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VAT / Sales Tax - Case Laws
Showing 681 to 700 of 27514 Records
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2023 (5) TMI 90
Deemed sale or not - supply of 'goods' defined under Section 2(h) (iii) [should have been sub-clause (ii)] and 2(h) (iv) of the GST Act - impugned orders challenged on the ground that the observations made by the Appellate Authority that the goods imported by the assessee from outside the State on the strength of C-Forms were supplied to the contractors for execution of work contracts and there was, thus, transfer of property in goods to the contractors was erroneous and legally unsustainable - Whether the Tribunal was bound by its earlier orders in the cases of applicant itself as they have attained finality and, on the principle of “consistency”, the Tribunal should not hold otherwise than what has been settled by its earlier Benches?
HELD THAT:- It is held by the Assessing Authority that the transaction i.e transfer of equipments/assets erected and established by the assessee either itself or through sub-contractors is tantamount to execution of works contract by the assessee and, therefore, by the definitions of “Sale”, “Goods and “Dealer given in the GST Act, the transfer of goods or property in goods utilized in the execution of works contract is a sale exigible to tax under the GST Act. This finding of fact and the conclusion drawn on the basis of the definitions of “Sale, “Goods” and “Dealer” given in the GST Act has been upheld by the Appellate Authority as well as the Tribunal - Once the questions of law framed by the Tribunal are appreciated in the aforesaid backdrop, it would clearly transpire that, having regard to the definitions of “Goods, “Dealer” and “Sale” given in the GST Act, the services provides in the shape of works contract, whether divisible or indivisible involving transfer of property or not, fall in the definition of the term “goods” and any such transaction shall be deemed to be a sale by the person making the same.
Handing over of the goods and material to the contractors for construction and laying of power grids, sub-stations and transmission lines of the assessee did not involve the transfer of right to use goods. Not only the ownership and dominion over the goods handed over to the contractors remained vested with the assessee, but the transfer or handing over of the goods and material to the contractors was without any consideration. It can, thus, be safely concluded that the transaction between the assessee and its contractor involving transfer of goods was not supported by any valuable consideration and, therefore, cannot be construed as a transfer of right to use goods so as to bring it within the purview of term “sale” as defined under Section 2(L) of the GST Act.
From deep scrutiny, it could only be found that the assessee, after erecting grid stations, sub-stations and transmission lines, provides facility of transmission of electric energy to the State and other utilities/undertakings by levying transmission charges. Whether the works executed by the assessee through its sub-contractors involving the use of goods and material are executed for and handed over to the States, other utilities or undertakings, is not clear from the record. As a matter of fact, this aspect has not been considered either by the Assessing Authority or the two Appellate Forums under the GST Act which have heard and decided the appeals. Absent such material on record, it is difficult for us to make any comment, lest the parties or either of them may be prejudiced.
In the considered view that, in respect of assessing year 1996-97, there was no transfer of right to use goods from assessee to the contractors who constructed, set up and laid power grids, sub-stations and transmission lines for the assessee by utilizing the goods and material provided to them by the assessee itself without any consideration.
It shall be the contractor, who shall be accountable for paying the sales tax on the services provided to the assessee in the shape of works contact. Such is also not the case set up by the revenue before the Forums below or even before us. This will leave us with only the transfer of right to use goods by the assessee to the contractors. It is reiterated that, in the given facts and circumstances, it is found that no transfer of right to use the goods provided by the assessee to the contractors for constructing, erecting or laying out the power grids, sub-stations and transmission lines for the assessee.
In the instant case, the ownership and dominion over the goods purchased by the assessee from outside the State always remained with the assessee and the goods were never transferred to the contractors against any valuable consideration. As a matter of fact, the goods and materials purchased by the assessee from outside the State were utilized by the contractors as per the directions of the assessee in raising the construction of various transmission lines, power grids and sub-stations etc.
Principle of “consistency” - Tribunal was bound by its earlier orders in the cases of applicant itself as they have attained finality or not? - whether the Tribunal should not hold otherwise than what has been settled by its earlier Benches? - HELD THAT:- Not only the Tribunal but all the Authorities subordinate to it are bound to follow and comply with the law laid down by the Tribunal. This is necessary to maintain judicial discipline and avoid uncertainty in law. The Tribunal may, in appropriate cases, take a view different from the one taken by it earlier if there is change in law or the fact situation in the context whereof the law was declared by it earlier. The Assessing Authorities or the Statutory Appellate Authorities under the GST Act cannot and should not take a view on question of law contrary to the view taken by the Tribunal. Such conduct of the Authorities shall be gross impropriety and indiscipline which may call for initiation of appropriate departmental action.
References disposed off.
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2023 (5) TMI 76
Validity of assessment order - concealment of Gross Turn Over (GTO) - it is alleged that AO despite taking actual figure of sale price, has taken the value of goods sold on the basis of average IBM rate prevalent for the said month as well as average sale price of three nearby mines-M/s. Orissa Manganese & Minerals Ltd., M/s. Rungta Mines Ltd., & M/s. Misri Lal Jain and Sons Co. Ltd.
Determination of sale price on the basis of average sale price of I.B.M. as the average sale price of I.B.M. is only for the purpose of determining royalty payable on minerals and the same cannot be the basis of determination of sale price, or otherwise? - imposition of penalty under Section 40 (1) of the JVAT Act, 2005 is sustainable in the eye of law, especially when the original proceedings were initiated under Section 40 (2) of the JVAT Act, 2005?
HELD THAT:- After going through the proviso to Section 35 (7) of the Act it appears that the statute specifically postulates that prescribed authority shall record his reason before initiating the proceedings and no order shall be passed under this sub section without giving the dealer an opportunity to be heard. Section 40(1) provides for Assessment in cases where turnover has escaped assessment on account of reasons indicated under Clause (a) to (e). In cases of concealment or failure to disclose willfully etc. the penal provisions under proviso to 40(1) provide imposition of three times the amount of additional tax assessed. Section 35(7) contemplates of such a proceeding against an assessee regarding whom the Assessing Officer is satisfied that he has resorted to selling of goods at a higher price than shown in his invoices - the proviso to Section 35 (7) of the JVAT Act firstly stipulates that the reasons must be recorded by the prescribed authority for initiating the proceeding and secondly, the principles of natural justice should be followed.
Though in the instant case the second ingredient of the proviso has been fulfilled; however, there is no document to suggest that the assessing officer has recorded his reason before initiating the proceeding.
It is reiterated that recording of satisfaction is sine qua non before proceeding to impose tax and penalty upon the assessee under Section 35(7) read with Section 40(1) of the JVAT Act. Any such satisfaction is to be based on tangible materials as are found by the assessing officer as the provisions are penal in nature where an assessee is found to be indulging in tax evasion by suppression or concealment of actual sales or turnover by selling goods at a higher price than shown by him. The matter is therefore required to be remanded to the assessing officer to comply the provisions of Section 35(7) of the Act for initiating the proceeding, if he finds any evidence that the goods have been sold at higher price than shown by the dealers - As such, on remand, the AO shall proceed strictly in accordance with law. The petitioner shall be at liberty to raise all the grounds available to him before the AO which shall be considered accordingly.
Learned Tribunal has completely failed to consider that the requirement of law for initiating a proceeding under Section 35(7) by recording reasons has not been fulfilled by the Assessing Officer even after remand by the Appellate Authority on the first instance.
Petition allowed by way of remand.
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2023 (5) TMI 6
Seeking deletion of adverse entries regarding the sales tax liability of Regent and Eastman - seeking direction upon the tehsildar to mutate the subject property, after quashing of the order dated 22nd December 2006 - declaring the action of the excise and taxation officer as illegal, unjust and without the authority of law.
Whether, in view of dismissal of the special leave petition qua PNB by the order dated 8th April, 2011, the judgment and order outlawing section 16-B of the HPGST Act can at all be examined? - HELD THAT:- A law, which the State legislature had the competence to enact, has been outlawed by the High Court while hearing a writ petition which was rendered infructuous due to developments subsequent to its filing and prior to its disposal but such developments had not been brought to the notice of the High Court - A reading of the affidavit reveals that during the pendency of the writ petition (filed by PNB) before the High Court, the borrower had offered a compromise proposal which PNB had accepted. In terms thereof, the borrower paid to PNB an amount of Rs.36 lakh towards full and final settlement of the loan liability. Upon receipt of the compromise amount, the title deed of the mortgaged property was duly returned to the borrower. Pursuant thereto, PNB filed an application for withdrawing the execution case before the Recovery Officer, DRT, Chandigarh on 13th August, 2002 and the case, upon being disposed of as withdrawn, was consigned to the record room.
The High Court by its judgment and order dated 2nd January, 2008 decided an infructuous writ petition and, in the process, outlawed section 16-B of the HPGST Act when the same was not at all warranted - it was also a clear but inadvertent error on the part of this Court to dismiss only the special leave petition against PNB as infructuous; the appropriate course for this Court ought to have been to dismiss the writ petition of PNB itself as infructuous having regard to the clear stand taken by PNB in its aforesaid affidavit dated 30th September, 2010 that nothing survived for a decision on the writ petition on the date it was decided in view of release of the property from mortgage - this issue is answered in affirmative.
Should the answer to the above question be in the affirmative, whether section 16-B of the HPGST Act should have been outlawed by the High Court on the ground that it is ultra vires the Constitution or the Banking Companies Act? - HELD THAT:- The High Court while seized of the writ petition of PNB [2008 (1) TMI 836 - HIMACHAL PRADESH HIGH COURT] was not at all concerned with the SARFAESI Act as such. The matter had travelled to the High Court from proceedings under the DRT Act. There was, thus, no occasion for the High Court to pronounce on the validity of section 16-B of the HPGST Act based on what was held by its coordinate Bench in M/s A.J. Infrastructures Pvt. Ltd. [2007 (9) TMI 563 - HIMACHAL PRADESH HIGH COURT]. The High Court was therefore in clear error.
Thus, section 16-B of the HPGST Act is a perfectly valid piece of legislation and is not ultra vires the Constitution and/or the Banking Companies Act as erroneously held in the decision of the High Court dated 2nd January, 2008. Also, following the decision in Central Bank of India [2009 (2) TMI 451 - SUPREME COURT], it is held that any observation in the decision dated 7th September, 2007 touching upon section 16-B of the HPGST Act vis-à-vis section 35 of the SARFAESI Act is of no effect.
Whether having regard to the facts and circumstances triggering the writ petitions, the High Court was justified in returning the findings that the State’s claim of first charge on the subject properties is not substantiated? - HELD THAT:- Section 14 of the HPGST Act postulates assessment of tax. The cumulative effect of the several sub-sections of section 14 is that after returns are furnished by a dealer in respect of any period, the duty of the assessing authority is to assess the appropriate quantum of tax required to be paid by the dealer, in terms of the procedure laid down therein; and to initiate steps, also in terms of the laid down procedure, to recover any amount of unpaid tax, penalty or interest payable under the enactment. Section 16 envisages that any amount of tax, penalty or interest payable under the HPGST Act remaining unpaid after the due date shall be recoverable as arrears of land revenue. Section 16-A, starting with a non-obstante clause, confers power on the Commissioner or any officer other than the one excluded to initiate a special mode of recovery.
While adopting such a stand, the State and its department either overlooked or were ignorant of the requirement of law that section 16-B would be attracted only after determination of the liability and upon any sum becoming due and payable; and that, it is only thereafter that the charge, if any, would operate - no relevant documentary evidence having been placed before the High Court, when CWP 306 of 2007 was being heard, to indicate that necessary steps under the HPGST Act had been initiated by the State and its officers, the third issue has to be answered by holding that the State not having taken steps as required by law for realization of its dues, there was no determination of liability, a fortiori, question of taking recourse to the HPLR Act for recovery of dues as arrears of land revenue did not arise. Without such determination of liability, no red entry marks could have been inserted in the revenue records and the High Court was right in holding that the State ought not to have refused mutation.
Whether dismissal of the review petition/application for recall instituted by the State by the High Court suffers from any infirmity, legal or otherwise? - HELD THAT:- No error apparent on the face of the record was pointed out, which is the first ground for seeking a review. Documents were annexed to the application, which were in existence when the reply to CWP 306 of 2007 was filed by the State and no case had been set up that despite discharge of due diligence, such documentary evidence, which were in existence, could not be annexed to the said reply. Much indulgence is shown to the State Governments when they carry judgments/orders in time-barred appeals/revisions, having regard to the impersonal machinery being involved. However, undue indulgence cannot be shown to the State Governments either when they do not file a proper reply or when, despite there being a provision for review, such remedy is not pursued and a different one pursued presumably to overcome the restrictions the provision for review imposes - High Court was justified in rejecting the application for recall.
Relief - HELD THAT:- The appellants (State and its officers) are not entitled to any relief except the declaration that section 16-B of the HPGST Act is not ultra vires any provision of law. In view of section 16-B having been outlawed by the High Court on 2nd January, 2008, this declaration shall not enure to the benefit of the State in respect of cases that are old and have been closed but would be effective once again from this day.
Appeal disposed off.
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2023 (5) TMI 5
Jurisdiction of State GST Department to initiate proceedings for recovery of any nature for the period prior to acceptance of the Resolution Plan - HELD THAT:- Law is well-settled that with the finalization of insolvency resolution plan and the approval thereof by the NCLT, all dues of creditors, Corporate, Statutory and others stand extinguished and no demand can be raised for the period prior to the specified date.
The impugned show cause notices and the demand orders came to be passed in reference to the Financial Years 2017-18 and 2018-19, which are much prior to the date of finalization of the Resolution Plan, i.e. 12.10.2019 - The Deputy Commissioner, State GST Department exercises quasi judicial functions while acting under the provisions of the GST Act and thus, it is expected from such officer to act judiciously, consider the reply of the party, apply mind to the facts and law and pass a reasoned order. However, a bare perusal of the impugned orders dated 22.04.2020 is sufficient to satisfy us that the officer acted in gross defiance of the settled legal position as expounded by Hon'ble Supreme Court in the case of Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT] and this Court in the case of Ultra Tech Nathdwara Cement Ltd. [2020 (4) TMI 269 - RAJASTHAN HIGH COURT].
Such laconic approach of the authority exercising quasi judicial powers reflects sheer incompetency and pedantic approach and adds to the evergrowing dockets of cases in the courts - While passing the impugned orders, the Deputy Commissioner failed to consider the replies of the party and acted with sheer non-application of mind. His conduct deserves to be deprecated.
The impugned orders and demand notices do not stand to test of law, i.e. mandate of Section 31 read with Section 238 of the IBC and the interpretation thereof as made by Hon'ble the Supreme Court in the case of Committee of Creditors of Essar Steel India Ltd. Hence, the same are declared to be invalid and quashed.
Petition allowed.
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2023 (4) TMI 1358
Maintainability of writ application - High Court dismissed the petition stating that 'writ petition is accordingly dismissed on the ground of laches' - HELD THAT:- Having regard to the basis on which the High Court dismissed the State’s writ petition, there are no reason to interfere with impugned judgment.
The Special Leave Petition is accordingly dismissed.
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2023 (4) TMI 1264
Levy of Entry Tax - HELD THAT:- The issue relating to the payment of entry tax is no longer res-integra. It is covered by a judgment of the Division Bench of this Court in SRI BALAKRISHNA TRANSPORT VERSUS COMMERCIAL TAX OFFICER, TAMBARAM I ASSESSMENT CIRCLE, CHENNAI [2009 (2) TMI 787 - MADRAS HIGH COURT] where it was held that Since there is no provision in the Entry Tax Act for assessing a person who failed to furnish the return under section 7 of the Act, the only course open to the assessing authority was to levy penalty not exceeding twice the amount of tax due as provided under section 15(1) of the Act.
In view of such settled position of law, where this Court held that the demand notice is not valid, since there is no specific provision for assessment of a person, who has not filed return, these Writ Appeals stand allowed.
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2023 (4) TMI 1248
Works contract - neither tripartite agreement nor any prior sale deed nor had the assessee otherwise executed any works contract on behalf of the eventual purchasers with respect to construction raised by the assessee on its own land - addition of 10% in purchase of value of goods for calculating the deemed sale, ignoring the value of goods at the time of incorporation of goods consumed in the construction even though the property in goods passes later on - constructions raised by the assessee were by way of execution of ‘works contract’ - applicability of decisions of the Supreme Court in the case of K. Raheja [2005 (5) TMI 7 - SUPREME COURT] and Larsen & Toubro [2013 (9) TMI 853 - SUPREME COURT].
Whether the linkage between such 'agreement' and the construction raised by the assessee exists as may further qualify the 'agreement' to be a 'works contract', within the meaning of that term of Section 2(au) of the Act? - HELD THAT:- The assessee was raising the constructions of residential accommodation. Though it may have started that construction activity on its own account, at the same time, it invited offers from the public at large and accepted such offers from particular individuals, against conditions agreed in writing - on a mutual set of promises extended by the allottees and the assessee, the terms of the Allotment Letter and the ‘agreement’ giving rise to a ‘works contract’ arose. Thus, amongst others, it included a payment plan, adherence to which a sine qua non to the continued allotment in favour of that individual allottee. The fact that the assessee had a right to cancel the allotment and the further fact that the title in the constructions being raised and the interest in land would be transferred on a future date (upon execution of proper lease deed and sale deed), would not deflect the existence of ‘works contract’ that had arisen, as a direct consequence of the Allotment Letter.
In L&T case [2013 (9) TMI 853 - SUPREME COURT], the matter came to be referred to the three judge bench of the Supreme Court. Again, in that case, the L&T was a developer seeking to raise constructions described as development over the land owned by an individual. There was an arrangement between the L&T and the owner of the land that after the development, 25% of the total space would belong to the owner whereas 75% would belong to the L&T yet, applications were invited from public for allotment of the proposed constructions. Upon Allotment Letters issued and also under an agreement to sell executed with intended purchasers, the constructed apartments were to be handed over to the individual purchasers with undivided interest in the land also. Sale deeds were thus executed in favour of the allottees by the L&T and the owner of the land. It is in such circumstance and that L&T was subjected to ‘works contract’ tax.
While dealing with the doubt expressed as to the correctness of the K. Raheja case [2005 (5) TMI 7 - SUPREME COURT], the larger bench of the Supreme Court clearly opined that the fact that the transfer of the flat and conveyance of land would arise on a future date, upon all installments being paid and that agreement between the developer and flat purchaser was one for sale of flats, had no merit. The reason to reject the challenge was given by the Supreme Court by observing that the doubt thus expressed clearly overlooked the typical nature of developer agreement. The developer does so for monetary consideration. The liability of payment was also found not decisive, though the factum of payment was found to be so.
Here, as well, it is an undeniable truth in the facts found by the Tribunal that the constructions were made by the assessee, though on its own land against Allotment Letter issued to and payments made by 403 allottees. It would be appropriate to note here itself that the revenue authorities have taxed the assessee only to the extent of payments were received by it against 403 flats. Only with respect to those allotments/payments received, ‘works contract’ was found existing and only with respect to those flats, transfer of property involved in the execution of ‘works contract’ has been assessed. That has been quantified at 59% of the total flats.
Addition of profit to the book value of the goods involved in the execution of the ‘works contract’ - HELD THAT:- Though the books of accounts of the assessee have not been rejected, in absence of proof of facts requiring applicability of Rule 9, estimation of deemed profit became necessary to be made - to determine the turnover of ‘works contract’. In that, the Tribunal cannot be faulted for applying the 10% rule as a rough and ready method to estimate, considering compoundable cases, the turnover (to be subjected to tax). Insofar as the Tribunal seems to have applied the time tested measure to make estimate, there are no good ground to offer any interference with the finding of the Tribunal, in exercise of revision jurisdiction of the Court.
Rule 9 enables the assessee to seek all appropriate allowable deductions. Thus, on this issue as well, the matter does not call for any interference.
The questions are answered in favour of revenue and against the assessee - revision dismissed.
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2023 (4) TMI 1191
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- The issue involved in this writ petition is squarely covered by a decision of this Court in M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER & COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [2019 (2) TMI 1850 - MADRAS HIGH COURT] wherein the identical issue was considered and it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the ‘C’ forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [2018 (10) TMI 1529 - MADRAS HIGH COURT] Ltd can be extended only to those dealers in that are party to the decision.
Petition allowed.
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2023 (4) TMI 1190
Omission of the 2nd respondent-Tahsildar in entertaining Form A application submitted by the petitioners for re-assessment of rate of Basic Tax on land and for making necessary entries in the Basic Tax Register - HELD THAT:- This Court has considered the issue of reassessment of land tax on the basis of the orders obtained under the Kerala Land Utilisation Order, 1967 in the judgment in MARY ABRAHAM VERSUS STATE OF KERALA AND ORS. [2020 (3) TMI 1445 - KERALA HIGH COURT]]. This Court held that once enabling order is passed under Rule 6(2) of the Kerala Land Utilisation Order, 1967 permitting conversion of the land, then the earlier entries in the BTR showing the land as Nilam, Paddy Land, etc. will become superfluous and redundant and the competent Revenue officials like the Tahsildar are obliged under law to make a fresh assessment of the property under Section 6A of the Kerala Land Tax Act, 1961.
As the nature of the land of the petitioners has been permitted to be changed pursuant to passing of a statutory order under the Kerala Land Utilisation Order, 1967, the competent authority is bound to re-assess the rate of Basic Tax in respect of the land and to make necessary entries in the Basic Tax Register, if necessary, after verifying the veracity/genuineness of the permission obtained under the Kerala Land Utilisation Order, 1967 produced by the petitioners.
There will be a direction to the 1st respondent-Revenue Divisional Officer to consider Ext.P6 Form-5 application submitted by the petitioners and take a decision thereon, within a period of one month - Application disposed off.
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2023 (4) TMI 1147
Clandestine business - Ex-parte orders of assessment - suppression of sales - Business was carried on or not - presumption drawn on the basis of weighing machine - findings of the taxing authorities are based on no evidences - Whether on the facts and in the circumstances of the case, report of a particular year can be relied and made basis for assessing for previous years?
HELD THAT:- As a matter of fact, the Assessing Officer in support of start of business has relied upon the evidence of the inspecting officials who found that the Weights and Measures License with effect from 10.07.2000 being renewed every year and an electronic weighing machine was installed at the shop since 27.03.2000 and basing upon the confession of the dealer his daily sales was accepted by the Inspector of Sales Tax (Vigilance) at Rs. 2,000/- and estimated the total sale transaction at Rs. 6,20,000/- for 2001-02. Apart from the same, at the time of inspection, the dealer could not produce any purchase bill, purchase register confessing his unaccounted for purchase since 2000-01 and also at the time of inspection the dealer could not produce any sale bill or sale invoice before the officials. If it is the case of the petitioner that after cancellation of registration certificate he had stopped the business and could not revive the same, the Assessing Officer should not have drawn a presumption, on the basis of weighing machine said to have been purchased and obtained Weights and Measures License on 10.07.2000 and available in the premises, and the electronic machine said to have been installed at the shop since 27.03.2000, and come to a conclusion on the basis of best judgment assessment that the petitioner was engaged in clandestine nature of business during 2001-02 and accepted the Gross Turnover estimated by the Inspector of Sales Tax (Vigilance) at Rs. 6,20,000/-.
On perusal of the orders passed by the assessing officer, first appellate authority and also the second appellate authority, namely, the Tribunal, it appears that no material relevance was indicated to justify the assessment of daily sales for the assessment years 2001-02, 2002-03 and 2003-04. Thereby, fixing of liability by the Assessing Officer on surmises and conjectures cannot be sustained in the eye of law. More so, if the Vigilance Officials conducted inspection in April, 2004, that material can be utilized for the assessment made in same year, i.e., 2004-05 but the same cannot be used for the assessment years 2001-02, 2002-03 and 2003-04, particularly when the petitioner had not carried out any business due to reason beyond its control.
It may be pertinent to make observation that the inspection of the business premises was made on 11.08.2004 by the Vigilance personnel. On the material found available on the said date there was suggestion for determination of liability for the periods from 2000-01 to 2004-05 vide Vigilance New Case Report bearing No. 8, dated 29.11.2004. No material is placed on record by the Revenue to the effect that any of the documents suggested sale of goods during the period from 2000-01 to 2003-04 - Mere presence of weighing machine and obtaining Weights and Measures License ipso facto would not lead to construe that there was sale and the turnover exceeded the threshold limit as contained in Section 4(7) of the OST Act at any point of time during 2001-02 to 2003-04 particularly when the “continuing liability” fixed for the period 2000-01 was set aside by the Appellate Authority which attained finality as no second appeal was preferred thereagainst.
Non-maintenance of books of account by the present petitioner-dealer, whose registration has been cancelled under Section 9(3-f) of the OST Act with effect from 01.04.1997, cannot be taken as pointer for suppression of sales so as to saddle on him the burden of tax on the specious plea that the assessee failed to discharge liability, more so when the liability fixed for the year 2000-01 was set aside by the Appellate Authority which attained finality being not questioned by the Revenue in the further proceeding.
Whether there can be backward and forward projection of materials detected which are relevant to a particular assessment for the purpose of making assessment for some other year? - HELD THAT:- If the assessing officer wants to do so, some material has to be brought on record to justify just projection, which is absent in the present case. Thereby, the orders so passed by the authorities cannot be sustained in the eye of law - the date when the material was discovered is not relevant. What is relevant is the nature of evidence or material discovered during inspection is the most important thing. In absence of the same, the same cannot be utilized for making assessment for other years unless their relevance to any other period is established by the Assessing Officer.
The matter is remitted back to the assessing officer to make fresh assessment in adherence to the principles of natural justice and in conformity with the provisions of law - Revision allowed.
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2023 (4) TMI 1127
Levy of penalty - Detention of goods - failure on the part of transporter to produce documents - non-reporting about the consignment at the concerned ICC - machinery so transported was not for sale or trade as the same was plant and machinery parts to be installed at the Indian Railway Workshop at Patiala - capital goods or not - non-reporting of goods can be a ground for imposition of penalty though the goods were covered by proper invoice, Goods Receipt and Insurance and no other discrepancy had been pointed out at the time of detention?
HELD THAT:- Undoubtedly, it is mandatory under the provisions of the PVAT Act that the carrier of the goods while entering or leaving the limits of a Punjab State will generate information about the goods at the nearest ICC which was not proved to be shown by the driver in the instant case. However, in our opinion, from this act of driver only, no interference can be drawn that the declaration was not obtained with a view to avoid payment of tax. Reliance in this regard can be placed upon GANPATI FOODS VERSUS STATE OF PUNJAB AND ANOTHER [2013 (9) TMI 986 - PUNJAB AND HARYANA HIGH COURT] wherein non-generation of declaration at ICC was considered to be not sufficient enough to arrive at a conclusion that an attempt to evade tax was made.
Further, merely on the basis of statement alleged to have been made by the driver that he had been told by the appellant to not to generate bills, no penalty could be imposed upon the appellant - Merely non-reporting about the consignment at the concerned ICC and not making declaration in the prescribed form did not lead to the conclusion that there was violation of Section 51 (4) of PVAT Act with a view to make an attempt to avoid the tax. It is not the case of the respondent that the invoice or GR were not genuine. The authorities below and the Tribunal did not examine the genuineness or otherwise of these invoices and goods receipt etc. and the Tribunal had merely gone by the alleged admission of the driver.
The impugned orders are not sustainable as the Tribunal was required to examine the entire material on record before concluding that there was any attempt to evade tax on the part of the dealer - impugned orders passed by the Tribunal are set aside and it is held that no case for imposition of penalty has been made out against the appellant - Appeal allowed.
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2023 (4) TMI 1067
Detention of goods alongwith vehicle - failure to produce any document and failure to explain the manner in which the goods were being transported from Delhi to Haryana - case of tax evasion - levy of tax with penalty - HELD THAT:- The arguments raised by the appellant lack any merit. Admittedly, the goods i.e. kabuli chana kept in 330 bags was being transported by the appellant from Delhi to Kundli, District Sonepat i.e. in the State of Haryana. It has come on record that when the goods were brought from Delhi to State of Haryana, no original Form DVAT-33 which was required to be statutorily issued had been shown by the driver. When the authorized representative of the appellant had appeared before the Detaining Authority, even at that time only photocopy of Form DVAT-33 had been shown which was not found to be complete as neither the serial number of the vehicle in which the goods were transported, signatures of the consignor and consignee nor the goods receipts accompanying the transaction showing the destination of the goods to be delivered were shown. As such, the stand taken by the appellant that the goods were being sent for storage purposes only had not at all been substantiated.
It is revealed from the impugned order as passed by the Tribunal that it was only before the First Appellate Authority that some documents issued by one M/s Dhingra Cold Storage were tried to be shown by the appellant though at stage, such document could not be taken into consideration as Section 33 (3) of the Act, 2003 specifically bars acceptance of the same in appeal proceedings.
The Tribunal after considering all facts and circumstances had passed a well reasoned order which for the reasons mentioned, calls for no interference - Appeal dismissed.
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2023 (4) TMI 1011
Functioning of state tax tribunal - Principles of natural justice - petition pending - Hearing was not taking place before the Sales Tax Tribunal - Petitioner had pleaded in the petition that no daily orders are uploaded, there is no case status available online where the litigant can check the status of the cases, next date, stage of appeal, etc. - HELD THAT:- Considering that the Sales Tax Appellate Tribunal is an independent adjudicator manned by judicial officers, the Division Bench of this Court has already stressed the need for a dedicated website. Uploading information on the GST department website can only be a stop-gap arrangement. The Registrar states that he has taken note of the situation with seriousness and assures the Court that all necessary steps will be taken to comply with the order passed by this Court on 28 and 29 September 2017. He states that steps would be initiated for creating a separate dedicated website and uploading the case status, and daily orders on the dedicated website.
The State Government, if the requisition is received from the Registry of the Sales Tax Tribunal, is directed to release funds for the creation of a dedicated website and for uploading the case status, etc., the same shall be released at the earliest to avoid any action flowing from the breach order of this Court of the order dated 28 and 29 September 2017 - the Registrar of the Sales Tax Tribunal is directed to hold a meeting with the Central Project Coordinator of the High Court to understand how the High Court website is structured so that the broad features of the website can be replicated when the dedicated website of the Tribunal is created.
To monitor further compliance, stand over to 6 June 2023 to be listed under the caption "For Directions".
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2023 (4) TMI 1010
Validity of demand - incorrect audit report - Maintainability of writ petition in lieu of statutory appeal against an order rendered in exercise of power under Section 32A of the Maharashtra Value Added Tax Act, 2002 - HELD THAT:- The sine qua non for invoking the jurisdiction under Section 32A of the VAT Act is that the assessee shall have agreed with, and accepted, the recommendations made by his Accountant. It is the acceptance by the assessee, which in a sense is an admission of the liability, that clothes the authority with the jurisdiction to proceed under Section 32A of the VAT Act and obviates the need to take recourse to the adjudicatory and adversarial regime statutorily provided.
The finding recorded in the order impugned that the assessee has accepted the liability clearly militates against plain and unambiguous disagreement recorded in the audit report. We have not come across any other material warranting any other view.
The provision of sub-section(2) of Section 32A of the VAT Act only provides that as regards the liability which is deemed to have been admitted in view of the provisions of sub-section (1) of Section 32A, the interest regime of Section 30 shall come into play mutatis mutandis. There are no other or further significance of sub-section (2).
The demand impugned is without jurisdiction - Petition allowed.
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2023 (4) TMI 913
Legislative competence - power to amend repealed Gujarat VAT act with retrospective effect - denial of interest on delayed refund - Impermissible Judicial Overiride - Infringement of doctrine of separation of powers - petitioner contended that the State legislature could have never amended the repealed GVAT Act, 2005 without even bothering to revive the same, assuming such revival was possible after 16.09.2017 - whether the impugned Amendment Act is an instance of impermissible judicial override to reverse or set at nought the judicial decisions of this Court even after SLPs against the same were dismissed by the Hon'ble Supreme Court? - HELD THAT:- The Constitution Bench has held that the Court examining the validity of a validating statute must first examine the issue of legislative competence. Secondly, granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind, for that would tantamount to reversing the decision in the exercise of judicial power, which the Legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances - the validity of a validating law depends upon whether the Legislature possesses the competence that it claims over the subject matter and whether, in making the validation, it removes the defect that the Courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax.
The super-session of judicial verdicts through legislation sometimes involves the violation of the separation of powers doctrine under the Constitution of India. The Hon'ble Supreme Court considered this issue in Government of Kerala, Irrigation Department and Ors, vs James Varghese and Ors. [2022 (6) TMI 97 - SUPREME COURT], and State of Tamil Nadu vs State of Kerala [2014 (5) TMI 1110 - SUPREME COURT] - the Hon'ble Supreme Court held that even without the express provision of the separation of powers, the doctrine of separation of powers is an entrenched principle in the Constitution of India. This doctrine informs the Indian Constitutional structure and is an essential constituent of the rule of law. In other words, the doctrine of separation of powers though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of the Indian Constitution.
The impugned Amendment Act is an impermissible legislative override. Therefore, based upon the impugned Amendment Act, the respondents cannot decline to implement this Court's decisions in Writ Petition No. 424/2018 and connected matters. These decisions have attained finality after SLPs against the same were dismissed by the Hon'ble Supreme Court. Accordingly, notwithstanding the impugned Amendment Act, which is an instance of impermissible legislative override, the respondents will have to comply with the directions in this Court's decisions in Writ Petition No. 424/2018 and connected matters.
Amendment to a repealed/lapsed statute without its revival - HELD THAT:- The impugned Amendment Act purports to amend the GVAT Act, 2005, with retrospective effect. This Amendment was made in 2020. Before that, the Goa State Legislative passed the Goa GST Act, 2017, which entered force on 01.07.2017.
The impugned Amendment Act of 2020 concerning goods other than those included in Entry 54 of the State List of Seventh Schedule to the Constitution is ultra vires, unconstitutional and void. - The impugned Amendment Act, 2020, in so far as it applies to goods other than those included in amended Entry 54, would be ultra vires, null and void. Therefore, based upon the impugned Amendment Act, the relief granted to the petitioners in Writ Petition No.23/2021 and 229/2022 could not have been withheld.
Legislative Competence - HELD THAT:- The primary Amendment in the Maharashtra Act was enacted within one year of the coming into force of the Constitution (101st Amendment) Act, 2016. However, Gujarat and the Goa amendments were after one year, i.e., 2018 and 2020 respectively. Further, there is a similarity between Section 174 of the Gujarat GST Act, 2017 and Section 174 of the Goa GST Act, 2017. The Maharashtra VAT Act, 2002 was never formally repealed after the Constitution (101st Amendment) Act, 2016, entered into force though some exercise was undertaken to align its provisions with the constitutional amendments.
Manifest arbitrariness - HELD THAT:- The State of Goa does not dispute liability to refund the excess tax amount in the present cases. The State does not even dispute the liability to pay interest at 8% per annum. However, the State contends that interest would not become payable from the 91st day of the refund order but the 91st day of the sanction order. As noted earlier, no time limit for making the sanction order is fixed. No reasons are required to be provided for any delay in making the sanction order. Thus, the State contends that it can, based upon its Officers' tardiness or procrastination, retain the excess tax amount for an indefinite period or at least an unreasonably lengthy period without obligation for payment of any interest - prima facie, such a provision would be arbitrary and unreasonable given the reasoning in the decisions of the Hon'ble Supreme Court on the issue of the necessity to pay interest by way of compensation where tax refunds are unduly delayed.
Deprivation of vested constitutional rights with retrospective effect - HELD THAT:- The provisions providing interest on delayed refund of excess tax collected by the Revenue created statutory and constitutional rights. Even though Article 19(1)(f) is no longer a fundamental right under the Constitution, Article 300-A provides that no person shall be deprived of his property save by the authority of law - by depriving the Assessee of interest on excess tax paid, the State is depriving the Assessee of his property save by authority of law. Besides, there is a constitutional bar under Article 265 about the levy and collection of taxes except by the authority of the law. Even Article 14 would shun the retention of excess taxes determined as refundable either indefinitely or for unreasonably lengthy periods only due to the tardiness of revenue officers making sanction orders without liability to pay any interest on the delayed periods. Therefore, this is also a case of taking away vested constitutional rights with retrospective effect. The grant of retrospective effect is consequently liable to be interfered with.
Thus, the impugned Amendment Act is an impermissible judicial override defying the doctrine of separation of powers. Moreover, by granting retrospective effect to the impugned Amending Act, the vested constitutional rights of the petitioners have been taken away - petition allowed.
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2023 (4) TMI 912
Input Tax Credit (denied retrospectively) - denial on account of cancellation of the VAT registration of the dealers (who have effected sale of the goods to these petitioners/appellants) - denial in absence of transport documents and other documents to prove movement of goods to these petitioners/appellants from the dealers who effected sale of goods to these petitioners/appellants - amendment to Section 19(1) of TN VAT Act, 2006 vide Tamil Nadu Act, 13 of 2015 with effect from 29.01.2016 is prospective or retrospective? - levy of penalty.
HELD THAT:- Under the scheme of the TN VAT Act, 2006, the credit that is availed on the strength of the original invoice containing the details specified in Rule 10(2) of the TN VAT Rules, 2007 is provisional. Such input tax credit can be denied to a dealer, if the dealer fails to discharge the burden of proof as under Section 17(2) of the Act.
As long as credit was availed validly where there is not only a transaction of “sale” as defined in the Act but also incidence of tax being borne, input tax credit was to be allowed to be utilized as a set-off against the tax liability declared in the self assessment in the monthly/annual return under the Scheme of the Act. If tax is not paid by the seller, machinery is prescribed to recover the tax from such dealer.
A close reading of the provisions indicates that for a dealer to validly avail Input Tax Credit, the dealer should be in possession of the original invoice containing the details prescribed under Rule 10(2) of the TN VAT Rules, 2007. However, credit availed was always provisional under Section 19(16) of the TN VAT Act, 2006 and could be denied under any of the circumstances specified and situations contemplated in Section 19(13), 19(15) and 19(16) of the TN VAT Act, 2006 and recovered under the machinery provided under Section 27(2) of TN VAT Act, 2006.
However, before denying input tax credit under Section 19(13) of the TN VAT Act, 2006, the assessing authority has to make an enquiry as it thinks fit and give a reasonable opportunity of being heard to a dealer who has availed such input tax credit being denying the benefit of such input tax credit to such registered dealer. Enquiry has to be in consonance with the machinery under Section 27(2) of TN VAT Act, 2006. If on enquiry the dealer fails to discharge the proof, it has to be construed that there was jurisdictional fact to deny credit under Section 27(2) of the TN VAT Act, 2006.
If there is a cancellation of registration, the assessing officer can call upon the dealer to repay to the input tax credit availed and utilized if indeed there was no evidence of sale. It may result in denial in the credit. However, it cannot be helped, where registration itself was obtained by such dealer to facilitate input tax credit being availed on such bogus invoice without a corresponding transaction of sale.
It was incumbent on the part of a registered dealer like petitioner/appellants availing input tax credit to prove that indeed a transaction of “sale” had taken place. They should not only preserve but also produce collateral evidence in the form of transport documents, such lorry receipts or consignment note, etc. when called upon failing which it cannot be said they have discharged the burden of proof required to be discharged under Section 17(2) of the TN VAT Act, 2006.
Section 19(15) in the TN VAT Act, 2006 was an innovation which was not contemplated in under Section 70 of the Karnataka Value Added Tax Act, 2003.Under Section 70 of the Karnataka Value Added Tax Act, 2003, the consequence was on the dealer issuing such false invoice to cheat revenue by imposing penalty.
If there was indeed a sale but the registered dealer who had sold goods but had failed to pay the tax from his end, notwithstanding cancellation of registration of such dealer, a dealer who has availed input tax credit on the strength of the original invoice and has documents to establish the transaction of sale, credit cannot be denied. The remedy that is available to the authorities under the Act is only to recover the tax not paid under Section 27(1) of the TN VAT Act, 2006 from such dealer.
Therefore a dealer claiming ITC has to prove the actual transaction of sale by furnishing the name and address of the selling dealer, details of the vehicle which was/were used for delivery of the goods, tax invoices and payment particulars etc. The above information would be in addition to tax invoices, particulars of payment etc., as held by the Hon’ble Supreme Court in M/s.Ecom Gill Coffee Trading Private Limited. [2023 (3) TMI 533 - SUPREME COURT]
Main issue decided in largely favor of Revenue.
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2023 (4) TMI 911
Exemption from levy of Entry Tax - coal imported by petitioners for generation of electricity in it’s Thermal Power Plant - applicability of notification dated 13.12.2010 - Whether provisions of Odisha VAT Act, 2004 are pari materia to the provisions of M.P. VAT Act, 2002, to enable petitioners to take advantage of Division Bench judgment of Orissa High Court in ODISHA POWER GENERATION CORPORATION LTD. VERSUS STATE OF ODISHA & ANOTHER [2015 (5) TMI 62 - ORISSA HIGH COURT] whereby in similar facts and circumstances the contention of petitioners therein (which were similar to the petitioners herein) was upheld by treating coal as the raw material brought in the course of business for generation of electricity?
Whether coal imported by petitioners for generation of electricity by Thermal Power Plant is exempted from Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of business? - HELD THAT:- Bare perusal of the charging provision Section 3 of M.P. Entry Tax Act reveals that the levy of Entry Tax is on the entry in the course of business of a dealer of goods specified in Schedule II into each local area for consumption, use or sale. However, no levy of entry tax can be made over goods specified in Schedule III which are for sale - The State is vested with power to exempt certain goods from levy of entry tax subject to such restrictions and conditions and on such terms and conditions as it thinks fit. In the instant case, the State by notification dated 13.12.2010 Annexure P/3 in W.P. No.16965/2016 exempted in whole payment of Entry Tax on coal which is brought by dealers into the local area as raw material in the manufacture of goods. Petitioners or all dealers bring coal into local area for being consumed by their thermal power stations for generation of electricity - In absence of coal which is the very primary source for generation of heat leading to creation of steam resulting in turning of turbines, no electricity can be produced by any thermal power station.
Whether coal can be termed as raw material as defined in Section 2(g) of M.P. Entry Tax Act? - HELD THAT:- Bare reading of expression “raw material” reveals that the definition is not only generic in nature but wide enough to include all articles used as ingredients in the process of manufacturing of goods or articles consumed in the process of manufacturing including fuel required for the process of manufacture - Since manufacture is not defined in M.P. VAT Act, resort is made to the definition of manufacture u/S 2(p) of the M.P. VAT Act which is exhaustive in nature due to its inclusive characteristic. The said expression ‘manufacture’ u/S 2(p) in the MP VAT Act includes any activity of brings out change in an article as a result of some process, treatment, labour and leads to transformation into an article which is new and different in commercial parlance having distinct name, character, etc. - In the definition of “manufacture” there is nothing to imply that unless and until any traces or element of raw material are found in the finished product, the requirement of the process of manufacturing is not satisfied. Merely because coal gets burnt out in the initial process of creation of heat for making steam and thereby turning the turbine leading to production/manufacture of electricity and thus coal is not found in any physical form in the finished product i.e. electricity, does not mean that coal cannot be treated as raw material for generation/manufacture of electricity.
The other aspects which need to be satisfied is that coal is brought into the local area by petitioners in the course of its business as per Section 3 of M.P. Entry Tax Act - the expression “course of business” is not defined in M.P. Entry Tax Act and therefore, resort is made to M.P. VAT Act which though does not defined the expression “course of business” but defines expression “business” in Section 2(d) of the M.P. Tax Act. The definition of expression “business” in M.P. VAT Act is generic, inclusive and thus exhaustive in nature. This expression “business” includes the process of manufacture - it is obvious that coal is raw material as defined in Section 2(g) of M.P. Entry Tax Act required for the process of manufacturing/generation of electricity. More so coal is also one of the items mentioned in Schedule II appended to the Entry Tax Act.
Once it has been held that coal is raw material for manufacturing/generating electricity and thus is exigible to Entry Tax Act, the exemption/concession notification issued by the State u/S 10 of M.P. Entry Tax Act vide Annexure P/3 in W.P. No.16965/2016, and Annexure P/4 in W.P. No.3109/2015 are available to be availed by petitioners exempting them from payment of Entry Tax on coal brought into local area where the thermal power station of petitioners are situated on such terms and conditions as mentioned in the notification.
Applicability of judgement in the case of Odisha Power Generation Corporation Ltd. vs. State of Odisha and another - HELD THAT:- Bare perusal of the aforesaid comparison of provisions in Madhya Pradesh and Orissa reveal that textually as well as contextually the provisions are para materia and are not materially different and distinct as contended by the State. Thus, there is no substance in the State’s objection about applicability of Division Bench judgment of Orissa High Court in the case of Odisha Power Generation Corporation Ltd.
This Court has no manner of doubt that submissions of State deserve to be rejected and petitions with regard to exemption as well as concession deserve to be allowed.
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2023 (4) TMI 910
Validity of assessment orders - Jurisdiction - Constitution of Advance Ruling Authority (comprising three officials not below the rank of Joint Commissioner) - HELD THAT:- The Respondents are agreed upon that the decision of the Tribunal in the case of IN RE: B.U. BHANDARI PVT. LTD., B.U. BHANDARI AUTOMOTIVE PVT. LTD., B.U. BHANDARI MOTORS PVT. LTD. [2018 (6) TMI 1830 - MAHARASHTRA APPELLATE TRIBUNAL], though it provides relevant legal guidance for the Petitions under consideration, this decision cannot be applied directly to each Petitioner to quash the assessment orders. It is necessary to conduct an enquiry to determine whether the Petitioners can be considered similarly situated persons. The Assessing Officers based their decision on the law the Advance Ruling Authority laid down in the case of M/s. B.U. Bhandari Auto. If this order is reversed, the implication of the order passed by the Tribunal will have to be considered in each case of the Petitioners. Therefore, an enquiry must be conducted to determine whether the facts of each Petitioner case warrant similar treatment.
The Writ Petitions are disposed off by quashing and setting aside the impugned assessment orders in each of these Petitions - Commissioner would examine the issue pending before the Commissioner in light of the decision rendered by the Tribunal in the case of M/s. B.U. Bhandari Auto and in the context of the provisions of Section 55 of the Act referred and take the decisions as per law.
Petition disposed off.
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2023 (4) TMI 867
Levy of additional amount of tax - petitioner failed to prove that certain transactions were covered under Section 3 of the Central Sales Tax Act, 1956 - It is averred in the present petition that the petitioner had the relevant documents to establish the inter State sales, however, it could not produce the same because of non-receipt of any notice.
HELD THAT:- The concessional rate of duty had been denied to the petitioner on the ground that the C-Forms, relied upon by the petitioner, had been cancelled by the concerned tax authorities in Haryana with retrospective effect.
Mr. Satyakam, learned Counsel appearing for the respondent, submits that since the petitioner contends that it has documents to establish the inter State sales and there is no dispute that the adjudicating authorities have the jurisdiction to examine the relevant documents, the matter should be remanded to the concerned authority for deciding afresh, after affording the petitioner, an opportunity to be heard.
The impugned notices of penalty and assessment dated 22.05.2019 and 02.08.2018 are set aside - matter is remanded to the assessing authority to determine the petitioner’s claim afresh - Petition allowed.
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2023 (4) TMI 866
Classification of services - Deemed Sale - crane services given by the assessee to the Govt./Private institution - Transfer of right to use goods or Section 2(36) (iv) of the RVAT Act 2003 - HELD THAT:- The crane as provided to the consumer-Transport Department, could also be interchanged/exchanged at any point in time during the sustenance of the contract. Therefore, without an iota of doubt, it could be said that the consumer-Transport Department did not enjoy the exclusive control and possession of the crane, for the reasons mentioned herein-above. Accordingly, the contract dated 13.10.2008, did not give rise to a transfer of the right to use goods as stipulated under Section 2(35)(iv) of the Act of 2003 read with Article 366(29A) of the Constitution of India. It is also noteworthy that as the contract dated 13.10.2008 was essentially a contract of service, the respondent-assessee had duly paid the amount of service tax leviable upon them. Therefore, in the facts and circumstances of the instant matter, the crane services provided by the respondent-assessee do not constitute sale as provided under Section 2(35)(iv) of the Act of 2003.
In the case at hand, it is clear that the contract dated 13.10.2008 was a contract of service and not sale, as the consumer i.e. Transport Department had demanded the specific services of loading, unloading, lifting and shifting, by way of the said contract. It cannot be said that consumer had the exclusive right to use the crane or that the said crane was under the control and possession of the consumer, as is illustrated by the fact that the conditions in the contract provided for the respondent-assessee to undertake the care and maintenance of the cranes during the sustenance of the contract and also supply the services of a driver and helper alongside the crane. Therefore, inadvertently, keeping the control and possession within the realms of the respondent-assessee - this Court is of the view that the crane services provided by the respondent-assessee do not constitute sale as provided under Section 2(35)(iv) of the Act of 2003 and hence, the order of the learned Tax Board does not call for any interference of this Court.
The control and possession of the crane, as evidenced by the requirements imposed under Condition Nos. 17 and 28, lay with the respondent-assessee only. Hence, there were no mitigating circumstances warranting the contract dated 13.10.2008 to encapsulate a sale as provided under Section 2(35)(iv) of the Act of 2003 read with Article 366(29A) of the Constitution of India.
The question of law is answered in favour of the respondent-assessee and against the Revenue - the Sales Tax Revisions are dismissed.
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