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VAT / Sales Tax - Case Laws
Showing 361 to 380 of 629 Records
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2020 (5) TMI 168
Levy of turnover tax - foreign liquor - compounding scheme - Section 7 of the KGST Act - legality to adopt assessed tax of the previous year as the basis for fixing the compounded liability - HELD THAT:- The decision in M/s.Hotel Breezeland Ltd [2019 (2) TMI 1086 - KERALA HIGH COURT ] was rendered by the Division Bench after considering a batch of writ appeals and a writ petition where it was held that dealer who opts for payment of tax under Section 7 cannot be said to have been absolved of the liability for all the consequences arising from such an assessment made for the previous three years which is the reference point for determining the tax payable in the relevant year under clause (b) of Section 7.
It was well within the authority of the 1st respondent to have revised the assessment for the years 2008-09, 2009-10 and 2010-11, based on the revision of the assessment and tax component for the year 2007-08, resulting in a cascading effect on the assessment for the following three years. The fact that compounded tax was paid for those three years did not fetter the right to revise the assessment.
Petition dismissed.
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2020 (5) TMI 149
Power of High Court to entertain writ petition - The option to file statutory appeal was foreclosed by time limitation including extended period of limitation - whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India ought to entertain a challenge to the assessment order on the sole ground that the statutory remedy of appeal against that order stood foreclosed by the law of limitation?
HELD THAT:- The assessment order dated 21.6.2017 was challenged by the respondent by way of statutory appeal before the Appellate Deputy Commissioner only on 24.9.2018. Section 31 of the 2005 Act provides for the statutory remedy against an assessment order. The same, as applicable at the relevant time - Section 31 states that the statutory appeal is required to be filed within 30 days from the date on which the order or proceeding was served on the assessee. If the appeal is filed after expiry of prescribed period, the appellate authority is empowered to condone the delay in filing the appeal, only if it is filed within a further period of not exceeding 30 days and sufficient cause for not preferring the appeal within prescribed time is made out. The appellate authority is not empowered to condone delay beyond the aggregate period of 60 days from the date of order or service of proceeding on the assessee, as the case may be.
In the present case, admittedly, the appeal was filed way beyond the total 60 days’ period specified in terms of Section 31 of the 2005 Act. In that, the respondent had filed the appeal accompanied by an application for condonation of delay setting out reasons - The High Court finally allowed the writ petition vide the impugned judgment and order on the ground that the statutory remedy had become ineffective for the respondent (writ petitioner) due to expiry of 60 days from the date of service of the assessment order. Inasmuch as, the appellate authority had no jurisdiction to condone the delay after expiry of 60 days, despite the reason mentioned by the respondent of an extraordinary situation due to the act of commission and omission of its employee who was in charge of the tax matters, forcing the management to suspend him and initiate disciplinary proceedings against him. Soon after becoming aware about the assessment order, the respondent had filed the appeal, but that was after expiry of 60 days’ period.
Whether the High Court ought to have entertained the writ petition filed by the respondent? - HELD THAT:- As regards the power of the High Court to issue directions, orders or writs in exercise of its jurisdiction under Article 226 of the Constitution of India, the same is no more res integra. Even though the High Court can entertain a writ petition against any order or direction passed/action taken by the State under Article 226 of the Constitution, it ought not to do so as a matter of course when the aggrieved person could have availed of an effective alternative remedy in the manner prescribed by law.
The principle underlying the dictum in this decision would apply proprio vigore to Section 31 of the 2005 Act including to the powers of the High Court under Article 226 of the Constitution. Notably, in this decision, a submission was canvassed by the assessee that in the peculiar facts of that case (as urged in the present case), the Court may exercise its jurisdiction under Article 142 of the Constitution, so that complete justice can be done - Thus, what this Court cannot do in exercise of its plenary powers under Article 142 of the Constitution, it is unfathomable as to how the High Court can take a different approach in the matter in reference to Article 226 of the Constitution. The principle underlying the rejection of such argument by this Court would apply on all fours to the exercise of power by the High Court under Article 226 of the Constitution.
The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such - Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or noncompliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24.9.2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all.
The High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold - Appeal allowed.
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2020 (5) TMI 128
Constitutional validity of the Kerala Tax on Paper Lotteries Act, 2005 - levy of licence fee on the draw of lotteries - vires of Section 5BA of the KGST Act - main ground of attack against validity of the impugned Act is the lack of legislative competence of the state - principles of res-judicata - refund of tax already paid - HELD THAT:- The sale of lottery tickets does not involve any sale of goods. Inspite the lottery tickets representing a chance or a right to a conditional benefit of winning the prize, it was held that, it is nothing else but an actionable claim and no sale of goods is involved, within the meaning of the sales tax laws - apart from wording of the charging section “tax on paper lotteries”, the taxable event upon which the charge is to be imposed is totally absent. There is no much dispute that the draw is only a measure provided for the purpose of fixing the quantum of tax and it cannot be said that tax is levied on the draw. Hence the draw also cannot be considered as a taxable event.
While evaluating the issue regarding validity of the charging section and with respect to its alleged vagueness, uncertainties or ambiguities, even on accepting the contentions of the respondents that the taxable event is the entire activity of the scheme of lottery, it is necessary for this court to consider whether the impugned Act is extra territorial in operation. Under Article 246 (3) of the Constitution, legislature of any state has power to make laws for such state or any part thereof. There is no power at all to make any law with respect to any event happening in other states. As defined under the Act, the lottery is a scheme intended for distribution of prize by lot or by chance, by which a person purchases the ticket for participating in the chance for winning a prize - In the case at hand, it cannot be disputed that, organising and conduct of the lottery by the 1st respondent / State of Sikkim is what is sought to be taxed. In this context, question arose as to whether the activity in organisation and conduct of the lottery is in any manner done within the territorial limits of the State of Kerala. The only part of the activity which takes place within the State of Kerala is the distribution and marketing of tickets, probably through advertisements, enumerating the prize money as well as the price of the ticket and the date of draw etc. In the above context, even assuming that the expression “tax on paper lotteries” contained in the charging section indicates the whole lot of activity of the conduct of lotteries, whether the taxable event falls within the territorial limits of the State of Kerala, is the question posed. Can a part of the activity of distribution and sale of tickets within the State of Kerala alone can be taxed under the guise of the term “tax on paper lotteries”, contained in the charging Section?
The levy of tax is on the organising state or on the person appointed by that state for selling the lottery tickets within the State of Kerala. A person so appointed cannot be construed as a person responsible for organizing and conducting of the lottery. Further it has to be noted that the measure of tax is the draw, which takes place outside the territory of the state. The rate of tax is to be fixed based on the number and type of draws. The draws are conducted by the organizing state within their territory. But the person appointed for sale of the lottery is insisted upon, by virtue of provisions contained in Section 10, to make payment of the tax in advance, based on the draws proposed to be taking place in the organising state. Section 10 insists upon that the Promoter should pay the full amount of tax in advance based on the particulars of the draws, which are intended to be conducted by the organizing state, during the month commencing from the next succeeding month. Since the definition of the word Promoter includes the state which is organising the lottery, it has became obligatory on the part of the state which organises the lottery to pay the tax, if the person appointed for sale of the ticket fails to pay the tax in advance - it is assured that the levy and collection of tax will be made only with respect to the draws of the schemes for which tickets are marketed within the State of Kerala. The above aspect would again persuade this court to draw an inference that, what is sought to be taxed indirectly is the sale of the lottery tickets within the State of Kerala, which is prohibited by virtue of the law.
Doctrine of ‘constructive res judicata’ - HELD THAT:- In the present writ petition the challenge is against the constitutional vires of a statute on various grounds including the legislative competence of the state. Hence it cannot be said that the doctrine of ‘constructive res judicata’ would apply in the case at hand.
Refund of the tax amount already paid by the appellants / writ petitioners - HELD THAT:- It is evident that the liability has not been passed on to the customer of the lotteries. It is pointed out that, the State of Sikkim cannot be said to be gaining any unwanted or unmerited monetary benefit, if the refund if effected. When the money in question belongs to a State and the dispute is in between two States, the doctrine of ‘unjust enrichment’ cannot be applied.
It is clear that the Distributor has not passed on the liability to the consumers. But, as pointed out by the respondents, the writ petitioners have not furnished any materials to prove that the liability has been ultimately borne by the 1st appellant State. Nor it is proved through any convincing materials that such liability has been paid by the 2nd appellant – Distributor, out of the commission he had received from the State of Sikkim. At any rate, as contended, if the State of Sikkim is the ultimate person who borne the liability, there cannot be contended that the doctrine of unjust enrichment will apply. On the other hand, if it is of Distributor who had borne the liability, proof is required to the effect that the same has not been recouped from the State of Sikkim - Proof regarding quantity of the tax collected is also not available. Therefore we hold that the appellants will be entitled for refund of the tax paid from the State Government, on their producing proper accounts and proof as to who had ultimately borne the burden. Such proof being produced, the State of Kerala is held liable for making refund.
The Kerala Tax on Paper Lotteries Act, 2005 is hereby declared as unconstitutional and invalid. The appellants will be at liberty to make claim for refund of the tax already collected by the State of Kerala from the appellants under the said Act, on producing proper accounts and proof. If any such claim is received it is for the 1st respondent, State of Kerala, to consider the same and to pass appropriate orders making refund of the amount due, based on evaluation of such proof. The refund if any due shall be effected without any delay, on submission of such claim.
Appeal allowed.
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2020 (5) TMI 39
Validity of Garnishee Order - CIRP proceedings are ongoing - failure to deposit taxes by Banks for the period from 2011-12 & 2012-13 - direction to Banks to pay into Government's treasury, on account of tax / penalty due under the JVAT Act - resolution plan approved - According to the petitioner, since no claim was made by the State Government as regards the aforesaid tax liability in the corporate insolvency resolution process - bar on realisation of the amount under Section 31 of the IB Code - scope of 'Operational creditor' and 'Operational Debt' - HELD THAT:- In the present cases, the State Government shall fall within the definition of 'operational creditor', and the taxes payable by the petitioner shall fall within the definition of 'operational debt', as defined in the IB Code - As such, there can be no doubt that the case of the petitioner shall be governed by the provisions of the IB Code.
There are force in the submissions of the learned Additional Advocate General that the tax amount, which had been sought to be realised from the petitioner Company, had already been realised by the petitioner Company from the customers which was to be deposited in the Government Exchequer, but that having not been done by the Company and the amount having been utilized for its business purposes, throughout after the years 2011-12 and onwards, shall certainly amount to criminal misappropriation of the Government money by the Company, and the State Government is entitled to realize the same with the penalty due thereon.
It is also found that the re-assessment orders were passed on 17.08.2018 as contained in Annexure-3 to the writ applications, by which date the resolution plan was already approved by the NCLT on 17.04.2018, but the same was never brought to the knowledge of the Commercial Tax officials by the Company, even though the petitioner Company was given a hearing by the Assessing Authority, i.e., respondent No. 4 Assistant Commissioner of State Tax, Bokaro Circle, Bokaro, before passing the re-assessment orders - also, the notice under Section 13 of the IBC Code was never published in the State of Jharkhand, rather the notice was published only in the Business Standard of Kolkata Edition on 24.07.2017 as contained in Annexure-7 to the supplementary affidavit. There is no denial to the fact that such notice was never published in the State of Jharkhand.
A conjoint reading of Section 13(1)(b) of the IB Code read with Regulation 6 aforesaid, clearly shows that the public announcement had to be made in the newspapers with wide circulation at the location of the registered office and principal office, of the petitioner Company. Admittedly, the registered office of the petitioner Company is at Ranchi, and its principal place of business is in the District of Bokaro, both of which are situated in the State of Jharkhand, but no public announcement of the corporate insolvency resolution process was made in the State of Jharkhand - since the resolution plan is approved by the NCLT, and not interfered with even by the Hon'ble Apex Court as pointed out above, we are not required to look into the legality or otherwise of the resolution process, but the fact remains that due to non publication of the public announcement of the corporate insolvency resolution process in the State of Jharkhand, the authorities of the Commercial Taxes Department had no occasion to have any knowledge about the corporate insolvency resolution process of the Company, and they were deprived of making their claim before the interim resolution professional - Since the State Government was not involved in the resolution process, the resolution plan cannot be said to be binding on the State Government under Section 31 of the IB Code.
We are not inclined to entertain these writ applications, even though there is a resolution plan in favour of the petitioner Company, approved by the Adjudicating Authority, i.e., the NCLT, for the simple reason that it was never brought to the knowledge of the Commercial Tax authorities of the State of Jharkhand that the corporate insolvency resolution process had been initiated against the petitioner Company, and no public announcement of the corporate insolvency resolution process was made in the State of Jharkhand - Admittedly, the State Government was never involved in the corporate insolvency resolution process, and as such, the resolution plan cannot be said to be binding on it.
Petition dismissed.
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2020 (4) TMI 887
Maintainability of appeal - requirement to comply with the pre-deposit - demand of 12.5 per cent of the disputed tax - HELD THAT:- Division Bench of this court in the case of SRI HARI MAHARALAYAM COMPANY VERSUS COMMERCIAL TAX OFFICER, LALAPETA CIRCLE AND OTHERS [2019 (9) TMI 1550 - ANDHRA PRADESH HIGH COURT] while mentioning that the pre-deposit of part of the disputed tax is required only when the appeal is filed against the assessment order, and since no tax is quantified under the endorsement, held that the insistence of the authorities to pay 12.5 per cent of the disputed tax as a condition precedent for entertaining the appeal against the endorsement is untenable.
The second respondent is directed to entertain the appeal of the petitioner against the endorsement of the first respondent, without insisting for payment of 12.5 per cent of disputed tax - petition allowed.
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2020 (4) TMI 832
Withholding of refund - refund arising out of change in Rate of tax - packing material - Cement - APGST Act - HELD THAT:- In the instant case, the respondents had withheld the refund for 11 years on ground of ‘want of cross-verification details’ which is not a ground mentioned in Sec.33-C for withholding the refund due to petitioner. Admittedly no proceeding such as an appeal or revision was pending against the petitioner. So Sec.33 F(2) of the APGST Act is also inapplicable - Also a refund withholding order must invariably specify (as per Sec.33C) the period of time during which it will be in force and a refund cannot be withheld indefinitely as has been done in the instant case.
Sec.33-E and 33-F of the APGST Act give 6 months time to the respondents to complete the verification and the authorities cannot with hold the refund beyond the said period - Thus there has been an ex-facie abuse of power by the respondents 1 and 2 in denying refund to the petitioners of the sum of ₹ 28,10,432/-.
Petition allowed with costs.
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2020 (4) TMI 769
Time limitation for delivery of goods in case of inter-state sale - benefit of Section 6(2) of CST Act, 1956 - delivery of the respective goods from a carrier when the goods are delivered to a carrier for transmission in course of inter-state sale - validity of two circulars bearing S.No.115B dated 16th September, 1997 and S.No.1132A dated 15th April, 1998, which sought to impose a time limit on retention of goods in the carrier’s godown, beyond which time the revenue was to treat obtaining of constructive delivery of the goods involved - High Court quashed these Circulars.
HELD THAT:- The respondent in this case had taken benefit of sub-section (2) on the ground that this was a case involving inter-state sale and the sale took place by way of transfer of documents of title of such goods during their movement from one State to another. It is also the respondents’ case that the requisite forms and certificates were duly furnished pertaining to such sales. On the part of the State, barring retention of the goods in the transporters’ godown at the destination point for a long period of time, default on no other count by the assesses has been asserted - In the two appeals in which the respondent is Bombay Machinery Stores, sales pertained to financial years before the circulars came into subsistence. In these instances of sales, the Commercial Tax officer in the respective orders treated retention of goods beyond 30 days in the transporters’ godown as the cut-off period. After that date, the assessee was deemed to have had taken constructive delivery of goods and sale beyond that period within the State of Rajasthan was held to be local sales and subjected to sales tax under the State Law.
As per the aforesaid circulars, retention of goods by the transporter beyond the time stipulated therein (being 30 days as per the later circular) would imply that constructive delivery of the goods has been made by the transporter to the consignee. In such a situation, the transit status of the goods would stand terminated and the deeming provision in first explanation to Section 3 of the 1956 Act conceiving the time-point of delivery as termination of movement shall cease to operate.
Sub-clause (1) of the said provision specifies when the goods shall be deemed to be in course of transit and sub-clause (3) thereof lays down the conditions for termination of transit. That condition is an acknowledgment to the buyer or his agent by the carrier that he holds the goods on his behalf. There is no material to suggest such an acknowledgment was made by the independent transporter in these appeals. In such circumstances we do not think the decision of the High Court requires any interference.
In the case of Arjan Dass Gupta [1979 (8) TMI 194 - DELHI HIGH COURT] principle akin to constructive delivery was expounded and we have quoted the relevant passage from that decision earlier in this judgment. In our opinion, however, such construction would not be proper to interpret the provisions of Section 3 of the 1956 Act. A legal fiction is created in first explanation to that Section. That fiction is that the movement of goods, from one State to another shall terminate, where the good have been delivered to a carrier for transmission, at the time of when delivery is taken from such carrier. There is no concept of constructive delivery either express or implied in the said provision - the interpretation of the Division Bench of the Delhi High Court given in the case of Arjan Dass Gupta does not lays down correct position of law.
In the event, the authorities felt any assessee or dealer was taking unintended benefit under the aforesaid provisions of the 1956 Act, then the proper course would be legislative amendment. The Tax Administration Authorities cannot give their own interpretation to legislative provisions on the basis of their own perception of trade practise. This administrative exercise, in effect, would result in supplying words to legislative provisions, as if to cure omissions of the legislature.
The judgements of High Court upheld - appeals dismissed.
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2020 (4) TMI 768
Maintainability of petition - efficacious remedy of filing an appeal - Validity of reassessment order - validity of rectification order passed by the prescribed authority - KVAT Act - HELD THAT:- When an alternative and efficacious remedy is provided under the Act, such a remedy requires to be exercised by the party first. However, that does not mean that the jurisdiction of the Writ Court is unavailable but while exercising the jurisdiction, the Writ Court would necessarily have to indicate as to why it is entertaining a writ petition, not withstanding, the availability of an alternative or efficacious remedy to a party. Unfortunately, even after having noticed the preliminary objection regarding maintainability of the writ petition, the court has proceeded to frame the question on merits. This aspect of the matter in the impugned order passed by the learned Single Judge, we find as being erroneous.
In order to enable the writ Court to exercise its jurisdiction, it would first have to answer the availability of an alternative and efficacious remedy and as to why it intends to exercise the writ jurisdiction - In the absence of the same, consideration of the matter on any other ground, would not be sustainable, since the preliminary objection of the State has not been answered. There are no hesitation to hold that the writ Court could not have entertained the matter in view of an alternative remedy available under Section 62 of the Karnataka Value Added Tax Act, 2003.
There are no good ground to interfere - appeal dismissed.
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2020 (4) TMI 767
Validity of proceedings - duplication of entire proceedings - KVAT Act, 2003 - HELD THAT:- The re-assessments have already been concluded for the period April to July 2009, it is only with respect to that time period, the proceedings are required to be quashed and not the remaining period also.
The order of the learned Single Judge is partly set aside. The proceedings are set aside only for the period between April to July 2009. The proceedings shall go on so far as the remaining period is concerned - appeal allowed.
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2020 (4) TMI 672
Best Judgement Assessment - rejection of books of accounts - whether the authorities were justified in rejecting the account books of the assessee for assessment year 2008-09 on the basis of survey report dated 28/07/09 and 04/08/09 is not pertain to the above assessment period and to pass the best judgement assessment? - HELD THAT:- In the instant case, it seems that the books of accounts were tallied and there is no mention of any deficiency in the books of accounts, but they have been rejected solely on the ground that the same were not found in the premises during the survey. The tribunal has also not considered any other reason for accepting the rejection of books of accounts which, in my opinion, is based on apprehension, rather than due consideration of the facts of the present case. It is also borne from the record that for the financial year 2008-09 tax invoice No. 467 dated 05.02.2009 relating to 63.225 metric tons of Coal was found where the coal was sold at the rate of ₹ 3750/- per MT. It has also been observed that during the same period other traders have sold coal at the rate of ₹ 6200/-per MT while the brick kiln is at the Ghaziabad and appellants have purchased coal for ₹ 5800/- to ₹ 6400/-.
The Tribunal has not given any independent finding for accepting the order of the assessing officer in rejecting the books of accounts, but has only said that the same has also been upheld by the First Appellate Authority and no interference is required without taking into consideration the grounds taken by the assessee. It was the duty of the Tribunal, which is the final fact finding authority, to have considered the grounds raised by the assessee and to have returned a finding after considering the same - Though the Tribunal has recorded that the books of accounts were duly presented when the show cause notice was given to the assessee, and no discrepancy was found in the same, but non-presentation of the books of accounts at the time of survey cannot be the sole reason for rejection of the books of accounts.
The matter is remanded to it for fresh adjudication expeditiously, say within a period of six months from the date a certified copy of this order - matter allowed by way of remand.
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2020 (4) TMI 638
Garnishee Order - Initiation of Coercive action for recovery of the disputed tax and penalty - periods from June, 2014 to March, 2017 - APVAT Act, 2005 - revision petition and the stay petition were pending - Complaint of the petitioner is that while both the revision petition and the stay petition were pending, the respondents could not have initiated the recovery proceedings - HELD THAT:- The judgments cited by the learned counsel for the petitioner in ANAB-E-SHAHI WINES AND DISTILLERIES PRIVATE LIMITED VERSUS APPELLATE DEPUTY COMMISSIONER, SECUNDERABAD DIVISION, NAMPALLY, HYDERABAD AND OTHERS [1995 (3) TMI 439 - ANDHRA PRADESH HIGH COURT], show that this Court consistently and continuously held that wherever there is a provision for grant of stay in an appeal or higher proceedings, coercive steps cannot be taken unless and until the authorities dispose of the applications filed under such provisions.
The garnishee order is quashed - petition allowed.
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2020 (4) TMI 637
Classification of goods - Bio Marine - Ecornax - Zoonami - whether fall under the categories of aqua feed/bacterial culture/organic manure or not? - HELD THAT:- These products are organic manures that are used for environmental protection and stability in prawn hatcheries and shrimp culture. The order of the Assessing Authority is completely bereft of any facts at all in support of his conclusion adverse to the petitioner and reliance is placed solely on the clarification issued in the case of the third party dealer.
Mr.Hariharan requests that the matter may be remanded back for de novo consideration - there are no reason to accede to this request insofar as the period of assessment is 2004-05 and there is a lapse of 15 years from the period of assessment till date - Petition allowed - decided in favor of petitioner.
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2020 (4) TMI 499
Reduction of input tax credit - reduction on the ground that the limitation of availing of the tax credit as provided under Section 11(3)((b) could be applied only once irrespective of the fact as to whether particular commodity purchased falls in more than one sub-clauses of Section 11(3)(b) of the VAT Act - whether Section 84A of the VAT Act is a validating Act?
HELD THAT:- It is evident that the amending Act specifically provides for validation of various aspects (namely assessment, reassessment, collection etc.) notwithstanding any judgement, decree or order of any court, Tribunal or authority to the contrary - Vide the Gujarat Value Added Tax (amendment) Act, 2018 (Gujarat Act No. 10 of 2017) Section 84A has been inserted in the Gujarat Value Added Tax Act, 2003 with retrospective effect. However, the amending Act does not provide for any validation of various acts of the revenue authorities namely the assessment, re-assessment, collection etc. Accordingly, the said Act cannot be treated as a “validating Act”.
Section 84A (as inserted by 2017 amendment Act), provides for exclusion of certain period spent by the revenue authorities in the appellate proceedings for the purpose of calculating time limit for (i) audit assessment (ii) turnover escaping assessment (iii) appeal and (iv) revision. All these provisions provide for outer time limit of the order to be made. In case where the orders are already made by the revenue authorities and matter is closed, the retrospectives amendment without validation may not validate such orders.
It is permissible for the Legislature, subject to its legislative competence otherwise, to enact a law which will withdraw or fundamentally alter the very basis on which a judicial pronouncement has proceeded and create a situation which if it had existed earlier, the Court would not have made the pronouncement - it is difficult to take the view that the VAT Amendment Act, 2018 is a validating Act.
Competence of the State Legislature to enact Section 84A of the Act - HELD THAT:- A law enacted by a legislature without having legislative competence would be void ab initio and the same cannot be revived or revitalised even if the legislative competence is conferred on that legislature subsequently. But in a case where the legislature has legislative competence to enact a law, and some of its provisions violate any of the fundamental rights contained in Part III of the Constitution, the same would be rendered void under Article 13(2) of the Constitution and would remain unenforceable. The law so enacted is not wiped off the Statute Book nor it stands repealed. Further if the offending provisions of the Statute which violate fundamental rights are removed the law would become effective and enforceable even without re-enactment. Such a law, whether preConstitution or post-Constitution, is not wholly dead if it violates fundamental rights; it is merely eclipsed by fundamental right and remains as it were in a moribund condition as long as the shadow of fundamental rights falls upon it - A law declared void by a court is not effected from the Statute Book; it is revived and revitalised if Constitutional limitations are removed by Constitutional amendment or by re-enactment by legislature.
Thus, Section 84A of the Gujarat Value Added Tax (Amendment) Act, 2018 is invalid on the ground that the same is beyond the legislative competence of the State Legislature.
Whether Section 84A of the VAT Act is manifestly arbitrary and is liable to be struck down being violative of Article 14 of the Constitution of India? - HELD THAT:- It is well settled that as long as the legislation has the necessary competence to frame a law and the law so framed is not violative of the fundamental rights enshrined in the constitution or any of the constitutional provision, the Court would not strike down the statute merely on the perception that the same is harsh or unjust. Particularly, in taxing statutes the Courts have recognized much greater latitude in the legislation in framing suitable laws - It is equally well settled that wherever the parliament has the power to frame a statute it also includes the power to make the law retrospective. In other words, the parliament also has wide powers to frame the laws including taxing statutes with retrospective effect. However, the Courts have recognized certain inherent limitations in framing retrospective tax legislations.
If unlimited time period is available to the Revenue for assessment/re-assessment/revision in any case based on a decision rendered in the case of any other dealer the same would lead to an irreparable situation and, in such circumstances, it renders Section 84A manifestly arbitrary and unreasonable - Section 84A of the VAT Act is liable to be struck down even on the ground of being manifestly arbitrary, excessive, oppressive and unreasonable.
Section 84A of the Gujarat VAT Act is ultra vires and beyond the legislative competence of the State Legislature - Section 84A of the Gujarat VAT Act is manifestly arbitrary, unreasonable and therefore, violative of the Articles 14 and 19(1)(g) of the Constitution of India - Section 84A of the Gujarat VAT Act is not a validating Act.
Section 84A of the Gujarat VAT Act is declared as ultra vires and beyond the legislative competence of the State Legislature under Entry 54 of List II of the Seventh Schedule to the Constitution of India and is also declared to be violative of Article 14 of the Constitution of India on the ground of being manifestly arbitrary, unreasonable and oppressive - the impugned notices in each of the writ applications issued under Section 75 of the Gujarat VAT Act is hereby quashed and set aside.
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2020 (4) TMI 492
Time limitation for Finalization of assessment - case of appellant is that the proceedings for finalization of the assessment was initiated beyond the time limit stipulated under Section 25 (1) of the Kerala Value Added Tax Act, 2003 - validity of Section 174 of the KSGST Act - HELD THAT:- The grounds raised in the writ petition other than the one relating to validity of Section 174 of the KSGST Act, has not been looked into by the Single Judge. Under such circumstances, a remand of the writ petition for a fresh consideration and disposal, on the grounds raised other than the one relating to validity of Section 174 of the KSGST Act, would suffice to meet the ends of justice.
Appeal allowed by way of remand.
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2020 (4) TMI 468
Rectification of mistake - mistake apparent on the face of record - Principles of natural justice - the petitioner is not been afforded any reasonable opportunity of being heard by the 1st respondent even prior to the present stage of the decision said to have been taken - HELD THAT:- The Secretary to the office of the Advocate General will immediately forward a copy of this judgment to the 1st respondent, for necessary information and immediate compliance.
Petition disposed off.
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2020 (4) TMI 467
Levy of penalty - Exemption from levy of tax - TNVAT Act - non-filing of Form-WW - violation of Section 63A(1) of the TNVAT Act - violation of principles of natural justice - HELD THAT:- It is seen that the impugned order of assessment was passed on the reason that the petitioner has not responded to the notice of proposal. The impugned order has referred to three notices viz., 04.01.2019, 01.03.2019 and 22.04.2019. Insofar as the first notice dated 04.01.2019 is concerned, the petitioner is not disputing the receipt of the same and however, it is stated that the petitioner has paid the penalty of ₹ 10,000/- on 01.06.2019. Insofar as the other two notices viz., 01.03.2019 and 22.04.2019 are concerned, it is the specific case of the petitioner that those notices were not served on the petitioner.
It is for the respondent to establish the proof of service. However, it is stated that the respondent is not having acknowledgment or returned post relevant to the notice dated 22.04.2019. Therefore, it is to be construed that no such notice was served on the petitioner. Thus, it is evident that the impugned order was passed without issuing notice to the petitioner or effecting proper service of the same.
This Court is of the view that a final opportunity shall be granted to the petitioner so as to enable them to appear and place all the material documents before the Assessing Officer to redo the assessment on merits and in accordance with law - the matter is remitted back to the Assessing Officer to redo the assessment - Petition allowed by way of remand.
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2020 (4) TMI 466
Stock Transfer - failure to furnish Form F - personal hearing not availed - principles of natural justice - Transfer of equipments and machineries from one site to other site between States - HELD THAT:- Even though it is stated that an opportunity of personal hearing was not availed by the petitioner, there is no averment as to the letter written by the petitioner on 25.06.2019 and that the delivery of the personal hearing notice, after the time fixed for the same. At the out set, this Court is of the view that the respondents have not complied with the principles of natural justice, as directed by this Court in its earlier order, dated 12.06.2018. On this ground alone, the impugned orders are liable to be set aside - In the instant case, tax is levied for transfer of equipments and machineries from one site to other site between States. When the requirement of the machinery is accomplished at one site in execution of the project, naturally, it will be taken to the other site, where it is required.
Even in the present case, it is a clear case that the petitioner is a Contractor involved in Infrastructure construction. In the present case, he has been carrying out construction of roads for the National Highways Authority of India. Perusal of the impugned orders show that the person who transferred the goods and the consignee are one and the same. In that event, transfer of equipments and machinery will not amount to transfer of property and the process of sale or resale is not attracted in this transaction - the impugned assessment orders passed by the respondent set aside - petition allowed.
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2020 (4) TMI 413
Classification of goods - rate of tax - Medical Oxygen IP - Nitrous Oxide IP - taxable under Entry 88 of Schedule IV of the Andhra Pradesh Value Added Tax Act 2005 or as “unclassified goods” under Schedule V? - HELD THAT:- Entry 88 includes drugs and medicines, whether patent or proprietary as defined in clauses (i), (ii) and (iii) of Section 3(b) of the 1940 Act. Any drug or medicine that falls within the ambit of clauses (i), (ii) and (iii) of Section 3(b) falls within the ambit of Schedule IV. Entry 88 also stipulates that hypodermic syringes, hypodermic needles, catguts, sutures, surgical cotton, dressing, plasters, catherters, cannulae, bandages and “similar articles” are also included, save and except for the three specified exclusions.
The judgments in PANKI OXYGEN THRU' PARTNER SUMIT BABBAR VERSUS STATE OF UP. THRU' PRINCIPAL SECRETARY TAX & REGD. & ORS. [2014 (2) TMI 764 - ALLAHABAD HIGH COURT] and THE STATE OF TAMIL NADU, REPRESENTED BY THE DEPUTY COMMISSIONER (COMMERCIAL TAXES) VERSUS RAM OXYGEN (PVT.) LTD. [2010 (6) TMI 710 - MADRAS HIGH COURT] highlight the curative and instrumental use of Medical Oxygen IP and Nitrous Oxide IP in the mitigation and prevention of disease or disorder. Nitrous Oxide is used as anesthetic agent. Medical oxygen with 99.9% purity is predominantly used in hospitals. Medical Oxygen is also used for the treatment of patients and to mitigate the intensity of disease or disorder in human beings. It is utilised to prevent a sudden collapse of patients and to aid in the recovery of health. As stated in the Counter Affidavit filed by the respondents, in order to carry out critical surgical procedures, supplemental oxygen is administered to patients. Medical Oxygen is also administered in resuscitation, major trauma, anaphylaxis, major hemorrhage, shock and active convulsions, amongst other conditions.
There is no doubt that Medical Oxygen IP and Nitrous Oxide IP are medicines used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings falling within the ambit of Section 3(b)(i) of the 1940 Act. Medical Oxygen IP and Nitrous Oxide IP fall within the ambit of Section 3(b)(i) of the 1940 Act and are consequently covered in Entry 88 of the 2005 Act.
The impugned judgment of the High Court, to the extent it held that Medical Oxygen IP and Nitrous Oxide IP fall within Entry 88 of the 2005 Act is upheld - appeal dismissed.
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2020 (4) TMI 375
Grant of stay on collection of 50% of the disputed tax - HELD THAT:- Admittedly, the appeal preferred by the petitioner before the Telangana Value Added Tax Appellate Tribunal challenging the revision order dt.09-05-2019 for the assessment years 2013-14 and 2014-15 is pending consideration before the said Tribunal and the petitioner had already deposited 25% of the disputed tax.
Having regard to the Advance Rulings issued by the competent authority under Section 67 of the said Act, and since based on the Advance Rulings of the respondents, petitioner did not to collect tax at 5% on the photo albums being sold by petitioner from 2005-06 onwards, the action of the 1st respondent in compelling the petitioner to pay 50% of the disputed tax and now proposing at 14.5% VAT on the sales appears to be arbitrary and illegal - Petition disposed off.
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2020 (4) TMI 337
Recovery of tax dues from the buyer of property as land revenue - bonafide purchasers or not - Presumption of knowledge of statutory charge created, either under Section 24 of the Tamil Nadu General Sales Tax Act, 1959 or under Section 42 of the Tamil Nadu Value Added Tax Act, 2006 - enforceability of charge - Section 100 of the Transfer of Property Act, 1882 - HELD THAT:- A charge created by operation of law will not automatically infer a presumption of knowledge on the intending purchasers about the tax arrears, as well as the consequent charge on the property, which they intend to purchase. Consequently, the question of “Wilful Abstention” or “Gross Negligence”, would generally be a question of fact or law or a mixed question of fact and law and the exception to such a finding would be the three explanations given under Section 3 of the Transfer of Property Act, 1882 as well as to cases wherein the purchaser has failed to make enquiries on the arrears of municipal taxes with the authorities. If and when this proposition is applied to the issue involved in the present case, the objections raised by the respondents that the intending purchasers had constructive notice of the charge on the property would be contrary to this decided ratio.
While that being so, when the prospective purchasers are not expected to have constructive knowledge of the charge and when the property is purchased for a valid consideration and without notice of the charge, they would be entitled to the saving clause provided under Section 100 of the TP Act.
While holding that the purchasers cannot be imputed with constructive knowledge of the existence of municipal taxes or tax arrears and on the facts of the case, the Hon’ble Apex Court held in AHMEDABAD MUNICIPAL CORPORATION OF THE CITY OF AHMEDABAD VERSUS HAJI ABDULGAFUR HAJI HUSSENBHAI [1971 (3) TMI 89 - SUPREME COURT] that an enquiry with the vendors was sufficient to hold that the purchasers had not indulged in willful abstention or gross negligence.
Petition allowed.
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