Interpretation of statute - whether in presence of a specific provision, the general provision can have the sway or whether in presence of a specific provision in a tax statute, can a Court embank on interpretation by taking aid from the subsequent statute or not? - HELD THAT:- By enacting the notification dated 08.02.1999 the State has clearly excluded bran from exemption as provided by Section 30-D. In terms of the specific provision, barn is exigible to sale tax @ 4% Where the tax statute is clear, unambiguous and direct, the court is not generally called upon to interpret such statute. Court has to act upon the literal provision only. As such, the observation, based on which the order of the First Appellate Court was reversed by the Tribunal, is un-called for and the interpretation made by the Tribunal is not only unwarranted in the present context but is also inappropriate.
Reopening of assessment - limitation under Section 30 of the Puducherry Value Added Tax Act, 2007 - HELD THAT:- The date of the notice dated 09.08.2018 which was subject matter of challenge before this Court in W.P.No.10998 of 2019 stood decided by an order dated 25.11.2021. The petitioner has not challenged the same in the manner known to law - Assessing Officer was thereafter merely required to pass assessment order based on the notice issued on 09.08.2018. The petitioner was to meet out the allegations in the notice on merits. There was no scope for entertaining any question of limitation merely because notice dated 19.04.2022 was issued.
The first respondent has merely issued a notice on 19.04.2022 which has now given a reason to the writ petitioner to state that the proceedings are time barred. This stand of the petitioner cannot be accepted.
Compounding assessment under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 - opportunity of hearing not provided - violation of principles od natural justice - HELD THAT:- The fact remains that the Assessing Authority passed the assessment order without hearing the appellant. It may be true that the appellant also to be blamed for his failure to submit the documents and appear before the Assessing Authority within fifteen days. The appellant, in his representation, dated 10.07.2021, has requested time for collection of evidence and to submit documents. As per the earlier direction of this Court, the appellant was asked to appear before the Assessing Authority on a particular date.
It is for the Assessing Authority to fix a date for hearing. If the communication is received immediately on the expiry of fifteen days time asked for by the appellant, he would only expect the second respondent to fix a date for hearing, so that he would be in a position to appear before the Assessing Authority and produce the documents to substantiate his case. Only in the said circumstances, the assessment order impugned in the writ petition cannot be sustained merely because it was passed fifteen days after the expiry of the time asked for by the appellant. The appellant cannot be punished for expecting a notice fixing a date for hearing.
This Court finds that the assessment order impugned in the writ petition is in violation of the principles of natural justice and finds merits in the writ petition - petition allowed.
Unreasonable delay in completion of reassessment - reassessment have been completed after almost 10 years after the deemed order of assessment - whether this Court in exercise of its jurisdiction under Article 226 of the Constitution of India can determine as to what would constitute "reasonable period" for passing orders under Section 27 of the TNVAT Act or should it be left to the assessing authorities to decide the same?
HELD THAT:- It would be useful to refer to the judgment of the Hon'ble Supreme Court in the case of STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [2007 (10) TMI 300 - SUPREME COURT], wherein question arose as to what would constitute a "reasonable period" for exercising revisional jurisdiction in the absence of limitation provided under the Act and whether it could be left to the statutory authorities to decide the same. It was held the authorities under the Act being creatures of the statute would not be able to determine the same. Thus, it is for this Court in exercise of its plenary jurisdiction under Article 226 of the Constitution of India, to determine what would constitute reasonable period for passing orders under Section 27 of the TNVAT Act - A reading of the above judgment would show that it is for this Court to decide as to what would constitute “reasonable time” for taking actions or passing order in the absence of statutory prescription of limitation.
It is thus clear that even if the notice was issued within the prescribed period of limitation, inordinate/unreasonable delay in completing the proceedings would vitiate the same. In the present case, there is no explanation as to why it has taken more than six years after the issuance of the first notice on 23.07.2014 to issue the second notice on 23.06.2020 while proceeding to pass the impugned order on 05.02.2021 after almost 10 years from the deemed assessment - This Court in the case of J.M.Baxi [2016 (6) TMI 813 - MADRAS HIGH COURT] found that failure to explain the delay of 5 years after initiation would vitiate the proceeding on the ground of unreasonable delay.
This Court is of the view that the impugned order of reassessment cannot be sustained and is liable to be set aside - Petition allowed.
Levy of higher rate of tax - inter-state sales to which C-forms were filed - burden to prove transfer of goods was not for sale - HELD THAT:- As per clause (1) of Section 6A, the burden is on the dealer to prove that the movement of the goods was not because of sale, but was for transfer of such goods by him to any other place of business or to his agent or principal outside the State.
The burden so cast on the petitioner to prove that the transactions were effected by it are otherwise, than by way of sale has not been discharged initially at the time of filing of returns. Only when the assessing authority has taken up investigation/enquiry, the petitioner had adduced some documentary evidence.
Perusal of the order passed by the Appellate Tribunal clearly reflects that the Appellate Tribunal had considered both factual and legal aspects, recorded elaborate reasons while allowing the appeal and also referred to and relied upon various judgments for its conclusion. The Appellate Tribunal had also discussed the purport of Section 6A of CST Act as well as Rule 14(3) of under CST Act (A.P.) Rules, 1957 and finally, confirmed the order of rejection of the assessing authority on the claim of concessional rate of tax in respect of C-forms.
The petitioner failed to make out any case warranting interference of this Bench with the order passed by the Sales Tax Appellate Tribunal - the question of law framed by the Court, while admitting the revision, deserves to be decided in the negative.
Levy of tax - freight charged separately from the buyer would fall part of the sale price or not - activity of transportation is an activity of service or not - freight charges collected separately as the carrier of the goods - Appellate Authority can exercise the power under Section 47 of the VAT Act, while taking Suo Moto Revision of the Appellate order under Section 3A of the VAT Act while passing the impugned order or not - HELD THAT:- Few substantial questions of law No.1, 2 & 3 were answered by Orissa High Court in the case of M/s Utkal Moulders [2021 (4) TMI 84 - ORISSA HIGH COURT ], where it was held that the freight shown in the sale bill separately is part of the sale price. It is held that the Petitioner is entitled to claim deduction of the freight charges from the taxable sales turnover.
Other substantial questions of law are squarely covered and answered in the decision of Goldie Glass Industries [ 2017 (8) TMI 1451 - MADHYA PRADESH HIGH COURT] where it was held that Section 3A was inserted in the Statute to provide for appointment of Appellate Authority by the State Government not below the rank of Deputy Commissioner of Commercial Tax. It is further clear from Sections 46 and 47 that from the order of Dy. Commissioner of Commercial Tax (Appeal), no further appeal or revision lies. In other words, the order passed by the Dy. Commissioner of Commercial Tax (Appeal) is final and is not amenable to suo-motu revisional powers conferred by Section 47 of the Act.
All the five substantial questions of law are answered in favour of the petitioner/assessee - petition disposed off.
Condonation of delay of 322 days in filing and 149 days in re-filing the Special Leave Petition - HELD THAT:- The delay is also exorbitant. Hence, the Special Leave Petition is dismissed both on the ground of delay as well as on merits.
Seeking restoration of the statutory appeal before the appellate authority - application for restoration was dismissed on the ground that he had not raised any valid ground for seeking restoration of the appeal - unsuccessful in availing the benefit under the Amnesty scheme - HELD THAT:- The appellate authority as well as the High Court ought to have permitted the appellant herein to seek restoration of his appeal before the appellate authority so that the same could have been heard on merits.
After all, the appellate authority was seized of the appeal which was in the nature of a statutory appeal and if the appellant was unsuccessful therein he had further remedies in law. In view of the application filed by the appellant being rejected, neither the appeal has been restored nor has he been heard on merits and further remedies have also been foreclosed. On that short ground alone, the orders of the High Court as well as the appellate authority on the application filed by the appellant herein are set aside. The appeal before the KVATA No.174/2019 which was pending before the Joint Commissioner of Appeals is restored on the file of the said authority.
Demand on pre-deposit even though it is accepted that no sales were made by the Appellant - demand of pre-deposit even though it is not in dispute that the fraudulent refund was pocketed by the consultant Mr. Sunil Shah through fraudulent bank account - demand of huge pre-deposit even though it was specifically pointed out that the business of the appellant is closed and it is facing financial crisis - HELD THAT:- The matter is remanded back to the first appellate authority so as to decide the appeal filed by the appellant within a period of four weeks from the date of fulfilling of the aforesaid conditions.
Benefit of Vera Samadhan Yojana-2019 - Short payment of tax - after filing of the return, it was noticed that there was an error in tax computation - HELD THAT:- Considering the material on record it is not in dispute that the petitioner has paid the entire amount of the outstanding dues as per the corrected intimation and assessment order prior to the date prescribed under the Vera Samadhan Yojna-2019 i.e. 31.08.2021. The petitioner has also deposited Rs. 1,31,643/- on 5th March, 2021 after the assessment order was passed on 31.12.2020. Thus, the petitioner has deposited the entire amount as per the assessment order.
The petitioner is entitled to the benefit of the Vera Samadhan Yojana- 2019 and merely because the respondent No. 3 has changed the figure of payment to be made by the petitioner in the intimation as the figure shown in the in the intimation was erroneous, cannot come in way of the petitioner in the facts of the case to deny the benefit of the Vera Samadhan Yojna-2019 Scheme which is a benevolent scheme for the assessees floated by the State of Gujarat so as to see that the principal amount of tax is recovered on waiver of interest and penalty, if any, so as to reduce the future litigation.
The impugned communication dated 20.07.2022 is hereby quashed and set aside - Petition allowed.
Disallowance of ITC - various inputs purchased locally and interstate and used by the petitioner in the manufacture of PVC pipes - Case of petitioner is that the input tax credit was availed only in respect of the raw materials purchased locally and the said raw materials were entirely consumed in the manufacture of that quantity of PVC pipes that were sold within the State - HELD THAT:- As rightly pointed out by the learned Government Pleader, the consistent finding of the First Appellate Authority and the Tribunal is that no records/accounts were produced by the petitioner before them to substantiate the contention that no input tax credit was availed on the tax paid on raw materials/inputs purchased from outside the State and further that the said inputs were used exclusively for the manufacture of that quantity of PVC pipes which were eventually stock transferred outside the State.
In the absence of a clear bifurcation in the accounts between the two streams of supply of PVC pipes, namely, (1) through stock transfer outside the State and (2) through sale within the State, the authorities below cannot be faulted for having disallowed input tax credit proportionate to the quantity of PVC pipes that were stock transferred to outside the State.
The O.T.Revisions are therefore disposed by answering the questions of law raised in favour of the revenue and against the assessee.
Imposition of freight charges at the rate of one per cent. of the purchased value on overall turnover on the basis of the market value - Non-examination of individual vouchers - mala fide or intention of evading taxes or not - levy of penalty - HELD THAT:- The court finds that this indeed is an audit assessment under section 9C of the OET Act and at the relevant point in time, the decision of this court in Chandrakanta Jayantilal [2022 (7) TMI 607 - ORISSA HIGH COURT] was not available and, therefore, perhaps the issue was not raised by the assessee. That does not however mean that it cannot be raised a subsequent stage since it is a jurisdictional issue.
Since the Tribunal also had no occasion to examine the issue, the court considers it appropriate to direct that the matter be restored to the file of the Tribunal for a fresh decision - impugned order set aside.
Validity of assessment order - Constitutional Validity of Section 26(6A)(a) of the Maharashtra Value Added Tax Act, 2002 as ultra vires the Central Sales Tax, 1956 and the Central Sales Tax Rules (Registration and Turnover Rules) of 1957 as well as the Constitution of lndia - C-forms and F-forms not taken into consideration - HELD THAT:- There are substance in the contentions as urged by Mr. Patkar. It is a clear case of the petitioner that all the details in regard to C-Forms and F-Forms were placed for consideration of the assessing officer which ought to have been taken into consideration by the assessing officer in passing the impugned order.
It is a clear case of the petitioner that all the details in regard to C-Forms and F-Forms were placed for consideration of the assessing officer which ought to have been taken into consideration by the assessing officer in passing the impugned order - the assessment order provides no reasoning whatsoever in this regard. The assessment order neither refers to all such materials as placed on record by the petitioner nor there is a discussion as to why such material ought to be discarded in arriving at the final assessment. The only consequence from such order which is bereft of particulars and any discussion in that regard, would be that the order would be required to be held to be passed in patent non application of mind and materials on record.
The impugned order cannot be sustained, it would be required to be quashed and set aside with a directions to the Assessing Officer to hear the petitioner and after considering all the materials on record, pass a fresh order in accordance with law - Petition allowed.
Violation of principles of natural justice - respondent had passed impugned order without calling the petitioner for hearing - HELD THAT:- It is evident that the order has been passed in a tearing hurry, although the petitioner has requested for hearing after 18.05.2023.
The petitioner appears to have made out a prima facie case on merits. That apart, on merits also, it appears that the petitioner has a good case, as the petitioner has assessed the respective bill of entries, which were at the Special Economic Zone (SEZ), wherein, the goods were stored after their initial import - The only difficulty has arisen on account of non-filing of the details by the customs in respect of the four of the bills of entries out of six.
The impugned order set aside and the case remitted back to the respondent to pass a speaking order within a period of six weeks from the date of receipt of a copy of this order - petition disposed off.
Interest and penalty for delayed payment of tax - tribunal set aside the penalty - HELD THAT:- Given the said statutory provisions and powers conferred upon the Tribunal, it was within the powers of the Tribunal to look into the reasons which prevented the assessee in timely payment of tax and the delay also was too short a period so as to infer that the delay was with any mala fide intention.
Another fact which needs consideration is the fact that penalty imposed is invoking the provisions under Section 15(4) of the A.P.G.S.T. Act. The proviso to the said Section clearly indicates that before passing of an order of penalty, the authority concerned is required to issue a notice to the assessee seeking his explanation as to the cause which led to the delayed payment of tax. The very insertion of the aforesaid Section 15(4) pre-supposes that upon a notice being issued before penalty orders are passed, if the assessee was able to provide plausible and justifiable reasons which led to the delayed payment of tax it would be then within the discretion of the authority to decide whether penalty at all is to be levied.
The petitioners failed to make out any case warranting interference of this Bench with the order passed by the Sales Tax Appellate Tribunal - the question of law framed by the Court, while admitting the revisions, deserves to be decided in the negative.
Validity of assessment order - Levy of Trade Tax - association of persons - HELD THAT:- While making the assessment assessing authority was of the view that the business is being run by three brothers namely Pradeep Kumar, Kamlesh Kumar and Vimlesh Kumar and, therefore, treating them to be association of persons the said assessment order has been passed. The assessment has been made against the firm namely Pradeep Khad Bhandar which has challenged the assessing orders as well as both the appellate orders.
Against the said order of assessment an appeal was filed which was allowed by the Joint Commissioner (Appeal) - Ist, Lucknow thereby holding that all the three persons were part of the association of persons and directions were issued to the assessing authority to pass a fresh assessment order considering them to be an association of persons and issue them individual notices before finalizing the said assessment.
It is noticed that there is no dispute in the present case with regard to the assessment order but the grievance pertains only that the said Association of Persons has been described as S/Sh Pradeep Khad Bhandar and, accordingly, the liability to pay the tax for Association of Persons would fall directly on the revisionist. It is stated that the other two partners are also liable to pay the Trade Tax as per the assessment order.
In the present case it is noticed that the said Association of Person is being run by the three brothers while the firm is being run by only one brother, i.e., revisionist has been made liable to pay the amount of Trade Tax and, accordingly, even if the revisionist pays the tax as assessed, he can always recover it from other members of the Association of Person as the liability is joint and several but merely on this score the validity of the impugned orders cannot be doubted - this Court does not find any infirmity with the assessing order or with order passed by the Commercial Tax Tribunal and it is left open to the petitioner to recover the outstanding amount of the tax from the other members of the Association of Person in accordance with law.
Rejection of appeal - non-deposit of 15% of the pre-deposit - HELD THAT:- Considering the facts and circumstances of this case and in the interest of justice the impugned orders of the first appellate authority, revisional authority and the Tribunal are set aside and the matter is remanded back to the first appellate authority concerned to consider and dispose of the appeal on merit and in accordance with law subject to compliance of any other formalities, if any, which is required to be observed.
It is expected that the appellate authority shall consider and dispose of the appeal expeditiously - Application disposed off.
Classification of goods - Interpretation of statute - kattha and cutch - forest produce or mot - Whether for the purpose of Road Tax, both can be treated as one product or different products? - HELD THAT:- When the State Government in its letter dt. 20.07.2001 had itself taken a decision that both are different products and both cannot be taxed at same rate because their price in the market varies from Rs. 250-400/- per kg for ‘Kattha’ and Rs. 5-25/- per kg for ‘Cutch’, the said view of the Government was binding on the Excise and Taxation Commissioner because the said letter dt. 20.07.2001 was addressed by the Government to the Excise and Taxation Commissioner, Himachal Pradesh only.
It is not open to Excise and Taxation Commissioner to take a different stand as he is supposed to have done in the alleged letter dt. 20.01.2003, as stated by the Assistant Excise and Taxation Commissioner, Himachal Pradesh in his letter dt. 30.01.2003 - In fact, the request of the petitioner for supply of the proceedings dt. 20.01.2003 of the Excise and Taxation Commissioner under the Right to Information Act, 2005, has been returned on 18.07.2017 saying that said letter is not even available in the office of Deputy Excise and Taxation Commissioner, H.P.
The order passed by the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 cannot be sustained because he had simply refused to grant the refund on the view that the Excise and Taxation Commissioner, H.P. had rejected the refund on 20.01.2003. But there is no such letter made available to petitioner under the Right to Information Act, 2005 - the order dt. 28.9.2011 of the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 set aside.
The petitioner is entitled for refund of Rs. 40,48,125/- illegally collected by the respondents as Road Tax on ‘Cutch’ during the period 13.11.2000 to 28.12.2001 - Petition disposed off.
Taxability - Deemed sale or not - receipts towards royalty and the transfer of the right to use intangible property - HELD THAT:- A reading of the judgment in Quick Heal Technologies [2022 (8) TMI 283 - SUPREME COURT] clearly shows that the issue is not whether there is a transfer of property in goods but if there is a transfer of the right to use the property in goods. The first Appellate Authority and the Tribunal essentially held that there is no exclusive transfer of the goods and that the decision of the Division Bench in Malabar Gold regarding the trademark would come to the rescue of the assessee.
The judgment in Malabar Gold [2013 (7) TMI 101 - KERALA HIGH COURT] has not become final as it is challenged before the Supreme Court. That apart, it cannot be held that it is a requirement of law that there should be a transfer of the entire right to the exclusion of the transferor for there to be a transfer of the right to use. The transfer of the right to use goods is distinct and separate from the transfer of goods.
Thus, it has to be held that in a contract for the transfer of the right to use the goods, the taxable event is the execution of the contract for delivery of the goods, and if that has taken place, it was immaterial whether the transfer was exclusively or to the exclusion of all others. In the instant case, the transferee obtained a legal right to use the goods for the period during which he had such legal rights, which had to be to the exclusion of the transferor - the Tribunal has clearly gone wrong in law while dismissing the appeals preferred by the State. The order of the Tribunal impugned before us is set aside.
Case remitted back to the assessing officer to consider the question afresh and pass a speaking order dealing with the contentions of the assessee. The questions of law are answered in favour of the State and against the assessee - revision disposed off.
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