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VAT / Sales Tax - Case Laws
Showing 361 to 380 of 27749 Records
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2024 (6) TMI 999
Classification - rate of tax - powers sprayer - falls under Schedule-I of the Rajasthan Value Added Tax Act, 2003 and taxable @ of 4% under Schedule-IV of Rajasthan Value Added Tax Act, 2003 or not? - item “sprayers including their parts and accessories” under S. No. 29 of the ordinary agricultural implements of Schedule-I of the Rajasthan Value Added Tax Act, 2003 would also include the “powers sprayers and its parts and accessories” or not.
Whether in the facts and circumstances of the case, the learned tax board has erred in law in holding that the item “powers sprayer” does not falls under Schedule-I of the Rajasthan Value Added Tax Act, 2003 and is, therefore, taxable @ of 4% under Schedule-IV of the above Act? - HELD THAT:- A bare perusal of the Schedule-I of the Act of 2003 makes it amply clear that there is no specific word like “power sprayers” in Schedule-I. S. No. 1 of Schedule-IV specifically states that the same is taxable. Apparently, the goods power sprayer do not fall under Schedule-I of the Act of 2003 and, therefore, is taxable under Schedule-IV of the above Act.
Whether in the facts and circumstances of the case, the learned tax board has erred in law in not appreciating the fact that item “sprayers including their parts and accessories” under S. No. 29 of the ordinary agricultural implements of Schedule-I of the Rajasthan Value Added Tax Act, 2003 would also include the “powers sprayers and its parts and accessories”? - HELD THAT:- Schedule-V provides for the goods taxable which are not covered in any other schedule under the Act or under any notification issued under Section 4 of the Act. Apparently, the goods in question i.e. “power sprayers” is not specifically included in any Schedule and, therefore, the goods “power sprayers” is taxable as per Schedule-IV and the parts and accessories thereof are taxable under Schedule-V.
The learned Tax Board has not committed any illegality while passing the impugned orders and, therefore, the present revision petitions are dismissed accordingly.
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2024 (6) TMI 998
Violation of principles of natural justice - whether the Commercial Taxes Officer erred in affording reasonable opportunity of being heard to the petitioner-assessee and as such the initial order is vitiated in law and its affirmation by the Tax Board is also against the mandate of law? - HELD THAT:- In the case on hand, it was not verified from the businessmen named in the “Sauda Noon Register” as to whether actually any transaction of sale has taken place nor any other satisfactory report/ evidence was there to substantiate case of tax evasion. Evidently the order of Assessing Officer suffers from arbitrariness and non-compliance of mandates of law in the matter of just opportunity of hearing.
In KALRA GLUE FACTORY VERSUS SALES TAX TRIBUNAL AND OTHERS [1987 (3) TMI 110 - SUPREME COURT], Hon’ble Apex Court upset the conclusion of Assessing Authority which was based on statement of a witness, who was not cross-examined.
Coming to the facts of this case, it is evident that the Assessing Authority did not enquire about correctness of averments made in reply to the notice by the petitioner. In other words it was not verified that the entries in the Saudanoon Register were genuinely a sale transaction. A due enquiry might have given a different result and in absence of enquiry, correctness of the conclusion is not sustainable - The learned Tax Board has not considered this legal infirmity committed by the Assessing Authority while upsetting the reasoned order of the appellate court, therefore, the impugned order of Tax Board is fit to be set aside on this ground alone.
Whether the judgment and order of Tax Board is sustainable in law for non-consideration of the reasons of the Appellate Authority, whose order was under challenge before the Tax Board? - HELD THAT:- The Tax Board for the first time interpreted the abbreviation “WB” as without bills. This aspect was not touched by any of the Lower Authority including the Commercial Taxes Officer. The petitioner had interpreted the said abbreviation as delivery without bardan. The Tax Board has assumed without any precedent or supporting document or other reliable evidence that the abbreviation “WB” would be interpreted as without bill only and no other interpretation is acceptable - The initial order imposing tax, penalty etc., dated 23.03.1999 reveals that the Commercial Taxes Officer had asked the petitioner to deposit Rs. 5 Lacs for compounding. Later on the compounding failed. The Tax Board assumed that since the petitioner had deposited Rs. 5 Lacs, the petitioner admitted evasion of tax.
It is evident that the impugned order and judgment of the Tax Board is bad in law, hence the same is set aside and the order of the Appellate Authority is affirmed - Revision allowed.
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2024 (6) TMI 997
Power to grant exemption in respect of categories other than “registered dealers” under Section 8 (5) (b) of the CST Act - Scope of the expression “ to such person or class of persons as may be specified in the notification” as used in Section 8 (5) (b) of the CST Act - limited to “registered dealers” or not - HELD THAT:- Sections 8 (5)(a) and 8 (5) (b) empowered the State Government to grant total or partial exemption not only in respect of sales of any goods or class of goods to a registered dealer/government, but also empowered to grant total or partial exemption in respect of inter State sales to unregistered dealers of any person or class of persons specified in the notification. - Section 8 (5) (b) remains untouched even after the amendment of 2007, therefore, empowers the State Government to grant exemption in respect of categories other than registered dealers.
This view duly supported by judgment in Prism Cement Limited vs. State of Maharashtra, [2013 (7) TMI 668 - BOMBAY HIGH COURT], wherein it was held as under: "the argument of the Revenue that reference to the words 'sub-section (2)' and the words 'any person or class of persons' in Section 8 (5) as amended by Finance Act 2002 are redundant or surplus cannot be sustained. In this view of the matter, we do not consider it necessary to deal with the decisions relied upon by the counsel for the Revenue in support of their contention that the redundant or surplus words in a statute must be ignored."
To the similar effect is the judgment rendered in Diebold Systems (P) Limited vs. Additional Commercial Tax Officer (Iac), Puducherry, [2010 (2) TMI 1103 - MADRAS HIGH COURT], wherein question No. 3 was framed whether under Section 8 (5) (b) of Central Sales Tax Act, 1956 Act, Government still had power to issue notification without requirement of form C in respect of sales "to any persons or class of persons, who were non-dealers”
Unjust Enrichment - HELD THAT:- The respondent(s/assessee(s) cannot automatically be held entitled to refund of the said amount unless the assessee(s) establishes that it has not passed on the tax liability to the consumers as any person carrying on the activity of manufacture of goods utilizing some raw material which had already suffered some tax would normally include both the tax component and the cost of such raw material into the cost of the final product and pass on the same to the consumer of the manufactured product.
Hon’ble Supreme Court in DECCAN CEMENTS LTD. VERSUS ASST. DIRECTOR OF MINES AND GEOLOGY [2014 (8) TMI 1247 - SUPREME COURT] held that 'Though it appears from the said judgment, their Lordships relied upon the language of Section 27 of the Customs Act in support of their conclusion. In our opinion, the existence or otherwise of such a provision makes no difference for the correctness of the above stated principle of law Any person carrying on the activity of manufacture of goods utilising some raw material which had already suffered some tax would normally include both the tax component and the cost of such raw material into the cost of the final product and pass on the same to the consumer of the manufactured product.'
There are no reason to interfere with the impugned judgment under revision. Consequently, the revision petitions are dismissed.
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2024 (6) TMI 996
Rejection of petitioner’s stay application during pendency of the petitioner’s appeal before the Andhra Pradesh Value Added Tax Appellate Tribunal at Visakhapatnam - seeking grant of stay for the tax period from April, 2015 to June, 2017, during pendency of the appeal before the Tribunal - HELD THAT:- Once the statutory appeal is pending before the Appellate authority for adjudication, ordinarily the recovery of the balance amount deserves stay unless for special reasons, to be recorded in the order, recovery of the balance amount deserves not to be stayed or the balance amount has to be recovered even during pendency of the appeal, which is a statutory and valuable right. The stay may be the subject to imposing some conditions, which is also contemplated by Section 33 (b) of APVAT Act, 2005.
The impugned order does not record any cogent reasons to reject the stay petition. So far as the production of evidence in support of the petition, is concerned, as mentioned in the impugned order to dispute the revisional order, the appeal being pending, such matter has to be seen by the Appellate authority, on merits while deciding the appeal.
The order of rejection of the stay was passed with the conditions. In that case, in addition to the statutory deposit of 25%, the petitioner therein had deposited in total 50% inclusive of 25% of the statutory deposit under the orders of the Court passed in Writ Petition No. 10 of 2023 and considering that total 50% deposit, the stay was granted during pendency of the appeal before the Appellate Tribunal - the respondent No. 1 is not justified in rejecting the petitioner’s stay application. The impugned order, therefore, is set-aside.
Subject to the petitioner depositing 25% more of the disputed tax i.e., total 50% inclusive of the statutory deposit in filing appeal before the Appellate Tribunal, within a period of six (06) weeks, before the assessing authority/ respondent No. 3, the recovery proceedings for the balance of the amount i.e., in respect of 50%, shall remain stayed during the pendency of appeal before the Appellate Tribunal - Petition allowed in part.
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2024 (6) TMI 957
Penalty u/s 43 of the Value Added Tax Act - some transaction has not been recorded in books of accounts - HELD THAT:- The Tribunal while referring to section 42 (3) of the Uttarakhand Value Added Tax Act held that the Mobile Unit had not entered the business premises of the trader as there was no business activity going on. The Mobile Unit had only enquired regading the tax of trade in the business premises, which is not barred by the provisions contained under section 43 (3) of the Uttarakhand VAT Act.
Another ground taken by the assessee was that there was a family dispute and on account of this, the accounts books were kept at home, however, no evidence was led to show that there was any family dispute.
Subsequently and lastly, the ground taken by the learned counsel for the revisionist that as per the assessment order dated 10.11.2020, there is no contravention of the provisions of VAT Act, and in this backdrop the penalty order should be set aside, and in the alternative, he is praying that the penalty be reduced from 40% to 20% - this was the case of evasion of tax without maintaining the accounts books with regards to the entry of the goods, which was being carried in the truck. Hence, the assessment order cannot be made a ground to escape from the penalty proceedings, which was initiated on account of the non production of the account books with respect to carrying the goods from unregistered dealer.
There is no ground made out to interfere in the impugned order passed by the Tribunal. Since the revisionist has already paid the penalty under protest as receipt Annexure no. 2, no ground is further made out to reduce the penalty from 40% to 20% - Revision dismissed.
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2024 (6) TMI 956
Deemed sale - transfer of right to use within the provisions of Section 2 (40) of the Uttarakhand Value Added Tax Act, 2005 - upholding the assessment made by the Assistant Commissioner, Commercial Tax, when the First Appellate Court had not decided the appeal on merits - deduction on account of salary of driver, cleaner and cost of diesel and lubricants - deductible from the gross amount received from the Uttarakhand Transport Corporation or not.
HELD THAT:- For determining the net turnover, Rule 15 (2) prescribes the amount, which can be deducted from the total amount received by a dealer, and it includes (a) the amount representing the sale value of the goods covered by Sections 3, 4 & 5 of the Central Sales Tax Act, 1956; (b) the amount representing the value of the goods exempted under any of the provisions of the Act and; (c) the amount received as penalty for default in payment or as damages for any loss or damages caused to the goods by the person to whom such transfer was made, and as per the Explanation, the gross turnover meant the total amount received or receivable by a dealer in an assessment year as valueable consideration for the transfer of the right to use the goods whether such transfer was agreed to during that assessment year or earlier.
The Supreme Court in the case of M/S. K.P. MOZIKA VERSUS OIL AND NATURAL GAS CORPORATION LTD. & ORS. [2024 (1) TMI 443 - SUPREME COURT], while examining the case of Assam General Sales tax Act, 1993 and the Assam Value Added Tax Act, 2003, in the case of an assessee, who had agreed to provide different categories of motor vehicles, such as trucks, trailors, tankers, buses, scrapping winch chasis, and cranes, to the Oil and Natural Gas Corporation Limited to deliver its petroleum products, also examined the question whether hiring these motor vehicles / cranes, there was transfer of the right to use any goods and if there was a transfer of the right to use the goods, will it amount to a sale in terms of Clause (29A) (d) of Article 366 of the Constitution of India. After going through the salient features of the contract, the Supreme Court held that it was apparent that there was no intention to transfer the use of any particular tank truck in favour of ONGC. The contract was to provide tank trucks for the transportation of goods.
In the above case, the Supreme Court had also referred to the case of STATE OF ANDHRA PRADESH AND ANOTHER VERSUS RASHTRIYA ISPAT NIGAM LTD. [2002 (3) TMI 705 - SUPREME COURT]. The Supreme Court allowed the appeals of the assessees by holding that the contracts were not covered by the relevant provisions of the Sales Tax Act and of the VAT Act, as the contracts did not provide for the transfer of the right to use the goods made available to the person, who was allowed to use the same. The assesse had only entered into a contract to transfer the goods and there was no transfer of the right to use the vehicle, tankers etc.
The Tribunal was not justified in treating the transactions in question as ‘deemed sale’ as transfer of right to use within the provisions of Section 2 (40) of the Value Added Tax Act, 2005. Since the above said transaction was not taxable, there was no question that the deduction on account of salary of driver, cleaner and cost of diesel and lubricants was not deductible from the gross turnover received from the Uttarakhand Transport Corporation.
Revision allowed.
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2024 (6) TMI 902
Challenge to assessment order - without giving adequate time for the petitioner to produce documents required, the impugned assessment orders have been passed - violation of principles of natural justice - HELD THAT:- This Court is of the view that these Writ Petitions are nothing but an abuse of court proceedings. Since these Writ Petitions have been filed in time within few days after the impugned assessment orders were passed on the aforesaid dates, the petitioner is directed to file statutory appeals before the Appellate Authority under Section 107 of the TNGST Act, 2017 within a period of 30 days from the date of receipt of a copy of this order. Needless to state, the petitioner shall make pre-deposit as is contemplated under the provisions of TNGST Act, 1959 and TNVAT Act, 2006.
Petition dismissed.
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2024 (6) TMI 901
Time limitation - Sustainability of SCN or the assessment orders - specific period of limitation prescribed under Section 21 (3) and Section 21 (4) of the Telangana Value Added Tax Act, 2005 - HELD THAT:- The Hon’ble Supreme Court in the case of STATE OF PUNJAB AND OTHERS VERSUS M/S SHREYANS INDUS LTD. ETC [2016 (3) TMI 331 - SUPREME COURT] held 'the aforesaid expression would mean that the time can be extended even after original time prescribed in the said provision has expired.'
It is by now a well settled proposition of law that when the plain reading of the provision of law is unambiguous and is very clear in its intent and object, the need for giving a different interpretation which is otherwise not reflected on its plain reading, cannot be permitted or that may not be sustainable. The argument advanced by the learned Special Government Pleader in the given factual backdrop would not be sustainable.
Therefore, all the Writ Petitions would be liable to be allowed, as either the show-cause notices or the assessment orders in all the writ petitions have been issued beyond the period envisaged under Section 21 of the Act.
Petition allowed.
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2024 (6) TMI 753
Challenge to assessment order - It is contended that the proprietor of the M/s. P.G. Oil Traders was not aware about the said assessment orders - request for waiver of the condition of pre-deposit of 25% of tax amount not considered -whether appeal filed by the petitioner being aggrieved with the said assessment orders is required to be considered as per the provisions under AGST Act, 1993 or VAT Act, 2003? - non-application of mind - violation of principles of natural justice - HELD THAT:- The said question has already been answered by the Division Bench of the Hon’ble Supreme Court in Messrs. Hoosein Kasam Dada (India) Ltd. [1953 (2) TMI 35 - SUPREME COURT]. The said judgment was later on affirmed by a Constitution Bench of the Hon’ble Supreme Court in Garikapati Veeraya [1957 (2) TMI 54 - SUPREME COURT].
In Messrs. Hoosein Kasam Dada, the Hon’ble Supreme Court has held 'the appellant’s appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money. We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law.'
Thus, the appeals filed by the petitioner against the impugned assessment orders are required to be considered under Section 33 of the AGST Act, 1993 instead of Section 79 of the VAT Act, 2003 because lis arose in the matter with filing of returns by the petitioner, i.e. in the year 2002-2004, which is admittedly prior to coming into force of the VAT Act, 2003.
Perusal of the order dated 29.07.2013 passed by the respondent No. 3, it is clear that the request made by the petitioner for waiver of the condition of pre-deposit of 25% of disputed amount was not even considered and even the prayer of the petitioner to deposit the 25% of the disputed amount in the form of Bank Guarantee has also been rejected - it is clear that the Assam Board of Revenue has not applied its mind while passing the impugned order dated 16.07.2015.
The matter is remanded back to the Appellate Authority to consider and decide the appeal/appeals filed by the petitioner as per the provisions of Section 33 of the AGST Act, 1993 - petition allowed by way of remand.
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2024 (6) TMI 752
Rectification of errors in an order related to tax assessments and refunds - reversal of ITC - HELD THAT:- The respondent cannot refuse to pass appropriate order on the representation/petition filed by the petitioner under Section 84 of the TNVAT Act, 2006 on 24.08.2021 followed by two reminders dated 23.10.2021 and 14.04.2022.
There shall be a positive direction to the respondent to consider and pass appropriate orders on the representation/petition of the petitioner under Section 84 of the TNVAT Act, 2006, within a period of 3 months from the date of receipt of a copy of this order and refund the amount, if any available to the petitioner. Needless to state, the order shall be passed without prejudice to the rights of the respondent in the proposed appeal filed before this Court.
Petition allowed.
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2024 (6) TMI 751
Liability to pay excess tax collection to the Government when the tax liability of the respondent is higher than the tax collected - direction to respondent to pay the excess collected tax with interest to the Government even if the tax liability of the respondent is higher than the tax collected - HELD THAT:- The proviso to Section 8 (f)/Section 8 (f) (iii) deals with a situation where a dealer in bullion or ornaments or wares or articles of gold, silver or platinum group metals including diamond, who has chosen to pay tax at the compounded rate under Section 8 of the KVAT Act, in lieu of the normal rate under Section 6 of the KVAT Act, is permitted to collect tax from the person to whom he has sold goods at the prescribed rate. The second limb of the said provision clarifies that if the tax so collected during the year is in excess of the tax payable for the year then the tax collected in excess shall be paid over to the Government in addition to the tax payable under Section 8 (f) - if a dealer collects tax at a rate different from the rate prescribed in the first limb of the proviso/Section 8 (f) (iii), then it would not answer to the description of “tax so collected” for attracting the second limb of the provision. It is apparent therefore that the finding of the Appellate Tribunal, in the orders impugned in these O.T. Revisions, are contrary to the express provisions of Section 8 (f) (iii)/proviso to Section 8 (f).
Section 30 (1) clearly envisages a situation where a registered dealer is permitted to collect tax at the rates specified in Section 6. Thus, the provision, even if it applies in respect of registered dealers who pay tax under Section 8, cannot apply to cases where the dealer is permitted to collect tax only at the rates specified under Section 8. That apart, even if such a dealer collects tax at the rate specified under Section 6, he is obliged in terms of Section 30 (1) of the KVAT Act to pay it over to the Government since there is no provision similar to the proviso to Section 8 (f)/Section 8 (f) (iii), in Section 30 (1) of the KVAT Act - the order of the Appellate Tribunal impugned in these Revisions cannot be legally sustained.
The O.T. Revisions are allowed.
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2024 (6) TMI 708
Suspension of petitioners from service - habitually accepting illegal gratification - HELD THAT:- The orders of suspension had been kept in abeyance pursuant to the interim order passed by this Court and connected matters by its order. Thereafter, the matter was heard by the Tribunal and the impugned order was passed on 05.10.2023. The same was challenged before this Court and this Court had again issued interim order staying the suspension as against the petitioners herein. It is also admitted by the learned counsel appearing on either side that the charge memos have been issued to all the petitioners in these batch of writ petitions and that the disciplinary proceedings have been initiated against them.
In view of the fact that more than eight months have elapsed from the date of the order of suspension and since suspension had not been given effect to due to orders passed by this Court on two occasions, it is opined that at present all that requires to be done is to permit the petitioners, who had not suffered the consequence of the orders of suspension, to continue in service subject, of course, to the continuation of the disciplinary proceedings which have been initiated against them. In case any of the writ petitioners are still working in the posts from which they were suspended it will be open to the respondents to consider whether they require to be moved out of the said posts.
The suspension orders which were under challenge before the Tribunal shall not be given effect to. The petitioners shall be permitted to continue in service, subject to posting orders - Petition disposed off.
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2024 (6) TMI 678
Benefit of the Amnesty Scheme, 2020, for settlement of tax arrears for the assessment year 2015-16, as also for the assessment years 1998-99 to 2004-05 - HELD THAT:- Inasmuch as the Amnesty Scheme, 2020 envisages a settlement of even those dues that are pending for the assessment years 1998-99 to 2004-05, the appellant must get the benefit of the method of computation of Amnesty amount for the purposes of settlement as envisaged under the Amnesty Scheme, 2020. As the Scheme contains provisions which are beneficial to an assessee, the pendency of the Review Petition, together with the fact that interim orders were passed by this Court and the Supreme Court staying recovery proceedings against the appellant, should be seen as the backdrop against which the payments of various amounts were effected by the appellant during the pendency of the litigation referred.
Thus, the said payments have necessarily to be seen as provisional and subject to the final outcome of the litigation.
These appeals are disposed off by setting aside the impugned judgments of the learned Single Judges, quashing the impugned orders and demand notices in the Writ Petitions and declaring that the liability of the appellant towards turnover tax interest and penalty for the assessment years 1998-99 to 2004-05 and 2015-16 shall be seen as finally settled in terms of the Amnesty Scheme, 2020 through the payment of Rs. 3,19,32,523/-.
Petition disposed off.
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2024 (6) TMI 610
Limitation period for assessment order u/s 23(2) of the MVAT Act - personal hearing despite petitioner seeking a personal hearin not provided - violation of principles of natural justice - whether the impugned assessment order under sub-section (2) was made within a period of four years from the end of the year containing the period to which return relates? - HELD THAT:- The petitioner has made a very categorical statement that the order available in SAP system also indicates that the order was signed digitally by respondent no. 3 only on 23rd June 2020 and SAP system does not show any order dated 19th March 2020. There is no response filed to the said rejoinder by the said Sambhaji Kisan Yadav - He has not explained why he could not have served the same order which was allegedly digitally signed by him on 19th March 2020 and why a fresh digital signature had to be put on 23rd June 2020. It is also pertinent to note that the order which he had served by email on 24th June 2020 in the reference states 2020-21. Therefore, it is obvious that both are different documents. In view thereof, the only conclusion that can be arrived at is the order which has been made is dated 23rd June 2020. In the affidavit in rejoinder, it is categorically stated that even the MVAT portal shows only this order of 23rd June 2020 and there is no order of 19th March 2020.
The impugned assessment order having been passed after expiry of four years from the end of the year containing period to which return relates, is not a valid order and same is quashed and set aside.
Petition allowed.
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2024 (6) TMI 609
Deduction allowed to a contractor who assigned work to a sub-contractor - proviso to Section 3-B(2) of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- The sub-contractor has to be a registered dealer. In the present case, the authority has concluded that the subcontractor is a registered dealer. In view of that, when the work is already assigned to its sub-contractor, which is registered, the sub-contractor is liable to pay the tax under the Act and it is the responsibility of the sub-contractor to include the same in his return.
The Apex Court, in the case of LARSEN & TOUBRO LIMITED VERSUS ADDITIONAL DEPUTY COMMISSIONER OF COMMERCIAL TAXES & ANOTHER [2016 (9) TMI 519 - SUPREME COURT], has considered the pari materia provision under the Karnataka Sales Tax Act, 1957 and concluded that payments made to the sub-contractor are not to be included while calculating the total turnover of the contractor.
In view of the authoritative pronouncement of the Apex Court in the case of Larson & Toubro Limited, proviso to Section 3-B(2) to the extent “and that the turnover of such amounts is included in the return filed by such subcontractor” is read down as “not to apply to the contractor who has assigned the work to a sub-contractor who is a registered dealer”. It will be open for the Revenue to collect the tax from the sub-contractor, if the same has not been paid by the subcontractor in respect of the works assigned by the petitioner.
Petition allowed.
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2024 (6) TMI 575
Validity of assessment order - applicability of time limitation period u/s 25(1) of KVAT Act - HELD THAT:- The assessing authority appears to have ignored the said contention on limitation apparently, because the assessment order was passed pursuant to an audit objection raised in terms of Section 25A of the KVAT Act.
At any rate, since the issue of applicability of the limitation provision under Section 25 (1) on the facts of the instant case is under consideration before this Court, the appellant herein had established a prima facie case for the grant of a stay pending disposal of the writ petition. This is more so because the express provisions of Section 25 (1) of the KVAT Act clearly indicate that the limitation period for completion of assessment is six years from the end of the relevant assessment year. It is not in dispute that Ext. P2 order was passed beyond the said period since the assessment year in question is 2016-17.
It is deemed appropriate to allow this writ appeal by setting aside that part of the impugned order of the learned Single Judge that directs the appellant to deposit 25% of the dues of tax assessed within a period of two weeks as a condition for grant of stay of recovery of balance tax, interest and penalty pending disposal of the writ petition.
Petition allowed.
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2024 (6) TMI 489
Slump sale - sale or not - taxability.
Whether the slump sale under the BTA would amount to sale of goods within the purview of the MVAT Act so as to be taxed, as held by the impugned order? - Whether the Reviewing Authority was within its jurisdiction under Section 25 of the MVAT Act to vivisect the BTA? - Whether the impugned order would stand vitiated or rendered illegal when tested on the provisions of law and the grounds as raised by the petitioner?
HELD THAT:- The jurisdictional facts for the levy of VAT were certainly not satisfied in the review authority passing the impugned order. Thus, the reviewing authority has acted in excess of jurisdiction in exercising its powers under Section 25 of the MVAT Act in vivisecting the BTA. It is also clear to us that as per se slump sale under the BTA would not amount to sale of goods within the meaning of the MVAT Act, the reviewing authority could not have dissected or attempted to reconstruction of the BTA in the manner as done in the impugned order.
When the reviewing authority intended to confine itself to the value assigned to the intangible assets as contained in Schedule 3.3 read with Section 3.3 and Section 2.5, the same has been borrowed / copied from the service tax demand notice in ad-verbatim manner. This is clear from the comparative extracts of the service tax demand notice and the extract of the impugned order and more particularly from perusal of paragraphs 13 to 26 and 30 to 31 of the impugned order when examined against paragraph 4, 5.1 to 5.4, 6.1 and 10 of the Service Tax demand notice, where the impugned order has clearly copied and pasted the findings and reasoning as contained in the service tax demand notice issued to the petitioner in regard to BTA.
The amounts qua each of such intangible items as specified in Schedule 3.3 certainly could not have been regarded as the itemized amounts of sale price received by the petitioner on sale of goods, as would be understood in the usual course of business, much less considering that it is the sale of business in its entirety as comprehended under the BTA. For such reason, it was completely a flawed approach on the part of the reviewing authority to tax such part of the BTA considering the same to be petitioner’s sales/turnover of sales, for the financial year 2010-11 qua the amounts of the intangible assets as set out in schedule 3.3 of the BTA. Thus, in the context of the BTA, the reviewing authority could not have regarded such intangible items to be in any manner “sale of goods”, so as to fall within the petitioner's turnover of sales. We may also observe that merely for the reason that schedule ‘C’ of the MVAT Act under item 39 provides for “goods of intangible or incorporeal nature” that would not mean that de hors the context the BTA intended to achieve, the reviewing authority could not have arbitrarily singled out and/or picked up Schedule 3.3 and tax the items in question as contained therein to be the petitioner’s turnover of sales for the said financial year. It would not be permissible for the reviewing authority to disintegrate the BTA and to attribute a different effect to the BTA which was far from realistic and in fact destructive of the BTA.
Thus, in the facts of the present case slump sale under the BTA would not amount to sale of goods within the purview of the MVAT Act, attracting any tax in the manner as held in the impugned order - the impugned order is illegal and cannot be sustained, it is accordingly required to be set aside.
Petition allowed.
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2024 (6) TMI 488
Jurisdiction of the respondent to levy tax - compounding of tax evasion - violation of principles of natural justice - HELD THAT:- Though the learned counsel for the petitioner has relied on several judgments in support of his case to show that the assessment order has not been done and neither is the reassessment been done. The same would not apply to the petitioner in the present case for the reason that the petitioner had not approached this Court to show that the assessment order is not done or reassessment has not been done after subjecting himself to the statement agreeing to pay the penalty amount, CF amount, the Entry Tax amount as well as the VAT amount, by subjecting himself to the compounding of the offence under section 82 of the Act, which deals with compounding of the offence and pursuant to such compounding of the offence, the entire case is closed and nothing survives in view of the fact that the petitioner has compounded the offence which is forthcoming by the records produced by him, which nowhere depicts that he had paid such amount by way of any protest or taken any defence anywhere stating that it was under duress.
Petition dismissed.
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2024 (6) TMI 386
Rejection of returns - determination of taxable turnover on best judgment basis - levy of VAT at the applicable rates on the consideration received by the petitioners from their customers by treating the transactions as works contracts - absence of a machinery provision in the KVAT Rules that provides for the exclusion of the value of land from the total turnover, for the purposes of determining the taxable turnover - allowance of deduction of 22.5% of the contract receipt as deduction towards value of land.
HELD THAT:- While the charging section [Section 6 of the KVAT Act] specifies the rate of tax applicable to the works contract in question, the determination of the turnover on which the tax is to be levied, at the said rate, is to be in the manner prescribed under the KVAT Act and Rules. The Scheme for determining the taxable turnover under the KVAT Rules is to begin with the total amount received or receivable by the dealer for the execution of the works contract and then deduct therefrom the amounts expressly mentioned in Rule 10 (2) (a) of the KVAT Rules. The formula in the Rules is thus for the purposes of determining the taxable turnover pertaining solely to the transfer of goods involved in the execution of the works contract.
In a situation where, as under the KVAT Act and Rules, there is no contemplation of inclusion of the land value in the value of the works contract undertaken, the absence of a machinery to exclude such land value from the total turnover so as to arrive at the taxable turnover, cannot be seen as rendering the machinery provision under the KVAT Rules unworkable - it was for the petitioner companies to have provided the turnover relatable to the works contract undertaken by them, by reducing the portion attributable to the undivided share of land from the amounts received by them from the customers, and then arrive at the taxable turnover by applying the formula under Rule 10.
Thus, in the absence of a statutory Scheme similar to what obtains in the State of Maharashtra or Haryana referred above, we are of the view that it was incumbent upon the petitioner/assessees to declare the total turnover [contract receipts] pertaining solely to be works undertaken by them, without including therein the component representing the value of the undivided share in the land - The statutory Scheme for determining the taxable turnover of a works contract under the KVAT Act does not suffer from any defect so as to render it unworkable to effectuate the charge to tax on a works contract - The contentions of the learned senior counsel for the petitioner/assessees rejected on the said issue.
In the absence of any document produced by the petitioner to show the actual land value included in the contract receipts, the above methodology can be adopted by the Appellate Tribunal to determine the taxable turnover of the petitioner assessees for the assessment years 2008-09 and 2009-10 respectively. For this limited purpose, therefore, it is deemed appropriate to remand O.T. Rev. Nos. 105, 106 and 107 of 2019 to the Appellate Tribunal for a fresh determination of the taxable turnover of the respective petitioners in those cases for the assessment years in question.
Revision disposed off.
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2024 (6) TMI 385
Challenge to summon issued in Form PP calling upon the respective petitioners to furnish the documents - intention of implementing Section 81 of the TNVAT Act, 2006 - specific case of the petitioner is that summon in Form PP under Rule 16 (1) of the TNVAT Rules, 2007 applies only to a third party and not to an assessee - HELD THAT:- The purpose of Section 22 (3) of the TNVAT Act, 2006 read with Rule 10 (11) of the TNVAT Rules, 2007 is to ensure that atleast 20% of the total number of such assessments are selected by the Commissioner in a manner as may be prescribed for the purpose of detailed scrutiny regarding the correctness of the returns submitted by the dealer. Wherever there is a stratified random sampling method of selection by the Commissioner, revision of assessment can be made, wherever necessary. This is in addition to the power to be exercised independently by an Assessing Officer under Section 81 of the TNVAT Act, 2006.
Merely because assessment is deemed to be completed under Section 22 of TNVAT Act, 2006, ipso facto will not mean that an Assessing Officer cannot call for information from a dealer whose name features in the list under Section 22 (3) of the Act.
In this case, it has been informed by the respondent Commercial Tax Department that the Commissioner of Commercial Taxes vide Letter dated 08.01.2021 bearing reference No. R5/4593/2017 has issued instructions relating to finalization of accounts relating to dealers who have been selected for detailed scrutiny under Section 22 (3) of the TNVAT Act, 2006 - there are no embargo on the respondent Commercial Tax Department from summoning the respective petitioners to furnish the records.
Issuance of summons is for ascertaining to produce information. Whether the petitioners have complied with all the requirements of Section 22 (2) of the Act and whether the declarations in the returns filed by the petitioners are correct or not can be ascertained only if records are summoned.
There are no merits in the present Writ Petitions and these Writ Petitions are liable to be dismissed - Petition dismissed.
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