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VAT / Sales Tax - Case Laws
Showing 721 to 740 of 27514 Records
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2023 (4) TMI 163
Validity of assessment order - rejection of claim for input tax credit on the purchase of capital goods - levy of penalty on the appellant under the KVAT Act for the assessment years 2016-17 and 2017-18 - whether the learned Single Judges were justified in relegating the appellant to its alternate remedies under the KVAT Act against the orders impugned in the writ petitions?
HELD THAT:- The power of judicial review is traceable to Articles 32 and 226 that confer on the Supreme Court and the High Courts the power to issue prerogative and like writs to protect the citizens from state action that infringes upon their rights. The Constitution being the supreme law of our land, and the rule of law being one of its basic features, the exercise of statutory power has to conform, inter alia, to the requirements of fairness, non-arbitrariness and reasonableness, all of which are integral aspects of the rule of law. Thus, when a litigant approaches a writ court, alleging a breach of his rights – be it a constitutional right, a statutory right or a common law right – by an authority empowered by the State, the court examines the manner in which the decision was arrived at, and in exceptional cases, the decision itself, to see whether it conforms to the requirements mandated by the rule of law.
The writ jurisdiction being a discretionary jurisdiction, it is for the constitutional courts to decide whether or not they should exercise their discretion to entertain a writ petition. In that context, it would be apposite to point out that there is a subtle distinction that exists between instances when a court dismisses a writ petition as ‘not maintainable’ and when it exercises its discretion against ‘entertaining’ it. The former is a case where the court finds that the circumstances are such that it is rendered incapable of even receiving the lis for adjudication whereas the latter is a case where the court finds that, while it is competent to adjudicate the lis, the adjudication is better left to other forums that are more suited for the same - Justification refers to the principle that the exercise of public power must be justified, intelligible and transparent, not in the abstract, but to the individuals subject to it. Demonstrated expertise refers to the requirement of the decision maker establishing the reasonableness of his decision by demonstrating therein his experience and expertise.
Is the exercise of Judicial Review warranted in these cases? - HELD THAT:- A reading of the assessment orders and penalty orders that are impugned in these cases would reveal that the assessing officer has interpreted the terms of the contract entered into between the appellant assessee and BPCL as requiring the appellant to transfer the property in the plant put up by them on land leased from BPCL and also to sell to BPCL the gases manufactured in that plant - What the assessing officer completely overlooks, however, is the fact that there has been no transfer of the property in the goods involved in the execution of the works contract. The taxable event under the KVAT Act is not the execution of a works contract but the transfer of the property in the goods involved in the execution of the works contract. The latter aspect being absent in the transaction between the appellant and BPCL, as evident from the findings of the Intelligence Officer in the penalty orders, based on which the assessing officer rendered similar findings in the assessment orders, the assessing officer virtually usurped to himself the jurisdiction to tax a ‘works contract’ by erroneously assuming the existence of the jurisdictional fact/taxable event that would have conferred him with such a jurisdiction.
It is deemed appropriate to observe that in matters of assessment under a taxing statute, the requirement of fairness, that is an integral aspect of the rule of law in our country, mandates that an assessing authority should apply its mind to the various factors that influence an assessment and give sufficient indication in the assessment order of having done so. This would necessitate his/her giving reasons for the finding regarding the existence of the taxable event that attracts the charge of tax as also other factors that result in a demand from an assessee of more tax than what has been admitted by him/her as payable. The profile of an assessing authority can no longer be that of a stern and unreasonable automaton that is programmed solely to collect the tax that the revenue department feels is due from an assessee. The right of an assessee to seek justification of state action would mandate that this court step in to correct unreasonable orders of assessing authorities so as to uphold the culture of justification that legitimizes state action.
Appeal allowed.
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2023 (4) TMI 162
Validity of reassessment Orders - primary grievance is that the impugned reassessment orders are without a fair and complete opportunity - violation of principles of natural justice - HELD THAT:- The petitioner on receipt of the photocopies of the documents has made a request for further time citing third party information and the volume of the documents as reasons. This request is admittedly made on 27.02.2023 i.e., before the expiry of the time allowed by the endorsement dated 17.02.2023. But the same is not received, as canvassed on behalf of the petitioner, on the ground that separate requests had to be made. The petitioner has persisted with its request for further time by filing a further request on 28.02.2023. In fact, the petitioner's case is that its representative was present with the respondent's office both on 27.02.2023 and 28.02.2023 and the request is received at the fag end of the second day.
There could be failure by the petitioner to respond immediately to the Call Notices or the Proposition Notices, but for the purposes of the present case, it would not decisive especially when the petitioner is furnished with the copies of the documents on 17.02.2023. If the petitioner has been given photocopies of the documents [including the statement of third parties] on 17.02.2023 and the documents are third party documents and voluminous, this Court is of the considered view that the request on 27.02.2023 for further time [of course, with the statutory constraints in mind] should have been considered.
There must be interference with the impugned assessment orders with the proceedings being restored to the respondent for conclusion of the assessment proceedings with opportunity to the petitioner to file detailed objections with a request for cross examination of the witnesses to be considered by the respondent, if permitted in law.
The impugned reassessment orders for the tax periods viz., April 2015 to March 2016, April 2016 to March 2017 and April 2017 to June 2017, which are produced as Annexure-A in each of the writ petitions, are quashed and the corresponding proceedings are restored to the respondent for reconsideration - Petition allowed.
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2023 (4) TMI 161
Disallowance of Input Tax Rebate (ITR) in-respect-of the GST purchases made from few of the companies - dis-allowance primarily was on the ground that the sellers were bogus dealers who have not deposited the tax collected from the petitioner herein - HELD THAT:- Both these Writ Petitions in-fact are squarely covered by the decision of the Division Bench of this High Court in the case of the STATE OF CHHATTISGARH AND OTHERS VERSUS TATA TELESERVICES LIMITED [2022 (12) TMI 264 - CHHATTISGARH HIGH COURT] where it was held that Invocation of Section 22 is permissible only when assessment of a dealer (a) has been under assessed or has escaped assessment or (b) has been assessed at a lower rate or (c) any wrong deduction has been made while making the assessment or (d) a rebate of input tax has incorrectly been allowed while making the assessment or (e) is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal, which has become final. The aforesaid conditions precedent cannot be countenanced in absence of an order of assessment in writing and in that view of the matter, in respect of deemed assessment, recourse cannot be taken under Section 22 of the VAT Act.
The issue involved in the present Writ Petitions since it stands squarely covered by the decision of the Division Bench and which is not in dispute in-terms-of the submission made by the Counsel for the State itself. This Court is of the firm view that under the circumstances, the question of relegating the petitioner to avail the statutory alternative remedy available to the petitioner would not be proper and justified at this juncture.
This Court is also inclined to allow the present two Writ Petitions on the legal ground that is involved in the Writ Petitions so far as there being no assessment order passed by the respondent. Further without there being an assessment order as is otherwise required under Section 21(1) of the Chhattisgarh Vat Act, there could not have been any re-assessment proceedings drawn under Section 22(1) of the VAT Act initiated by the authorities concerned - the impugned orders passed by the Commercial Vat Tribunal dated 01.09.2021 and the order of the Appellate Authorities dated 14.12.2017 and the order of reassessment dated 26.03.2016 are set aside.
Petition allowed.
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2023 (4) TMI 150
Classification of goods - melamine utensils, i.e., plates, bowls, spoons and dinner sets, etc. - exigible to tax @ 1% under Part-I of Schedule to the OET Act or not - misclassification of melamine utensils’ as non-scheduled goods under the OET Act, 1999, or not - Reduction of demand raised in the assessment framed under Section 10 of the Odisha Entry Tax Act, 1999 to NIL - tax periods from 01.04.2007 to 31.12.2010 - conclusion of proceeding ex parte whereby entry tax has been levied on the sale of finished goods as per Section 26 taking into consideration the figures disclosed in the returns and the turnover suppressed as alleged.
HELD THAT:- There is no ambiguity in mind that “melamine” being “used in making plastics”, it itself cannot be said to be “plastic”. Therefore, considering that “melamine” may be one of the ingredients for manufacture of “plastic”, it cannot be said to be “plastic” simpliciter and thereby melamine utensils may not strictly fall within the connotation of “plastic goods”, the Revenue has abandoned such contention.
The word “appliances” being word of day-to-day use, its popular or commercial parlance meaning has to be adopted as against its scientific or technical meaning because of the well-settled principle of interpretation that in taxing statutes, words of everyday use must be construed not in the scientific or technical sense but as understood in common parlance. However, the word “appliance” as used in Entry 35 of Part-II of Schedule is to be construed in the sense it is accompanied by other items.
Further investigation into the matter revealed that in COMMISSIONER, SALES TAX VERSUS HM INDUSTRIES [1980 (1) TMI 172 - ALLAHABAD HIGH COURT] it has been made clear that sewai ki machine is used as a means to an end; it is a device which gives the desired result by producing sewai by mechanical method. It is therefore an appliance. Sewai ki machine made of iron (machine for producing vermicelli) is understood in common parlance as kitchen appliance. Kitchen is a room where food is cooked, and it is in this sense that it is normally understood. An article may not be of direct use yet its use may be such without which it may not be possible to run the kitchen. Thus, the item in question cannot be attributed the meaning of “all kinds of kitchen appliance” as enumerated in Entry 35 of Part-II of the Schedule.
Entry 87 of Part-I of Schedule used the symbol “/” which is preceded by “kitchen ware” and succeeded by “utensils”. It is well established principle of construction that an effort must be made to give effect to all parts of statute and unless absolutely necessary, no part thereof shall be rendered surplusage or redundant. The intention is clear that symbol “/” in Entry 87 of Part-I signifies that the OET Act wanted to restrict the levy of tax to such “kitchen ware” which are similar in nature and use as “utensils” and such utensils must be of similarity with goods as that of “rice cooker” and “pressure cooker”. Therefore, drawing distinction between entries in the OET Act and entries under the Karnataka statute, it may not be inept to say that Stovekraft Pvt. Ltd. (supra) does not come in aid of the contention of the Revenue.
Whether “dinner set” made of melamine fell within the scope of any of the entries in the Schedule to the OET Act was never under consideration before the taxing authorities. It is the “melamine utensils” which was subject-matter of examination by the authorities. Even the grounds of second appeal filed by the Revenue did not suggest the same. Instead of making prevaricating statements, the Standing Counsel for the Revenue before the Tribunal should not have confused by taking new plea for adjudication as to whether plates, bowls, spoons and dinner sets would be exigible to rate of tax @ 1% without specifying the particular entry in which “melamine utensils” would fall - As the item “melamine utensils” does not fit into any of the entries as suggested by Sri Sunil Mishra, learned Additional Standing Counsel, the Tribunal is apt to hold the same to be non-scheduled goods, and therefore, entry tax is not exigible on the finished goods sold by the opposite party-dealer. Hence, the revision preferred by the Revenue under Section 19 of the OET Act fails.
Since “plates, bowls, spoons and dinner sets” were never came for adjudication before the Assessing Authority nor the First Appellate Authority, for the first time before the Tribunal the Revenue could not have raised such a plea - the Odisha Sales Tax Tribunal has not committed error in classifying “melamine utensils” as non-scheduled goods under the OET Act, 1999.
Revision petition dismissed.
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2023 (4) TMI 149
Levy of Entry Tax - Hydrate Lime being a chemical can be treated as a schedule goods under the O.E.T. Act as mentioned in SI. No.6 Part-1 of Schedule appended to the O.E.T. Act, or not - validity of confirming the charging of entry tax on imported coke, when the dispute is pending for decision by the Larger Bench of the apex Court - imposition of penalty U/s. 7(5) of the O.E.T. Act - HELD THAT:- Section 7(5) has to be construed to mean that the presumption contained therein is rebuttable and the penalty of one and half times of tax assessed stipulated therein is only the maximum amount, which could be levied and the Assessing Authority has the discretion to levy lesser amount depending upon the facts and circumstances. In the absence of satisfaction, the presumption is that non-disclosure in the return is with an intention to evade payment of entry tax and, as such, depending on the facts of each case the Assessing Authority has to decide what would be the reasonable amount of penalty to be imposed.
Thus, cardinal principle of the statute is that under the Act penalty may be imposed for failure to pay entry tax and furnish the return in due time, but the liability to pay penalty does not arise merely upon proof of default in filing return or failure to pay entry tax and furnish the return in due time.
The Odisha Entry Tax Act being a new legislation and the petitioner being under the bona fide belief that the disputed goods is an un-scheduled goods and there being some confusion with regard to levy of entry tax on goods imported, being a new legislation, which is in a fluid state, no penalty should have been imposed - The cardinal principle of taxing statute is that when two views are possible, the view favourable to the assessee should be preferred and in that view of the matter no penalty should have been imposed on the petitioner.
In view of the meaning attached to the word ‘penalty’ under different provisions of different taxing statute, in an unequivocal term it can be said that the penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute.
In view of the fact that in the instant case the petitioner has already paid the tax and so far as payment of tax is concerned there is no dispute. Since there is no violation or deviation in payment of tax, as a consequence thereof, the petitioner is not liable to pay the penalty - the impugned orders passed by the Assessing Authority, First Appellate Authority and the Sales Tax Tribunal, Cuttack, so far as imposition of penalty under Section 7(5) of the O.E.T. Act is concerned, are hereby quashed.
The revision is allowed.
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2023 (4) TMI 148
Levy of penalty under Section 7(5) of the OET Act - rejection of revised return and enhancement of turnover on valid materials and evidence and the books of accounts maintained by the petitioner - absence of any adverse material on record - HELD THAT:- In view of the meaning attached to the word ‘penalty’ under different provisions of different taxing statute, in an unequivocal term it can be held that the ‘penalty’ ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute.
Above being the meaning attached to the word “penalty”, if that would be taken into consideration in the present context, without accompanying the revised return, no best judgment assessment could be done by the Assessing Authority. As such, no reason for rejection of revised returns has been pointed out by the Assessing Authority. More so, no reasons have been assigned as to why the penalty will be imposed under Section 7(5) of the O.E.T. Act. Even against the order of assessment when appeal was preferred, the Appellate Authority though quashed the same, but in the Second Appeal the Tribunal set aside the order passed by the Appellate Authority and confirmed the order passed by the Assessing Authority which clearly indicates that the same has been passed by the Tribunal without any application of mind.
Once the Assessing Authority has come to a conclusion that there is no mistake in the books of account, imposition of penalty under Section 7(5) of the O.E.T. Act cannot be sustained in the eye of law.
There is no dispute that the Assessing Authority initiated proceeding under the O.S.T. Act but not under the O.E.T. Act. By asking information without proper manner cannot be treated as initiation of proceedings against the petitioner. As such, the Assessing Authority has committed error without initiating the proceeding under O.E.T. Act and without issuing notice to the petitioner under the O.E.T. Act - This Court in similar circumstances in the case of RAM KISHAN RAJKUMAR VERSUS ASSESSING AUTHORITY, CUTTAK-I WEST CIRCLE, CUTTACK AND ANOTHER [2004 (6) TMI 600 - ORISSA HIGH COURT] has interfered with the assessment under Section 7 of the O.E.T. Act read with Rule 15 of the O.E.T. Rules (as it stood at the relevant point of time) and quashed the order of assessment. Therefore, the assessment which has been made for imposition of penalty cannot be sustained in the eye of law.
No doubt, the petitioner has filed all the monthly statements and returns, as shown in the monthly statements and also paid due admitted tax before filing the said return. As such, the petitioner is in no way a defaulter in payment of admitted tax under the O.E.T. Act. Therefore, the provisions contained under Section 7(5) of the O.E.T. Act is not applicable.
The question is answered in favour of the assessee-petitioner and against the Department - revision allowed.
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2023 (4) TMI 123
Impact of the regular assessment order on the penalty imposed before assessment - misinterpretation of section 40 (2) of the JVAT Act - concealed turnover - evasion of tax or not - HELD THAT:- It appears that on 27.4.2015 the petitioner filed NIL Returns for the month of March though before that on 30.3.2015 itself it had raised a bill for Rs 6,73,233/- and this fact finds mention in the order dated 29.4.2016 of the Appellate Court and nowhere denied by the petitioner. Further, since the petitioner was aware of having raised bill of Rs 6,73,233/-, there was no occasion for the petitioner to file returns for the month of March, 2015 showing it be NIL returns. This filing of NIL returns itself is self- sufficient to make out a case under Section 40(2)(b) of the JVAT Act, 2005 - The petitioner himself has admitted the fact that it had received the TDS certificate from the Government on 01.07.2015. Though, the TDS certificate was received by the petitioner on 01.07.2015 but he did not revise the returns for the month of March, 2015 on any day prior to 30.07.2015. If the same would have been revised on any day prior to 30.07.2015; then the proceeding under Section 40(2) of the Act would not have been initiated; rather the conduct of petitioner in not revising the returns despite admittedly having received the TDS certificate from the government on 01.07.2015, appears to be indicative of the mens- rea of the petitioner.
The proceeding u/s 40(2) was initiated on 30.07.2015 and notice was issued to the petitioner. Thereafter, the returns were revised only after initiation of the proceeding and issuance of notice to the petitioner and therefore, any attempt to revise the returns after the initiation of proceeding will be hit by the mischief of rule 14(7) of JVAT Rules, 2006.
Further, Section 40(2) states that if the prescribed authority in the course of any proceeding or upon any information, which has come into his possession before assessment is satisfied that any registered dealer has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this Act, or has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases in the return furnished under sub-section (1) of Section 29; or otherwise, it could initiate penalty proceedings - In the instant case when ‘information’ regarding excess turnover than what was disclosed by the petitioner came into the possession of the prescribed authority and that petitioner has not disclosed the Turnover of March, 2014 inspite of having full knowledge, concealed the same in the Returns filed by him and thereby furnished incorrect particulars, the prescribed authority rightly initiated the penalty proceedings and issued notice upon the petitioner.
In the instant case, the actual turnover was shown as NIL for March 2015 in the return filed on 27.04.2015 in-spite of the fact that the petitioner had raised bill for the amount of Rs.6,73,233 on 30.3.2015 itself. Further though TDS certificate was received by the petitioner on 1.7.2015 but Returns were not revised till 30.7.2015 when proceedings u/s 40(2) was initiated. Thus, the intent to evade tax or conceal/suppress turnover appears to be clear indicative of mens rea on his part. As a matter of fact, after the proceeding under section 40(2) of the JVAT Act was initiated and the notice was served to the petitioner he filed the return on 05.08.2015 i.e., after the period of three months for filing revised return. There is no document on record to suggest or any averments giving reason for non-filing of revised return within time. As such, the element of mens rea on the part of the petitioner is also made out.
The fact of the instant case as enunciated herein before clearly shows absence of bona-fide on the part of the petitioner in not filing the revised return even after getting the TDS certificate as he filed the revised return only on 05.08.2015 after initiation of proceeding under section 40(2) of the JVAT Act on 30.07.2015. It is thus clear that the instant case does not fall under section 30 (4)(d); rather is covered by the condition prescribed under Rule 14(7) of the JVAT Rules. As such the action of the respondent revenue authority is fully justified; no error has been committed by the learned Tribunal by rejecting the revision petition of the petitioner.
Application dismissed.
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2023 (4) TMI 122
Discretionary power for imposition of penalty - Rule 12(4) of the Central Sales Tax (Odisha) Rules, 1957 - concessional rate of tax against declaration in Form ‘C’ - suppression of turnover or not 0- tax periods from 01.04.2010 to 31.03.2012 - HELD THAT:- In the case at hand, nothing has been placed on record indicating that the turnover disclosed in the return has been escaped assessment so as to entitle the assessing authority to impose penalty under Rule12(4)(c) of CST (O) Rules, 1957. But the assessing authority imposed penalty in exercising his discretion and such discretion has been exercised without any reasonable cause. There is a specific finding that the petitioner has not suppressed any turnover which will affect the revenue. It is no doubt true that a discretionary power has been vested with the assessing officer for imposing penalty under Rule 12(4)(c), but when suppression of any turnover or commission of any fraud has not been established, nor the petitioner has been found to have illegally deducted any turnover as exempted sale to affect the tax liability, in that case imposition of penalty under Rule 12(4)(c) cannot have any justification.
The discretionary exercise of power amounts to something that is not compulsory, but it is left to discretion of the person or authority involved, such as a discretionary grant. It is opposite to mandatory. Therefore, discretionary is a term which involves an alternative power, i.e., a power to do or refrain from doing a certain thing. In other words, it would be power of free decision or choice within certain legal bounds.
If Rule 12(4)(c) provides for exercise of discretionary power for imposition of penalty, the assessing officer should have exercised such discretionary power reasonably. In absence of any rationality or reasonability, exercise of discretionary power can be construed as arbitrary and unreasonable exercise of power by the authority. Therefore, when the first appellate authority examined the fact vis-à-vis contention raised by the parties and came to a definite finding that the petitioner has not suppressed any turnover which will affect the revenue and the discretionary power has been vested with the assessing officer while imposing penalty under Rule 12(4)(c) and in fact there has been no suppression of any turnover or fraud nor the petitioner has been found to have illegally deducted any turnover as exempted sale which will affect the tax liability, it limited the penalty to Rs.30,000/- instead of Rs.1,22,052/- - The learned Tribunal has failed to consider the effect of words “if he is satisfied that the escapement is without any reasonable cause” contained in Rule 12(4)(c) of the CST (O) Rules. But nothing has been placed on record to that extent and, as such, there is no question of levy of two times of penalty in case the assessing authority comes to the conclusion that the escapement is with reasonable cause. Therefore, reduction of penalty by the first appellate authority appears to be improper, when such determination of liability against the petitioner is absolutely based on no record.
Penalty is not prescribed for mechanical imposition because law permits such a levy. It is well settled legal position that while interpreting the provisions of the statute, every part of the provisions of the statute has to be given effect to and one part cannot be interpreted in a manner inconsistent with another part of the statute that would defeat the object and purpose of the Act and rules framed thereunder - It is also well-established that where language of any provision in a statute is clear, it is impermissible to vary the language unless the plain and unambiguous language leads to an absurd result. In the present case, the language of Rule 12(4)(c) in unequivocal terms spells out that satisfaction of the Assessing Authority as to the reasonableness of the cause is imperative. In absence of such material borne on record, the very invocation of exercise of power to impose penalty is considered to be flawed.
Since penalty is a statutory liability and is substantive in nature, the provisions for imposition thereof are to be strictly construed. It is, therefore, pertinent to put forth the well-accepted principle with regard to strict interpretation. In a taxing statute one has to look at what is clearly said. There is no equity about a tax. There is no intendment. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly on the language used. If the meaning of the provision is reasonably clear, Courts have no jurisdiction to mitigate harshness - The Court is to ascribe the natural and ordinary meaning to the words used by the Legislature and the Court ought not, under any circumstances, to substitute its own impression and ideas in place of the legislative intent as is available from a plain reading of the statutory provisions.
The question of law as framed by this Court is answered in the negative, i.e., in favour of the petitioner-assessee and against the State of Odisha-Revenue - the sales tax revision petition allowed.
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2023 (4) TMI 69
Refund of Input Tax Credit (ITC) on Export of Goods and Services without payment of Integrated tax - rejection on account of difference in turnover - typographical error - invoices mentioning Lowa State in the United States of America - HELD THAT:- The learned Counsel for the Respondents submitted that considering the magnitude of the refund sought, the Deputy Commissioner was careful in scrutinizing of the documents and having found that the typographical error had to be corrected by the Petitioner and not by the Deputy Commissioner, rejected the refund application and there is no error in the same. The learned Counsel for the Respondents states that there are other grounds on which the Petitioner is not entitled to refund.
Invoices mentioning Lowa State in the United States of America - HELD THAT:- There is an obvious typographical error as there is no such State in the United States. The corresponding name to that place is Iowa State, and therefore, the explanation of the Petitioner is plausible and should have been considered by the Deputy Commissioner. Therefore, it is opined that with this finding / correction the Deputy Commissioner needs to examine the Refund Application made by the Petitioner afresh, also examine the evidence that is produced by the Petitioner in addition to the invoices and take a decision.
The impugned order dated 22 April 2022 passed by the Respondent no.2 Deputy Commissioner of Sales Tax, Pune, is quashed and set aside. The application of the Petitioner for refund is restored to the file of the Deputy Commissioner - It is open to the Petitioner to supply additional documents in support of its claim for refund. During the hearing the Petitioner would also keep the originals of the documents to enable the Deputy Commissioner to scrutinize and ascertain the veracity thereof.
The Writ Petition is allowed.
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2023 (4) TMI 68
Owner of goods - sale in Delhi or not - failure to furnish information regarding the receipts of the goods found at its godown - whether the Tribunal has erred in upholding the order of the Appellate Authority on the ground that the appellant had not produced necessary information in his possession in respect of the goods stored at the godown? - order of default assessment passed - rebuttal of presumption.
HELD THAT:- The plain reading of Sub-section (9) of the Section 3 of the DVAT Act indicates that if a person who transports or holds goods in custody fails to furnish any information in respect of the goods in his possession, on being required to do so by the Commissioner, it would be presumed that he is the owner of the goods - Undisputedly, the presumption under Section 3(9) is a rebuttable presumption. Further, the said presumption would arise only if a person who is in custody of the goods fails to produce the information in his possession in respect of the goods.
It is the appellant’s case that it had, in fact, produced relevant documents to show the ownership of the goods in question and therefore, no such presumption could be drawn - Admittedly, there is no dispute that at the time of inspection of the godown, the appellant’s Manager had not produced the relevant documents. However, the record indicates that the appellant had produced the relevant documents at a subsequent stage prior to the order of default assessment. There appears to be no real dispute that the appellant had done so. The appellant has produced photocopies of the documents that were filed before the VATO Enforcement at the time of the default assessment or prior, thereto. These were also produced before the Appellate Tribunal.
It is material to note that Section 3(9) of the DVAT Act does not specifically provide a time-frame for submission of documents. It merely contemplates a presumption as to the ownership of the goods if the person in custody of goods fails to furnish any information in possession in respect of the goods on being required to do so by the Commissioner - It is also not disputed that the appellant’s godown and its office were located at different places and the respondents do not dispute that it was permissible for the appellant to keep the documents at its office instead of at the godown.
It would be open for a person found in custody of goods to produce the relevant information in its possession in respect of the goods within a reasonable time on being required to do so by the Commissioner. The question as to what is a reasonable period of time for providing information is necessarily required to be determined in the facts of each case. In the given facts of the present case, the question is required to be answered in the affirmative; that is, in favour of the appellant and against the Revenue.
The appellant’s appeal is restored to the Appellate Tribunal. The Appellate Tribunal shall consider the documents as produced by the appellant and take an informed decision on the appellant’s appeal - Appeal disposed off.
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2023 (4) TMI 4
Interest on refund - relevant period - interest for the period commencing from the date when two months elapsed [which in turn would commence from the date when the return was filed], and running till the date when the refund was paid, or not - whether the assessee's right to interest fructifies immediately, upon the expiry of the period prescribed under Section 38(3)(a)(ii) of the 2004 Act?
HELD THAT:- It is crystal clear that strict timelines have been set forth in the 2004 Act for the grant of refund. In the instant matter, since the revised return was filed on 10.07.2015, the refund in terms of Section 38(3)(a)(ii) of the 2004 Act accrued in favour of the assessee on 10.09.2015. Admittedly, the notice under Section 59(2) of the 2004 Act seeking additional information was issued only thereafter, i.e., 11.09.2015. This notice led to the issuance of the notice of default assessment dated 02.08.2017, giving rise to a demand amounting to Rs.1,25,60,785/- via order dated 02.08.2017; which was, ultimately, set aside by the OHA via order dated 26.08.2019. Rule 34(4), which is invoked by the revenue, has no application to the instant case, as is evident upon a plain reading of Sub-rule (1) and (4) of the said Rule.
The OHA, in a brief order, concluded that ITC was wrongly denied to the assessee, i.e., the objector, since it had in its possession valid tax invoices and there was no dissonance in the 2A-2B mismatch report of the purchasing and selling dealer. OHA noted that the “Assessing authority in the assessment order has not brought any material to prove collusion between purchasing dealer and selling dealer and also [did] not invoked Section 40A of the DVAT Act". Accordingly, the assessee's objections were accepted and the impugned order dated 02.08.2017 passed under Section 32 of the 2004 Act was set aside - while the OHA ruled on the legal tenability of the order dated 02.08.2017, concerning objections filed under Section 74 of the 2004 Act, it could not have stymied the accrual of interest which was based on a claim lodged by the assessee via its revised return. The assessee's right to refund accrued on completion of the timeframe given in Section 38(3)(a)(ii) of the 2004 Act, i.e., on 10.09.2015. The proceedings taken out thereafter, i.e., issuance of notice under Section 59(2) of the 2004 Act on 11.09.2015 followed by a default assessment order dated 02.08.2017 and the adjustment order dated 25.08.2017, were non-est in the eyes of law.
Sub-rule 34(4) of the 2005 Rules had no applicability in the present case. The provision which did apply was Section 38(3)(a)(ii) of the 2004 Act insofar as the assessee is concerned - Since the claim for a refund made by the assessee was embedded in its return, it did not arise out of an order passed by the Court or an authority constituted under the 2004 Act, the assessee was not required to file a fresh claim as contended by the revenue under DVAT 21.
Thus, the assessee will be entitled to interest at the rate of 6% (simple) per annum for the period spanning between 11.09.2015 and 14.08.2020. Interest for the said period will be quantified on the principal amount refunded to the assessee i.e., Rs.1,25,60,785/- - appeal of Revenue dismissed.
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2023 (4) TMI 3
Input tax credit for claim of burning loss - Time limitation - two separate notices issued for different assessment years, one covering for the years 2006-07 upto 2010-11 and the other covering for the years 2011-12 upto 2015-16, the contention of the learned counsel for the petitioner that it is a single notice has to be rejected by this Court - Section 27(1) of the Tamil Nadu Value Added Tax Act 2006 - HELD THAT:- The separate notices make it clear that the first notice has been issued for the assessment years 2006-07 upto 2010-11 and the second notice has been issued for the assessment years 2011-12 upto 2015-16. Being two separate notices issued for different assessment years, one covering for the years 2006-07 upto 2010-11 and the other covering for the years 2011-12 upto 2015-16, the contention of the learned counsel for the petitioner that it is a single notice has to be rejected by this Court. The first notice dated 12.07.2021 for the assessment years 2006-07 upto 2010-11 is alone barred by limitation and the second notice dated 12.07.2021 issued by the respondent for the assessment years 2011-12 upto 2015-16 is not barred by limitation as the demand has been made, within a period of six years by the respondent as prescribed under Section 27(1) of the Tamil Nadu Value Added Tax Act 2006.
The impugned notice dated 12.07.2021 issued by the respondent for the assessment years 2006-07 upto 2010-11 is hereby quashed and insofar as the second notice is concerned, the contention of the petitioner is rejected by this Court.
Admittedly, the petitioner has not challenged the assessment order passed by the respondent in respect of the assessment years 2011-12 upto 2015-16. If aggrieved by the same, the petitioner will have to challenge the same in the manner known to them under law and liberty is granted to the petitioner for challenging the said assessment order pertaining to the assessment years 2011-12 upto 2015-16.
This writ petition is partly allowed.
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2023 (3) TMI 1458
Rejection of petitioner’s application for waiver of pre-deposit under Section 63(4) of the KVAT Act - validity of the provisions of Section 63(4) of the KVAT Act - HELD THAT:- On careful consideration of these circumstances, and this Court’s opinion on modulating the requirement of pre-deposit under Section 63(4) of the KVAT Act in the light of the earlier decision of this Court, this Court is of the considered view that the petitioner, which cannot be granted complete waiver, must deposit 50% (15% of the amount in demand) of the requirement of pre- deposit under Section 63(4) of the KVAT Act with reasonable time.
The petitioner is permitted to deposit 50% (that is 15% of the amount in demand) as required under Section 63(4) of the KVAT Act and the petitioner shall be at liberty to make this deposit within six (6) weeks from the date of receipt of a certified copy of this order - Petition allowed in part.
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2023 (3) TMI 1331
Rate of tax - HSD and LDO - fresh assessment under Section 12(8) of the OST Act - such reassessment is vitiated on account of “change of opinion” or not - disallowing set off of entry tax paid on the goods which were sold to the dealers at concessional rate of tax @ 4% as per Entry 81 of schedule appended to Notification dated 31.03.2001 issued under Section 5(1) of the OST Act - set off of entry tax - whether the petitioner is entitled to set off entry tax paid against tax payable for sale of goods?
HELD THAT:- Both the First Appellate Authority and the Second Appellate Authority have come to the conclusion that the petitioner, having dealt with the item(s) mentioned in Entry No.101 and sold said item(s) against declaration in Form IV at concessional rate of tax, is not entitled to get set off of entry tax paid against the amount of tax payable for sale of goods. The Item No.101 deals with the general provision, so far as HSD and LDO are concerned, and for that the dealer is liable to pay tax @ 20%. There is no dispute on that. But here is a case where the petitioner is carrying on business in HSD and LDO, which is used within the State.
There is no iota of doubt that the petitioner claims concessional rate of 4% tax on the strength of Form-IV. The transaction which was done by the petitioner with the others, being on the strength of Form-IV, set off was granted to the petitioner. The assessment order issued by the Assessing Officer under Section 12(4) is very clear to that extent, but reassessment made under Section 12(8) and confirmation thereof made by the First Appellate Authority and the Second Appellate Authority cannot be sustained in the eye of law.
The reopening of the assessment is based on the investigation report of the tax authorities themselves and is, therefore, founded on nothing but a mere change of opinion. As a consequence thereof, the order passed by the Assessing Authority under Section 12(8) for reassessment has no justification in view of law laid down by the apex Court in Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT] followed by Nava Bharat Ferro Alloys v. State of Orissa, [2010 (3) TMI 1009 - ORISSA HIGH COURT]. Therefore, the formation of opinion in the reassessment under Section 12(8) of the OST Act cannot have any justification and while forming such opinion, as it appears from the records, no opportunity of hearing to the petitioner was given in compliance of the principles of natural justice.
It is also not in dispute that the petitioner-company has paid entry tax on procurement of HSD and LDO into the State of Orissa but has not sold any finished goods rather sold the same goods as procured. On perusal of the assessment order under Section 12(4) of the OST Act, it is made clear that the Assessing Authority has taken note of the fact that HSD and LDO, which have been utilized by different companies by furnishing the Form-IV, the same has been taken note of and assessment thereon has been made by the Assessing Authority - obviously the petitioner is liable to pay tax @ 20% as per Entry-101, ibid. In such eventuality, the petitioner is liable to discharge its liability by availing set off of entry tax paid. The issue of set off being taken into consideration while finalizing assessment under Section 12(4) of the OST Act, on account of “change of opinion” the reassessment under Section 12(8), ibid. is not legally tenable.
HSD is one of the covered goods under Note-1(b) and, thereby, the petitioner is statutorily entitled to claim set off of entry tax against sales tax payable on sale of HSD. As the State Government has not imposed any restriction/limitation on the claim of set off of entry tax on the covered items, the reassessment made by the Assessing Authority under Section 12(8) and confirmation made thereof by the First Appellate Authority and also the Tribunal denying the benefit of set off cannot be sustained in the eye of law. The benefit statutorily permissible, vide notification dated 31.03.2001 issued by the Government, cannot be denied/disallowed without considering such notification in proper perspective.
The reassessment order under Section 12(8) of the OST Act dated 27.01.2007 under Annexure-3 passed by the Assessing Officer disallowing the set off of entry tax to the petitioner, which comes under the purview of the notification dated 31.03.2001, cannot be sustained in the eye of law - Revision allowed.
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2023 (3) TMI 1330
Validity of assessment order - scope of rectification or reassessment and the powers under Section 10-B of the Act - non-entitlement to the amounts deposited towards development charges as the same were charged from the buyer - Tribunal specifically recorded that the material which led to the passing of order in the year 2015 were not available with the Assessing Authority when the assessment was done for the first time in the year 2012.
HELD THAT:- In view of the law as laid down in the case of M/s. A.K. Corporation [[1993 (11) TMI 226 - ALLAHABAD HIGH COURT]], it is well settled that the assessment after Section 10-B of the Act proceedings has to be confined to the material on record that were available when the first assessment order was passed, any subsequent material cannot be the basis for reassessment in view of the law laid down - The order of the Tribunal is in consonance with the law, as such the revision filed by the State is liable to be dismissed.
Revision dismissed.
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2023 (3) TMI 1270
Entitlement for interest on the amount due as there is no specific provision under the VAT Act for payment of interest on refund - HELD THAT:- Admittedly, the assessment order was quashed upholding the order of this Court - the respondent was obliged to refund the amount so collected to the petitioner immediately after dismissal of SLP. Even though, there is no provisions of payment of interest on refund of amount so collected under the VAT Act, but, looking to the fact that the SLP was dismissed on 17.04.2017, the petitioner would be eligible for interest@6% per annum w.e.f. 17.04.2017 till the date of refund.
In the circumstances, petition is allowed - Respondents are directed to refund the amount so collected and withheld since 2016 alongwith interest @6% per annum w.e.f. 17.04.2017 till the actual date of payment.
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2023 (3) TMI 1269
Reopening of assessment under Section 12(8) of the O.S.T. Act, 1947 - rate of tax - turnover relating to payments received towards supply of goods - taxable at 4% or 13%? - works contract or transaction of sale - HELD THAT:- The law regarding contract for supply, erection and thereafter installation of machinery was entertained as contract work and no independent sale had ever been made since the principles of law have already been decided in number of cases also and the petitioner is deriving the principles from the case of COMMISSIONER OF SALES TAX, MAHARASHTRA STATE, BOMBAY VERSUS BRIMCO PLASTIC MACHINERY PRIVATE LIMITED [1995 (2) TMI 379 - BOMBAY HIGH COURT] had categorically stated that the works contract executed along with supply installation etc. will be taxed as works contract exigible to Orissa Sales Tax @ 4%.
In the case of STATE OF ORISSA VERSUS UGRATARA BHOJANALAYA [1992 (7) TMI 300 - ORISSA HIGH COURT], it has been held that if the assessing authority initiates proceeding under Section 12(8) of the O.S.T. Act in respect of assessment which has merged with the appellate order, it would be without jurisdiction. Since the assessment for the subject-year framed under Section 12(4) has already attained finality at the second appellate level, there was no scope to initiate proceeding under Section 12(8) of the O.S.T. Act.
The reopening of the case basing on the A.G. audit report has further negated the issues, as held in the case of COMMISSIONER OF INCOME-TAX VERSUS LUCAS TVS. LTD. [2000 (12) TMI 102 - SC ORDER] by the apex Court that if the Assessing Officer accepts the audit report, it would be vulnerable and report of the audit party cannot make the basis to issue notice for reassessment under Section 148 of the of the I.T. Act, which is pari materia to Section 12(8) of the O.S.T. Act, 1947, since the common issues were involved on erection and installation of machinery, which constituted works contract but not for sale.
Once the Full Bench of the Odisha Sales Tax Tribunal held that the petitioner being a contractor executed works which were indivisible contract and came to a conclusion that works executed by the dealer during the period were entertained as works contract and made exigible to tax @ 4%, a different view should not have been taken on the basis of the audit report submitted before the Assessing Officer and notice should not have been issued under Section 12(8) of the O.S.T. Act, 1947 for reassessment and the order of reassessment, which has been passed by him by holding that contract is divisible and, therefore, the petitioner is liable to pay higher tax @ 13%, which has been confirmed in First Appeal and Second Appeal, should not have been passed. The reason being, once the Full Bench as well as Coordinate Bench of the Tribunal has come to a definite conclusion that it should be treated as works contract and exgible to tax @ 4%, instead of 13%, thereby, the questions formulated in this revision petition are answered in favour of the petitioner and against the Revenue.
The revision petition is allowed.
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2023 (3) TMI 1268
Club and Association Services - applicability of doctrine of mutuality - supply of goods/services/amenities/luxuries by the club to its members - supply effected by one person to another for consideration or not - HELD THAT:- In Lotus Club [2018 (10) TMI 452 - KERLA HIGH COURT], the Division Bench essentially followed an earlier division bench judgment of this Court in Trivandrum Club v. Sales Tax Officer (Luxury Tax) [2013 (1) TMI 606 - KERALA HIGH COURT] that unambiguously held that under the KTL Act, the charging section recognised the club as the person liable to luxury tax. The Division Bench therefore recognised the club as the person on whom the incidence of tax fell. Since the later division bench in Lotus Club did not find any cause for doubting the propositions laid down in Trivandrum Club and dismissed the appeal preferred by Lotus Club by following the decision in Trivandrum Club, we cannot read the observations of the Division Bench in Lotus Club as having laid down the proposition that the incidence of tax under the KTL Act is on the person enjoying the luxury and not on the ‘proprietor’ who provides the luxury.
Similarly, the observation of the division bench of this court in M/s Madhavaraja Club [2013 (2) TMI 614 - KERALA HIGH COURT] that the doctrine of mutuality is relevant only for the purposes of the Income Tax Act and is not apposite in the context of the KTL Act cannot be seen as laying down the correct law in the light of the subsequent judgment of the Supreme Court in Calcutta Club Ltd [2019 (10) TMI 160 - SUPREME COURT] where the doctrine of mutuality was held applicable in the context of legislations regulating the levy of indirect taxes such as VAT and Service Tax - the principle recognised in Calcutta Club Ltd, that the absence of two distinct persons to a transaction viz. a supplier/provider of goods/ services/ amenities/ luxuries and a recipient thereof, makes the transaction a supply to oneself, which cannot be taxed under the statute, applies equally to the KTL Act which contemplates the levy of tax whenever a luxury is provided by one specified person to another.
Matters remanded to the assessing authority for de novo assessment taking note of the observations in this judgment as also the applicability of the mutuality principle to the assessment of members' clubs under the KVAT Act, as declared by the Supreme Court in Calcutta Club Ltd. - petition allowed by way of remand.
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2023 (3) TMI 1267
Seeking grant of stay on deposit of 20% of the existing tax demand - non-maintenance of books of account properly - pattern of suppression was established - HELD THAT:- The Tribunal has considered the relevant facts and has also exercised discretion in accordance with the law. On perusing the orders impugned before it, it has granted a conditional stay, which is found to be reasonable and legal.
There are no merit in the original petition, which will stand dismissed. However, as a measure of indulgence, we extend the time granted by the Tribunal for complying with the conditions imposed up to 17.04.2023. If the petitioner complies with the order of the Tribunal before 17.4.2023, it will be treated as compliance with the order of the Tribunal for the grant of stay of the recovery. The petitioner may also move the Tribunal for an expeditious hearing of the appeal.
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2023 (3) TMI 1266
Condonation of delay of 2569 days in filing the appeal - reasons put forth in the application for condonation of delay before the Tribunal was that the Lawyer handling the case had suffered from serious illness and ultimately died on 6th August, 2012 - Sufficient cause for delay, present or not - HELD THAT:- The Court is of the view that what was expressed in the context of the Land Acquisition proceedings cannot ipso facto be extrapolated to proceedings like the present one which arise under the Sales Tax legislation. Here, the Assessee is fully aware of the requirement of having to file returns and proceedings within time. After all, the Petitioner is a dealer registered under the Orissa Sales Tax Act and is aware of the necessity for filing returns, for challenging demands before an Appellate Authority and of the fact of the further appeal before a Second Appellate Authority like the Tribunal.
The long and short of the narration is that as far as the Petitioner/Assessee is concerned, the explanation offered for an extraordinary delay of 2569 days was not convincing at all.
Since no substantial question arises from the impugned order of the Tribunal, the present revision petition is dismissed.
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