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VAT / Sales Tax - Case Laws
Showing 441 to 460 of 629 Records
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2020 (3) TMI 817
Imposition of penalty u/s 4-B(5) of the U.P. Trade Tax Act, 1948 - diesel purchased against Form III-B - existence of mens-rea on the part of the applicant or not - admittedly diesel has been used in generator set for generation of electricity used for plant and machinery, used for manufacture of Khandsari namely notified goods - HELD THAT:- It is an admitted fact that the revisionist factory had no power connection and therefore had installed generator set for production of power which in turn was used to run the plant and machinery for manufacture of sugar. It has also been urged that the remaining amount of Diesel was used for maintenance and installation of machinery, which is permissible under the law.
Looking into the facts and circumstances that the Revenue in exercise of power under Section 4-B of the Act, 1948 has granted recognition certificate to the revisionist for procuring Diesel Oil to be used for production of sugar and taking into consideration the judgment of this Court in the case of M/S SHREE BHAWANI PAPER MILLS LTD., M/S RAMA SHYAMA PAPERS LTD., M/S GOELS COIR FOAM (INDIA) PVT. LTD., M/S CAMPHOR AND ALLIED PRODUCTS, M/S N.P. AGRO (INDIA) INDUSTRIES LTD., M/S BHOLENATH INDUSTRIES LTD. VERSUS STATE OF U.P. AND ANOTHER [2015 (11) TMI 48 - ALLAHABAD HIGH COURT], the revisionist was entitled for the benefit under the Act, 1948.
Perusal of the impugned order passed by the Tribunal clearly indicates that there was no material before the Tribunal to conclude that the excess Diesel has been diverted for private gain or that the excess quantity of Diesel Oil was utilised for "other purposes" which was different from the purpose of manufacturing sugar. Before coming to such a finding, there should have been sufficient material before the Tribunal to reach such a conclusion. In absence of any such material, such a finding cannot be recorded by the Tribunal.
The matter is required to be remanded to the U.P. Trade Tax Tribunal, to pass fresh orders - revision allowed by way of remand.
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2020 (3) TMI 816
Levy of tax - Job-work - trading and sales in absence of Form-F - Section 6 A of the Central Sales Tax Act - HELD THAT:- The question regarding levy of sales act on the goods which are not accompanied by Form- F are on which the dealer cannot produce Form- F is no longer res-integra and has considered by the Hon'ble Supreme Court in the case of AMBICA STEELS LTD. VERSUS STATE OF UP. AND OTHERS [2009 (3) TMI 550 - SUPREME COURT] where it was held that even in cases where the dealer cannot produce Form- F he can still demonstrate before the authorities that the said transaction is not a sale and for which the Court has allowed the dealer to produce relevant document and material and other evidences to prove that the said transaction was not a sale on which the Central Sales Tax cannot be levied.
The Supreme Court has given liberty to the dealer to appear and submit before the assessing authority the material from which it can be determined as to the nature of the transaction and the assessing authority after considering the entire material would come to a finding as to whether provisions of Central Sales Tax would be applicable under said transaction or not.
It is directed that the revisionist will appear and submit before the assessing authority alongwith a certified copy of this judgement in six weeks to complete the assessing proceedings with regard to the said transaction only, on its own merits, after examining the record of transactions between the parties, keeping in mind that the assessee has not in possession of Form- F - Revision disposed off.
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2020 (3) TMI 734
Imposition of penalty u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 - imposition of additional tax on the sales made by the Assessee, which were not supported by declaration in 'C' Forms - Best Judgment Assessment - HELD THAT:- The parameters of Section 12(3)(b) of the Act are not satisfied in the present case.
Section 12(3)(b) provides for imposition of penalty in case of submission of incorrect or incomplete return by the Assessee. Both the grounds given above for imposition of additional tax on the Assessee did not result in Best Judgment Assessment against the Assessee and it cannot amount to filing of incorrect or incomplete return by the Assessee. On debatable issues, even if the addition in taxable turnover is made by the Assessing Officer, it does not amount to Best Judgment Assessment, which can be passed, only if the regular books of accounts and the return filed by the Assessee are rejected for given reasons. Therefore, the learned Tribunal has erred in relying upon the insertion of the Explanation in Section 12(3) of the Act at a later date with effect from 01.04.1996 to uphold such penalty in the year 1993-94.
Thus, the Explanation to Section 12(3) does not get attracted to the facts of the present case at all.
Petition allowed.
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2020 (3) TMI 733
Validity of assessment order - cancellation of registration of dealer - Gujarat VAT Act - HELD THAT:- It is not in dispute that the assessment order came to be passed pursuant to the returns, said to have been filed by the writ-applicant. However, in fact, no such returns were filed by the writapplicant and it was the Tax Consultant who created the bogus record - There is no hesitation in quashing the assessment order as well as the order passed by the first appellate authority dated 31st July, 2018.
The matter is remitted to the authority concerned for fresh hearing on the subject - Appeal allowed by way of remand.
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2020 (3) TMI 732
Maintainability of appeal - Section 58 of the Tamil Nadu Value Added Tax Act 2006 - principles of natural justice - HELD THAT:- There is no error in the order passed by the learned Single Judge and even the ground of breach of principles of natural justice, if at all can be established by the Assessee, the Assessee can very well file an appeal under Section 58 of the Act before the Sales Tax Appellate Tribunal besides raising the grounds on the merits of the case. Therefore, it does not entitle the Assessee / Appellant to resort to writ jurisdiction invariably in all circumstances for the alleged breach of principles of natural justice.
In the present case the appellant could avail the effective alternative remedy - the Writ Appeal is disposed of by relegating the matter back to the first appellate authority viz., the The Appellate Deputy Commissioner (CT), Chennai (East), Chennai.
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2020 (3) TMI 731
Principles of Natural Justice - validity of assessment order - HELD THAT:- On account of the fact that the petitioner did not place certain facts before this Court, this Court, while considering the writ appeals held that there has been no violation of principles of natural justice and accordingly confirmed the order passed in the writ petitions. However, after elaborately hearing the learned counsel today, we find that certain important factual details were not placed before us when the writ appeals were heard. Though the petitioner is to be blamed for such an act, nevertheless the Court has to take into consideration the facts, which are undisputed and then take a decision and merely because there was a default committed by the petitioner, the Court cannot refuse to exercise the review jurisdiction especially when those undisputed facts will turn the dimension of the case.
Review application allowed.
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2020 (3) TMI 699
Vires of Notification dated 15th February, 2010 - sub-section (1A) of section 3 of the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 - in the impugned notification, State Government while amending the schedule added Entry 9 pertaining to “stainless steel plates, flats, sheets and coils” and specified the maximum rate of tax as four percent.
It is the case of the petitioners that while the State Government reduced the applicable rate of tax under the VAT Act on stainless steel flats and sheets to 1% it did not correspondingly reduce the rate of entry tax applicable to the same goods and thus, while the rate of tax under the VAT Act for stainless steel flats and sheets is reduced to 1%, the rate of entry tax on the same goods continues to be four percent.
HELD THAT:- The validity of the Entry Tax Act was challenged before this court in the case of EAGLE CORPORATION PVT. LTD. VERSUS STATE OF GUJARAT AND OTHERS [2006 (10) TMI 395 - GUJARAT HIGH COURT], on which heavy reliance has been placed by the learned advocate for the petitioners. In the said case, this court considered as to whether by enacting the Entry Tax Act, is there any discriminatory treatment and/or such levy is discriminatory? In the said context, this court while upholding the validity of the Entry Tax Act held that considering the Statement of Objects and Reasons in juxtaposition with the provisions of the Entry Tax Act, it cannot be said that the provisions of the Entry Tax Act and consequent levy of the entry tax on the specified goods are violative of Article 304 of the Constitution of India. This court further held that entry tax is not discriminatory between the goods so imported and goods so manufactured, produced in a local areas and the challenge to the constitutional validity of the Entry Tax Act and the levy of entry tax thereof fails - While upholding the validity of the provisions of the Entry Tax Act, it has been held by this court that when there is a reduction in the effective rate of sales tax under the erstwhile Gujarat Sales Tax Act, there will automatically be a corresponding reduction in the maximum rate of entry tax prescribed in the schedule so that the goods brought from out side the State are not discriminated against the goods manufactured within the State, from the point of view of ultimate burden of tax.
Thus, in absence of any special circumstances pointed out by the State Government either in its affidavit or during the course of the submissions made by the learned Assistant Government Pleader, it can be safely concluded that neither there exist any circumstances for redressal of an inequitable situation nor was there any sufficient and reasonable cause which weighed with the State Government for removing the discrimination between the goods entering into the local areas from any place outside the State.
Clearly, as is discernible from the aforesaid well established principles, the Entry Tax Act is aimed at achieving a level playing field so as to obviate any chance of discrimination. Further, considering the provisions of the Entry Tax Act, in juxtaposition with the provisions of the VAT Act further read with the provisions of Article 304(a) of the Constitution of India, it is abundantly clear that if rates of a specified goods are reduced by the State Government in exercise of the powers conferred under the VAT Act, there has to be a corresponding reduction of the rates of entry tax by the State Government by issuing a notification under the Entry Tax Act; proportionately reducing the rate of tax. Not doing so and continuing with the notification specifying the rate of entry tax on the higher side as compared to the rates specified by the State Government in the notification under the VAT Act, would be in the teeth of the aforesaid well established principles enunciated by this court in the aforesaid judgment.
The continuation of the notification dated 15th February, 2010 prescribing the rate of tax as 4%, after the issuance of the notification dated 3rd October, 2012 is discriminatory and is directly hit by the provisions of Article 304(a) of the Constitution of India and thus, cannot be sustained. Thus, the notification dated 15th February, 2010 insofar as it prescribes the rate of tax as 4% is illegal and not in sync with the provisions of the Entry Tax Act so also the VAT Act and hence, it is impermissible to the State Government to charge tax in excess of the rate of tax prescribed under the notification dated 3rd October, 2012.
Since the notification dated 15th February, 2010, has been held to be illegal and bad in law insofar as it prescribes a higher rate of entry tax vis-á-vis the rate of tax provided in the notification dated 3rd October, 2012 issued under the provisions of the VAT Act, the consequential notices dated 23rd January, 2017 (Annexure 'B' collectively) also cannot be sustained.
The impugned notification dated 15th February, 2010 (Annexure A) to the extent it prescribes a higher rate of entry tax vis-à-vis the rate of tax provided in the notification dated 3rd October, 2012 issued under the provisions of the VAT Act is hereby held to be illegal and bad in law - petition allowed.
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2020 (3) TMI 698
Valuation - freight and pumping charges on the ready mix cement concrete sold by the assessee, billed separately - to be included in taxable turnover or not - HELD THAT:- Reliance can be placed in the case of M/S. LARSEN & TOUBRO LIMITED VERSUS STATE OF TAMIL NADU REP. BY THE JOINT COMMISSIONER (CT) [2019 (1) TMI 711 - MADRAS HIGH COURT] where the Tribunal committed a serious error in deciding the questions against the assessee - the issue decided in favor of assessee.
Sale in the course of import exempted under section 5(2) of the Central Sales Tax Act, 1956 - HELD THAT:- The issue is covered by the decision of the Supreme Court in the case of INDURE LTD. AND ANOTHER VERSUS COMMERCIAL TAX OFFICER AND OTHERS [2010 (9) TMI 883 - SUPREME COURT] where it was held that appellant-company was entitled to claim the benefit of section 5(2) of the act in relation to the import of ms pipes from south korea - thus, the issue is covered in favour of the assessee, because the sales in course of import taken place in the course of import and was inextricably related to the import itself and therefore the same has been rightly exempted by the tribunal.
Imposition of penalty under section 9(2-A) of the Central Sales Tax Act, 1956 - HELD THAT:- Since the imposition of tax itself has been set aside by the tribunal and has been upheld, consequential penalty imposed on the assessee has been rightly deleted by the tribunal.
There are no merit in the present case filed by the Revenue Department - appeal dismissed.
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2020 (3) TMI 583
Scope of the term 'Total Turnover' - Entitlement for deduction of exempted turnover of the food and drinks which is served in the Club - exemption on the second sales made by such Club within their premises to the customers - HELD THAT:- The concept and definition of total turnover, exempted turnover and taxable turnover are distinct in the Sales Tax Law and these terms are separately defined in the definition caluses of the Act and the Rules made thereunder. The total turnover obviously would include the total turnover of all the goods made by the Assessee, irrespective of the liability to pay tax thereon. If the turnover in question is exempted from payment of tax, it would nonetheless remain part of the "total turnover" even though it may not form part of the "taxable turnover".
Section 3-D of the Act as it stood prior to 01.04.1999 clearly mentioned the "total turnover" for applying the said flat rate of 2% tax. Even after amendment from 01.04.1999, the words "total turnover" have been employed in said Section 3-D of the Act - there are no merit in the argument raised by the learned counsel for the Assessee that the provisions after its substitution from 01.04.1999 should be held to be clarificatory in nature and to apply to the period even prior to 01.04.1999 i.e. Assessment year 1997-1998 which is the assessment year involved in the present case.
A substantive provision of the Act unless specifically made retrospective by the Legislature cannot, by a deeming fiction, be construed to be a retrospective provision.
As far as the words "total turnover" is concerned, there are no doubt that the "total turnover" would include even the exempted turnover. Since obviously the total turnover of the Assessee in question for the Assessment Year 1997-98, 1998-99 was beyond the prescribed limit of ₹ 50 Lakhs viz., being ₹ 72,34,527/- and ₹ 82,56,668/- as quoted above, we have no doubt that the learned Tribunal and the authorities below were justified in not applying the Section 3-D of the Act to the present case.
There are no merits in the present petition - petition dismissed.
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2020 (3) TMI 521
Validity of clarification issued by the learned Commissioner of Commercial Taxes under Section 28A of the Tamil Nadu General Sales Tax Act, 1959 - Imported Pile Fabrics - whether taxable at 16% as per entry No.22A Part E of the First Schedule to the TNGST Act, 1959 for the Assessment year 2000-01? - HELD THAT:- The learned Commissioner, while exercising the powers under Section 28A of the Act, which empowers him to pass a quasi judicial order on any point concerning the rate of tax under the Act and which is a wide and significant quasi-judicial power of Advancing Ruling given to the higher authority of the Commercial Excise Department with a view to remove the difficulties and doubts about the rate of tax, has issued such orders prima facie without application of mind at all. The said order firstly has been issued in the form of a letter instead of an order and we quote below the one liner order of the learned Commissioner dated 28.03.2009.
The non discussion of the facts and controversy, no reasons assigned in the order and simply holding the commodity in question viz., Imported Pile fabrics to the taxable at 16% under the Entry 22A, in our opinion, is no order in the eye of law at all under Section 28A of the Act.
The Assessee not only challenged this order, but under the garb of this order even laid a frivolous challenge to the entry 22A itself without disclosing how the said entry was in any way in conflict with Section 14(vii) of the CST Act - Section 14(vii) of the CST Act gives the list of Declared Goods and it includes in clause (vii) thereof description of various types of 'man made fabrics' covered under heading 60.01 of the Central Excise Tariff Act, 1985. Unless one establishes that the commodity in question falls under the particular category of Declared Goods, there is no question of disbelieving the applicability of the Entry 22A of the TNGST Act which on its own force applied a rate of 16% on the entry relating to 22A "Textiles Imported into India from foreign country" under the First Schedule to the Act. This Entry 22A is wide enough to cover even the goods in question but we are not expressing any opinion on the same.
We would like also to observe that some such other non speaking orders passed by the Commissioner in exercise of Section 28A of the Old TNGST Act, 1959 and Section 48A of the TNVAT Act, 2006 have come on our notice quite often and some kind of non-speaking orders are passed by the learned Commissioners without appreciating the responsibility which lies upon them to pass well reasoned quasi judicial orders - Since we have directed above for the fresh assessment order to be passed, at this stage, the impugned order passed in the present case on 27.05.2009 for Assessment Year 2000-01 is set aside.
The Writ Petitions is disposed off by relegating the Petitioner/Assessee before the learned Commissioner so that fresh orders are passed under Section 28A of the Act and then consequential appropriate assessment orders be passed in the case of the Assessee for Assessment Year 2000-01 involved in the present case.
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2020 (3) TMI 520
Recovery of dues from the petitioner's bank - provisional attachment of the goods which was secured with the petitioner-Bank - Section 44 of the VAT Act - HELD THAT:- It is not in dispute that the petitioner had advanced a loan of ₹ 40,00,000/- on hypothecation of 200 cotton bales to the respondent No.3. It also emerges from the record that the respondent No.1 passed an order of provisional attachment, under Section 45 of the VAT Act after the petitioner advanced a loan to the respondent No.3.
On perusal of the aforesaid provisions of the VAT Act, it is clear that the petitioner is not holding any money of the respondent No.3, who is a borrower of the petitioner and therefore, the respondent No.1 could not have issued the notice by invoking the provisions of Section 44(1)(b) of the VAT Act - the provision of Section 48 of the VAT Act would not come into play and therefore, the respondent No.1 could not have issued provisional attachment order under Section 45 of the VAT Act, nor notice could have been issued under Section 44 of the VAT Act to the petitioner.
The learned Assistant Government Pleader stated that after expiry of the provisional attachment order on completion of one year, it was extended only for a period of one year and thereafter, the same was not extended. Therefore, as on today, provisional attachment order is not in existence, as per Sub-section (2) of Section 45 of the VAT Act.
The impugned notices dated 07.05.2012 and 11.05.2012, issued under Section 44 of the VAT Act, are hereby quashed and set aside - Petition allowed.
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2020 (3) TMI 482
Reversal of input tax credit - inter-state sales - case of Revenue is that the petitioner was eligible for ITC only in excess of 3% of Central Sales Tax under Section 8(1) of Central Sales Tax Act, 1956 on the inputs locally purchased by the petitioner whereas case of petitioner is that the petitioner was entitled to avail input tax credit (ITC) under Section 19(1) of the TNVAT Act, 2006 for the purposes enumerated in Section 19(2) of the said Act without any limitation - Section 19(5)(c) of the TNVAT Act.
HELD THAT:- A plain reading of the section 19(2)(v) as it stood during the period in dispute and thereafter shows that it applies only to the sale of the goods as such. In other words, intention was to restrict the credit only in the case of dealers who were purchasing goods at higher rate of tax and accumulating credit and selling final product under interstate sale at a lower rate of tax - Section 19(2)(v) was never intended apply to a manufacturer as the input tax credit availed by a manufacturer under section 19(1) of TNVAT Act, 2006 was allowed on such input used in the manufacture or process of goods in the State. Since the proviso to Section 19(2) was confined to situations contemplated under Section 19(1)(v) alone, the restrictions contained therein could not apply to dealer engaged in the manufacture or process of goods in the state.
The case is remitted back to the respondent to pass fresh order - The respondent shall pass a speaking order in terms of the observation in this order - petition allowed by way of remand.
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2020 (3) TMI 450
Benefit of concessional rate of 2% of CST - Post GST era - Denial of benefit of purchases of HSD Diesel, Natural Gas in the course of inter-State Trade or Commerce - Declaration of 'C' forms of the CST Act, 1956.
The bone contention of the Revenue in the present Writ Appeal is that with the enactment of the Constitutional 101st Amendment and consequential GST Laws enacted in all the States with effect from 1.7.2017 and the consequential amendments effected in the CST Act, 1956 also and amendment in the definition of 'Goods' restricting the operation of CST Act for only six commodities like Petroleum Crude, High Speed Diesel, Motor Spirit (Petrol), Aviation Turbine Fuel, Natural Gas and Liquor, the Assessee Company or whoever engaged in the manufacture of Cement and other things, which were now covered by the GST Laws were not entitled to purchase such Diesel, etc. these six specified goods against the Declaration Form 'C' at the concessional rate on the inter-State purchases of such goods made by them.
HELD THAT:- The liability to pay tax under the provisions of CST fixed on the Seller is not a condition precedent or the only contingency for getting himself registered under the provisions of the CST Act. Even a person, who is only purchasing goods in the inter-State Trade or Commerce, who may not be liable to pay tax under the provisions of CST Act as a Seller can also secure registration under the provisions of the said Act and can continue with it. Even a dealer liable to tax under State Sales Tax law, which may include even new State GST Act, 2017, can obtain registration under CST Act. In the present case, the Assessee, a Cement Company, continues to be liable to pay tax under local TNVAT Act, 2006 if it sells or purchases any of these six goods also. The TNVAT Act also has not been completely repealed but now applies only to these six commodities after 1.7.2017, as per Section 174 of the TNGST Act, 2017.
On a conjoint reading of both sub-sections (1) and (2) of Section 7 of the CST Act, it is clear that the Respondents/Assessees and their likes can continue to have registration under the provisions of the CST Act and the contention raised on behalf of the Revenue that they have lost their entitlement to be so registered is misconceived and liable to be rejected. We, accordingly, reject the same.
The mere restriction of the operation of the CST Act with respect to six commodities with effect from 1.7.2017 does not take away the right of the Purchasing Dealers to purchase such goods in the course of inter-State Trade or Commerce under the said Act and their registration cannot be said to be either pro tanto cancelled nor they can be cancelled as a matter of right by the Revenue Department. The right to deal with in those six goods still continues to vest in the Purchasing Dealers and therefore, this contention is misconceived.
Right to hold registration - HELD THAT:- The right to purchase, which is, essentially, a part of freedom of trade under Article 301 and 304 of the Constitution, cannot be taken away on the anvil of the argument raised by the learned counsel for the Revenue. Equally, the liability of these dealers to pay tax under local TNVAT Act on these six commodities also continues after 1.7.2017 if sale or purchase is made within the State - their right to hold registration under CST Act, 1956 cannot be denied to them under Section 7 of the Act.
The next contention of the learned Special Government Pleader for the Revenue is that concessional rate of tax under Section 8(1) of the Act has to be read with the conditions specified in Section 8(3)(b) of the Act viz., against the Declaration in 'C' forms and therefore, such a provision for giving concessional rate of tax should be strictly construed and the said right should be deemed to have been taken away with the Amendment in law with the GST Regime coming into force - This is also a contention equally devoid of merit. Even a strict, literal and plain construction of provisions of the Act does not, in the opinion of this court, disentitle the Purchasing Dealers to purchase these six goods at concessional rate against 'C' forms in the course of inter-State Trade or Commerce. Since the first contention of the State that the registration of such Purchasing Dealer itself is liable to be treated as void is a misconceived contention, this second contention raised for denial of the concessional rate of tax to such Purchasing Dealers is equally unacceptable.
The scope of Section 48A is very limited and does not empower the said Commissioner to issue such general Circulars or any Guidelines to the lower Authorities in the State. Besides thus, being without jurisdiction and any statutory support, the impugned Circular dated 31.5.2018 is also passed in violation of principles of natural justice. There is no justification for creating any invidious classification by creating categories of Dealers, arbitrarily, in violation of Article 14 of the Constitution as has been done in the impugned Circular - The mere target to achieve more revenue, as has been mentioned in the impugned Circular itself, also cannot be a reason to sustain such Circulars and tax collection, without authority of law is a bane under the Constitutional Scheme and therefore, we are of the opinion that the learned Commissioner has exceeded his jurisdiction to issue such a Circular.
The intention of the Legislature, by the series of Amendments, cannot be inferred in the manner canvassed by the learned counsel for the Revenue so as to defeat the right of the Purchasing Dealers to purchase at the concessional rate against Declaration in 'C' form even the said six commodities. No law has prohibited any such Dealers, who purchase the six commodities to start even selling these six commodities and therefore, the Respondent/Assessee like M/s.Ramco Cements Limited can even sell any of those six commodities, subject to their complying with other licensing requirements, if any. Therefore, their act of purchasing any of these six commodities under CST Act cannot be adversely affected.
Thus, if a Dealer has a right to sell as well the restricted six items under CST Act, one fails to understand as to how their right to purchase those goods at present time under the existing Registration Certificates can be taken away merely because they are not selling those goods. If sale of the goods was the only criteria of registration under the CST Act, the consequent amendments would not have allowed concessional rate of tax for purchase of those six commodities for user in activities like Mining or Telecommunication Networks, where no such resale or use in manufacturing is involved - such a right is equally available to other industries like Cement Industries and the same cannot be denied to them. That would result in an invidious classification in violation of Article 14 of the Constitution of India, which is neither envisaged nor is called for.
The Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers - The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside - appeal dismissed - decided against Revenue.
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2020 (3) TMI 449
Principles of Natural Justice - Restoration of the penalty under Section 12(3)(a) of TNGST Act - ex-parte order - HELD THAT:- The findings of the Assessing Authority in the impugned assessment order itself states that, the Assessee has filed the return. However, without discussing the effect thereof, the assessing authority has imposed the penalty of ₹ 1,97,534/- under Section 12(3)(a) of the Act.
The learned Tribunal has erred in restoring the penalty, that too by an exparte order. The contingency in which the penalty under Section 12(3)(a) of the Act can be imposed is if an Assessee does not file any return, and it does not talk whether any return is being filed in pursuance of any inspection or otherwise. The fact that the Assessee was not previously registered and later on got registered upon inspection or survey by the Department is not relevant for the purpose of Section 12(3)(a) of the Act - Since the fact that the Assessee got himself registered and filed the return and paid the due tax thereon is not disputed, it is sufficient to set aside the penalty in question.
The Tribunal has erred in restoring the penalty in the impugned order - Petition allowed - decided in favor of assessee.
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2020 (3) TMI 448
Input Tax Credit (ITC) - Restriction of ITC to the extent of CST payable in case of interstate sale - Restriction of ITC in case of goods consumned or burned but not transferred into or existent in finished product - Validity of amendments brought in Section 18 of the JVAT Act, 2005. - Retrospective effect or effective prospectively.
Whether the amendments made to the provision of Section 18(4)(ii) and Section 18(4)(iii) of the JVAT Act vide amendment notification dated 8.2.2016, to the extent proviso has been inserted by providing, interalia, that ITC shall be available only in respect of tax paid on CST sales under section 8(1) of the CST Act, and the balance ITC shall be forfeited is wholly arbitrary, confiscatory in nature being violative of Article 14 of the Constitution of India? - Whether the retrospective effect granted with effect from 23.09.2015 to the substituted proviso inserted to clause(ii) and (iii) of sub- Section 4 of Section 18 of the JVAT Act, vide Amending Act dated 8.2.2016 has an effect of interfering with the vested right already accrued in favour of writ petitioners in respect of purchase and sales made between the period 23.09.2015 to 07.02.2016, and, is liable to be struck down as being violative of Articles 14 and 19(1)(g) of the Constitution of India? - HELD THAT:- The substituted provisos inserted vide notification dated 08.02.2016 are not clarificatory in nature and, has an effect of curtailing the vested right of the dealers in respect of purchases and sales of goods made between the period 23.09.2015 to 07.02.2016 and is, thus declared ultra vires to the extent said provisos have been given retrospective effect. In other words, these provisions are held to be intra vires w.e.f. 7.2.2016 only and onwards.
Whether Amendment carried out in sub-section 8 of Section 18 of the JVAT Act, wherein a new clause (xviii) has been inserted after existing clause (xvii) of the aforesaid section, is ultra-vires and violative of Articles 14 and 19(1)(g) of the Constitution of India? - HELD THAT:- By virtue of said amendment the State Government is putting restrictions on the availability of ITC on such raw materials which are consumed or burnt up and not found existent in the finished product. Thus, specified class of raw materials has been excluded for being eligible for claiming benefit of ITC. The aforesaid decision being in the nature of policy decision, wherein reasonable classification has been made between two kinds of raw material, that is , raw materials found existent in the finished product and raw materials consumed or burnt up and not being found in the finished product, the same cannot be said to be unreasonable classification attracting the vice of Article 14 of the Constitution of India. Thus, the challenge to the amended provisions contained under section- 18(8)(xviii) fails having no merit.
Whether insertion of Rule 26(11A) under the JVAT Rules, vide notification dated 17.2.2017 with retrospective effect i.e. from 01.04.2015, is ultra-vires to the provision of Section 94 of the JVAT Act, being beyond the powers of the delegate i.e. the State of Jharkhand? - HELD THAT:- The provision of Section- 94 of the JVAT Act, 2005 does not confer any power to the State Government to frame any Rule with retrospective effect and thus, the State Government, while enacting the machinery provision for giving effect to the amendment carried out in clause(ii) and (iii) of sub-section-4 of Section 18 of the JVAT Act with retrospective effect i.e. w.e.f. 1.4.2015 have exceeded its jurisdiction, and to that extent amended Rule is ultra vires the provisions of Section 94 of the JVAT Act, 2005 - Accordingly, we declare that Amendment carried out under the JVAT Rules, 2006 vide amending Notification dated 17.2.2017 by which Rule 26(11A) was inserted shall have only prospective operation with effect from 17.2.2017 and the provision contained in the aforesaid notification to the extent it gives retrospective application of the said Rule is hereby quashed and set aside as beyond the competence of the delegate i.e. the State Government.
Whether in absence of machinery provision for giving effect to the amendments made in section 18(4)(ii) and 18(4)(iii) of the JVAT Act, upto 16.2.2017, the said provisions are unworkable and cannot be acted upon? - HELD THAT:- In absence of machinery provision having been prescribed by the State of Jharkhand for giving effect to the proviso inserted in clause(ii) and (iii) of sub-section 4 of Section 18 of the JVAT Act, the said provisos were unworkable between the period 23.09.2015 till 16.02.2017 and during the said period no assessment could be made and for the said period no forfeiture of ITC can take place and the computation of ITC is to be made for the said period in terms of existing Rule i.e. Rule 26(5) JVAT Rules, including the formula prescribed therein. Any assessment order, scrutiny order, etc, passed in respect of the writ petitioners having an effect of forfeiture of ITC are hereby declared illegal and quashed for the period 23.09.2015 till 16.2.2017.
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2020 (3) TMI 367
Classification of goods - Polyurethane Footwear - It is the case of the writ applicant that Polyurethane is a plastic - Gujarat Value Added Tax Act, 2003 - pre-condition for stay of demand of dispute - issue raised is to the effect that as the footwear manufactured by the writ applicant contains certain accessories not made of plastic, the footwear, as a whole, will fall within the ambit of residuary entry.
HELD THAT:- The issue of granting stay pending appeal is governed principally by the two circulars issued by the CBDT. The first circular was issued way back on 2nd February 1993 being instructions no.1914. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in super-session of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof.
This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly - Ordinarily, the writ Court would be slow in interfering with such discretionary exercise of powers by the authority concerned. However, in the present case, the total tax demand is quite on higher side. The issues are at the first appeal stage. Even 15% of the disputed tax dues comes to around ₹ 60 Lakh.
It is deemed fit to reduce the requirement of depositing the disputed tax dues to enable the writ applicant to avail the benefit of the stay pending the appeal before the Appellate Authority to 5% - application disposed off.
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2020 (3) TMI 366
Review of the assessment of the sales tax - inter-State sales to unregistered dealers - exemption from the State tax under Section 7 (1-a) of the Bihar Finance Act, 1981 - Section 8 of the Central Sales Tax Act - HELD THAT:- Since Rule 32 of the Bihar Sales Tax Rules clearly says that before passing the review order under the Act, the reasons are required to be recorded, which is a mandatory provision, the review order needs to be looked into, to see whether it passes the test of Rule 32 of the Rules.
It is submitted by the learned counsel for the State that when the assessee admits that he has paid the tax at the maximum rate prescribed under the State Act, sufficient reason has been given by the Assessing Authority to impose the surcharge on the transactions made by the petitioner, particularly when the original assessment order is not challenged - We cannot subscribe to the view of the learned counsel for the State on this count. We find that what has been stated by the Assessing Authority in his review order, is only that in view of the objection raised by the Audit Team, the review order is passed imposing the surcharge. No reason whatsoever has been given by the Assessing Authority, applying his own independent mind, whether in the inter-State transactions made with the unauthorized dealers, the surcharge is also payable by the assessee, and whether in failing to levy such surcharge, there was any mistake apparent on the record.
In absence of any such reason given by the Assessing Authority, showing the application of his own independent mind, we are of the considered view that only recording the audit objection cannot mean the independent reasoning given by the Assessing Authority. When the Rule requires the Assessing Authority to record his reasons in writing, that means the Assessing Authority has to make out his own subjective satisfaction about the objection raised by the audit team, and if the Assessing Authority finds that the objection raised by the Audit Team is sustainable, he shall proceed to review order. He cannot proceed to review the order only on the basis of the objection raised by the Assessing Authority, without application of his own independent mind. Rule 32 of the aforesaid Rules is absolutely clear in these terms.
Since, no reason has been assigned by the Assessing Authority in the review order dated 01.10.2009, the same cannot be sustained in the eyes of law - Accordingly, both the review orders dated 01.10.2009, with respect to the assessment years 2004-05 and 2005-06, as challenged in both these writ applications are hereby, quashed.
Application allowed.
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2020 (3) TMI 365
Imposition of penalty under Section 70[2] of KVAT Act - Whether the proceedings initiated under Section 39(1) of KVAT Act is after obtaining the necessary approval from the prescribed authority, namely, the authority prescribed under Section 2(24) of KVAT Act? - HELD THAT:- The authority who undertakes re-assessment provisions under Section 39(1) of KVAT Act could only be the prescribed authority and said authority is empowered to do so, which would be on the ground that it has reasons to believe that return furnished which is deemed as assessed is incorrect tax liability of the dealer.
Whether the Revisional Authority was justified in initiating the proceedings under Section 64(1) of KVAT Act and setting aside the Appellate Authority order dated 24.07.2017 Annexure – C passed under Section 62(6) of KVAT Act? - HELD THAT:- It has been found by the Revisional Authority that seller of the appellant namely M/s. Tradex Metal Corporation had engaged in bill trading “to evade the tax due to the State Government”. In fact, a criminal case has also been registered against said dealer by the jurisdictional police namely, Kalasipalayam Police Station which fact is available on record and completely ignored by the 1st Appellate Authority and said issue having not been addressed to by the 1st Appellate Authority. Revisional Authority having taken note of all these aspects has arrived at a conclusion that input tax credit claimed by the assessee is not sustainable.
The penalty imposable under Section 70[2] of the Act using the words ‘knowingly issues or produces a false tax invoice’ does not shift the burden on the Revenue, merely because the dealer claiming such input tax credit claims that he is a bonafide purchaser and knowingly he has not produced a false and fake invoice in question. The burden of proving the correctness of input tax credit remains upon the dealer claiming such input tax credit. Such a burden of proof does not get shifted on to the Revenue - mere his production before the Assessing Authority and his cross examination recorded by the Assessing Authority does not dispel the fact that the tax invoices produced by the Assessee for claiming input tax credit emanates from the genuinely existing selling dealers.
Thus, burden of proving that the claim of input tax credit is correct, is squarely upon the Assessee who never discharged the said burden in the present case. The first Appellate Authority was absolutely wrong in setting aside the penalty assuming such burden of proof to be on the Revenue. The Revisional Authority, was therefore, perfectly justified and within his jurisdiction to restore the order of penalty in these circumstances - substantial question of law No.2 in favour of revenue and against appellant/assessee.
Appeal is hereby dismissed by answering the substantial question of law against appellant/assessee.
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2020 (3) TMI 305
Maintainability of appeal - appeal was dismissed for non-payment of pre-deposit - HELD THAT:- The Tribunal could not have ordered to pay an amount of pre-deposit on the basis of the turnover. The amount of pre-deposit is to corelate with the amount of tax demand and not with the amount of turnover of the assessee.
We modify the order passed by the Tribunal and substitute the amount of pre-deposit being 5% of the tax demand, as condition precedent of entertaining the appeal, under Section 73(4) of the VAT Act.
Petition allowed.
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2020 (3) TMI 304
Maintainability of appeal - Failure in complying with the requirement of pre-deposit - It is the case of the writ-applicant that the GSPC used to receive the total consideration of the sales made from the Hazira block, and the tax liability under the Act, 1969, as well as the VAT Act, used to be discharged by the GSPC on the total sale consideration - whether the order of pre-deposit to the tune of ₹ 10 lakh is reasonable or sustainable in law? - HELD THAT:- Section 73(4) of the VAT Act, 2003 would make it clear that no appeal against an order of assessment shall ordinarily be entertained by an Appellate Authority if such an appeal is not accompanied by satisfactory proof of the payment of tax in respect of which an appeal is preferred. However, the proviso to clause 4 makes the picture further clear. It confers discretion upon the Appellate Authority in appropriate cases to entertain the appeal without the payment of tax with penalty or in an appropriate cases on proof of the payment of the smaller sum as the Appellate Authority may consider reasonable. It is very much necessary to clarify that, before the Appellate Authority or the Tribunal passes an order of pre-deposit, it is obliged to consider a prima facie case, which the appellant may be in a position to highlight. If a strong prima facie case is made out, then in such circumstances, there should not be any difficulty in entertaining the appeal even without insisting for the payment of tax with penalty or even a smaller sum.
In the case on hand, we do not find any discussion as regards the prima facie case which has been put up by the writ-applicant. Straightway the order is passed for the purpose of pre-deposit. Such an approach may lead to injustice if a meritorious appeal is dismissed only on the ground of non-payment of the pre-deposit amount. Therefore, in appropriate cases, the First Appellate Authority is expected to exercise its discretion judiciously and it should not insist for pre-deposit, if otherwise the appellant is able to make out a strong prima facie case in his favour.
The issue of granting stay pending appeal is governed principally by the two circulars issued by the CBDT. The first circular was issued way back on 2nd February 1993 being instructions no.1914. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in supersession of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof - This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly.
Application allowed.
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