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VAT / Sales Tax - Case Laws
Showing 601 to 620 of 27514 Records
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2023 (7) TMI 535
Recovery of sales tax dues - encumbered property or not - liability of auction purchasers - liability of petitioners nos. 1 and 2 who are auction purchasers in a securitization auction held by petitioner no. 3, to discharge the sales tax dues, for the recovery of which, the property as purchased by them, was attached by the Sales Tax Department prior to the auction.
Whether the Sales Tax Department is correct in asserting that it has a charge on the property in question as purchased by petitioner Nos. 1 and 2 from petitioner No. 3? - HELD THAT:- Section 37 of the MVAT Act clearly provides that for the liability under the MVAT Act, to be the first charge, is itself, subject to any provision regarding creation of first charge in any Central Act for the time being in force. This pre-supposes that when under a Central enactment there is a provision creating first charge, then in such case, the Sales Tax Department for the purpose of Section 37 shall not have the first charge - Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967 provides for the manner of attachment of immovable property which provides that the order shall take effect as against purchasers for value in good faith and against all other transferees from the defaulter from the date the said order is made as provided in sub-rule (3).
On a perusal of the order of attachment of the said property dated 11 August, 2017, it is seen that the attachment is made in pursuance of the demand notice issued under Section 178 read with Section 267 of the Maharashtra Land Revenue Code, 1966 read with Section 34 of the MVAT Act and referring to Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967.
The attachment is for recovery of an amount of Rs. 10,31,38,003/- being the sales tax dues payable by the dealers/borrowers – M/s. Taurus Autodeal Pvt. Ltd.. The attachment notice was never challenged by the said dealers and its directors. For such reason in the hands of petitioner no. 3, the property stood as a property as attached by the Sales tax department, however, subject to the first charge of petitioner no. 3 to realise its dues as a secured creditor - The grievance of petitioner no. 3 in the said writ petition was to the effect that the Deputy Commissioner was legally not correct to assert that petitioner no. 3 did not have the first charge on the property, while claiming unpaid sales tax dues of the dealer, in asserting that there was a charge on the said property.
It is crystal clear that there is nothing in the sale certificate to indicate that petitioner Nos. 1 and 2 have purchased the said property from petitioner No. 3 free from encumbrances, which is a specific requirement of “Appendix V” as extracted above. In fact, it is definite from what has been observed by us above that petitioner No. 3 had taken all the precautions to secure its own interest, to recover the amounts payable by the borrowers, by sale / auction of the said property, hence, certainly petitioner Nos. 1 and 2 have not purchased the said property free from any charge or encumbrance of the Sales tax department.
Thus, it is more than clear that at all material times, that is with effect from 11 August, 2017, there was a charge and/or an encumbrance on the property of the Sales Tax Department and further petitioner nos. 1 and 2 had purchased the property along with such charge/ encumbrance. The word ‘encumbrance’ would mean a burden or charge upon property or a claim or lien upon an estate or on the land. It also means a burden of legal liability on property. When there is an encumbrance on a land, it constitutes burden on the title which diminishes the value of the land.
It may be observed that once the question arises as to whether there is a charge on a property and in the present case a charge which has arisen by operation of law, Section 100 of the Transfer of Property Act, 1882 would become relevant in the context of the legal status of such property - Applying Section 100 of the TP Act to the facts of the present case, legal consequences emanate, firstly that by operation of the provisions of Section 37 of the MVAT Act there was undoubtedly a charge on the said property, when the property stood in the hands of petitioner No. 3 being the secured creditor. The charge of petitioner no. 3 as the secured creditor was the first charge and not that of the Sales Tax Department, as held by the Division Bench, interpreting Section 37 of the MVAT Act, in the order dated 10 January 2020 passed on the writ petition filed by respondent no. 3.
The Full Bench considering the provisions of Rule 8 of the Security Interest (Enforcement) Rules, 2002 read with the provisions of Section 13(4) of the SARFAESI Act and the decision of the Supreme Court in AI CHAMPDANY INDUSTRIES LIMITED VERSUS THE OFFICIAL LIQUIDATOR & ANR. [2009 (2) TMI 921 - SUPREME COURT], held that in terms of the provisions of the SARFAESI Act read with 2011 Rules, the secured creditor is expected to know the encumbrances. It was observed that once a statutory mechanism noting the encumbrances in respect of the immovable property being put up for sale by auction not being available before 24 January 2020, the authorized officers were found to play it safe by inserting the “as is where is, whatever there is basis” clause in the sale advertisement. The Court observed that once such clause is inserted in the advertisement and the prospective purchaser, upon bidding in the auction emerges as the highest bidder, normally such purchaser cannot insist upon issuance of sale certificate without clearing the liability of meeting other dues in relation to such property, and this is because he participates in the auction and bids, with his eyes open, that the sale would be on “as is where is, whatever there is basis”, and that the prospective purchaser cannot wriggle out of the consequences and claim that the other dues are not payable by him, if he cannot disprove constructive notice of the charge created on the property put up for auction sale.
Analyzing the provisions of the SARFAESI Act as also the MVAT Act, the Full Bench has held that the attachment orders issued post 24 January 2020 if not filed with the Central Registry, any department of the Government to whom a person owes money on account of unpaid tax has to wait till the secured creditor by sale of the immovable property being the secured asset mops up its secured dues. Insofar as the attachment orders which were issued prior to coming into force the 2011 Rules as amended, the Court observed that insofar as recovery as initiated under the MLRC is concerned, not only the provisions contained therein but also the provisions contained in the 1967 Rules were required to be complied with, and the proclamation has to be made in the required form and must be as specified in the 1967 Rules.
Thus, this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos. 1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No. 3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same.
Petition dismissed.
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2023 (7) TMI 472
Amnesty Scheme - Substantial amount paid prior to announcement of the amnesty scheme and even prior to assessment order passed by the Assessing Officer (change to Vera Samadhan Yojana - 2019) - HELD THAT:- It would emerge from the record that at the time of spot inspection and assessment at the place of the petitioner, the petitioner deposited an amount of Rs. 48,75,000/- on 01.07.2015 towards the amount of tax, however while passing assessment order, the concerned Assessing Officer had not taken into consideration the said amount and thereby held that the petitioner is liable to pay total amount of Rs. 77,77,575/- (including tax of Rs. 38,03,216/- + penalty and interest). Thus prima facie from the record, it is clear that the concerned Assessing Officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner. The petitioner, therefore, filed first appeal before the appellate authority.
In the memo of appeal, the petitioner has specifically taken contention in Paragraph No. 9 that while passing an order of assessment on 29.06.2015, the concerned officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner and, therefore, he has wrongly calculated the amount of interest and penalty, which is not permissible - It is further reflected from the record that separate application for stay was also filed by the petitioner before the appellate authority and the appellate authority has considered the amount of Rs. 48,75,000/- paid by way of tax by the petitioner to the concerned respondent authority and, therefore, the appellant authority has granted stay on 25.05.2017 in favour of the petitioner against the recovery.
It is also pertinent to note that against the aforesaid order passed by this Court, the State preferred SLP in STATE OF GUJARAT AND ANR. VERSUS SAFAL DEVELOPERS AND ANR. [2016 (10) TMI 1383 - SC ORDER] before the Hon’ble Supreme Court and the Hon’ble Supreme Court has dismissed the SLP preferred by the State and thereby the Hon’ble Supreme Court has not interfered with the order passed by this Court in the aforesaid case.
The respondents have committed an error while rejecting the application submitted by the petitioner under the amnesty scheme as the petitioner had already paid an amount of Rs. 48,75,000/- even prior to the order of assessment was passed by the concerned Assessing Officer and prior to announcement of the scheme - the petitioner is entitled to get the benefit of the scheme and remission of penalty and interest.
The impugned communication dated 11.05.2022 at Annexure-A as well as the attachment order dated 20.06.2022 at Annexure-K are hereby quashed and set aside. The respondent no. 3 herein is hereby directed to grant benefit of the amnesty scheme to the petitioner - Petition allowed.
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2023 (7) TMI 422
Stay of demand / Waiver of pre-deposit - Revision of assessment order - Direction to petitioner to pay further 25% of the disputed tax in addition to the amount already paid by the petitioner at the time of filing the appeal - HELD THAT:- At the time of filing the appeal itself, the petitioner has paid 25% of the disputed tax. By way of this impugned order, the first respondent insisted the petitioner to pay further 25% of the disputed tax. The appeal was filed in the year 2019 and it is yet to be disposed for want of written submission from the third respondent.
The impugned order of the first respondent is set aside, with a direction to the first respondent to dispose of the appeal within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.
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2023 (7) TMI 385
Taxability - Maize Flakes, Malted Barley, Malt conversion and Malt extract are taxable under KTEG Act or not - imposition of interest and penalty for the period prior to the decision in United Breweries [2015 (9) TMI 1516 - KARNATAKA HIGH COURT] - HELD THAT:- Admittedly, the decision in United Breweries is rendered on September 14, 2015. Hence, Maize Flakes, Malted Barley, Malt conversion and Malt extract became taxable pursuant to the decision in United Breweries. Assessee was paying tax on hops pallets prior to the said decision.
In Jayce Trading Corporation [2021 (3) TMI 956 - KARNATAKA HIGH COURT], the assessee therein had paid taxes for period between 03.03.2010 and 31.03.2011 prior to the date on which the Commissioner had clarified the issue on 07.07.2014. In the case on hand, the basis to impose tax is the decision in United Breweries which has been rendered on 15.09.2015. Therefore, imposition of tax prior to the decision in United Breweries is not sustainable. For the same reason, interest and penalty are also not sustainable.
The aspect of ‘fit for consumption’ has been considered by this Court in United Breweries. Therefore, this contention is untenable and accordingly, rejected.
Revision petition allowed.
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2023 (7) TMI 295
Levy of penalty under Section 9 (2A) of the CST Act read with Section 37 (6) of HGST Act, 1973 - Evasion of tax - Inter-State Sales shown as branch transfers - HELD THAT:- In the present case, a consignment of motor cycles destined to Ghaziabad and Secunderabad Depots were checked at STCB, Faridabad and a penalty was imposed under Section 9 (2A) of the CST Act read with Section 37 (6) of HGST Act, 1973. The verification regarding stock transfer to Ghaziabad and Secunderabad Depots from Faridabad was also made. The assessee admitted the certain branch transfer in the original return as inter state sales. The dealer filed revised returns for first and second quarter showing an enhanced turnover of interstate sales and paid additional tax - the lack of bona fides on the part of appellant’s part as he did not file the revised returns under Section 25 (4) of the 1973 Act and waited till the filing of fourth return. The appellant had deliberately filed incorrect return and omitted to pay the amount of tax due and thus contravened Section 25 (2) and 3 of 1973 Act. The penalty has rightly been imposed by the Assessing Officer.
The assesse filed his revised return when his vehicle was confiscated. The mens rea and deliberate attempt to conceal and suppress the taxable turnover by fabricating or maintaining false returns with a motive to evade the payment of tax due are the essential ingredient of Section 48 of HGST Act. No material was brought on record by the assessee to prove any deliberateness. The Assessing Officer had enough ground to impose penalty under Section 48 of the Act.
No substantial question of law arises for consideration in the present appeal and the same stands dismissed.
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2023 (7) TMI 191
Scope of clarification issued by the Revenue Department - To be retrospective or prospective - Applicability of Exemption Entry No. 8 on maize starch - overriding effect of Taxation Entry No. 61 - recovery of taxes retrospectively is a mere change of opinion or not - HELD THAT:- The Exemption Notification was erroneously held by the High Court not to have statutory backing. Recital thereof shows the source of power. Exercise of power was in terms of Section 17 of the Act, which appears to be the repository of the State Government’s power to exempt payment of tax. However, nothing really turns on it in view of the several Amendment Acts by which the Schedules were amended from time to time - Indeed, the Act was amended further with effect from 27th March, 2002 by Act No.18 of 2002, i.e., the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 2002, but the same being a post-millennium event is admittedly beyond the period under consideration, i.e., 1998-99; hence, we need not be too concerned with the latter amendment.
It would appear from the conspectus of the statutory provisions as delineated above that there were two entries in the field at or about the period of the relevant assessment year, i.e., “sago and starch of any kind” in Schedule I, referred by us as Taxation Entry No.61, and “products of millets (rice, flour, brokens and brans of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize)” in Schedule III which we are referring to as Exemption Entry No.8.
Law is well settled that if in any statutory rule or statutory notification two expressions are used - one in general words and the other in special terms - under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail - it is thus emerged that Taxation Entry No.61 is relatable to ‘starch’ of any kind whereas Exemption Entry No.8 relates to products of ‘millet’.
The clarification vide Circular dated 8th October, 1998 was issued in exercise of power conferred by the statute (i.e., Section 28-A of the Act). Whenever a clarification pursuant to an application made by a registered dealer as to the applicable rate of tax is issued under sub-section (1), or the Commissioner on his own clarifies any point concerning the rate of tax under the Act, or the procedure relating to assessment and collection of tax as provided for under the Act is issued under sub-section (2), the object is to make the rate of tax explicit what is otherwise implicit - What the clarification provided by the Commissioner does is to clear the meaning of the two entries which was already implicit but had given rise to a confusion. A clarification of this nature, therefore, is bound to be retrospective.
The impugned judgment is upheld albeit for reasons not assigned by the High Court. Finding no merit in the appeals, the same is dismissed.
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2023 (7) TMI 104
Reversal of input tax credit against the supply - purchase of materials from a dealer whose registration has been cancelled - basis of the cancellation of registration of the selling dealer, not provided to appellant - violation of principles of natural justice - HELD THAT:- Admittedly, the details of such cancellation has not been furnished to the appellant. In any event, the appellant having availed the input tax credit against the inward supply cannot be directed to reverse the input tax credit by way of an email communication without mentioning as to what was the basis of the cancellation of registration of the selling dealer.
There are no need to travel far to examine the correctness of the direction issued by the respondent department to the appellant, without furnishing any details to the appellant, the respondent could not have directed reversal of the input tax credit, which was availed by the appellant and it is informed that the appellant was compelled to pay the amount and without prejudice to their rights have paid the amount - the procedure adopted by the authority for directing reversal of the input tax credit and thereafter compelling the appellants to pay the amount is not sustainable in the eye of law but will be in violation of the principles of natural justice.
Communication sent by the authority by an email dated 20th December, 2022 is set aside with a direction to the authority to remit the amount of input tax credit which was reversed by the appellant on effecting payment without prejudice to their right by transmitting the same amount in the appellants’ electronic credit ledger - Petition allowed.
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2023 (7) TMI 41
Calling to pay the deferred sales tax immediately - validity of G.O.Ms. No. 503 Revenue (CT-II) Department dated 08.05.2009, whereby Rule 67 of the A.P. VAT Rules, 2005 came to be amended - contrary to the industrial policy of the State Government in G.0.Ms. No. 108 dated 20.05.1996 or not - HELD THAT:- Under Section 69 read with Rule 67, all those industrial units, who availed the option of tax holiday / exemption prior to 2005, came to be converted to the unit availing tax deferment, however, with condition that the balance period of tax holiday / exemption available as on 31.03.2005 to such units shall be doubled for the purpose of tax deferment. Meaning thereby, an industrial unit having two years balance period available as tax holiday / exemption as on 31.03.2005, the same shall be converted to the unit availing tax deferment for four years, i.e., double the balance period. However, the illustration to Rule 67 provided contrary to Rule 67 and it provided for 14 years deferment.
As per the settled position of law, an illustration cannot govern the Rule but it is the Rule which shall govern and the illustration is always for clarification and it is to explain what is provided under the Rule. But the illustration cannot be contrary to the main statute namely, Rule and/or Act. Therefore, thereafter when the illustration came to be amended subsequently, vide G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009, to bring it in line with the statutory provision – Rule 67, it cannot be said that the same is illegal and/or contrary to the parent act and/or contrary to the original industrial scheme - In fact, the State Government has taken care of the interest of the industrial units by providing double the balance period while converting the industrial units, who earlier availed the tax holiday as the units having tax deferment. Therefore, it cannot be said that the State was not aware of the interest of the industrial units under the VAT regime.
The High Court has rightly dismissed the writ petitions upholding the subsequent G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 and amendment to Rule 67 of the Rules, 2005 - The impugned judgments and orders passed by the High Court upholding the validity of the amendment to Rule 67 of the Rules, 2005 vide G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 is/are hereby confirmed.
Appeal allowed in part.
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2023 (7) TMI 40
Attachment of immovable property - existence of any material to establish that there was valid publication of proclamation of attachment of the property or not - HELD THAT:- There is a clear distinction between the service of notice/warrant of attachment on the defaulter - assessee, and publication of proclamation of attachment in the manner and mode prescribed by law, as elucidated in DESH BANDHU GUPTA VERSUS. N.L. ANAND & RAJINDER SINGH [1993 (9) TMI 350 - SUPREME COURT] and M/S. MAHAKAL AUTOMOBILES & ANR VERSUS KISHAN SWAROOP SHARMA [2008 (4) TMI 710 - SUPREME COURT]. Mere passing of an order of attachment and service on the defaulter - assessee is not sufficient for constructive notice to the general public, unless proclamation of attachment is publicized in the manner prescribed by law.
It is, no doubt correct that the appellants had handed over a copy of the Attachment Warrant to the office of Sub-Registrar of Assurances, albeit it is also a fact that the register recording the attachments was misplaced in April 2004. Further, the sale deeds in favour of respondent nos. 1 and 2, namely, Amit Ahuja and Shalini Ahuja were registered by the Sub-Registrar of Assurances on 26.04.2006.
It is a need to update and revise Rule 54 to Order XXI of the CPC, as the prescribed modes of publication for proclamation of attachment are outdated. A dedicated and specific website and publication in the electronic and social media, apparently appears to be a better method to inform and alert the general public. This would be easier, less prone to challenge and more transparent and open for the public to verify and check.
It will not be appropriate and proper for this Court to interfere with the impugned judgment passed by the High Court - appeal dismissed.
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2023 (7) TMI 39
Forfeiture of the refund permitted to the petitioner - third respondent has erred in his jurisdiction in upholding the fourth respondent’s rectification order dated 12.07.2019 under Section 69 of the KVAT Act or not - HELD THAT:- In the present case, the petitioner, when not obliged to deduct any tax at Source from M/s. Ocean Interior Limited [its Contractor] as contemplated under Section 9-A of the KVAT Act, has deducted certain amount as tax and deposited the same along with interest because of its own reading of this provision. Subsequently, when the petitioner has made a request for VAT Form-156, its representatives are informed that it was not obliged under the provisions of Section 9-A of the KVAT Act to deduct the amount. The petitioner has repaid the amount to M/s. Ocean Interior Limited. Neither this fact, nor the further assertion that the contractor has filed full returns disclosing this transaction and offering tax is contested.
This Court must opine that, given the scheme under Section 47 of the KVAT Act and the circumstances in which the petitioner has deduced TDS and deposited the same notwithstanding the provisions of Section 9(A) of the KVAT Act, there could not have been a forfeiture. The petitioner has repaid the amount deducted as TDS to its contractor on being informed that it could not have deducted any amount as TDS and the contractor has also offered such amount as tax - In the present case, without any detailing, the fourth respondent has only opined that refund is not in accordance with the proceedings dated 11.07.2019. The fourth respondent, unless could explicate in the impugned order dated 12.07.2019 how the proceedings dated 11.07.2019 related to deductions made notwithstanding the provisions of Section 9-A of the KVAT Act, could not have been relied upon the same to conclude that there was a mistake apparent from the record in permitting the refund.
This Court is of the considered view that the respondents must refund a sum of Rs. 80,75,720/- in terms of Form- 185 dated 11.02.2019 (Annexure-M) within a reasonable time without interest, but if there is any delay, then must be liable to pay interest for the delayed period - Petition allowed.
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2023 (6) TMI 1237
Rejection of rectification of assessment order - admission of Appeal without any pre-deposit - case of petitioner is that impugned orders are passed without giving opportunity of hearing insofar as, disallowance of input tax credit qua all the parties is concerned - violation of principles of natural justice - HELD THAT:- The Petitioner has approached this Court under Article 226 of the Constitution of India, in order to bypass the mandatory provision under the MVAT Act, 2002 which required pre-deposit of 10% of the tax for entertaining the appeal. In the facts of the present case, this approach of the Petitioner cannot be accepted moreso because against order rejecting the rectification, it had filed an appeal because according to the Petitioner against such rejection of rectification order no pre-deposit is required to be made. [This clearly shows that the present petition is filed to bypass the mandatory pre-deposit provision in entertaining the appeal].
The issue raised in the assessment order interalia qua circular trading requires factual determination which this Court cannot go into in exercise of its jurisdiction under Article 226 of the Constitution of India. It is also important to observe that by various show cause notices, the Petitioner was called upon to file all the evidences in support of its return of income and furthermore order sheet annexed to the Petition records that the Petitioner’s accountant refused to sign the proceedings sheet in relation to the circular transaction query raised by Respondent No. 2. Therefore, prima facie, the contention of the Petitioner that opportunity of hearing was not given may not be correct.
The decision of the Supreme Court in the case of State of Tripura Vs. Manoranjan Chakraborty & Ors. [2000 (11) TMI 1079 - SUPREME COURT] relied upon by the Petitioner does not assist the case of the present Petitioner in the facts of the present case. The decision of the Supreme Court was in connection where there is a high ended assessment and gross injustice done. Therefore, the decision of the Supreme Court is not applicable to the facts of the present case.
The issue raised in the present petition qua opportunity of hearing would require examination of the factual matrix in the complexion of the proceedings as they stand, which can be effectively adjudicated more appropriately by the Appellate Authority - the Petitioner relegated to avail the alternative remedy of an appeal - petition disposed off.
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2023 (6) TMI 1236
Calling for the records pertaining to the Petitioner’s case and after going into the validity and legality thereof to quash and set aside the impugned Order - direction to Respondents themselves, their officers and subordinates to withdraw and/or cancel the impugned Order dated 11.12.2018 passed by the Respondent No. 2; and to refrain from taking any steps or proceedings in pursuance of and/or in furtherance of and/or in implementation of impugned Order dated 11.12.2018 passed by the Respondent No. 2 - benefits of the exemption granted vide Notification No. DNH/CST/4-1/99/4 dated 31.12.1999 and Notification No. ADM/LAW/CSR/2/84 dated 04.01.1984 without the production of C Forms.
HELD THAT:- The petitioner has drawn our attention to the judgment and order dated 30 August, 2012 passed by a co-ordinate bench of this PRISM CEMENT LTD & AKSHAY RAHEJA VERSUS STATE OF MAHARASHTRA, FINANCE DEPARTMENT & OTHS. MUMBAI [2013 (7) TMI 668 - BOMBAY HIGH COURT] to the order passed on Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors.) dated 03 September, 2012, as also to another order of even date in case of Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors. to contend that the issue as arising in the present petitions is squarely covered by the decision in Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors. as also in cases of Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. and Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors.
The orders passed by the Division Bench in Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. by which the Division Bench disposed of the said case following the decision in case of Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors held that the petitioners have challenged the validity of the Circulars at Exhibits S, U, V & W to the petition. Counsel for the parties state that this Court in the case of Prism Cements Ltd. V/s. State of Maharashtra & Ors. has quashed similar circulars issued by the Commissioner of Sales Tax, State of Maharashtra.
Petition allowed.
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2023 (6) TMI 1235
Sale of High Speed Diesel (for short ‘HSD’) to various private industries of three States viz. Gujarat, Maharastra and Madhya Pradesh at concessional rates of sales tax without complying with the mandatory requisite permission from the Ministry of Petroleum & Natural Gas - diversion thereof has caused huge revenue loss to the Government and wrongful gain to the concerned - whether C.B.I. had any case to even lodge a prosecution?
HELD THAT:- Admittedly CVC too had not found any case against the accused to grant sanction.
The compilation and circulation by OCC on 08.07.1991, of the Guidelines for Release of Petroleum Products and Lubricants to Direct Consumers have not been denied, which suggests that the same was in force and all oil companies were following the guidelines since 1991. The charge-sheet has been filed for period between 1997-2000. The guidelines of OCC dated 08.07.1991 had not found any change. Mr. Shastri had referred in his Fax message of no change in the guidelines for allocation of HSD to processors. According to him, HSD allocation to the processors is approved by the MoP&NG based on the certification and recommendation of the TEC of the Oil Companies. The guidelines referred and relied upon does not reflect any certification and recommendation of the TEC to the oil companies, and, when a clarification was sought by P. Sudarsnam by a letter dated 23.08.1999, Mr. Shastri states before the C.B.I. that there was no change in the allocation policy and requested P.Sudarsnam of IOC not to make HSD supplies to the processors without the Ministry’s allocation / Linkage, and, since clarification was sought by the E.D., IOC from OCC, reply was sent by OCC, which stated by Mr. Shastri, according to the existing guidelines available, the directions were to be followed by the oil companies necessarily, and according to him the clarification was in accordance with the existing guidelines of the Ministry, and, in the present case, to his clarification on behalf of OCC, Ministry did not issue any such amendment, which implies, concurrence of the MoP&NG on the particular issue, upon which the Oil Companies were required to act accordingly.
It is required to be noted that TEC was dissolved with effect from 01.04.2002; the non-requirement of the TEC had been noted in the letter dated 27.03.2002.
The C.B.I. while filing the F.I.R. has failed to take a clarification from the authorized person of the Ministry as to why the Circular dated 02.01.1981 was only addressed to IOCL for the utilization of HSD from Koyali Refinery and not for any other oil companies. While the guidelines of the OCC does not refer to the requirement of TEC recommendation for uplifting HSD from any other oil companies. All the letters/circulars referred earlier hereinabove with the communication starting from 1988-1996 require TEC evaluation only for supplying LSHF-HSD/High Flash-HSD, LDO and Crude Sludge to processors for the manufacture of petroleum specialities - All the companies were clear on the fact that in the year 1991, the MoP&NG had issued the instruction vide letter/circular dated 2/6.1.1981 for instituting a procedure for utilization of HSD from Koyali Refinery and not from any other refineries, and the Ministry had addressed by Circular dated 17.03.1988 to all the oil companies regarding the constitution of TEC on supply of feed-stock for the production of petroleum specialities, by making a reference to the Ministry’s letter dated 02.01.1981, for reconstitution of the TEC; it was clarified that it would initially look into the supply of LSHF-HSD, LDO and Crude Sludge for the manufacture of petroleum specialities. There was no reference with regard to the supply of regular HSD.
There was no reason for the C.B.I. to file charge-sheet against any of the accused. None of the communications of the Ministry, except of 02.01.1981, for the utilization of HSD from Koyali Refinery, required any TEC recommendation for lifting of HSD from any other companies. The C.B.I. failed to take into account that the Ministry had never called for any clarification from any other company during the period between 1997 – 2000 in connection with the alleged facts noted in the F.I.R., the officers, who were working in the company, would go by the understanding of the Circulars.
The learned Special Judge observed that as per the record, four oil companies are of Gujarat, Maharashtra and Madhya Pradesh and there is no evidence to show that the officers of the oil companies had gathered, or met sales tax officers or staff or purchasers with an intention to commit the alleged offence - For the offence under the P.C. Act, the learned Special Judge found that there is no prima facie evidence to show that the applicants had accepted any gratification from any person as a motive or reward, and the applicants accused had followed all the instructions issued by the MoP & NG and acted in discharge of the duties; no sanction has been brought on record by the C.B.I., while sanction has been refused against the officers of the oil companies and against refusal C.B.I. had written to Central Vigilance Committee, but the said committee to confirm the order of non-issuance of sanction against the officers of the oil companies and therefore, no summons were issued against those accused persons.
The Petroleum Rules, 2002 came into force on 13.03.2002. A technical body being Oil Industry Safety Directorates Standards (OISD) had been formed for assisting the safety council constituted under the MoP&NG. The rules deals with restrictions of delivery and dispatch of petroleum in all classes A, B and C, the requirement of the licence for the import of petroleum, and the dispute with regard to the HSD would have to be resolved by the Board, which is governed by the Petroleum and Natural Gas Regulatory Board Act, 2006. The legal provision of the Petroleum Act and rules thereunder become relevant in this case, since chargesheet came to be filed on 25.03.2009.
This Court finds that the Special Judge has not committed any error in discharging the accused. No sanction has been granted for prosecuting the officers of the oil companies. The assessment made by the Special Judge discharging the accused is consistent with the record - the orders passed by the learned Special Judge discharging the accused – respondents herein are just and correct, the findings are in accordance to the documents on record, the accused are rightly discharged, as there are no sufficient grounds for proceedings against them.
All the present revision applications fail merits and are dismissed as rejected.
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2023 (6) TMI 1230
Issuance of Suspension proceedings - Action on enquiry report - petitioner were put under suspension without any basis and without following the procedure prescribed under the A.P. Civil Services (Classification, Control and Appeal) Rules, 1991 - HELD THAT:- It is manifest that the respondent authorities already conducted detailed enquiries on two occasions i.e., on 16.04.2021 and 19.12.2022, and by relying the said enquiry reports and without observing the principles of natural justice and without providing any opportunity to the petitioner to submit an explanation, the present impugned orders came to be passed by de horsing the procedure as contemplated under Rules 21 and 22 (1) of the CCA Rules, 1991.
On a perusal of the Rule 8 (1), this Court is of the opinion that Rule 8(1) is not applicable, since the enquiry was already completed twice in the present case and the enquiry reports were submitted by the Inquiry Officers on 16.04.2021 and 19.12.2022.
As per service jurisprudence, as stated by the respondents, that the notice is contemplated under Rule 8(1) of CCA Rules before issuing impugned proceedings is misconception, but in the given facts and circumstances and also as per the circular issued by the Central Vigilance Commission (CVC), if any enquiry or anyaction is proceeded by the disciplinary authority basing upon anonymous letters/complaints by third parties or news reports, the authority under obligation to issue prior notice to concerned delinquents before any enquiry/action. The detailed enquiries were already conducted and basing upon the enquiry reports, the present impugned orders were passed.
As seen from the impugned order, it is crystal clear that no show cause notice and no charge memo were issued to the petitioner to submit his explanation and no opportunity was given to him to participate in the enquiries said to have been conducted by the respondents. The fact remains that the enquiries were not conducted as per the CCA Rules, 1991 without complying the procedure as contemplated under Rule 20 of CCA Rules, 1991 - It is also settled principle of law that, basing upon anonymous letter or complaint from the public and news reports, neither the disciplinary proceedings nor punishment can be proceeded/imposed/awarded.
The enquiry reports dated 16.04.2021 and 19.12.2022 cannot be relied upon. Therefore, the power of suspension is only to be used to achieve the object to keep the delinquent away from the records and witnesses at the time of enquiry, but here enquiry was already completed, and the power cannot be used as a means of punishment. In fact, the present impugned proceedings does not speak any administrative exigencies, but due to the enquiry reports which are unknown to the petitioner, the impugned proceedings were issued for other reasons particularly as punitive measure only.
The respondents did not follow due process of law before issuing the impugned orders, which would attract the principle of malice in law as the impugned order was not based on any real factor germane and it was based upon the allegations made against a unit of Department in a news item published in a Telugu Newspaper on 04.04.2021. Admittedly, the petitioner never discharged his duties at the subject unit and his duties do not at all relate to collection of tax as alleged - Petition allowed.
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2023 (6) TMI 1191
Denial of claim for concessional rate of tax and claim for sales returns - no C Forms to support the claim for concessional rate of tax - claim of the petitioner rejected on the ground that the claim for sales return had not been made within the time contemplated under the statute - differential demand of tax on the petitioner - HELD THAT:- While considering claims for exemption from tax, the burden of proof is strictly on the petitioner to demonstrate that he fulfils the conditions for claiming the exemption, and the statutory provisions in that regard must be strictly construed in favour of the revenue and against the assessee - In the instant case, it is found that the statutory provision mandates that any claim for sales return be made within a period of six months from the date of the sale transaction, and admittedly, in the instant case, the claim for sales returns was made beyond that period.
There are no reason to interfere with the order passed by the Appellate Tribunal, which conforms to the well-settled principle in taxation that a statutory provision providing for an exemption has to be strictly construed in favour of the revenue and against the assessee.
The questions of law raised in this revision petition have to be answered in favour of the revenue and against the assessee - Petition dismissed.
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2023 (6) TMI 1150
Rejection of request of the appellants/writ petitioners for waiver of tax arrears and penalty - HELD THAT:- As the Assessee has decided to go before the Authority, the Assessee, as a matter of right cannot demand that the entire waiver shall be granted. The Authority has the power either to waive or reject the waiver in its entirety and he also has the power to demand a higher perccentage as an interim measure till the issue is finally decided. In case, the Authority concerned accepts the case of the Assessee, the excess amount, if any collected will have to be refunded to the Assessee. The Authority, while passing a final order can either accept 4% or 12.5%, depending upon the acceptance of the contentions of the parties, but cannot increase the percentage from 4% or reduce it from 12.5%.
The order of the learned Single Judge need not be interfered with, since the entire issue is at large and the issue has to be decided on merits, in order to give a quietus to the entire issue and the matter being pending before the authorities, as an interim measure, the respective appellants can be directed to pay another 4% of the tax. Accordingly, the respective appellants are directed to pay 4% of the tax determined by the authorities, apart from 4% already remitted, i.e., Total 8% (4% + 4%) within a period of four weeks from the date of receipt of a copy of this order - the matter is remitted back to the authority concerned for passing appropriate orders on merits and in accordance with law.
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2023 (6) TMI 1100
Maintainability of Review petition - error apparent on the face of the record - HELD THAT:- There is no error apparent on the face of the record, warranting reconsideration of the order impugned.
The Review Petitions are, accordingly, dismissed.
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2023 (6) TMI 1099
Exemption from U.P. Trade Tax Act - PVC coated cotton fabrics - to be included in Entry 53 or under Chapter 59.03? - HELD THAT:- This Court has independently considered the reasoning of the High Court and concurs with it. The reliance placed by the appellant on the classification in the Central Excise Tariff, is of little consequence since the terminology used in Chapter 59 under the relevant heading is different. Chapter 59 is far more nuanced than Entry 53 of the U.P. Trade Tax Act.
In these circumstances, having regard to the express terms of Item 53 which is in question in the present case, this Court is of the opinion that no cause for interference has been shown.
SLP dismissed.
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2023 (6) TMI 1098
Amount of penalty for compounding the offence - grant of right to the applicant to be treated as registered dealer eligible to claim input tax credit and/or collect tax on sales - Section 53 of the Goa Value Added Tax Act, 2005 - HELD THAT:- The grievance of the petitioner with regard to penalty of Rs. 1,00,000/- being imposed by the impugned order would be required to be accepted being ex facie contrary to the provisions of the Act. Even assuming as to what has been stated on behalf of the Revenue that a penalty of Rs. 25,000/- would be maximum penalty under Section 44 of the Act or even if the petitioner is right in his contention that the maximum amount of penalty would be Rs. 10,000/- under notification dated 2 February, 2012 issued by the State Government on either of the Counts, the impugned order which orders a penalty of Rs. 1,00,000/- cannot be sustained.
Insofar as the petitioner’s grievance with regard to the wording of the operative part of the order as noted above, the grievance raised by the petitioner is quite correct, although such observation may be clarificatory in nature, it has some consequence, more particularly when the substantive appeal itself is pending before the Appellate Authority assailing the Assessment Order.
It would be in the interest of justice that the impugned order dated 30 July, 2021 is required to be set aside. It is accordingly set aside directing the Commissioner of State Tax to hear the petitioner afresh on the issue of penalty and de hors pass a fresh order in accordance with law - Petition disposed off.
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2023 (6) TMI 990
Recovery of sales tax - transfer of the right to use any goods - Power of Revenue Dept. to direct deduction at Source for payment of Sales Tax from Bills of any person who transfers right to use any goods for any purpose - Rule 3A(2) is a valid piece of delegated Legislation or not.
Whether Sub-rule (2) of the Rule 3A of the TST Rules can be declared ultra vires being contrary to the provisions of the ‘TST Act’, though there is express proviso in Section 3(1) for levy of 4% Sales Tax on any transfer of the right to use any goods for any purpose?
HELD THAT:- In exercise of the powers under Section 44 of the TST Act the State Government had enacted the TST Rules which were placed before the Legislative Assembly. On fair reading of Section 44 of the Act which is a rule making power it can be seen that the rule making power under Section 44 is inclusive and wide enough to cover the procedure for recovery including tax deduction at source.
Section 3 of the TST Act can be said to be the charging Section and the liability to pay the tax shall be as per Section 3 of the TST Act. As per Section 3(1) of the TST Act every dealer in taxable goods shall pay a tax on his turnover at the rate specified in column (3) of the Schedule. As per the proviso to Section 3(1) as inserted by Tripura Sales Tax (Fourth Amendment) Act, 1987 w.e.f. 12.05.1987 the rate of tax on any transfer of the right to use any goods for any purpose (whether or not for a specified period) shall be 4%. The ‘Sale’ is defined under Section 2(g) and it means any transfer of property, in goods for cash or deferred payment or other valuable considerations, and includes any transfer of the right to use any goods for any purpose for cash, deferred payment or other valuable consideration, and such delivery or transfer of any goods shall be deemed to be a sale of those goods by the person making the delivery or transfer and purchase of those goods by the person to whom such delivery or transfer is made. Thus, any transfer of right to use any goods including the vehicles shall be deemed to be a ‘sale’ as defined under Section 2(g)(ii) - the submissions on behalf of the respondents – suppliers/transferers that as there is no sale or transfer of the goods and that they are not registered with the TST Act and therefore, the liability to pay the tax at 4% does not arise cannot be accepted. As observed, the liability to pay the tax shall be on the transferer who transfers the right to use any goods as per proviso to Section 3(1) read with Section 2(b) and 2(g) of the TST Act.
Whether Rule 3A(2) of the TST Rules and the memorandum issued by the Government to deduct the tax at 4% and the bills to be paid to the transferers can be said to be ultra vires to TST Act? - HELD THAT:- It appears that the High Court has held the said provision as ultra vires by observing that there is no such provision for tax deduction at source under the TST Act and therefore, the Rule cannot go beyond the Act. The aforesaid view taken by the High Court is absolutely fallacious. Rule 3A(2) can be said to be a recovery machinery/mechanism. What Rule 3A(2) provides is only for a machinery/mechanism where the person buying the goods is required to deduct the tax at source and deposits the same with the Revenue. It does not in any manner change the chargeability of the tax or liability of the tax which is under Section 3(1) of the TST Act read with Section 2(b) & 2(g) of the TST Act.
The rules are framed in exercise of Rule-making power under Section 44 of the Act and in that view of the matter and as the liability to pay the tax on transfer of right to use the goods shall still be continued under proviso to Section 3(1), mere providing for mode of recovery and/or providing for machinery/mechanism to recover the tax to be paid by the transferer/supplier from the person buying the goods deducting the tax at source and depositing the same with the Revenue cannot be said to be ultra vires to TST Act and the Rules as observed and held by the High Court - the High Court has fallen in error in misinterpreting Rule 3A(2) of the TST Rules and has fallen in error in declaring Rule 3A(2) of the TST Rules ultra vires to TST Act and the High Court has materially erred in quashing and setting aside the memorandum issued by the State Government requiring the hirers namely the ONGC and the GAIL to deduct an amount equivalent to 4% out of the respective bills of the suppliers of the vehicles.
The order passed by the learned Single Judge declaring Rule 3A(2) of the Tripura Sales Tax Rules, 1976 as ultra vires to the Tripura Sales Tax Act, 1976 and quashing and setting aside the memorandum of 1992 issued by the State Government requiring the hirers to deduct an amount of tax at 4% out of the respective bills of the suppliers of the vehicles are hereby quashed and set aside - appeal allowed.
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