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VAT / Sales Tax - Case Laws
Showing 561 to 580 of 27514 Records
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2023 (8) TMI 467
Validity of order of tribunal in Review Appeal - Denial of benefit which was allowed earlier - Power to Review - Penultimate sale - Disallowance of claim of exemption and levy of penalty - Inter-State stock transfer of goods purchased for foreign country export - it was held by High Court that The actual portion of the raw seeds procured in Tamil Nadu, transported to Karnataka and thereafter, exported to foreign after processing, has not been specifically stated under Form-H, which would reflect the quantum of the seeds procured actually transported to the foreign countries. In the absence of purchase order from the Karnataka Branch and export order from foreign buyer or contract between foreign buyer and Karnataka Unit, exemption cannot be granted to the dealer.
HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India - The Special Leave Petition is accordingly dismissed.
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2023 (8) TMI 466
Default in payment of Tax under the Gujarat Value Added Tax Act, 2003 - Charge levied on personal properties of Directors (for default of company) - entry is mutated in the City Survey records recording Charge on the properties owned by the petitioners - Time limitation - HELD THAT:- What is evident from the chain of events is that only after the petitioners made an application for mutation of their names in the Revenue Records did the authorities, both, the Revenue and the Tax authorities swung into action and by exchange of communications and relying on some communication dated 27.04.2018, which is not on record did instructions go forward by the Tax Authorities to the Revenue Authorities to record a charge on the property which was already sold by the Director. Apart from it being a personal property, nothing has come on record to satisfy this Court as to what proceedings were undertaken by the authorities to attach the properties in question, when they were still in correspondence seeking details thereof.
It was incumbent upon the Revenue Authorities in exercise of powers under Section 135 C of the Bombay Land Revenue Code to record the entries. There is no obligation, as rightly submitted by the learned counsel for the petitioner, to even apply for entering the names in the revenue records. When a registered document is produced, the authorities are bound to record the same in the revenue records.
As held in the case of Jhaverbhai Savjibhai Patel [2005 (5) TMI 693 - GUJARAT HIGH COURT] when a registered document is produced the authority must prima-facie post an entry in the record of rights leaving it for the competent Court or Authorities to adjudicate on the dispute.
In accordance with the provisions of the Bombay Land Revenue Code therefore once a registered document is produced before the revenue authority, he is bound to record a revenue entry based on such a document.
The contention of the learned Assistant Government Pleader that in accordance with the provisions of Section 48 of the GVAT, 2003 the authorities are empowered to enter a charge as the sale could be a bogus one and a shield to overcome attachment of a property is also misconceived. On the date on which the petitioners had purchased the property, neither any attachment proceeding was pending nor finalised. No proceedings to record a charge were also in progress or a decision so taken. The default in question had already culminated into the attachment of the showroom and the workshop of Eagle Motors Private Limited by an order dated 09.01.2015 and akin thereto there were no proceedings vis-a-vis the property in question which was even the personal property of the Director. Even otherwise for assessment proceedings which were initiated for the years 2012 to 2014 whether attachment proceedings could be issued is an issue which begs a question, however not considered as even otherwise, it is held that the property in question was of the personal ownership of the Director and therefore could not have been attached.
The personal liability of the Director in the facts of this case when related to the personal property of the Director cannot be a matter of attachment or creation of a charge as is sought to be done in the facts of the present case.
What therefore is culled out from the facts of the case is that apart from the fact that the attachment of the properties is beyond the reach of the taxation authorities in light of being the personal properties of the Director and the fact that they have been sold by a registered sale deed prior to the exercise of undertaking any proceedings of attachment or creation of a charge, the only option open, if the authorities were of the opinion that the sale was with a view to defraud the government, is to file a civil suit - the prayers made by the petitioners are answered in their favor. The communication dated 03.08.2019 passed by the City Survey Superintendent of Rajkot is quashed and set aside. The communications and directions/orders dated 17.06.2019 mutating the entry no. 8056 and 8057 recording the charge of the Tax authorities is also quashed and set aside.
Application allowed.
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2023 (8) TMI 465
Charging employees twice on same misconduct by issuing two charge memos - Penal proceedings agaisnt the Assistant Commercial Tax Officer - HELD THAT:- In the facts of the present case, the 2nd charge memo must be understood as continuation of the 1st charge memo and inasmuch as there is no hiatus between the 1st charge memo and the 2nd charge memo. As a matter of fact, the 2nd charge memo came to be issued even during the pendency of the 1st charge memo which was withdrawn only thereafter. In the circumstances, this Court is unable to agree with the submissions of the learned counsel for the petitioner that the 1st charge memo gets obliterated on being withdrawn and thus there was no charge memo pending on the crucial date. The 1st charge memo was pending on the crucial date and the 2nd charge memo was issued as a matter of continuation of the 1st charge memo which this Court was informed has ended in punishment, thus there is no merit in the submission of the learned counsel for the petitioner.
There is no merit in the writ petition and the same stands dismissed.
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2023 (8) TMI 464
Provisional attachment of transaction of shares - request to share the depository account/s held by the petitioner and the KYC details relating to PAN as enlisted in the said letter and freeze the transactions of shares - time limitation - HELD THAT:- There are substance in the contention as urged on behalf of the petitioner, insofar as the effect of provisions of sub-section (2) of Section 35 of the MVAT Act would have in regard to the fact situation and the legality of the impugned attachment dated 11 April 2022 is concerned, after the expiry of a period of one year. Sub-section (2) of Section 35 clearly provides that the provisional attachment as made under sub-section (1) of Section 35 shall cease to have effect after expiry of a period of one year from the date of service of the order issued under sub-Section (1). However, the power under proviso to sub-section (2) to extend the period for one year, has not been exercised.
In this view of the matter, certainly the attachment has ceased to have effect by operation of law after 12 April 2023.
The petitioner would be correct in praying for the reliefs - Petition allowed.
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2023 (8) TMI 403
Refund claim - illegal deduction and recovery from the bills of the petitioner as advance Value Added Tax - manufacture and supply of the goods by the petitioner to the Railways was an inter-state sale - not exigible to sales tax within the State of Bihar either as a sale of goods or as a works contract - Section 40 and 41 of the Bihar Value Added Tax Act, 2005 - HELD THAT:- A Division Bench of the Hon’ble Supreme Court also examined the very same position in HYDERABAD ENGINEERING INDUSTRIES VERSUS STATE OF ANDHRA PRADESH [2011 (3) TMI 1427 - SUPREME COURT]. Therein the appellant, a registered dealer within the State of Andhra Pradesh was engaged in the manufacture and sale of electrical and other consumer items and they entered into an agreement with another company for marketing and sale of their products. The appellant, pursuant to orders of sale issued by the other company, the agent, transported the products to the various depots belonging to themselves from where the agent collected the goods and delivered it to the ultimate purchaser. The assesse-appellant claimed it as a branch transfer. The Hon’ble Supreme Court found favour with the order of the Assessing Officer, which found it to be an inter-state sale exigible to tax under the CST Act.
In the present case also the contract is one for manufacture and transportation of pre-stressed concrete slabs and RCC Ballast Retainers of precise and particular specification. There is no works contract involved and it is only a sale pure and simple of goods manufactured by the petitioner, who has been awarded the contract; which is only for manufacture and sale - The transaction is purely of an inter-state sale of goods and is not a works contract nor a sale of goods exigible to tax within the State of Bihar. The sale of goods as per Annexure-2 and Annexure-5 agreements constitute an inter-state sale not exigible to tax within the State of Bihar.
The Railways had made a deduction on the ground that it is a works contract; which are negatived. The Railways is bound to refund the illegal tax deduction made from the bills to the petitioner contractor. The Railways could definitely apply for refund from the Bihar Value Added Tax Department.
The refund granted, but, confined to the deductions made three years prior to the date of registration of the above writ petition which is on 14.05.2012; giving effect to the limitation as prescribed for recovery of money under the Limitation Act. The Railways shall refund the amounts with 6% interest within a period of 4 months from the date of receipt of the certified copy of this judgment. If the refund is not granted within that time then the interest shall run at the rate of 12% from the date of expiry of the 4 month period.
Petition allowed.
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2023 (8) TMI 345
Grant of Selection Grade cancelled - recovery order on the ground that the earlier service rendered in Khadi Board is not eligible service for awarding Selection Grade and Special Grade in the Government department - HELD THAT:- Admittedly, the petitioner was appointed as Khadi Assistant Grade-III in Khadi Board and thereafter, the petitioner found as excess staff in Khadi Board, thereby totally she was absorbed in other Government department. While she was working in the respondent department, she was awarded with Selection Grade and Special Grade on completion of 10 years and 20 years service, respectively. That the incentive increment sought to be recovered subsequently, on the ground that the service rendered in the Khadi Board, is not eligible to get benefits in the respondent department, thereby, the present recovery order was passed. Though there is no violation of principles of natural justice, the present recovery order is passed after hearing the petitioner.
Similar issue came up for consideration before the Hon'ble Apex Court in State of Punjab and others Vs. Rafik Masih [2014 (12) TMI 1415 - SUPREME COURT], wherein, the Apex Court held that in the absence of any misrepresentation, if any benefits granted to the clause 3 and 4 employees cannot be sought to be recovered subsequently, at a later point of time.
The Recovery proceedings, initiated by the respondents is not sustainable, and accordingly, the present impugned order is quashed - Petition allowed.
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2023 (8) TMI 312
Scope of SCN - Challenge to Review order - jurisdiction of the Respondents to pass the impugned order which is contrary to the decision of the Supreme Court in case of GANNON DUNKERLEY & CO. VERSUS STATE OF RAJASTHAN & LARSEN & TOUBRO LTD. & UNION OF INDIA [1992 (11) TMI 254 - SUPREME COURT] - principles of natural justice.
Whether the orders impugned in the present petition passed by Respondent No. 2 would satisfy the test of law when questioned on the ground of jurisdiction and illegality being attributed to it by the Petitioners? - whether, in the facts and circumstances of the case, whether it is required to entertain this petition, by not accepting the objection urged on behalf of the revenue of an alternate remedy available to the Petitioners to file an appeal before the Tribunal?
HELD THAT:- On a perusal of the show cause notice dated 22nd October 2018 and on a complete reading of the said show cause notice, it is very clear that the show cause notice was issued only to deny deduction on account of profit on supply of labour and service, amounting to Rs. 9,41,22,626/- which would only fall under Rule 58(1)(h) and therefore, the reference to Rule 58 in the show cause notice although not specifying the sub-rule, should be read to mean that the show cause was only for disallowance of the item under Rule 58(1)(h) of the MVAT Rules and not all the deductions under Rule 58(1)(a) to (h). This is further fortified by the second show cause notice dated 23rd November 2020 which specifically refers to Rule 58(1) (h) only to deny the deduction of Rs. 9,41,22,626/. The figure of Rs. 9,41,22,626/- in the show cause notice is only under Rule 58(1)(h). Therefore, in our view, the show cause notice was only for item to be disallowed under Rule 58(1)(h) and not all the items under Rule 58(1)(a) to (h). However, in the review order dated 8th March 2021 under Section 25 of the MVAT Act, what is disallowed is all the items under Rule 58(1)(a) to (h), amounting to Rs. 30,59,93,405/-. The Respondents have not brought to our notice any document which would show that the show cause notice was issued for disallowing all the items specified in Rule 58(1)(a) to (h). It is well settled that any order beyond the show cause notice is bad-in-law.
The Supreme Court in case of COMMISSIONER OF CUSTOMS, MUMBAI VERSUS TOYO ENGINEERING INDIA LIMITED [2006 (8) TMI 184 - SUPREME COURT] noted that the Department cannot be allowed travel beyond the show cause notice. The Supreme Court further observed that it would be against the principles of natural justice that a person who has not been confronted with any ground is saddled with liability thereof and since the issue did not form the basis of the show cause notice and was not even confronted to the order passed beyond show cause notice is to be quashed.
The Supreme Court in case of COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUS M/S BALLARPUR INDUSTRIES LTD [2007 (8) TMI 10 - SUPREME COURT] observed that if Rule 7 of the Valuation Rules 1975 have not been invoked in the show cause notice, it would not be open to the Commissioner to invoke the said rule in the remand proceedings. The view expressed by the Supreme Court in cases of Commissioner of Customs, Mumbai vs. M/s. Toyo Engineering India Limited and Commissioner Of Central Excise, Nagpur vs. M/s. Ballarpur Industries Ltd. was applied in subsequent decisions of the Supreme Court in case of The Commissioner of Central Excise, Bhubaneswar-1 vs. M/S. Champdany Industries Ltd., [2009 (9) TMI 7 - SUPREME COURT] and also in the case of Commissioner of Central Excise Vs. Gas Authority of India Limited [2007 (11) TMI 276 - SUPREME COURT]. Therefore applying the ratio of the Supreme Court, the impugned order disallowing all the deductions under Rule 58(1)(a) to (h) without giving any show cause notice to the Petitioner would be rendered bad in law.
Such defect in the adjudication goes to the root of the matter and is an incurable defect. Further the Respondents in the review order have applied the rate of 20% specified in table under Rule 58(1). On a reading of Rule 58(1) of the MVAT Rules, the rates specified in the Table can be applied only if the contractor has not maintained accounts which would enable a proper evaluation of the different deductions as specified in Rule 58(1)(a) to (h) or where the Commissioner finds that the accounts maintained by the contractor are not sufficiently clear or intelligible. It is only under these circumstances that the Commissioner may in lieu of the deduction as prescribed under Rule 58(1)(a) to (h) of the MVAT rules on actual basis can apply the percentage specified in the Table to arrive at the sale price of the goods for the purpose of MVAT Act - in the absence of satisfying the pre-condition prescribed under proviso to Rule 58(1) the application of rate specified in Table below Rule 58(1) in the final review order is without jurisdiction.
Even otherwise, in the assessment order dated 11th December 2015, the Assistant Commissioner of Sales Tax has recorded a finding that he has verified the books of accounts with respect to the claim of the dealer under Rule 58 on actual basis. Insofar as the GAIL project is concerned, the assessment order records verification of trial balance, expense ledger copies, contract copies, sample invoices, sub-contractors works order, etc. The audit done under Section 22 of the Act by the Deputy Commissioner prior to the passing of the said assessment order also accepts the maintenance of the books of accounts by the Petitioner with respect to the works contract executed by the Petitioner - the jurisdictional condition required for applying the rates prescribed in the table to Rule 58(1) have not been complied with before passing the review order and, therefore, even on this account, the impugned order is without jurisdiction.
The issue of exercising jurisdiction under Article 226 of the Constitution of India, when an alternate remedy is available has been a subject matter before the Supreme Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks Mumbai [1998 (10) TMI 510 - SUPREME COURT], and the also very recently in the case of Godrej Sara Lee Limited [2023 (2) TMI 64 - SUPREME COURT] wherein, the principles laid down in the case of Whirlpool Corporation [1998 (10) TMI 510 - SUPREME COURT] for exercising the jurisdiction under Article 226 of the Constitution of India have been reiterated on the ground of challenge to the very jurisdiction and principles of natural justice.
The impugned orders dated 8th March 2021 and 6th July 2021 are hereby quashed and aside - Petition allowed.
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2023 (8) TMI 311
Seeking restoration of appeal - Appeal dismissed on account of non compliance of Section 62 (5) of the Punjab VAT Act, 2005 - HELD THAT:- In view of the fact that proceedings in respect of the assessment year 2010-2011 are pending since 2016, the prayer of the petitioner deserves to be accepted.
Keeping in view the peculiar circumstances of the case, the impugned order dated 12.04.2023 (Annexure P-13) is being set aside and the Appellate Authority is directed to accept 25% of the tax due after adjusting the amount already deposited by the petitioner and pass a fresh order on the appeal filed by the petitioner, on merits, expeditiously, within a period of two months from the date of receipt of certified copy of this order.
Petition disposed off.
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2023 (8) TMI 310
Rectification of order - It is submitted that the petitioner may be asked to file a rectification application under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) as made applicable to assessment under provisions of the Central Sales Tax Act, 1956 (CST Act) - HELD THAT:- The Assessing Authority has wide powers to reopen the assessment under Section 27 in the circumstances specified in sub clause(3), on the ground of discovery of new facts or revision by a higher authority on the ground that the findings of the Assessing Authority are contrary to law. Such re-assessment or revision may be done in accordance with the provisions of the General Sales Tax law of the state.
As per decision of the Hon'ble Supreme Court in Ashok Leyland Limited vs. State of Tamil Nadu and Another, [2004 (1) TMI 365 - SUPREME COURT], an Assessing Officer can reopen the assessment if it is found that there was a jurisdictional error committed and the order passed under retain Sub-Section (2) of Section 6A was found to be illegal or void ab initio or otherwise voidable - as per this decision, the Assessing Authority would derive jurisdiction to reopen of the assessment only under those circumstances and not otherwise.
A reading of the notice issued to the petitioner on 30.12.2021, indicates that it proceeds on the assumption that generally cars with high value are transferred to sales Depots on stock transfer basis only after getting confirmed booking from the customers or making financial arrangement from financial companies. There is a fallacy in this approach. The view that since, the value of the cars manufactured by the petitioner was high and are sold only after getting financial arrangement and confirmed order from financial companies is also based on an assumption, presumption and conjectures. Thus, the conclusion that the cars were transferred to the petitioners's branches based on pre-confirmed order or prior order and therefore, the value of stock transfer was not eligible for exemption under Section 6A, and liable to tax did not give an authority to reopen the assessment.
Reading of the impugned order makes it clear that the notice was passed on assumption, presumption and conjecture. There were no material that was available on the date when a revision notice dated 30.12.2021, based on which the assessment could be re-opened. In fact, the notice itself calls upon the petitioner to furnish the purchase orders/stock transfer note received from other branches with documentary evidence for the value of stock transfer for the aforesaid value. If there were no purchase orders, questioning of furnishing non existing purchase order also does not arise.
Merely because the petitioner has sold one of the car which was stock transfered, for which the petitioner produced Form F was later sold as an interstate sale and produced Form C and sold as an inter-state sale, ipso facto would not mean that all the eleven stock transferred cars were sold in the course of inter-state sale. To hold that there was an inter-state sale, the twin test as recognized by the Hon'ble Supreme Court in the State of Tamil Nadu vs. The Cement Distributors Private Limited. [1975 (3) TMI 104 - SUPREME COURT], has to be satisfied - The settled view of this Court is that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale ten the sale is an inter-state sale.
The petitioner has also showed that ten of these cars were given to its own employees and were later transferred to them on written down value after use. Thus, there is no scope for interfering inter-state sale. At best, there could be first sale in the State of Haryana where ten of the cars which were stock transferred were later sold to the petitioners' own employees after use.
Petition allowed.
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2023 (8) TMI 255
Levy of VAT - ATM Management Services provided by the petitioner to various Banks across the State of Karnataka on which the petitioner has already paid Service Tax - Karnataka Value Added Tax Act, 2005 (KVAT Act) - HELD THAT:- The impugned orders, levies and demands are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed.
The undisputed material on record, in particular the agreements also make it unmistakeably clear that it is nowhere evident that the ATMs and equipment at any stage are transferred/delivered to the banks and neither does the possession get transferred to the bank. The petitioners all through out the tenure of the agreement continues to provide ATM Management services to the banks deploying/using the ATMs and equipment. Delivery/transfer is sine qua non to attract levy of VAT. However, no delivery but only deployment takes places. The petitioners not only has the possession but is also in effective control of the ATMs and equipment. If it was neither in possession or in effective control over the ATMs and equipment, the petitioners would have been unable to provide the aforesaid services.
The impugned orders have erroneously held the petitioners transaction to be one of deemed sale. A deemed sale or delivery on hire purchase would arise only when goods are either delivered physically or on the grant of effective control and possession therein to the recipient. In the present case, the transaction is a pure service transaction not entailing any transfer of property of goods or effective control of the goods to the recipient. The various terms of the Agreements with the Banks discloses that the only intent of the contract is only provision of ATM management service for which the petitioners deploys ATMs and other assets at various sites across India. The petitioners uses the ATMs and other assets merely as a means for providing ATM management services to banks.
The levies and demands are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed - petition allowed.
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2023 (8) TMI 180
Seizure of goods - twenty four cartons containing gold and silver jewellery along with cash - Validity of report of the three-member committee set up to examine the claims of the Petitioners/Angadias - seeking constitution of new committee and conduct a fresh enquiry to determine the ownership of the seized jewellery and to submit a fresh/new report - HELD THAT:- It is the petitioners’ case that their claims were communicated through the Angadias. The said contention is noticed only to be rejected. If the petitioners were claiming ownership over the seized articles, they were obligated to raise those claims before the Committee. It is the case of the respondents that none of the petitioners apart from petitioner no. 5 had submitted any claim for the consideration of the respondents. In the absence of any material having been placed by the petitioners before the respondent DT&T in support of their asserted title over the seized goods, there exists no justification for this Court to consider granting the writs as prayed for.
Petition disposed off.
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2023 (8) TMI 179
Classification of commodities - rate of tax - Clohex - Clohex Plus - to be treated as medicament and taxable at 5% or not - Senquel-AD Mouthwashes - taxable at the rate of 14.5% by virtue of entry No.92(6) of SRO 82/2006 or not - HELD THAT:- On a reading of the principles emerging from the decisions in Heinz India Limited v. The State of Kerala [2023 (5) TMI 290 - SUPREME COURT] and Puma Ayurvedic Herbal Private Ltd. v. Collector of Central Excise [2006 (3) TMI 141 - SUPREME COURT], it can be seen that when a product contains pharmaceutical ingredients that have therapeutic or prophylactic or curative properties, the proportion of such ingredients is not invariably decisive, and what is of importance is the curative attributes of such ingredients that render the product 'medicament' and not a cosmetic. Although a product is sold without a medical practitioner's prescription and is available over the counter, it does not lead to the conclusion that they are cosmetics - A product used mainly in curing or treating ailments or diseases and containing curative ingredients, even in small quantities, is to be branded as a medicament. The dominant use to which the product is being used certainly has a bearing.
It is also to be seen that whenever a product has curative or prophylactic value as well, but the revenue still wants the said product to be brought under a different Chapter, the onus is on the revenue to show that it is not a medicament; the revenue will have to demonstrate that curative or prophylactic value is only subsidiary in nature or that the description covers the product under the Chapter wherein it is sought to be excluded. The product in the instant case normally should have come under Chapter 30 but for the specific exclusion under Note to Chapter 30 - it is also found that if a product is registered as a medicament by the Drugs Controller, that would be a strong factor to consider it as having curative or prophylactic value as a medicament.
The department also did not discharge its onus of proving that the product cannot be classified as a medicament, though it certainly has attributes of a medicament - it is also found that the clarification order accepts the classification accorded to the other products Clohex and Clohex Plus by the assessee, as medicament based on the fact that they were manufactured under a drug licence. However, there is no reason discernible from the clarification order as to why Senquel-AD Mouthwash which is presented in a similar form cannot also be classified as a medicament more so when the Central Excise authorities had accepted the said classification during the relevant period.
Since the clarificatory authority did not consider these aspects, it is deemed appropriate to remit it to the same authority to consider all the above aspects in the first instance. Accordingly, the impugned order (Order No. C3/26631/13/CT) of the authority for clarification dated 09.01.2015 set aside and matter remitted to the said authority for fresh consideration.
Appeal allowed by way of remand.
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2023 (8) TMI 116
Nature of transaction - sale or service - Levy of sales tax on the turnover of sale - tankers given on hire - deemed sale or transfer of the right to use any goods for any purpose - HELD THAT:- The deemed sale of transfer of right to use any goods for any purpose came up for consideration before the Apex Court in the case of BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [2006 (3) TMI 1 - SUPREME COURT]. In the said judgment, the Apex Court has considered the judgment of STATE OF ANDHRA PRADESH AND ANOTHER VERSUS RASHTRIYA ISPAT NIGAM LTD. [2002 (3) TMI 705 - SUPREME COURT].
The Apex Court in the said case held that to constitute a transaction for the transfer of the right to use the goods, it is necessary that there must be a consensus ad idem as to the identity of the goods, the transferee should have a legal right to use the goods and consequently all legal consequences of such use including any permissions or licences required therefor should be available to the transferee and for the period during which the transferee has such legal right, it has to be to the exclusion of the transferor. The Apex Court held that this is the necessary concomitant of the plain language of the statute, viz., a “transfer of the right to use” and not merely a licence to use the goods. Another condition was that having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. Thus, it could be seen that unless all these ingredients are available, the transaction will not come within the meaning of “transfer of the rights to use any goods”.
The Gauhati High Court in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF TAXES, ASSAM AND OTHERS [2009 (2) TMI 749 - GAUHATI HIGH COURT] considered a similar provision under the Assam General Sales Tax Act. In the said case, petitioner IOCL, which was engaged in the business of sale and supply of petroleum products inside as well as outside the State of Assam, had hired trucks for delivery of petroleum to its dealers and in the course of its business entered into agreement with contractors as regards hiring of trucks/tankers - After taking into consideration the various clauses of contract entered between the assessee and the owners of the vehicles, the Division Bench held that there was no transfer of right to use to make it taxable under the Act. The Court, therefore, found that show cause notice issued was without jurisdiction and as such, allowed the petition, setting aside the show cause notice.
In the present case, the clauses in the agreement reveal that oil company is in exclusive possession and use of the tankers to transport its petroleum products and have full control over the tankers and crew for transportation and delivery of petroleum products to customers/other locations. The agreement in clear terms provides for transfer of right to use the trucks for transportation of petroleum products of oil company - the effective control and possession was always with AHS. What was being provided to HPCL was only a transportation service on hire.
The Tribunal instead of applying the law as laid down by the judgments in the case of Bharat Sanchar Nigam Ltd., Indian Oil Corporation Ltd., has read the agreement in bits and pieces and referred to only certain clauses which were in place to ensure commitment for uninterrupted efficient transportation service. The Tribunal has referred to the clauses which provides that the tankers are not under agreement with any other party, AHS not to assign right in the tankers or the tankers should not be used for products other than oil of HPCL, HPCL has right to change the loading location etc. The Tribunal has failed to appreciate that these clauses referred to and provided for in the agreement with HPCL were only to ensure uninterrupted transportation services by AHS to HPCL. The right to use of tankers does not get transferred because of these clauses - Merely because of the fact that certain clauses were provided in the agreement in view of the nature of the cargo to be carried and to ensure that the transportation of their products do not get disrupted, it did not necessarily mean that the right to use the tankers stood transferred in favour of HPCL by AHS, more so, when the agreement provided for substitution of the vehicles.
The judgments relied upon by Mr. Sonpal (respondent) are of no assistance to him in as much as, as held in STATE OF ANDHRA PRADESH AND ANOTHER VERSUS RASHTRIYA ISPAT NIGAM LTD. [2002 (3) TMI 705 - SUPREME COURT] the effective control was with AHS. In BRAHMAPUTRA VALLEY CONSTRUCTION AND SUPPLIERS VERSUS OIL AND NATURAL GAS CORPN. LTD. AND OTHERS [2014 (9) TMI 371 - GAUHATI HIGH COURT] also the Gauhati High Court has held that it is the features of the contract which are material and to be looked into - As regards WALTOR BUTHELLO OF MUMBAI VERSUS THE COMMISSIONER OF SALES TAX AND HARROLD BUTHELLO VERSUS THE COMMISSIONER OF SALES TAX [2017 (5) TMI 769 - BOMBAY HIGH COURT], the facts were entirely different in as much as in that case the buses were handed over by the contractor to PMT and the buses, which were handed over to PMT, were registered with the RTO, Pune in the name of PMT as a lessee. In that case, even the conductor of the bus was provided by PMT and not the owner of the bus. It was the conductor of PMT who was to collect the fare from the passengers. The contractor was also permitted to employ other surplus drivers employed with PMT where the post of drivers has become surplus on PMT’s establishment. Those were the factors which weighed in the mind of the Court which is not the case in the appeal at hand.
Thus, by no stretch of imagination, it can be held that there was any transfer of right to use goods - The Tribunal was not justified in holding that the transportation job with the use of tank trucks (tankers) as per the agreement with HPCL dated 26th June 2006 amounted to transfer of right to use goods and hence, covered by definition of sale under the MVAT Act.
Appeal allowed.
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2023 (8) TMI 115
Composition Scheme - Interpretation of statute - Condition No. 3 of N/N. VAT 1510/CR-65/Taxation-1 dated 09.07.2010 - restriction on set-off only in respect of purchases of those goods involved in the execution of a works contract the property in respect of which (goods) are transferred in the execution of such works contract - non-restriction on set-off in respect of purchases of goods involved in the execution of a works contract the property in respect of which (goods) are not transferred in the execution of such works contract.
HELD THAT:- Pursuant to the powers vested in it by virtue of the provisions of Section 42(3A) of the MVAT Act, the State Government has notified the Composition Scheme vide the said Notification dated 9th July 2010. As held by this Court in the case of Maharashtra Chamber of Housing Industry and Others (Supra), a dealer has the option as to whether to opt for such a Composition Scheme or not and there is no compulsion or obligation upon a dealer to opt for such a scheme.
As per the Composition Scheme notified by the said Notification dated 9th July 2010, the composition amount is one percent of the agreement amount specified in the agreement or the value specified for the purpose of stamp duty in respect of the said agreement under Bombay Stamp Act, 1958, whichever is higher - the Scheme provides for tax at a flat rate of one percent on the aforesaid amount. However, Condition No. 3 provides that a dealer who opts to pay composition under the said Scheme shall not be eligible to claim set-off of taxes paid in respect of the purchases.
In the present case, the Appellant’s claim of set-off pertains to administrative expenses as well as expenses towards the lease of construction equipment which were used for the purpose of undertaking construction activity. The Appellant could not have executed the contract without the said expenses - On a plain reading of Condition No. 3 of the said Scheme, it is clear that the said condition prohibits a dealer opting for the Scheme from claiming set-off of taxes paid in respect of purchases. There is no merit in the argument of the Appellant that, just because Condition No. 3 refers to “the purchases”, it applies only in respect of certain kind of purchases and does not apply in respect of certain other purchases. If Condition No. 3 wanted to make an exception in respect of certain kind of purchases, then it would have expressly stated so. In the absence of any such exception made by Condition No. 3, in our view, on the plain language of Condition No. 3, it applies to all purchases.
Further, the whole purpose of such a Composition Scheme is to provide for a convenient, hassle-free and simple method of assessment. By opting for the Composition Scheme, the contractor saves himself the bother of book keeping, assessment, appeals and other such things - this being the purpose and object of such a Composition Scheme, this very purpose and object would be totally and completely defeated if the argument of the Appellant is accepted and the AO has to make an enquiry as to what goods have been transferred and in respect of what purchases set-off can be claimed.
Thus, no substantial question of law arises in the present Appeal. The Appeal is dismissed.
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2023 (8) TMI 114
Maintainability of appeal - limitation under Section 51 of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 - HELD THAT:- It is noticed that the petitioner's tax amount of Rs. 3,32,800/- has already been recovered towards duty that was confirmed in the Assessment Order dated 20.01.2022 for the Assessment Year 2014-2015. The petitioner has not paid the tax that was determined vide impugned order dated 25.07.2022 for the Assessment Year 2015-2016 amounting to Rs. 5,83,125/- - To balance the interests of the petitioner and the revenue, this Court is inclined to dispose these two writ petitions by directing the petitioner to file a statutory appeal before the Appellate Commissioner under Section 51 of the TNVAT Act within a period of 30 days from the date of receipt of a copy of this order together with a pre-deposit of 50% of the disputed tax.
Subject to such compliance, the appeal for the Assessment Year 2015-2016 shall be numbered. As far as the Assessment Year 2014-2015 is concerned, since the entire amount has been recovered, the appeal shall be numbered, if such appeal is filed within a period of 30 days from the date of receipt of a copy of this order.
Writ Petitions are disposed of.
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2023 (8) TMI 113
Levy of penalty in terms of Section 47(6) of the KVAT Act - gold ornaments brought into Cochin by the petitioner were in fact taken back to Mumbai by the petitioner on the same day or not - scope of term “baggage” for the purposes of the Explanation I to S. 46 (3) of KVAT Act - HELD THAT:- It is not in dispute that in respect of the amount of Rs. 15 lakhs that was paid by the petitioner towards alleged tax due on the said consignment, he has disputed his tax liability by preferring an application for refund, which has not been adjudicated by the intelligence officer till date. Rather than issue a direction to the intelligence officer to adjudicate the matter at this belated stage, it is felt that on account of lapse of time this aspect can now be adjudicated by the Appellate Tribunal, which is the final fact finding authority, after calling for the refund application filed by the petitioner from the Intelligence officer concerned.
The other issue raised by the petitioner, namely whether for the purposes of imposition of penalty under Section 47 of the KVAT Act, the transportation of gold ornaments as personal luggage would have any implication considering the provisions of Explanation 1 to Section 46(3) of the KVAT Act, also has to be considered by the Appellate Tribunal. The said aspect although specifically raised by the petitioner in the appeal before the Tribunal and noticed by the Tribunal at paragraph 3(2) of the order impugned herein, was not adverted to in the operative part of the order of the Tribunal. The issue requires to be considered by the Tribunal since it may have a bearing on the legality of the penalty imposed on the petitioner.
Matter remanded back to the Tribunal for a fresh adjudication of the matter - appeal allowed by way of remand.
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2023 (8) TMI 112
Non-speaking order - Revision Order under Section 27 of the TNVAT Act - revision order without issuance of any notice to petitioner - violation of principles of natural justice - HELD THAT:- The impugned order has been passed after awaiting for a long period after order dated 16.06.2015 was passed in W.P.No.14652 of 2015 on 16.06.2015 the impugned order has been passed is without following the principles of natural justice. Therefore, the impugned order is unsustainable. The impugned order is therefore liable to be quashed and it is accordingly quashed. The case is remitted back to the respondent to pass a speaking order on merits in accordance with law within a period of eight (8) weeks from the date of receipt of a copy of this order.
Petition allowed.
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2023 (8) TMI 111
Failure to pay appropriate tax - import of goods for trading purpose or not - petitioner was not heard before the impugned order was passed - violations of principles of natural justice - HELD THAT:- There is no admission by the petitioner in the affidavit filed in support of the present Writ Petition. Notice dated 16.06.2022 has not served on the petitioner before the impugned order dated 30.06.2022 was passed. The date 16.06.2022 in the impugned order appears to be CAG Audit defects, as is evident from the reference in the preamble to the impugned order. Copy of the said CAG Defect Memo dated 16.06.2022 of CAG Audit team also appears to have not been served to the petitioner before the impugned order was passed on 30.06.2022.
The impugned order is set aside and the case is remitted back to the respondent to pass an appropriate order within 75 days from the date of receipt of a copy of this order - Petition allowed by way of remand.
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2023 (8) TMI 110
Award of tender/auction for toll collection for lorry entry - forbearing the respondents from collecting any fee/toll charges for the lorries - It is the contention of the petitioner that the first respondent has no right to collect toll from the vehicles entering into the petitioner's premises - HELD THAT:- On perusal of the Section 249 of the Coimbatore City Municipal Corporation Act, this Court is of the view that the above Section gives right to recover the expenses caused by extraordinary traffic in the Civil Court by proving the same. Except that, it does not permit to levy tax. Admittedly, there is no material whatsoever available on record so as to substantiate the submission of the first respondent to show that only because of the lorries entering into the petitioner's warehouse the roads suffered damages and to meet out that expenses recovery has to be made.
In JINDAL STAINLESS LTD. AND ANOTHER VERSUS STATE OF HARYANA AND OTHERS [2006 (4) TMI 120 - SUPREME COURT] the Hon'ble Apex Court has held that the compensatory tax is a charge for offering trade facilities and they are based on the principle of equivalence.
Thus, as in the auction notice the amount has been fixed as Rs. 30,000/- and the same would not commensurate to the expected expenses as alleged in the counter. Such view of the matter, this Court is of the view that the action of the first respondent Corporation to collect toll only from the lorries entering the petitioner's premises is nothing but discriminatory and cannot be said to be compensatory in nature.
The writ petition is allowed.
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2023 (8) TMI 109
Reopening of assessment - Time limitation - impugned order dated 22.04.2022 for the assessment year 2007-08 challenged on the premise that the same is barred by limitation - HELD THAT:- The original assessment order dated 24.10.2013 although refers to Section 22(2) of the Act, it appears that the same cannot be traced to Section 22(2) of the Act in view of the fiction contained in the proviso to Section 22(2), which provides that all assessments from the assessment year 2006-07 till 2010-11 shall be deemed to have been assessed on 30.06.2012. In view of the above deeming the assessment under Section 22(2) of the Act is deemed to have been made on 30.06.2012. Any assessment made after 30.06.2012 could be traced to Section 27 of the Act, which prescribes six years from the date of orders of assessment, viz., 30.06.2012. Thus, any assessment ought to have been made under Section 27 of the Act on or before 30.06.2018.
Assuming that this assessment dated 24.10.2013 is traceable to Section 27 of the Act and the present impugned order is also traceable to Section 27 of the Act, the impugned order dated 22.04.2022 ought to be in compliance with the limitation prescribed under Section 27 of the Act, which provides that any assessment ought to be made within six years from the date of the assessment. In the present case, the original assessment is deemed to have been made in terms of Section 22(2) of the Act on 30.06.2012.
This Court is of the view that the impugned proceedings being barred by limitation, the same is bad for want of jurisdiction and a nullity. In such circumstances, interference under Article 226 of the Constitution of India is warranted inasmuch as question of limitation relates to jurisdiction. An order barred by limitation is a nullity.
This Court is of the opinion that the impugned proceedings is barred by limitation and thus bad for want of jurisdiction and a nullity - Petition disposed off.
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