendments to Section 25 of the KVAT Act through the Kerala Finance Act 2018 was declared to be illegal and unconstitutional in as much beyond the legislative competence of the State Legislature. Be that as it may, the limitation in the instant case expired as per the provisions of the 25(1) of the KVAT Act on 31st of March 2018, whereas the Ext.P1 assessment order is dated 26th March 2019 much beyond thereof.
The assessment order dated 26th March 2019 could not have been revised after expiry of six years - the assessment order is devoid of the merits, and is quashed - petition allowed.
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2020 (6) TMI 276
Validity of Assessment Order - Recovery of the amounts due in term of the assessment order - CST Act, 1956 read with Assam Value Added Tax Act, 2003 - violation of principles of Natural Justice - HELD THAT:- List this matter along with WP(C) No. 2278/2020. Till the next date fixed, no coercive is to be taken by the respondent authorities in respect of the recovery of tax sought to be made by the impugned notice dated 28th December, 2019.
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2020 (6) TMI 275
Stay on operation of the assessment order - deposit of pre-requisite money as required U/S 70(2) of the TVAT Act, 2004 - HELD THAT:- This court finds sufficient force in the submission made by Mr. Bhowmik, learned Advocate General. But as from the record it has surfaced that the said amount has been shown on account as the excess payment, the revisional authority (the Commissioner of Taxes, Government of Tripura) is directed to consider the said excess amount and adjust the same against the pre-requisite payment in terms of Section 70(2) of the TVAT Act, if the said amount is really the excess amount. Since the revisional authority has fixed date on 07.07.2020 for consideration of admission, till that day, no coercive action shall be taken against the petitioner on the basis of the assessment order of the dated 17.01.2020 for the assessment years of 2016-17 and 2017-18. In addition thereto, the direction of the Commissioner of Taxes to the respondent No.5 to deduct the amount i.e. the assessed tax and penalty from his bill as reflected in the communication dated 15.05.2020 (annexure-2 to the writ petition), shall remain suspended till the decision in the revision petition.
Petition disposed off.
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2020 (6) TMI 274
Compounding of Offences - suppression of sales turnover - failure to take registration - Kerala VAT Act - Special Rebate - HELD THAT:- In the present case, what assumes significance is that the assessee failed to establish that the stock available belongs to a registered dealer; and that it reached the assesse’s hands as per the permissible mode and with supporting prescribed documents, under the KVAT Act - there are no reason to interfere with the assessment made adopting the sales turnover as detected by the Intelligence Officer.
Purchase Turnover - HELD THAT:- It is very clear from the records that the assessee had not been maintaining proper books of accounts and there were purchases made of gold and sale of ornaments. The mere fact that the sale effected was minimal would not detract from the fact that the assessee would have probably suppressed other transactions also for which there would be no material available. The purchases found on inspection, to have been made, were above the limit prescribed under Section 15, for registration. The sale made of the goods purchased after manufacture would definitely have been higher. The Intelligence Officer had only adopted the actual turnover suppression and in the best judgment assessment, the Assessing Officer was well within his power to make an estimation of the purchase made which also had to suffer tax under Section 6(2). When there is no material to evidence the purchases or the tax paid on that count, the estimation made is perfectly in order.
Special Rebate - Whether the Tribunal erred in allowing the Special rebate under Section 12, in the context of the specific prohibition under sub-section (2) of Section 12? - HELD THAT:- There would be no question of law arising from the assessment made insofar as the equal addition as made by the Assessing Officer and affirmed by the Tribunal with respect to both the liability under Section 6 and Section 6(2). However considering the contention of the assessee that the assessee had been carrying on job-works as also the fact that the assessee is dis-entitled from claiming special rebate we modify the further addition to be at 25% (1/4th )of the actual addition made on account of the sales and purchases as adopted by the Assessing Officer.
Application disposed off.
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2020 (6) TMI 221
Mistake in original assessment - It is claimed that the difference in the rate of tax has now been claimed in the order impugned before this Court - HELD THAT:- Since only a self assessment has been made and since the books of accounts have not been verified till this date, the order now impugned is set aside and a direction is issued to the petitioner to produce the books of accounts on or before 19.06.2020 for verification by the respondent. The respondent may then verify the entries in Part -B and Part-C in Form -WW. If the respondent requires any clarification, necessary notice may be issued to the petitioner and the petitioner is at liberty to clarify either by themselves or through their Auditor. At any rate, it will be in the interest of both the petitioner and the respondent that the assessment is completed as expeditiously as possible.
Petition disposed off.
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2020 (6) TMI 211
Maintainability of revision - violation of Rule 63(5) of the U.P. Value Added Tax Rules, 2008 - HELD THAT:- The conduct of the appellant has not been up to the mark. He should have appeared before the Courts where he had filed the appeals - In the event, no appearance is there, the Courts have no other option but to decide the cases summarily. At the same time I also find that the Appellate Courts have not adhered to the Rule 63(5) of the U.P. Value Added Tax Rules, 2008.
The First Appeal being First Appeal No.2 of 2015 is restored to its original number and the applicant shall appear and argue the case and thereafter the First Appellate Court shall decide the appeal on merits as per the provisions of Rule 63 (5) of the U.P. Value Added Tax Rules, 2008. The First Appeal shall be fixed for 8.4.2020 - Revision allowed.
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2020 (6) TMI 181
Reimbursement of the sales tax paid - Scope of terms of works contract - contract inclusive of taxes - as per the contract the stipulation that any Central or State sales tax and other taxes on completed items of works (excluding penalty), as may be levied and paid by the contractor shall be reimbursed by the employer on proof of payment (and) on production of assessment certificate. - Circulars dated 07.11.2001 and 19.06.2002 - main plank of the case of the appellant about the nature, extent and implication of the levy of sales tax in relation to a works contract, it could be usefully recapitulated that in view of the forty–sixth amendment to the Constitution of India, Clause (29-A) came to be inserted to Article 366; and, by virtue of sub-clause (b) thereof, it became permissible for the States to levy sales tax on the price of goods and materials used in works contracts as if there was a sale of such goods and materials
HELD THAT:- Heavy reliance on behalf of the appellant on the expression “completed item of work”, as occurring in the first part of Clause 45.2, is entirely misplaced. The only implication of this expression is that a claim for reimbursement of sales tax cannot be made in relation to a particular work or item whose execution is pending or is in progress and has not been completed. So far the levy of sales tax in relation to a works contract is concerned, the same is on “taxable turnover” and not on the entire turnover. It follows necessarily that the claim for reimbursement could only be made of the amount of sales tax that had been levied; and had been paid by the contractor. Hence, the suggestion as if the expression “completed item of work” refers to the end-product of a works contract is without any substance. The contentions urged in that regard are required to be, and are, rejected.
It remains trite that the terms of contract bind the parties thereto and unless there be any case of ambiguity or violation of law, ordinarily, the terms of contract, revealing the intent of parties, are required to be given effect to - It is, therefore, crystal clear that even when the contract provided that the rates quoted by the contractor shall be deemed to be inclusive of sales and other taxes and royalties on the materials, it was agreed to between the parties that sales tax and other taxes under completed items of work, as paid by the contractor were to be reimbursed.
On a plain reading of the aforesaid relevant terms of the contract, it is clear that while the contractor cannot claim any payment towards the taxes/duties/royalties etc. on the goods/materials purchased by it for performance of the contract but that does not disentitle the contractor from claiming reimbursement of the sales tax levied upon it by the employer, of course after proof of payment/assessment. It is also pertinent to mention that the respondent No.1 only claimed reimbursement of the sales tax paid by it on the turnover of the works contract and not of any tax or duty or royalty paid by it on the material procured for the purpose of execution of the works contract.
On a comprehensive reading of the Circular dated 04.11.1986, it is evident that the State Government was fully conscious of its obligation towards reimbursement under the existing terms of contracts and hence, issued directions for due discharge of such obligation with necessary safeguards and, at the same time, provided that henceforth, neither such a clause be inserted in the contract documents nor any tender containing such a clause or condition be accepted.
Evidently, the doubts at the later stage, as indicated in the Circular dated 27.01.2000, and converse decision against the obligation of reimbursement, as stated in the Circular dated 07.11.2001, had only been of unwarranted attempts to wriggle out of the contractual obligations with rather perverse construction of the plain terms of the existing contracts - appeal dismissed.
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2020 (6) TMI 141
Reduction in tax liability - payment of tax at compounded rate - Section 8(f) of the Kerala Value Added Tax Act, 2003 - Explanation added in the year 2014 - clarificatory in the nature or not - Section 43B of the Income Tax Act - assessee contended before the learned Single Judge that the only measure that could be adopted by the Assessing Officer to correct the mistake if at all occasioned, was the devise of rectification for which limitation is prescribed of four years - HELD THAT:- Section 8(f)as available in the subject assessment year and as amended in the year 2014 have been extracted by the learned Single Judge which we need not repeat. Suffice it to find that the entire provision itself was substituted, on amendment, but however, sub-clause (i) in its effect remained the same. The tax payable under the year of option was dependent upon the turnover of the previous year and had to be at the rate of 115% of the tax paid or payable, if the turnover for the preceding year was ₹ 10 lakhs or below, 120%, if it were above ₹ 10 lakhs and up to ₹ 40 lakhs, 135%, above ₹ 40 lakhs and up to Rupees one crore and 150% above Rupees one crore. The percentage being determined on the highest tax conceded or paid in the three consecutive years preceding the year under option.
In the present case no curative exercise having been carried out by the amendment of 2014. Clause (f) of Section 8 was substituted in its entirety with six explanations where as the original clause (f) had eight explanations. If Explanation 3 in the new clause (f), as introduced in 2014, is found to be clarificatory, it has to be bodily taken out of the amended provision and placed in the un-amended clause (f) which is not a permissible exercise. The Explanation in the amended clause(f) applies to that provision and not to the earlier one. Clause (f) as amended in 2014 can only apply prospectively and the Explanations therein are intended at explaining the meaning and intendment of the section itself, to clarify any obscurity or vagueness thereat, to make meaningful and workable the dominant object of that particular provision and not do any or all of these with respect to the un-amended provision, which had all-together different explanations - Explanation 3, of the amended Section 8(f) if available in the year 2011-12 and 2012-13 would not enable a reduction insofar as the determination of the quantum of the tax payable under the compounding provision for the year under option merely for reason of the closure of the business in the previous year, which in the present case is on the last date of closure, ie, 31st of March. Explanations, of the year 2014, speak only of a closure in the year of option and does not reckon a closure in the previous year.
The option available was very clear insofar as the tax payable under the compounding scheme to be at a percentage above the tax liability of the previous year. The assessee with open eyes applied under the scheme and obtained permission. There was no cause for any exclusion since the closed down branch had business in the previous year for which tax was also paid at the compounded rate. Coming to the relevant years, 2011-12 and 2012-13 again the assessee could not have claimed any deduction since the provision remained as such - The assessee however carried on that branch's business for the entire year - there is no such exclusion of a liability for the previous year can be granted under the provisions under Section 8(f) as it existed in the year 2011-12 and 2012-13. The closure of branch on 31.03.2010 is irrelevant insofar as the tax liability determined in the years 2011-12 and 2012-13 on the basis of the tax conceded or paid in the three consecutive years preceding the year under option.
Appeal allowed - decided in favor of appellant.
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2020 (6) TMI 119
Levy of VAT - Medical services for in house patients - stents, valves, medicines, x-ray and other goods used while treating their in house patients - works contracts or not - deemed sale - whether in the course of provision the medical service, petitioners who are private hospitals were liable to pay Value Added Tax (VAT) under the provisions of the Tamil Nadu Value Added Tax Act, 2006 on the stents, valves, medicines, x-ray and other goods used while treating their in house patients?
HELD THAT:- “Works contract” essentially involves two fundamental elements namely (i)transfer of material and (ii) rendering of service. The supplier transfers the ownership and possession of the material used to the recipient in the course of execution of the work contract. Sometime such work may result in new identity altogether different from the material supplied while sometimes such materials become part of the existing structure or goods - It can be both divisible and indivisible contract.
The Honourable Supreme Court in Commissioner of Central Excise versus Larsen and Toubro Ltd and another [2015 (8) TMI 749 - SUPREME COURT] while dealing with the above provision in the Finance Act, 1994 held that works contract is a separate species of contract distinct from contract for services simpliciter recognised by the world of commerce and law as such, and has to be taxed separately as such. This decision though was rendered in the context of levy of service tax on “works contract”, make it clear on supply portion sales tax was payable. Thus, the Hon’ble Supreme Court has time and again recognized that “works contract” is a separate specie of contract distinct from contract for service.
A possible conflict which would have arisen as to whether a “health service” having trappings of “works contract” as we understandnow in the said notification could also have been classified as a “works contract” also. Scope for such any confusion was averted by clever drafting by the draftsman in the Act. The definitions were defined separately. Section 65(F)(2) which dealt with “Principles of interpretation of specified descriptions of services” or bundled services left no scope for ambiguity - As per Section 65F(2), where a service was capable of differential treatment for any purpose based on its description, the most specific description was to be preferred over a more general description.
The “health services” involving the implanting of prosthetics and other artificial parts inside the body of a patient were either outside the purview of tax levy under Tamil Nadu Value Added Tax Act, 2006or earlier under the Tamil Nadu General Sales Tax, 1958 or were exempted by notifications under the respective enactments in absence of a specific notification.
The “dominant test” after the 46th amendment does not survive for the reasons stated in this order. Even if such a test was to be applied, the Court has to first answer as to whether in the course of the provision of “medical /health service”, any of the clauses in the definition of “sale” in Section 2(t) of the Bihar Finance Act 1981 were attracted or not. It is only after ruling out the applicability of Section 2(t) and the definition of “works contract” in the said Act, the Court could have thereafter proceeded to determine the taxability or non-taxability of the transaction.
Thus, the definition of “works contract” in Section 2(43) of the Tamil Nadu Value Added Tax Act, 2006 is of very wide import. It is a generic definition. It is not limited. It is not confined to any specific genre of contract involving service and supply of goods. It is also not confined to immoveable property. Any agreement for fitting or installation of any moveable property such as prosthetics can quality as “works contract” - It encompasses within its fold it every possible and conceivable commercial transactions which involve sale and service.
Therefore, Medical / Health service cannot be carved out as separate specie of service and/or sale different from the definition of “works contract” for the purpose of the Tamil Nadu Value Added Tax Act, 2006 - fitting out or implanting of prosthetics into the physiology or the body of the patient for alleviation of pain or for improvement of the life of the patient in the course of medical/surgical procedure can be construed as “works contract”. It is for the petitioners to demonstrate how the definition of works contract is not attracted to this case.
There is merits in the contention of the respondent that the medical/Health services rendered by the petitioners could fall within the ambit of the Article 366 (29-A) of the Constitution of India read with the provisions of the Tamil Nadu Value Added Tax Act, 2006. At the same time, dispensing of medicine to such patients while they undergo treatment as an inpatient in the hospital cannot come within the purview of the definition of “works contract”. Consequently, no tax can be demanded on the value of such medicine - there is not only transfer of possession of prosthetics into the physiology of the patient but also the ownership of such prosthetics to the patient for consideration in the course of the provision of medical/health service. Similarly, in the course of taking x-ray, scan, MRI/CT Scan for such in-patient, cost of which get included into the package are taxable as such activity can be termed as the processing of moveable property.
The respondent shall exclude the value of medicine and other consultation charges while determining the taxable value. The demand shall be confirmed to the value of prosthetics and charges incurred towards X-ray, C.T.Scan, PET Scan etc. - The respondent assessing officer shall hear out the petitioners separately and pass appropriate order on mertis all the other issues raised in the respective notices impugned in these writ petitions - Petition disposed off.
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2020 (6) TMI 118
Imposition of penalty u/s 67 of the KVAT Act - Production of Books of Accounts - principles of natural justice - HELD THAT:- It is pertinent to note that, neither in the impugned orders nor in the counter affidavit, there is no allegation of the petitioner having failed to produce the books of account on 8.10.2014. On the other hand, what is stated is that, “the dealer had not produced any books of accounts for any of the years 2008-09, 2009-10, 2010-11, 2011-12 for verification now, in spite of the directions by the appellate authority and of the issuance of this office notice”. The above statement lends credence to the submission of the petitioner that, though the books of accounts were produced on 8.10.2014, he was directed to produce them at a later stage, but was not served with any notice thereafter.
The impugned orders, passed without reference to the books of accounts and by discarding the statements of the witnesses, examined behind the petitioner's back, cannot be sustained - the first respondent is directed to reconsider the penalty orders in terms of the directions contained in Ext.P4 appellate order, providing effective opportunity to the petitioner to participate in the enquiry proceedings, including examination of witnesses - petition allowed by way of remand.
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2020 (6) TMI 85
Payment of amount due to the Government - priority of charge arising out of sales tax arrears, vis-a-vis the arrears due to others including the petitioner mortgagee - sale of the defaulter's properties - creation of rights between the mortgagor and mortgagee bank - right in personam - HELD THAT:- Definitely, the sales tax arrears take precedence over the claims of an existing mortgagee also.
In the present case, the respondent issued the notice along with Form B6 on 18.09.2006 to the petitioner, demanding the arrears of sales tax to the tune of ₹ 4,80,05,508/- payable by the company, which, according to the petitioner, was received only on 12.10.2006. In the mean while, the auction was confirmed in favour of M/s.Annam Steels Pvt. Ltd and the sale certificate was issued to them under the SARFAESI Act on 26.09.2006 and the available sale proceeds were distributed to all the secured creditors and the other lenders by 30.09.2006.
But, in terms of the decision in STATE BANK OF BIKANER AND JAIPUR VERSUS NATIONAL IRON AND STEEL ROLLING CORPORATION AND OTHERS [1994 (12) TMI 72 - SUPREME COURT], the demand raised by the respondent prior to the appropriation of the sale proceeds, will have precedence over the claims of the petitioner - mortgagee. Hence, the petitioner is bound to pay the sale proceeds realised by them towards partial fulfillment of the demand raised by the respondent - Petition dismissed.
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2020 (6) TMI 84
Levy of VAT - Renting of space - Transfer of Right to use - transfer of “right to use” of the space to the mobile service providers as these companies were having access of the equipment, infrastructure and space for their use - whether within the scope of VAT or not - Section 48-A of the TNVAT Act, 2006 - HELD THAT:- The petitioner is a provider of “Passive Infrastructure Service” for the Mobile Telecommunication Operators (MTO). The petitioner acquired such facilities from existing Mobile Telecommunication Operators (MTO). The petitioner was incorporated with view to reduce the cost of telecom service provided by Mobile Telecommunication Operators (MTO). Thus, same shelter and tower could be used by two or more Mobile Telecommunication Operators (MTO) to receive and transmit signals.
The petitioner has not only offered facility to mount the mobile operator’s RF antenna at a particular height and direction on the top of the tower and offered required level of temperature (i.e) below 35 degree Celsius as to protect the equipments - Apart from that the petitioner has also offered Uninterrupted Power Supply (UPS) for converting electricity AC current from 220, Volts AC current into (-) 48 DC which is essentially required to run the mobile operators transmission equipments without disruption. This activity is performed by Power Management System of the petitioner.
Reliance can be placed in the case of M/S. ASCEND TELECOM INFRASTRUCTURE PVT. LTD., (FORMERLY KNOWN AS M/S. ASTER INFRASTRUCTURE PRIVATE LIMITED) VERSUS THE ASSISTANT COMMISSIONER (CT) , COMMISSIONER OF COMMERCIAL TAXES, THE GOVERNMENT OF TAMIL NADU, SERVICE TAX GROUP – I, UNION OF INDIA [2020 (6) TMI 57 - MADRAS HIGH COURT] where it was held that The business model is not based on exclusivity. It is on a shared usage basis of the facility viz., passive infrastructure consisting of temporary shelter, Mast, AC, Genset etc. Therefore, there is no “deemed sale” within the meaning of Article 366(29-A)(d) of the Constitution of India and Secion 2(33)(iv) of the Act so as to attract a charge under Section 4 of the TNVAT Act, 2006. - the reasoning given in the case is fairly applicable to the facts of the present Writ Petitions.
Petition allowed.
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