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VAT and Sales Tax - Case Laws
Showing 1 to 20 of 27296 Records
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2024 (5) TMI 1430 - ANDHRA PRADESH HIGH COURT
Failure to extend benefit of waiver of demand of Rural Development Cess for the Assessment Year 2002-03 pursuant ot G.O. Ms. No. 950 & 951 dated 10.09.2003, G.O. Ms. No. 682 & 683 dated 03.09.2004, G.O. Ms. No. 25 dated 09.01.1996 and G.O. Ms. No. 290 dated 07.09.2005 - demand of Rural Development Cess (RDC) and the payment of APGST amount in installments - HELD THAT:- Admittedly two components are involved in this case i.e., tax component of Rs. 66,269/- under AP GST Act for the year 2002-03 and RDC of Rs. 3,00,514/- for the year 2002-03. So far as tax of Rs. 66,269/- is concerned, the petitioner admits its liability to pay the said amount but on the ground of some financial difficulties the petitioner prays to grant six equal monthly installments for payment of the said amount. As rightly contended by the Government Pleader, this Court cannot consider the said request and order the payment of tax under installments. The petitioner can approach the concerned authority and make a representation in that regard if so advised.
Rural Development Cess (RDC) - HELD THAT:- The petitioner is not disputing the quantum of the cess but only questions its validity on the ground that in view of several G.Os narrated supra, the petitioner shall be exempted from payment of the cess. The respondent opposes the claim of the petitioner on the main contention that in the normal circumstances the petitioner is entitled to the exemption, but however, since the petitioner has already collected the cess amount from the FCI for the relevant period, the petitioner is not entitled to claim exemption and if such exemption is granted, it will amount to facilitating the petitioner to get undue enrichment.
There are force in the said contention of learned Government Pleader. If the petitioner has already collected the cess amount from the FCI, it has to remit the same to the Government as otherwise granting exemption will amount to undue enrichment on the part of the petitioner. It should be noted that the petitioner did not file any rejoinder challenging the counter averments that the petitioner has already collected the cess amount from the FCI. As such, the said contention shall be accepted as a true fact.
The writ petition is dismissed.
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2024 (5) TMI 1418 - SC ORDER (LB)
Dismissal of SLP on the ground of delay - insufficient reason for the delay - Recovery of dues - priority/precedence of dues - it was held by High Court that 'dual disability sets in. First, in the absence of material to show that the first charge under section 37 of MVAT Act was enforced by a valid attachment order before the registration of security interest by the petitioner with the CERSAI, the petitioner cannot be deprived of the right of priority under section 26E of the SARFAESI Act. Secondly, with the registration of the security interest with the CERSAI on 9th July 2020, coupled with the absence of registration of the department’s demand and/or order of attachment, the claim of the respondents becomes subservient to the right of the secured creditor.'
HELD THAT:- There is a delay of 498 days in filing the Special Leave Petitions. The explanation for the delay is not sufficient. Consequently, the Special Leave Petitions are dismissed on the ground of delay.
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2024 (5) TMI 1328 - ALLAHABAD HIGH COURT
Scope of review jurisdiction - an error apparent on the face of the record - purchase price of purchase of plant and machinery, apparatus and equipment, to be included in the ‘Fixed Capital Investment’ or not - the amount has been allowed as MODVAT under the Central Excise Act, 1944 - HELD THAT:- In its judgment in ARIBAM TULESHWAR SHARMA VERSUS ARIBAM PISHAK SHARMA [1979 (1) TMI 228 - SUPREME COURT], the Hon’ble Supreme Court propounded that review power and appellate power are inherently distinct. While the appellate power enables the courts to rectify all manners of errors in the judgment or order under challenge, review power does not - Recently, in ARUN DEV UPADHYAYA VERSUS INTEGRATED SALES SERVICE LTD. & ANR. [2023 (7) TMI 1411 - SUPREME COURT], the Hon’ble Supreme Court reiterated that review power is to be exercised strictly within the confines of Order 47 Rule 1 of CPC, 1908.
Review jurisdiction is not a tool for the litigious or the disgruntled, it is a mechanism for safeguarding the integrity of the judicial process, for ensuring that justice remains blind to all but the merits of the case. Wielding the power of review jurisdiction carries a weighty burden – one that demands unyielding diligence and meticulousness. Courts must resist the siren call of extraneous influences or the temptation to revisit contentious issues - the review jurisdiction is not a weapon to be wielded recklessly but a shield to safeguard the sanctity of the legal process.
The review jurisdiction is a solemn duty bestowed upon the High Courts to rectify errors that may have crept into their judgments. It is not an avenue for re-argument or a platform for dissatisfied litigants to reiterate their grievances. Instead, it serves as a bulwark against miscarriage of justice, providing a mechanism for the correction of judicial fallibility. Judges, like all human beings, are liable to err. Thus, review jurisdiction stands as a sentinel against the tyranny of erroneous judgments, upholding the integrity of the judicial process.
Coming to the merits of the instant review, the ground taken by the Respondent that important judgments of the Hon’ble Supreme could not be submitted before this Court, does not merit the exercise of the power of review since the Respondent failed to establish that despite exercise of proper due diligence, the aforesaid judgments could not be brought to light. In any case, as held by the Hon’ble Supreme Court in Dokka Samuel [1997 (3) TMI 619 - SUPREME COURT], failure to produce a judgment would not tantamount to an error apparent on the face of the record.
Mere failure to cite a judgment does not, in and of itself, render the original judgment flawed. Review jurisdiction is not a panacea for addressing every perceived deficiency or oversight in the original judgment; rather it is a narrow avenue reserved for rectifying errors glaringly evident on the face of the record. Failure to cite a particular judgment does not automatically invalidate the reasoning or merit of the decision under question.
This Court finds no merit in the instant review application preferred against the order - Accordingly, the same is dismissed.
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2024 (5) TMI 1327 - KARNATAKA HIGH COURT
Constitutional validity of Section 2A (8-a) of the Karnataka Tax on Entry of Goods Act, 1979 - inclusion of the term “prevailing market price of such goods in the local area” within the definition of “value of the goods” under clause 2A (8-a) - significant lapse of time from the original assessments are valid under Section 6 (2) of KTEG Act or not - differential tax amount determined by respondent No. 5 based on mere change of opinion in contravention of Section 6 (2) of the KTEG Act - Maintainability of petition - availability of alternate remedy.
Whether the inclusion of the term “prevailing market price of such goods in the local area” within the definition of “value of the goods” under clause 2A (8-a), in instances where goods are not purchased, conflicts with the charging provision outlined in section 3 (1) of the Act? - HELD THAT:- The charging provision under Section 3 (1) of the KTEG Act serves as the foundational framework for levying entry tax. This provision mandates that the tax should be based on the value of goods entering the local area. However, the definition clause under Section 2A (8-a) introduces additional criteria, such as the 'prevailing market price,' which can potentially lead to conflicting interpretations, especially in cases involving stock transfers. In situations where there is a conflict between the charging provision and the definition clause, the Court's duty is to interpret these provisions in a manner that upholds the legislative intent behind the charging provision. The charging provision, being the substantive section imposing the tax, holds primacy over other provisions of the statute.
The definition clause under Section 2A (8-a) of the KTEG Act must be construed harmoniously with the charging provision under Section 3 (1) of the KTEG Act. The charging provision, being the substantive section imposing the tax, should hold primacy in determining the taxable value of goods, especially in cases of stock transfers. In elucidating these provisions, it becomes apparent that the crux of Section 3 (1) lies in anchoring tax assessment to the value of goods at the time of their entry. Therefore, any reference to prevailing market price in Section 2A (8-a) should be construed as pertaining to the market value of goods contemporaneous with their entry into the local area.
The term 'value of such goods' as mentioned in Section 2A (8-a) of the KTEG Act shall be interpreted to mean the value of goods at the time of their entry into the local area, consistent with the charging provision under Section 3 (1) of the KTEG Act. This interpretation ensures harmonization between the charging provision and the definition clause, eliminating any potential conflicts or inconsistencies.
Whether re-assessment notices issued by respondent No. 5 after a significant lapse of time from the original assessments are valid under Section 6 (2) of KTEG Act and assessment orders for the assessment year 2009-10 passed by respondent No. 5 in terms of the wordings “prevailing market price of such goods in local areas” under clause 2A (8-a) of KTEG Act are valid? - Whether differential tax amount determined by respondent No. 5 based on mere change of opinion are in contravention of Section 6 (2) of the KTEG Act? - HELD THAT:- The respondent No. 5 being a new Officer has conducted reassessment as opposed to the original assessing Officer who had accepted the returns submitted by the petitioner’s company indicating that there is entry tax compliance by the petitioner company strictly in terms of the charging Section 3 (1) of the KTEG Act. The power to reassess is vested with the original assessing officer. Therefore, reassessment done by respondent No. 5 merely on the ground of change of opinion does not adhere to the compliance of mandate contemplated under Section 6 (2) of the KTEG Act.
The assessment orders and reassessment notices issued by respondent No. 5 are based on change of opinion and therefore, the impugned assessment orders and reassessment notices are not sustainable and would warrant interference at the hands of this Court. Initiating reassessment purely on the grounds of change of opinion without substantive new material is impermissible under the law and therefore, liable to be quashed.
Whether petitioner/company needs to be relegated to avail remedy of appeal on the ground of alternate remedy? - HELD THAT:- In this case, the petitioner's challenge to the statutory provision goes beyond mere statutory interpretation and involves significant legal and constitutional implications, warranting this Court's intervention. Therefore, in light of the unique circumstances and the centrality of the disputed statutory provision to the petitioner's case, the writ petition represents not only the most efficacious but also the most equitable remedy available. By allowing the petitioner to directly address the substantive legal issues before this Court, justice can be served promptly and fairly, aligning with the overarching objectives of the legal system.
This Court is inclined to hold that the petitioner at this stage cannot be relegated to avail the alternative remedy of an appeal, in light of law laid down by the Apex Court in DR BAL KRISHNA AGARWAL VERSUS STATE OF U.P. [1995 (1) TMI 393 - SUPREME COURT], where the Apex Court was of the view that the Court was not right in dismissing the writ petition on the ground of alternate remedy having found that the writ petition is found pending since 1998, i.e. more than five years. In the present cases on hand, the petitions are pending for almost 14 years. The impugned assessment orders and reassessment notices issued by respondent No. 5 are one without jurisdiction. Therefore, this Court under writ jurisdiction has ample powers to examine the validity of assessment orders and also reassessment notices.
The writ petitions are allowed in part.
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2024 (5) TMI 1326 - GAUHATI HIGH COURT
Challenge to order of Reassessment - notice issued stating that the petitioner’s turnover escaped assessment for the year 2010-2011 and accordingly, proposes to assess the petitioner’s turnover for the period 2010-2011 to the best of assessing authority judgment under Section 40 of the Act.
It is the specific case of the petitioner that though the re-assessment has been completed in the purported exercise of power under Section 40 of the Act of 2003 read with Section 174 of the Assam Goods and Service Tax Act, 2017, but Section 40 of the Act of 2003 could not have been invoked inasmuch as, the said powers can be invoked only when the dealer have been assessed under Sections 34, 35, 36 and 37 of the Act of 2003.
HELD THAT:- No assessment whatsoever was completed by the assessing authority under Sections 34, 35, 36 and 37 of the Act of 2003 - there was no assessment. As such, the very initiation of proceeding under Section 40 of the Act of 2003 is absolutely illegal, without jurisdiction and not tenable in law.
The present case is covered by the decision of this Court in Assam Gas Company Ltd Vs. State of Assam & 2 Others [2024 (5) TMI 1173 - GAUHATI HIGH COURT] where it was held that 'In the present case, there was no assessment under section 35 of the Act, 2003, made during the prescribed period. Therefore, no assessment can be deemed to have been made in law - the said order of re-assessment having been completed without any assessment made under section 35 of the Act, 2003, the order of reassessment dated 17.03.2018 is absolutely illegal and without jurisdiction.'
The impugned Order of Re-assessment dated 29.03.2018 and the Notice of Demand alongwith the Recovery Notices dated 06.08.2018 and 28.09.2018 are set aside and quashed - petition allowed.
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2024 (5) TMI 1325 - PUNJAB AND HARYANA HIGH COURT
Denial of refund of excess tax paid by contractors - Haryana Alternative Tax Compliance Scheme for Contractors, 2016 - Constitutional Validity of Clause 4(2) of the scheme - HELD THAT:- The scheme has been made applicable to all contractors whether they have opted or not opted for the lump sum scheme under Rule 49 of the VAT Rules. Thus, those who had earlier opted for lump sum scheme under Rule 49 of the VAT Rules and were paying @ 4% of the aggregate amount, would be placed in a disadvantageous position vis-à-vis those who did not even deposit the amount earlier and had not opted under Rule 49 of the VAT Rules. It is also noticed that the State has modified the rate of composition @ 1% with retrospective effect for all.
In CORPORATION BANK VERSUS SARASWATI ABHARANSALA AND ANOTHER [2008 (11) TMI 387 - SUPREME COURT] Hon’ble the Supreme Court has held 'If the substantive provision of a statute provides for refund, the State ordinarily by a subordinate legislation could not have laid down that the tax paid even by mistake would not be refunded. If a tax has been paid in excess of the tax specified, save and except the cases involving the principle of 'unjust enrichment', excess tax realized must be refunded. The State, furthermore is bound to act reasonably having regard to the equality clause contained in Article 14 of the Constitution of India.'
Thus, from the reading of the aforesaid judgment, it could be concluded that the conditions laid down under Clause (4) of the 2016 Scheme seek to create unjust enrichment in favour of the Revenue and unjustifiable clause having no nexus. It seeks to create a distinction and also benefits those contractors who had not been honestly paying their taxes which is disadvantageous to those contractors who had been regularly paying @ 4% tax in terms of Rule 49 of the VAT Rules.
The orders rejecting the claim of refund dated 20.01.2017 and supplementary order dated 27.01.2017 impugned in all the four writ petitions denying the refund of the excess tax amount paid earlier by them is quashed and set aside and it is held that the petitioners are entitled for the refund of the said amount. They would also be entitled to receive interest as per rules on the said refund. The exercise of payment of refund shall be done within a period of four weeks henceforth, failing which further interest @ 9% shall be payable on the refund amount in addition to the interest required to be paid to them.
Petition allowed.
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2024 (5) TMI 1269 - DELHI HIGH COURT
Calculation of interest - relevant dates for calculation of interest - petition is not a dealer but a transporter, and was not engaged in trading of goods - HELD THAT:- Section 42 of the DVAT Act provides that the interest shall be computed from the date when refund was due to be paid to the person until the date of refund. Admittedly, the refund became payable consequent to the orders passed by the DVAT Appellate Tribunal. The interest therefore shall be computed from the date(s) of the orders passed by the DVAT Appellate Tribunal.
Admittedly, statutory rate of interest is 6% by virtue of notification dated 30.11.2005. The Tribunal vide order dated 26.08.2021 had set aside the notice of penalty amounting to Rs. 4,91,096/- under Section 86(19) and, therefore, interest on such amount shall be computed and payable from 26.08.2021 at the rate of 6% p.a. till the date of refund. Vide subsequent order dated 10.05.2023, the Tribunal had set aside the payment of tax of Rs. 4,91,096/- and penalty of Rs. 50,000/- imposed under Section 86(14). Therefore, interest on such amount shall be payable from 10.05.2023 at the rate of 6% till the date of refund.
The GSTO has rightly computed the interest vide its order dated 31.07.2023, and therefore, the writ petition is devoid of any merits - Petition dismissed.
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2024 (5) TMI 1268 - ALLAHABAD HIGH COURT
Levy of VAT - franchise of a trademark - transfer of the right to use goods or not - deemed sale or not - HELD THAT:- The Kerala High Court in the case of MALABAR GOLD PRIVATE LIMITED VERSUS COMMERCIAL TAX OFFICER, KOZHIKODE & OTHS [2013 (7) TMI 101 - KERALA HIGH COURT] wherein the trade mark of the petitioner was transferred to the franchisees for their use and the consideration received was the royalty paid to the petitioner, held that, such a transaction cannot be treated as a "deemed sale".
The taxation of franchise agreements and sales of goods represents a complex and multifaceted issue that defies easy categorization. While both involve commercial transactions, they embody distinct economic realities and legal considerations that necessitate differential tax treatment. By recognizing the unique characteristics of franchise agreements, including the prevalence of intangible assets and the importance of intellectual property, tax authorities can develop nuanced tax policies that promote fairness, efficiency, and compliance. Ultimately, a balanced approach that takes into account the economic substance of franchise transactions and the need to prevent tax arbitrage and avoidance will ensure the integrity and effectiveness of the tax system.
The franchise agreement in present case grants a non-exclusive license rather than a transfer of the right to use goods. As such, the transaction does not attract Value Added Tax under the UPVAT Act.
It is clear from the factual matrix of the instant case that the respondent herein had received royalty amount from various dealers under the franchise agreement and service tax has been duly paid by it on the same. If these payments have been subjected to service tax, they cannot be recharacterized as the sale of goods to levy VAT or sales tax. The prevention of double taxation is a fundamental principle of tax law. Double taxation occurs when the same income or transaction is taxed more than once by different tax authorities or under different tax regimes. An activity once taxed as a service cannot be taxed again as a sale of goods.
There are no reason to interfere with the view taken by the Commercial Tax Tribunal - the revision application is dismissed.
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2024 (5) TMI 1267 - ALLAHABAD HIGH COURT
Rejection of appeal filed by applicant - no reasons given for enhancing the turnover - non-consideration of material evidence on record - onus of proof lay on the assessing authority - non-obtaining of any form 31 from the Trade Tax Department - rejection of application for recall which was duly supported by an affidavit and the medical certificate without any cogent reason - proceedings on extraneous consideration.
Rejection of appeal filed by the applicant - allowing the cross appeal filed by the Opp. Party, without giving any reasons - HELD THAT:- A bare perusal of the impugned order indicates that sufficient reasons have been given in the order for restoration of the assessment made by the Assessing Authority and setting aside the order of the First Appellate Authority, as the order of the First Appellate Authority was based on the sole reason that merely a sum of Rs. 1,510/- was found in the cash box of the petitioner, ignoring the documentary evidence found at the time of survey which clearly establish sale of huge amount of goods on credit. Therefore, it cannot be said that the Tribunal has set aside the order of the First Appellate Authority and restored the order passed by the Assessing Authority without giving any reasons.
Non--consideration of material evidence on record - onus of proof - HELD THAT:- The Tribunal has taken into consideration the entire material available on record, including the slips found at the time of survey which established large scale sale made on credit by evading payment of tax, and it cannot be said that the Tribunal had passed the order without considering the material evidence available on record. It is also relevant to note in this regard that no documentary evidence in this regard had been adduced by the revisionist.
Failure to obtain any form 31 from the Trade Tax Department and is dealing in tax paid goods and the entire purchases were made within the State of U.P. which are verifiable from the purchase vouchers - HELD THAT:- The findings of the survey and the material placed by the petitioner could not establish that the revisionist is dealing in tax paid goods only. The revisionist could not produce any documentary evidence regarding purchase of huge quantity of goods and Iron bars. In these circumstances, the claim of the revisionist that it had not obtained any Form 31, is without any basis.
Enhancement of turnover determined by the First appellate authority without controverting the findings recorded by the First appellate authority - HELD THAT:- The Tribunal has set aside the order passed by the First Appellate Authority, which had been passed without taking into consideration the entire facts and circumstances of the case and which was based on perverse findings and it has restored the well reasoned order of the Assessing Authority and the Tribunal’s order cannot be termed as perverse.
Enhancement of turnover determined by the First appellate authority merely on the basis that the cash found at the time of survey - HELD THAT:- The First Appellate Authority had erred in reducing the amount of tax assessed by the Assessing Authority, which assessment was made after considering the entire record found during survey, including the slips establishing large scale sale of taxable goods on credit by evading payment of tax. In these circumstances, the Tribunal was justified in restoring the order passed by the Assessing Authority after taking into consideration the entire relevant material found during survey, which was not rebutted by the petitioner by submitting any reply to the show cause notice that was issued to him before making the assessment.
Ignoring the findings recorded by the First appellate authority wherein each and every parcha seized during the course of survey was duly considered and determined the turnover on the said basis - HELD THAT:- It is apparent that the First Appellate Authority had not taken into consideration the sale made by the petitioner on credit by evading tax and had assessed the amount of tax merely on the basis of cash amount found in the cash box. Therefore, the Tribunal was fully justified in setting aside the order passed by the First Appellate Authority and restoring the appeal passed by the Assessing Authority.
Rejection of application for recall which was duly supported by an affidavit and the medical certificate without any cogent reason - HELD THAT:- The appellant had sufficient knowledge of filing of the appeal as the same was filed by itself. The learned counsel for the appellant had attended the proceedings of appeal on some earlier dates but on the date of its decision, his counsel neither appeared before the Tribunal, nor did he seek an adjournment. In these circumstances, the provisions contained in the proviso appended to Rule 68(4) are attracted and the Tribunal was justified in proceedings to decide the second appeal ex-parte.
Proceedings on extraneous consideration - HELD THAT:- The Tribunal has proceeded on extraneous considerations and has committed factual and legal errors, the learned counsel for the revisionist could not point out any material to establish the allegation that the Tribunal has proceeded on any extraneous consideration -In COMMISSINER OF SALES TAX, U.P. VERSUS M/S. KUMAON TRACTORS & MOTORS [2001 (7) TMI 1283 - SUPREME COURT], the Hon’ble Supreme Court has held that Section 11 of the Trade Tax Act confers a limited jurisdiction on the High Court to interfere in the order of the Tribunal only on the question of law and while doing so, this Court cannot re-appreciate the evidence.
There appears to be no illegality in the impugned order - Revision lacks merit and the same is hereby dismissed.
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2024 (5) TMI 1173 - GAUHATI HIGH COURT
Time Limitation - submission of annual returns after the expiry of the prescribed time-limit - Validity of self-assessment u/s 35 of the Assam VAT Act, 2003 - Legality of re-assessment proceedings u/s 40 of the Assam VAT Act, 2003.
Timeliness of Submission of Tax Returns and Annual Returns - HELD THAT:- The monthly returns for the annual year 2009-2010 was not submitted within the 21st day of the succeeding month, in other words, it was not submitted within the time prescribed under 17 (1) of the said Rules, 2005, which is within next 21 days of the succeeding months. It is evident that the return for the month of April 2009 was submitted on 12.06.2009 which is after the expiry of the prescribed time. Similarly, in respect of other months for the year 2009-2010, the monthly returns were submitted after the expiry of the prescribed time - The revised returns were filed on 13.04.2011 i.e. after expiry of two months prescribed in Rule 17 (5) (a) of the said Rules, 2005 and as such the said revised returns were also not submitted within the prescribed time and therefore, no self-assessment can be deemed to have been completed under Section 35 of the said Act. Pertinent to mention that in the affidavit-in-opposition filed by the assessing authorities, there is no denial to the aforesaid statements made in paragraphs 4 and 5 of the writ petition. It is well settled that averments if not denied would amount to an admission of the facts.
The assessing authorities did not deny these facts, which are thus deemed admitted.
Validity of self-assessment u/s 35 of the Assam VAT Act, 2003 - Legality of re-assessment proceedings u/s 40 of the Assam VAT Act, 2003 - HELD THAT:- The assessment was initiated under Section 40 of the Act without completion of assessment under Sections 34, 35, 36 or 37 of the Act, 2003. Section 40 of the Act, 2003 dealing with turnover escaping assessment provides that for invoking the powers under Section 40 of the Act, a dealer must have been assessed under Section 34, 35, 36 or 37 of the Act, 2003 for any year or part thereof - Since in the facts of the instant case, no self assessment can be deemed under Section 35 of the Act, 2003 re-assessment under Section 40 of the said Act, 2003 could not have been made under the provisions of the said Act.
In order to re-assess under Section 40 of the Act, 2003, there has to be firstly an assessment in law. It is only after an assessment is made, the assessing authorities has jurisdiction to exercise powers of reassessment subject off course to the fulfillment of the other two conditions stipulated therein. The ‘existence of assessment’ is a condition precedent for making a reassessment under Section 40 of the Act, 2003 and if such condition precedent exist, the assessing authorities had no jurisdiction to make the reassessment. As such, without assessment under section 34, 35, 36 or 37 of the Act, 2003, the respondent authorities could not have resorted to the provisions of the reassessment stipulated under Section 40 of the said Act.
In the present case, there was no assessment under section 35 of the Act, 2003, made during the prescribed period. Therefore, no assessment can be deemed to have been made in law - the said order of re-assessment having been completed without any assessment made under section 35 of the Act, 2003, the order of reassessment dated 17.03.2018 is absolutely illegal and without jurisdiction - the very initiation of proceedings under section 40 of the Act, 2003 is absolutely illegal, without jurisdiction and not tenable in law.
The impugned Order of re-assessment dated 17.03.2018 and the Notice of Demand dated 17.03.2018 are set aside and quashed - Petition allowed.
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2024 (5) TMI 1145 - JAMMU AND KASHMIR AND LADAKH HIGH COURT
Invocation of Section 5 by Petrol Taxation Officer (PTO) - Provisions for Escaped Assessments - Requirement of Monthly vs. Annual Assessments.
Whether on the facts and circumstances of the case, the tribunal is right in law in holding that provisions of section 5 of the act can only be invoked by petrol taxation officer when he is not satisfied with the correctness and completeness of the return filed by Dealer pursuant to rule 15?- HELD THAT:- The provisions of the Act / Rules have to be applied strictly taking into account the intention of the legislature. Section 5 “power to determine certain questions” clearly states that any question as to whether a tax or penalty is recoverable under this Act, the person from whom it is due and the amount recoverable shall be determined by the PTO for the area where the sale takes place.
Rule 15 of the Act of 2005, states that every dealer shall deposit the amount of tax due and to furnish monthly returns of sales in the prescribed forms within the specified period. Rule 15(d) states that on receipt of the return, the PTO may examine the account books and other records of the dealer and such other enquiries, as he may consider necessary for the purpose of satisfaction that the return is correct and complete and the amount of tax and any other sum payable under the act has been paid, if the officer is satisfied in respect of the correctness and return and the dealer having paid the amount of tax on any other sum payable under the Act, he shall issue a certificate in form P-7. The conjoint reading of Section 5 and Rule 15 of the Act of 2005 clearly specifies that section 5 will be made applicable only if the return filed by an assessee before the PTO is held not to be complete and correct.
PTO can exercise his powers under section 5, read with rule 15-D. Section 5 will not be invoked in cases where complete and correct return is filed and P-7 is issued pursuant to Rule 15. This question has been answered in affirmation.
Whether the act and the rules do not contain any specific provision for taking action by the Petrol Taxation Officer in the cases of escaped assessments? - HELD THAT:- Admittedly, there is no specific provision for taking action by PTO in cases of Escaped assessments, whereas under section 7 (11) of the GST, there is a clear provision for reassessment, if the assessing authority has reasons to believe that by reasons of omission or failure on the part of a dealer to make a return under sub section (1) or sub section (3) for any year, to the Assessing Authority or to disclose fully and truly all material facts necessary for his assessment - There is no provision of escaped assessment in the Act of 2005. In the instant case PTO, upon perusal of the assessment record has invoked the power vested in him under section 5 of the Act of 2005 after the report was made by the internal audit party that too after a gap of three years. After receiving the return from the dealer, the PTO had already assessed the completeness and correctness of the return and had issued a certificate. PTO had not taken any action in terms of section 7 (11) of the GST - In absence of any specific provision with respect to escaped assessments, the tribunal was right in law in holding that the act and rules do not contain any specific provision for taking action by the PTO in cases of escaped assessments. this question has also been answered in affirmation.
Whether on facts and circumstances of the case tribunal is right in law holding that the act and the rules provide only for filing of monthly returns and therefore assessment are only required to be made month wise and any annual assessment made shall not be deemed to be an assessment under the act/rules? - HELD THAT:- Once the final assessments were made by the competent authority on monthly assessments as per the Act and Rules applicable, it was not open to the PTO to reassess after three years of filing the return. This question is also answered in affirmative.
The Reference made by the Tribunal is answered in affirmation and disposed of accordingly.
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2024 (5) TMI 1144 - JAMMU AND KASHMIR AND LADAKH HIGH COURT
Determination of penalty under section 69(1)(k) of the J&K Value Added Tax Act, 2005 - issuance of 35 improper invoices on the same day constitutes a single default or not - justification of levy of penalty of 10 times of the tax payable on the invoices or Rs. 10,000/-, whichever is higher - HELD THAT:- Tax invoice means a particular sale transaction made by the VAT dealer or a casual trader to a consumer. It is a tax invoice which generates default and if that default is proved then it invites penalty, against a defaulting person, equal to ten times of the tax payable on such default or Rs. 10,000/- whichever is higher. A questionable tax invoice, be it sham, false, forged or fake, has no relation with the day on which it is or was generated. If on any given day, a VAT dealer or a casual trader has generated any number of objectionable tax invoices each representing a respective sale transaction, then each invoice will constitute default as envisaged by clause (k) of sub-section 1 of section 69.
When section 69 itself does not hint to any angle of time duration, SSTAT was in error in pressing the time duration into play and reckon that the default envisaged under clause (k) of sub-section 1 of section 69 was referable to the time duration and not to the tax invoice - The penalty envisaged under section 69 (1) (xi), relatable to the default identified in clause (k) of sub-section 1 of section 69 was meant to be a deterrent so that any VAT dealer or a casual trader would not venture and resort to acts of omission or commission which would have the effect of under assessment or evasion of the tax liability resting upon the said VAT dealer or a casual trader.
Clause (xi) of sub-section 1 of section 69 itself decodes that a particular tax invoice may have a tax liability which multiplied by ten times may still fall short of a deterrent effect to a VAT duty evading trader and, therefore, even a penalty of ten times the tax payable may be on a lesser side and, therefore, the other option of penalizing a given defaulting VAT trader on a higher side has been provided for. Therefore, there was no reason to read that the default as envisaged under clause (k) of sub-section 1 of section 69 relatable to time duration of a given day and not to the tax invoice in itself.
Thus, each tax invoice, if afflicted with the default as envisaged under clause (k) of sub-section 1 of section 69, is to bear the penalty in reference to it and not in reference to the accumulation of tax invoices and that it has nothing to do with the collection of tax invoices for a particular day. Each default vis-à-vis each particular tax invoice is to earn the liability as envisaged under section 69 of sub-section 1 of clause (xi) of the VAT Act, 2005.
The reference is returned.
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2024 (5) TMI 1143 - JAMMU AND KASHMIR AND LADAKH HIGH COURT
Classification of Diagnostic Kits - to be considered as “drugs” which are covered by Entry 48 of Schedule C to SRO 167 or under Entry 87 of Schedule D or Entry 165 of Schedule D - whether these Kits are used for diagnosis, and hence have to be treated as “drugs” within the meaning of Section 3 (b) (i) of the Drugs and Cosmetics Act, 1940? - HELD THAT:- In the definition of “drug” under Section 3 (b) of the Act, as quoted above, it is clearly mentioned under Section 3 (b) (iv) that “drug” includes such devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human being or animals. While sub-section (i) of Section 3 (b) brings within the ambit of “drug”, “medicines” used for diagnosis, sub-section (iv) of Section 3 (b) brings “devices” used for diagnosis within the ambit of “drug”. However, every such “device” cannot be deemed to be a “drug” within the meaning of Section 3 (b) (iv) unless such device is specified as drug by the Central Government by notification in the Official Gazette. Thus, if such “device” used for diagnostic purpose is not specified by the Central Government in the Official Gazette, such device cannot be treated to be a “drug” within the meaning of Section 3 (b) (iv) of the Act.
Can a “Diagnostic Kit” be treated as “medicine” to fall within the definition of “drug” under sub-section (i) of Section 3 (b) as contended by the petitioners or can it considered to be a “device” to bring within the meaning of “drug” under sub-section (iv) of Section 3 (b) of the Act? - HELD THAT:- In the present context, “Diagnostic Kits” bears more resemblance with “devices” rather than “medicines”. Thus, seen from this perspective, “Diagnostic Kits” cannot be considered to be “medicine” and can be considered to be “device”. In such an event, the “Diagnostic Kit” will not come under the definition clause of sub-section (i) of Section 3 (b) but would come under sub-section (iv) of Section 3 (b) of the Drugs and Cosmetics Act, 1940 - “Diagnostic kit” which is a composite device, is a medicinal device, but it cannot be considered or understood to be a “medicine”. Consequently, if “Diagnostic kit” which is undoubtedly a medicinal device is to qualify to be a “drug” within the meaning of sub-section (iv) of Section (3)(b) of the Act, the same will be required to be notified as such by the Central Government in the Official Gazette.
The Diagnostic Kits in issue in the present case cannot be considered to be “drugs” within the meaning of Section 3 (b) (iv) of the Drugs and Cosmetics Act till these are so specified by the Central Government by notification.
What is notable is that the petitioners have not brought to the notice of this Court any material to show that Diagnostic Kits are considered to be “medicines” or “drug” by the medical practitioners, pathologists, patients and in medical literature - That these Diagnostic Kits are manufactured under the Drug License issued by the Drug Controller, does not necessarily make the Diagnostic Kits to be drugs within the ambit of VAT Act, unless these are notified by the Central Government to that effect under Section 3 (b) (iv) of the Act.
If these Diagnostic Kits are notified as “drugs” within the meaning of Section 3 (b) (iv) of the Drugs and Cosmetics Act, 1940 by the Central Government by issuing notifications in the Official Gazette in consultation with the Drugs Technical Advisory Board, these Diagnostic Kits would be liable to be charged only @ 4% as these would then be covered within Entry 48 of Schedule C of SRO 167 of 16th June, 2005.
If the devices namely, (i) Hepatitis HBS Ag Device Card, (ii) HIV Device Card, (iii) Pregnancy Device Card and (iv) VDLR Device Card have been notified by the Central Government in the Official Gazette after consultation with the Drugs Technical Advisory Board as “drugs” within the meaning of Section 3 (b) (iv) of the Drugs and Cosmetics Act, 1940. If it is found to be so, the above mentioned four Diagnostic Kits have to be treated as “drugs” falling within Entry 48 of Schedule C of SRO 167 dated 16th June, 2005 and charged VAT accordingly @ 4% with prospective effect from the date such notification is issued. Otherwise, being not “drugs”, the aforesaid “Diagnostic Kits” would fall under the residuary Entry 165 of Schedule D of SRO 167 of 16th June 2005 and attract VAT at the rate of 12.5%.
Petition disposed off.
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2024 (5) TMI 1124 - ANDHRA PRADESH HIGH COURT
Violation of the principles of natural justice - Delay and laches in filing the writ petition - opportunity of hearing not provided - cancellation of petitioner’s registration of GST - Digital signature on the impugned order - Retrospective effect of the impugned order.
Time limitation - HELD THAT:- The Hon’ble Apex Court in M/s. Godrej Sara Lee ltd. v. The Excise and taxation Officer – cum – Assessing Authority [2023 (2) TMI 64 - SUPREME COURT], held that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee’s case. All claims for refund ought to be, and ought to have been, only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum. The decisions of the Court saying to the contrary were overruled therein. In the aforesaid case it has not been held that the period of limitation for filing writ petition is three years - The Hon’ble Apex Court clearly held that Writ Court while deciding writ petition is required to remain alive to the nature of the claim and the unexplained delay on the part of the writ petitioner.
Violation of principles of natural justice - HELD THAT:- The show cause notice dated 01.04.2023 was issued to the petitioner and the petitioner did not submit any reply. In the order of cancellation in the first sentence it shows that “this has reference to your reply dated 18.04.2023 in response to the notice to show cause dated 01.04.2023”, and in the second sentence, “it clearly states that no reply to notice was filed by the petitioner”. The case of the petitioner is that he did not file any reply. Consequently, there is no violation of principles of natural justice since the petitioner was served with the show cause notice and he did not file any reply.
Opportunity of hearing - HELD THAT:- So far as the opportunity before passing the order of suspension is concerned, the suspension was passed during the pendency of the proceedings for cancellation, the opportunity of hearing is not required. Any legal provision could also not be placed that opportunity was required before suspension.
The petition is dismissed.
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2024 (5) TMI 1046 - PUNJAB AND HARYANA HIGH COURT
Grant of sales tax exemption to the petitioner without imposing any condition in consonance with the Industrial Policy named “Special Package of Incentives to Information Technology Industry, 2000” - HELD THAT:- A bare perusal of the record shows that after issuance of “Special Package of Incentives for Information Technology Industry Policy dated 15.03.2000”, the petitioner immediately took effective steps to get itself registered and was granted exemption Certificate on 26.09.2001 for a period of ten years i.e from 07.09.2000 to 06.09.2010.
In Suprabhat Steel Ltd’s case [1998 (11) TMI 530 - SUPREME COURT], it has been observed that issuance of such notifications entitles the industrial units to avail of the incentives and benefits declared by the State Government in its own industrial incentive policy. But in exercise of such power, it would not be permissible for the State Government to deny any benefit which is otherwise available to an industrial unit under the Incentive Policy itself. The Industrial Incentive policy is issued by the State Government after such Policy is approved by the Cabinet itself. Such notification is issued to carry out the objectives and the policy decisions taken in the Industrial Policy itself. If any notification issued by the government order in exercise of powers conferred in the Act, is found to be repugnant to the Industrial Policy declared in a government resolution, then the said notification must be held to be bad to that extent.
As held by Hon’ble Supreme Court in Suprabhat Steel Ltd’s case, the State Government cannot deny any benefit which is otherwise available to an Industrial Unit under the Incentive Policy itself and in the present case, the benefit of exemption was available to the petitioner under the “Special Package of Incentive for Information Technology Industry Policy”.
The condition imposed in Sub Para V of Rule 2 of Amendment Rules dated 16.09.2004 with respect to the date i.e 30.04.2000 by which effective steps are to be taken is struck down. Order dated 28.06.2002 withdrawing the exemption from payment of sales tax is quashed. Exemption Certificate granted to the petitioner on 26.09.2001 is ordered to be revived.
The petition stands allowed.
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2024 (5) TMI 1045 - PUNJAB AND HARYANA HIGH COURT
Refund claim - correctness in rejecting the claim of the appellant in view of Section 15A even though it does not bar the refund in case of generation of bye products while manufacturing taxable goods - appellant had paid voluntary tax for the Assessment Years 1998-99 and 1999-2000 - HELD THAT:- The present facts of the case reveal that the impugned order was passed on 30.11.2012 by the Haryana Tax Tribunal against the order passed in revision by the Revisional Authority dated 14.12.2006. The Act of 1973, which empowered authority to suo moto revise, stood repealed w.e.f. 01.04.2003 after coming into force of the Act of 2003. Thus, on the date when the Revisional Authority exercised its power, the Act stood already repealed and the powers under Section 40 of the Act of 1973 Act was no more available with it.
Therefore, the order of the Revisional Authority and the consequential orders of the Haryana Tax Tribunal, therefore, have become non-est, and accordingly this VAT Appeal stands allowed and the question framed at the time of admission need not required to be answered. The order passed by the Haryana Tax Tribunal stands quashed.
Appeal allowed.
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2024 (5) TMI 1044 - BOMBAY HIGH COURT
Priority of secured creditors u/s 26-E of the SARFAESI Act, 2002 over State Tax Authorities' claims - provisions of Chapter IV-A, and more particularly Section 26-E of the SARFAESI Act, 2002 which was brought into force on 24th January, 2020 - HELD THAT:- Once a security interest of the secured creditor is registered with CERSAI, and its registration is prior to any other registration, then, that secured creditor would get priority towards the sale proceeds of that particular asset over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government, State Government or local authority.
In the facts of the present case, the Petitioner bank’s borrowers had availed of financial assistance. To secure the same, on 15th July, 2015, the borrowers created a mortgage on the secured asset by deposit of title deeds. The intimation of mortgage was also given to the Joint Sub-Registrar, Haveli-22, Pune on the very same date. Thereafter, on 25th July 2015, the Petitioner bank duly registered its charge on the secured asset with CERSAI. In contrast, the State Tax Authorities have issued an attachment order only on 11th February, 2021 and have not even registered the same as contemplated under Section 26-B (5) of the SARFAESI Act, 2002.
The Full Bench of this Court in the case of Jalgaon Janta Sahakari Bank Ltd v/s Joint Commissioner of Sales Tax Nodal [2022 (9) TMI 163 - BOMBAY HIGH COURT] and a Division Bench judgment of this Court in the case of Indian Overseas Bank (supra). In fact, in Indian Overseas Bank [2024 (3) TMI 1134 - BOMBAY HIGH COURT], this Court has clearly held that once the security interest is enforced, the State Tax Authorities would have to look to the sale proceeds to satisfy their claim subject to the priority of the secured creditor but cannot chase the very same asset [which is sold by the Petitioner bank under the SARFAESI Act, 2002] in the hands of the purchaser.
The petition is allowed.
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2024 (5) TMI 987 - ANDHRA PRADESH HIGH COURT
Penalty u/s 7-A(2) of AP GST Act, 1957 - penalty levied on the ground of mere possession of the bills alleged to be false though the Petitioner did not produce the same before the assessing authority in support of claim or exemption as second sale - burden to prove - case of petitioner is that the petitioner did not claim exemption and that he did not produce the invoices etc., so as to attract Section 7-A(2) - HELD THAT:- It is evident from a bare reading of Section 22(1), that the revision lies to this Court against the order of the Appellate Tribunal on the ground either that a question of law has not been decided or a question of law has been erroneously decided - In THE SALES TAX APPELLATE TRIBUNAL VERSUS ANDHRA CEMENTS LIMITED [2023 (2) TMI 1302 - ANDHRA PRADESH HIGH COURT], it was held that as per Section 22(1) of the AP GST Act, the Tax Revision Case lies to the High Court only on the question of law.
Recently in the THE STATE OF A.P., REP. BY THE STATE REPRESENTATIVE VERSUS M/S. JAI SREE ENTERPRISES, VIJAYAWADA [2024 (5) TMI 720 - ANDHRA PRADESH HIGH COURT], this Court has held that the revision does not lie on a question of fact. It lies only if the question of law has either not been decided or has been erroneously decided. So there is no dispute on the proposition that under Section 22 of the AP GST Act, revision would not lie on a question of fact.
In Eswara Oil Company [1983 (3) TMI 241 - ANDHRA PRADESH HIGH COURT], the STAT Tribunal therein found that the petitioner therein had not actually produced the bill said to have been falsely obtained nor did he file any declaration in Form – E. In view thereof it was held that the penalty under Section 7-A(2) could not be imposed. The said case is of no help to petitioner as in the present case the petitioner produced false bills and claimed exemption on part of the turnover as second sale - In South India Agencies [1988 (6) TMI 301 - ANDHRA PRADESH HIGH COURT], it was held that action, under Section 7-A(2) of the Act, 1957 has to be taken by the Assessing Authority “on detecting such issue or production”. The sub-section itself specifies the starting point for the action there under. It was observed that there could be no question of taking proceedings for levying penalty for issuing or producing a false bill, voucher, etc., unless it is first found that such thing had happened. It was also observed that the Analogy of Section 14 has no application at all. Levy of penalties under Section 14 of the Act and levy of penalty under Section 7-A of the Act are distinct proceedings based on distinct grounds.
The revision has no force. The STAT has neither failed to decide a question of law nor has decided the question of law before it erroneously. No case for interference is made out.
The Tax Revision Case is dismissed.
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2024 (5) TMI 986 - ANDHRA PRADESH HIGH COURT
Admission of appeal for requirement of compliance of deposit of 12.5% under proviso to Section 31 of the AP VAT Act - Rejection of endorsement dated 26.04.2023 - rejection on the ground that the Form- H could not be considered since those forms were filed after completion of the CST assessment for the year 2011-12 - HELD THAT:- A bare perusal of Section 31(1) IIIrd proviso, shows that the appeal preferred under Sub-Section (1) shall not be admitted by the Appellate Authority unless the dealer produces proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such installments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which appeal is preferred. So the IIIrd proviso, specifically refers to the amount of 12.5% of the tax, interest and penalty or any other amount admitted. The endorsement impugned before the Appellate Authority the petitioner has not to pay any tax, penalty or interest or any other amount. Consequently, there would no question of deposit of 12.5% of the tax pursuant to the IIIrd proviso.
In M/s. Sri Hari Maharalayam Company [2019 (9) TMI 1550 - ANDHRA PRADESH HIGH COURT] direction was given to the appellate authority to entertain the appeal without insisting upon payment of 12.5%.
The impugned order is set aside with direction to the respondent No. 2 to consider the admission of the appeal without insisting for the compliance with the III proviso of Section 31 of the AP VAT Act - this writ petition is allowed.
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2024 (5) TMI 985 - MADRAS HIGH COURT
Validity of assessment orders - assessment order challenged on the ground of existence of alternative remedy - extent of labour involved in execution of works contract - levy of purchase tax on the basis of purchases made from unregistered dealers - Processing loss - HELD THAT:- It would be evident from the records that the question as to the extent of labour involved in execution of works contract is a question of fact which ought to be demonstrated / proved on the basis of documentary evidence.
Secondly, levy of purchase tax on the basis of purchases made from unregistered dealers also gives rise to disputed question of facts. Processing loss is again an aspect, which would require examination of facts of each case. The claim of deduction of TDS requires filing of statutory form, again an exercise which is alien to writ jurisdiction. Thus, there are no reason to interfere with the order relegating the appellant to avail statutory remedy of appeal. The appellate authority is the appropriate authority / forum to examine the above disputed questions of fact. It is trite law that the power under Article 226 of the Constitution of India is neither an appellate or a revisional jurisdiction nor can writ jurisdiction be converted into a Court of appeal.
Yet another reason as to why it is found that the order of the learned judge rejecting the writ petitions and granting liberty to file appeal, does not warrant interference is that despite revised notices having been issued by the assessing authority, the appellants have not filed their objections.
There are no reason to interfere with the order of the learned Judge. The appellant is granted liberty to avail statutory remedy within a period of 4 weeks from the date of receipt of a copy of this judgment subject to complying with all conditions relating to appeal including pre-deposit, if any.
Appeal disposed off.
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