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VAT / Sales Tax - Case Laws
Showing 761 to 780 of 27514 Records
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2023 (3) TMI 796
Validity of assessment orders - levy of interest u/s 7(5) of Orissa Entry Tax (OET) Act, on the balance unpaid entry tax for the period prior to 2017 inasmuch as the amount of 1/3rd was treated as “deposit” till pronouncement on 28.03.2017 - Whether, pursuant to direction of this Court the Committee having recommended not to enforce penalty for non-payment or withholding of entry tax, except in cases of suppression, the taxable persons/dealers are liable to pay interest under Section 7(5) for the period from 2010 (interim Order dated 03.02.2010 being passed by the Supreme Court in STATE OF ORISSA & ORS. VERSUS M/S. RELIANCE INDUSTRIES LTD. & ORS. [2010 (2) TMI 1305 - SUPREME COURT] to 2017 (till 28.03.2017, i.e, date on which the Division Bench of Supreme Court allowed the appeals of the State of Odisha)?
HELD THAT:- Harmonious reading of the various provisions along with charging provision, i.e., Section 3 of the OET Act gives clear indication that whereas the entry tax is exigible on entry of goods— specified in the Schedule appended to the OET Act— into the local area for consumption, use or sale therein and return disclosing “tax payable” is required to be furnished as per sub- section (1) of Section 7. It is provided under sub-section (10) thereof that each and every return is to be scrutinized by the Assessing Authority. If mistake is detected as a result of scrutiny, the Assessing Authority is vested with power to proceed with the matter against the dealer as provided under sub-section (11). Thus, it is explicit that detection of mistake in return upon scrutiny triggers action against the dealer asking it “to make payment of the extra amount of tax along with the interest as per the provisions of this Act”. The OET Act provides for levy of interest under sub-section (5) of Section 7. No other provision empowering Authority to levy interest is brought to the notice of this Court by any of the parties.
In the cases at hand, it is the consistent pleading of the petitioners that as this Court observed at RELIANCE INDUSTRIES LIMITED VERSUS STATE OF ORISSA (AND OTHER CASES) [2008 (2) TMI 825 - ORISSA HIGH COURT] that the State of Odisha is not competent to levy entry tax on the goods brought from outside and not manufactured or produced within the State, the dealers are not required to pay entry tax. However, on the basis of STATE OF ORISSA & ORS. VERSUS M/S. RELIANCE INDUSTRIES LTD. & ORS. [2010 (2) TMI 1305 - SUPREME COURT]of the State of Odisha by the Supreme Court they were required to “deposit” 1/3rd of tax due as disclosed in the returns. The Hon’ble Court made it clear that such payment is treated to be “deposit”, but not “tax”.
It seems there is obvious reason for not undertaking scrutiny of returns during 2010-17. The Hon’ble Supreme Court granted stay of operation of paragraph 30 of said Judgment of this Court to the extent which spelt out that ‘The State has no jurisdiction to impose tax on such goods imported from outside and are not manufactured within the State of Orissa. Therefore, the opposite parties may make scrutiny of the same and not realize entry tax on such goods’. Though said interim order suffered modification vide Order dated 03.02.2010 by directing the dealers to deposit 1/3rd of the tax liability shown in the returns, the Assessing Authorities have not taken up “each and every return” for scrutiny.
Therefore, it is not justified on the part of the Assessing Authorities to issue demand notice(s) in Form E-24 prescribed under Rule 10(6)(b) of the OET Rules as a result of scrutiny under sub-sections (10) and (11) of Section 7 of the OET Act that too in violation of observations made in Toyo Engineering [[2011 (9) TMI 888 - ORISSA HIGH COURT]].
Following the ratio of Toyo Engineering (supra), this Court would have to remit the matter to the Assessing Authority, but considering that the same would not serve fruitful purpose at this distance of time holds that issue of notice in Form E-24 under Rule 10(6)(b) of the OET Rules is not in conformity with the statutory requirement. Since the balance amount of tax due as per disclosure made in the return(s) is known to the petitioner, setting aside the notice in Form E-24 and remanding for computation of tax liability to the Taxing Authority would enure to the benefit of none. Therefore, the petitioner is required to determine its own liability as per self-assessed return(s) already filed.
Levy of interest under Section 7(5) of the OET Act - HELD THAT:- It is trite that provision for interest is to be construed as substantive law and not machinery provision. Ordinarily charging section which fixes liability is to be strictly construed. But the rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must be so construed as would effectuate the object and purpose of the statute and not defeat the same. Any provision made for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law.
There is no ambiguity in holding that in the presence of the expression “without sufficient cause” in sub-section (5) of Section 7 of the OET Act and the petitioner(s) having justified by showing sufficient cause for failure to deposit amount of tax due along with the return, which cannot be treated as admitted tax in view of legal position contained in paragraph 30 of Reliance Industries Ltd., of Orissa High Court, interest under Section 7(5) of the OET Act is not chargeable on such turnover falling within ambit of portion the said Judgment.
Whether Court can grant interest in exercise of jurisdiction under Article 226 of the Constitution of India? - HELD THAT:- Interest is compensatory in character. Since by virtue of order of the Court entire amount of tax due was not discharged, such order should prejudice none. In the present case the petitioner(s) withheld 2/3rd of the tax due as disclosed in the return(s). The Hon’ble Supreme Court while passing Order dated 03.02.2010 clarified that if State of Odisha loses, it would refund the amount deposited by the dealers along with interest. However, there was no proposition with regard to eventual losing of the petitioner(s). Nonetheless, the fact remains that the petitioner(s) could not succeed in the ultimate before the Supreme Court. Thus, there is warrant for an order from this Court granting compensation on the amount withheld since 2010 till 2017.
Applying the principles for grant of interest at a rate fixed as compensation, this Court is of the considered opinion that since by virtue of interim orders of the Supreme Court of India and the orders in writ petition(s) by this Court following such interim orders, the State of Odisha was deprived of recovering 2/3rd of tax due relating to September, 2009 to February, 2017, the petitioner(s) is required to compensate the State of Odisha by making payment towards interest in the interest of justice and equity. Hence, writ of mandamus is liable to be issued in exercise of extraordinary power under Article 226 of the Constitution of India.
Petition disposed off.
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2023 (3) TMI 795
Audit assessment under Section 34(2) of the Value Added Tax Act, 2003 - main plank of the challenge to the notice and the consequential order dated 1.9.2022 and 16.9.2022 respectively that the powers were invoked under Section 34(8A) of the Act despite the fact that no proceedings were pending - HELD THAT:- Section 34 of the Act deals with the audit assessment. It says that subject to the provisions of Sub section (2), the amount of tax due from registered dealer shall be assessed in the manner provided, separately for each year during which the registered dealer is liable to pay tax.
The clinching aspect is that the condition precedent for exercising powers under Section 34(8A) has not been satisfied, namely that any proceedings under the Act are not pending so as to invest the authority with the power to proceed under Sub section (8A) of Section 34. When the Section expressly contemplates that the assessment under the said provisions could be resorted to only during the proceedings under the Act, the powers has to be exercised in that manner only and upon fulfillment of the said condition.
In the facts of the case there is no gainsaying that any proceedings are not pending so as to justify the assessment proceedings under Section 34(8A) of the Act. When learned Assistant Government Pleader was confronted with the aforesaid aspect and non-compliance of the condition precedent for exercise of powers of assessment, he was entirely at his receiving end.
Since the basic condition ‘during the course of any proceedings under the Act’ of Sub section (8A) of Section 34 of the Act is not satisfied and no proceedings under the Act are pending, the impugned notice dated 1.9.2022 and the assessment order dated 16.9.2022 stands without jurisdiction. It is an incurable jurisdictional defect and illegality rendering the notice and the order liable to be set aside - Petition allowed.
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2023 (3) TMI 794
Violation of principles of natural justice - personal hearing was granted to the petitioner only on 18.02.2020 and not on 16.02.2020 as reflected in the impugned assessment orders - No fresh notice was also issued to the petitioner by the respondent, intimating a fresh date of personal hearing - HELD THAT:- Since the personal hearing has not been afforded to the petitioner, it is clear that principles of natural justice has been violated by the respondent. Hence, the impugned assessment orders have to be quashed and the matters will have to be remanded back to the respondent for fresh consideration on merits and in accordance with law.
This Court deems it fit to fix the next date of personal hearing of the petitioner before the respondent as 14.03.2023 and on that date the petitioner shall appear before the respondent at 10:30 a.m. without fail - the impugned assessment orders dated 29.04.2021 and 27.04.2021 passed by the respondent are hereby quashed and the matters are remanded back to the respondent for fresh consideration on merits and in accordance with law - Petition disposed by way of remand.
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2023 (3) TMI 734
Non-deletion of Tax free and First Point Tax Paid goods turnover from the taxable turnover - receipts of hire charges recovered from contractors by appellant falls within ambit of deemed sales as contemplated u/s 2(g)(iv) of the Orissa Sales Tax Act or not - receipt of hire charges of machineries from inter-department of the assessee for account purpose is sale to self as contemplated u/s 2(g) (iv) of the Orissa Sales Tax Act or not.
Whether the learned Tribunal is justified in not deleting the Tax free and First Point Tax Paid goods turnover from the taxable turnover and as such the order is illegal and arbitrary? - HELD THAT:- The Court is of the view that if indeed SAIL was unable to produce materials to show to what extent the canteen sales included sale of tax-free goods and first point tax paid goods, remanding the matter to the AO will be a futile exercise. In the absence of SAIL producing records relevant to the issue, even in this Court, the estimation that 70% of the sales was of cooked food items and 30% of tea, coffee and snacks etc. cannot be said to be arbitrary. Consequently, in this aspect the Court is not inclined to accept the plea of SAIL and remand the matter to the AO. In other words, the question is answered in the affirmative i.e. in favour of the Department and against the Assessee.
Whether the learned Tribunal is justified in holding that the receipts of hire charges recovered from contractors by appellant falls within ambit of deemed sales as contemplated u/s 2(g)(iv) of the Orissa Sales Tax Act? - whether the receipt of hire charges of machineries from inter-department of the assessee for account purpose is sale to self as contemplated u/s 2(g) (iv) of the Orissa Sales Tax Act? - HELD THAT:- Whether in fact the Tribunal asked SAIL to produce the full contract is not clear from the impugned order of the Tribunal. On its part, with SAIL having offered to produce the entire contract, the Tribunal could have asked SAIL to produce it before deciding the issue - With SAIL offering to produce the entire contract and the matter any way being remanded to the AO as regards the other questions, the Court considers it appropriate to refer questions also to the AO for being considering afresh by examining the complete text to the contract to be produced by SAIL as undertaken by it - the Court while setting aside the orders of the AO, the ACCT and the Tribunal on both issues and remands them to the AO for a fresh determination.
Petition allowed by way of remand.
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2023 (3) TMI 733
Rejection of request of the petitioner for rectification of assessment sought for under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 - rejection of rectification request on the ground that there was no discussion about this in the order - difference of opinion between the parties was that the petitioners claim that one of their products, TANG was existable to taxes at the rate of 4% and thereafter 5%, whereas it is the stand of the respondents that the rates applicable would be 12.5% and thereafter 14%.
HELD THAT:- The petitioner sought rectification under Section 84 that has come to be rejected by the officer on 15.11.2019 on the ground that there was no discussion in the order dated 03.05.2019 and hence no rectifiable error. This conclusion of the appellate authority is clearly contrary to law insofar as the very non-consideration of submissions dated 23.01.2019, would constitute an error apparent on record liable to be rectified under Section 84 of the Act. In light of this, the impugned orders need to be set aside.
The petitioner will appear before the appellate authority on 24.03.2023 at 10.03 a.m. with materials in support of the request of rectification and without anticipating any notice afresh for the hearing scheduled as aforesaid. After hearing the petitioner, orders shall be passed on the Section 84 application within a period of four weeks from the date of personal hearing as fixed aforesaid.
Petition allowed.
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2023 (3) TMI 732
Validity of assessment orders - rate of G.P. added was 10 – 11% on the purchases made - Enforcement Wing was of the opinion that this modus operandi is incorrect and required re-consideration by adding gross profit of the respective years as per Profit and Loss (P&L) accounts and on the basis of the audited financials - opportunity of personal hearing to be provided, before such increase in the GP - principles of natural justice - HELD THAT:- The issue in this case relates to adoption of Gross Profit, whether at 10 – 11 % as put forth by the petitioner, or at the rate proposed by the Officers. There are any number of submissions that could have been put forth by the petitioner in support of the rate propounded by it, pursuade to the Assessing Officer, had only such opportunity been granted.
The petitioner, in its wisdom and based on trade practice, has adopted a certain rate of GP and it is in my view, not appropriate for the Assessing Officer to have adopted a substantially higher rate, without affording the petitioner an opportunity to explain the rates adopted by it - In fact, the conclusion in the impugned orders, is that no materials were provided by the petitioner in support of the G.P. adopted by it. Such failure is a direct consequence of the failure of the authority to have granted an opportunity to the petitioner.
That apart, it is a settled position that the reports of the officials of the Enforcement Wing cannot be adopted mutatis mutandis by the Assessing Officer who are expected to apply their minds, independently to the matter though having regard to the opinion of the Enforcement officials as well. In the present case, it is an admitted position that the authority has had nothing new to bring to the table but has merely adopted the rate as put forth by the Enforcement Officers.
Petition allowed.
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2023 (3) TMI 688
Lifting of attachment on properties - right to service of assessment orders - revenue averred that the allegation of not furnishing of copies of assessment orders passed, was an after-thought, to thwart the proceeding initiated by the respondent for recovery of tax dues - HELD THAT:- The High Court’s reasoning is based entirely on the effect of Rule 64 of the rules. There can be no doubt that when any statutory or administrative order, visits a citizen or entity with adverse consequences, such an order has to be served upon the concerned person; especially so, when that order is appealable or subject to revision by higher authorities. That is the substance of the requirement under Rule 64. The High Court, in the present case, drew a distinction between two periods; for AY 2005-06 to 2008-09 it was held that the assessments could not be called in question. So far as AY 2009-10 and 2010-11 were concerned, the court held that the attachment orders were invalid, since the assessment orders were not served.
The findings of the High Court, on the facts would not normally have required a second look by this court; however, the peculiar circumstances of this case compel scrutiny. After the disposal of the writ petition filed by the assessee (on 15.04.2010) concededly, it made no attempt to file objections or even deposit the amounts the court had required it to. As a regular dealer, it had filed returns not only for AY 2005-06 to 2008-09 but also later periods (i.e., AY 2009-10 and 2010-11) - The revenue however, pointed out to the High Court, that the representations never alleged that assessment orders were not served and that the attachments were therefore not compliant with provision of law.
In the present case, arguendo if the assessee was unaware, in the first instance regarding the issuance of assessment orders against it, at least when the revenue filed a writ petition complaining about Canara Bank’s proposal to auction the assessee’s properties, it had impleaded the assessee too - The High Court, with due respect, fell into error, in holding that since the subject matter of the revenue’s writ petition (W.P. No. 25943/2011) was different, the assessee could not be faulted for highlighting that it had not received a copy of the assessment order. In fact, the entire premise of that writ petition was that the assessee owed tax dues, to the extent of ₹5,59,58,758/- and that the bank could not sell the assessee’s properties.
The revenue’s appeal has to succeed - Appeal allowed.
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2023 (3) TMI 687
Validity of order of tribunal in Review Appeal - Denial of benefit which was allowed earlier - Power to Review - Penultimate sale - Disallowance of claim of exemption and levy of penalty - Inter-State stock transfer of goods purchased for foreign country export - declaration accompanied with appropriate Form-H not present, instead goods were transferred accompanying Form-XX and Form-H only - also, dealer at Tamil Nadu for the purchase within Tamil Nadu from unregistered dealer and subsequent transfer of goods to its Branch Office, has not produced agreement or order for or in relation to such export, which is mandatory for giving exemption from tax under Section 5(3) of CST Act, 1956.
HELD THAT:- On review the Tribunal has found that the reasoning given by the Appellate Authority is incorrect and the judgment cited by the dealer and relied by the Appellate Authority are not relevant. It held that the Appellate Authority has come to an erroneous conclusion that the purchase within the State of Tamil Nadu and transport of the coffee seeds to Karnataka are not two distinct acts of the dealer and it has to be considered as inseparable continuous action.
The Tribunal has taken note of the fact that the dealer has raised purchase bills while procuring coffee seeds from the planters in Tamil Nadu and thereafter, the goods were transported to the Branch Office at Kushal Nagar, Karnataka, under Form-XX Delivery Note issued to the dealer in the State of Tamil Nadu. Therefore, the contention of the dealer as well as the reasoning of the Appellate Authority was held to be factually incorrect - The actual portion of the raw seeds procured in Tamil Nadu, transported to Karnataka and thereafter, exported to foreign after processing, has not been specifically stated under Form-H, which would reflect the quantum of the seeds procured actually transported to the foreign countries. In the absence of purchase order from the Karnataka Branch and export order from foreign buyer or contract between foreign buyer and Karnataka Unit, exemption cannot be granted to the dealer.
On considering the order passed in Review Appeal, it is found that a new fact on verifying the CST files of the assessee, the inconsistent stand of the assessee under the State Act and the Central Act has come to light. This is not a case of intra-State transaction or transfer of goods uninterrupted to the exporter, based on specific agreement for export. The legal position of transaction of this nature is well explained by the Tamil Nadu Taxation Special Tribunal in Razack Trading Co. Vs State of Tamil Nadu [1999 (2) TMI 720 - TAMIL NADU TAXATION SPECIAL TRIBUNAL] where it was held that By declaring the penultimate sale or purchase in the State as a sale in the course of export, the powers of the State Legislature to tax the transactions completed within its territory was taken away and to this extent, this sub-section infringes on these powers. The validity of Subsection (3) of this section was upheld by the apex Court in CONSOLIDATED COFFEE LTD. VERSUS COFFEE BOARD, BANGALORE (AND OTHER CASES) [1980 (4) TMI 278 - SUPREME COURT] on the ground that this sub-section does not create a legal fiction but only lays down a principle of general applicability in accordance with Article 286(2) and hence it is valid.
Therefore, this Court holds that the Review by the Tribunal in exercise of the power under Section 36(6) of TNGST Act is maintainable, since important facts has come to light after verification of CST files and it was not been brought to the notice of the Tribunal when the order dated 18.10.2004 in M.T.S.A.No.382 of 2004 came to be passed.
It is clear that for exemption from levy of tax, the dealer is bound to furnish the agreement or order for or in relation to the export. In this case, the dealer has failed to furnish any agreement or order. The transfer of goods from Tamil Nadu to Karnataka done only by furnishing Form-XX and not by furnishing Form-H. Therefore, on facts also, the dealer cannot seek exemption from tax liability for its turnover of Rs.2,24,00,783/-.
The Tax Case is dismissed.
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2023 (3) TMI 632
Attachment of petitioner's Bank Account - even without passing an assessment order for the respective assessment years, the impugned proceedings has been issued by the first respondent, exercising its power under Section 45 of the TNVAT Act 2006, which according to the petitioner is arbitrary and illegal.
HELD THAT:- Admittedly, only after passing the assessment orders, any coercive recovery proceedings can be initiated by the first respondent against the petitioner - This Court requested the learned Government Advocate appearing for the first respondent to get instructions as to whether any assessment orders were passed in respect of the respective assessment years prior to issuing the impugned proceedings dated 30.01.2023.
Unless and until the assessment orders are passed in respect of all the assessment years, for which the attachment order has been passed, which is the subject matter of challenge in this writ petition, the first respondent cannot exercise its power under Section 45 of the Tamil Nadu Value Added Tax Act, 2006 to enforce the sums alleged to be due and payable by the petitioner towards tax liability. If at all, the first respondent can take coercive steps against the petitioner under Section 45 of the TNVAT Act only in respect of the assessment years, where the assessment orders are passed. But being a single proceeding dated 30.01.2023, covering all the assessment years right from 2006-07 to 2016-17, it/the proceeding has to be declared as invalid as in respect of some of the assessment years, mentioned in the impugned proceeding dated 30.01.2023, no assessment orders were passed by the first respondent prior to the issuance of the impugned proceedings.
The petitioner also categorically contends that in respect of all the assessment years, for which the impugned proceedings dated 30.01.2023 has been passed, the respondents have not passed any assessment order. Necessarily for the aforementioned reasons, the impugned proceedings dated 30.01.2023 passed by the first respondent has to be quashed and the writ petition will have to be allowed.
Petition allowed.
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2023 (3) TMI 631
Works contract of the Tyre Retreading Division - expenses incurred for payment of labour charges and other labour related charges like, P.F., F.P.F., and E.S.I etc. (tyre division) - Permissible deduction under Section 3-B(2)(e) of the TNGST Act, 1959 or not - HELD THAT:- The non-production of supporting document is a question of fact and not a question of law as claimed by the revision petitioner. Nowhere the authorities have declined the entitlement of exemption of the expenses incurred towards labour or incidental charges. They have only pointed out the absence of supporting document from the assessee, the request to grant exemption is untenable.
This Court finds no error in the said reasoning, since no substantial question of law involved in this Tax Case Revision, this Tax Case Revision is dismissed.
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2023 (3) TMI 572
Exemption from payment of sales tax on the sales turnover of finished products namely molasses, bagasse and filter mud - G.O. No. CI 30 SPC 96 dated 15-03-1996 read with notification No. FD 32 CSL 96 (I) dated 15-11-1996 - Revenue’s specific case is, the exemption notification specifically mentions the word ‘manufacture’, hence, the by-products cannot be considered as products manufactured.
Whether the petitioner is entitled for exemption from payment of tax on molasses, bagasse and filter mud under 1996-2001 Industrial Policy?
HELD THAT:- It is not disputed that the activities of both petitioner and Chamundeshwari are identical. There is no pleading on behalf of the State Government that the benefit is denied to the petitioner based on the interpretation of the words ‘manufacture’ and ‘production’. It is only at the time of final hearing of this writ petition the learned Additional Advocate General sought to justify the action of the State Government by placing reliance of Arihant Tiles. The indubitable fact remains that, according to both petitioner and the State Government, the activities of petitioner and Chamundeshwari are one and the same. The State Government’s action amounts to conscious discrimination between two similarly situated industrial units.
It is relevant to note that Chamundeshwari Industry was granted sales tax exemption on sale of by-products of sugar under Industrial Policy 1993-98 and it also enjoyed the benefit of deferral of purchase tax as interest free loan from 2000 to 2010.
The petitioner being similarly situated as that of Chamundeshwari shall be entitled for exemption from payment of sales tax on by-products namely molasses, bagasse and filter mud - petition allowed.
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2023 (3) TMI 533
Input Tax Credit (ITC) - Genuineness - Onus to prove / burden of proof - Interpretation of statute - Section 70 of the Karnataka Value Added Tax Act, 2003 - Input Tax Credit claimed by the respective purchasing dealers - HELD THAT:- The provisions of Section 70, in its plain terms clearly stipulate that the burden of proving that the ITC claim is correct lies upon the purchasing dealer claiming such ITC. Burden of proof that the ITC claim is correct is squarely upon the assessee who has to discharge the said burden. Merely because the dealer claiming such ITC claims that he is a bona fide purchaser is not enough and sufficient. The burden of proving the correctness of ITC remains upon the dealer claiming such ITC. Such a burden of proof cannot get shifted on the revenue. Mere production of the invoices or the payment made by cheques is not enough and cannot be said to be discharging the burden of proof cast under section 70 of the KVAT Act, 2003. The dealer claiming ITC has to prove beyond doubt the actual transaction which can be proved by furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc.
The genuineness of the transaction has to be proved as the burden to prove the genuineness of transaction as per section 70 of the KVAT Act, 2003 would be upon the purchasing dealer. It is observed and held that mere production of the invoices and/or payment by cheque is not sufficient and cannot be said to be proving the burden as per section 70 of the Act, 2003.
In the present case, the respective purchasing dealer/s has/have produced either the invoices or payment by cheques to claim ITC. The Assessing Officer has doubted the genuineness of the transactions by giving cogent reasons on the basis of the evidence and material on record. In some of the cases, the registration of the selling dealers have been cancelled or even the sale by the concerned dealers has been disputed and/or denied by the concerned dealer - over and above the invoices and the particulars of payment, the purchasing dealer has to produce further material like the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods including actual physical movement of the goods, alleged to have been purchased from the concerned dealers.
In absence of any further cogent material like furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. and the actual physical movement of the goods by producing the cogent materials, the Assessing Officer was absolutely justified in denying the ITC, which was confirmed by the first Appellate Authority. Both, the second Appellate Authority as well as the High Court have materially erred in allowing the ITC despite the concerned purchasing dealers failed to prove the genuineness of the transactions and failed to discharge the burden of proof as per section 70 of the KVAT Act, 2003.
The impugned judgment(s) and order(s) passed by the High Court and the second Appellate Authority allowing the ITC are unsustainable and deserve to be quashed and set aside and are hereby quashed and set aside - Appeal allowed.
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2023 (3) TMI 532
Seeking grant of anticipatory bail - any offence committed by the Director or not - for non-payment of tax, can the directors be made liable? - HELD THAT:- Going through the FIR as also the papers of investigation and the documents annexed with the application, without entering into the discussion in detail about invoking provisions of “the Act, 2003” or the Penal Code, suffice it to say that its invocation in such set of facts, as stated, that too, against the Directors in absence of any specific provisions under “the Act, 2003” and there is no provisions under the IPC, when coaccused is already considered by this Court and while admitting the present application detail reasons are assigned, on those reasons also, it is deemed fit to grant an order in the nature of anticipatory bail, which was continued since 17.02.2022.
The present application is allowed by directing that in the event of applicant herein being arrested pursuant to FIR registered as C.R.No.I-11200011210293 of 2021 with Valsad Rural Police Station, Valsad, on his executing a personal bond of Rs.10,000/- with one surety of like amount on the conditions imposed - application allowed.
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2023 (3) TMI 493
Legality of the penalty orders and assessment orders - penalty imposed on the petitioner based on the data contained in the slips that were recovered from the premises of the petitioner - HELD THAT:- These are cases where the assessment for the years 2009-10 and 2010- 11 were mechanically completed based solely on the findings contained in the penalty orders passed by the Intelligence Officer for the years 2008-09, 2009-10 and 2010-11. The penalty orders were passed by placing reliance on the data contained in certain slips recovered from the business premises of the petitioner during a shop inspection that was carried out on 4.9.2010. It is not in dispute that those slips were recovered from one Balachandran, who was present in the premises of the petitioner on the date of inspection.
As rightly found by the First Appellate Authority, the fact that Sri. K.I. Sreenivasan and Sri.K.V. Abdul Rasheed were deposing against their own interests by admitting that the data in the slips pertained to their business, ought to have weighed with the Department to initiate an enquiry against the said persons to ascertain whether they had suppressed any turnover for the purposes of taxation. They could have done this simultaneously with a protective assessment against the petitioner assessee. The fact that they did not do so ought to have operated against them in an adjudication of the petitioner's case. On the contrary, the Intelligence Officer as also the Tribunal appears to have discarded this valuable evidence and mechanically presumed that the data contained in the slips recovered from the premises of the petitioner pertained to the business of the petitioner. Since there are no justification in the Intelligence Officer as also the Tribunal having discarded the evidence tendered by Sri. Balachandran, Sri. K.I. Sreenivasan and Sri. K.V. Abdul Rasheed, we cannot uphold the reasoning of the Tribunal, in the orders impugned before us, as correct or rational.
Further, as the assessment orders for the assessment years 2009-10 and 2010-11 were based on the penalty orders for the said years, and the said penalty orders in this judgment are set aside, the impugned order of the Tribunal, to the extent it restores the assessment orders for the said years, is also set aside.
Revision allowed.
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2023 (3) TMI 492
Valuation - place of removal - charges incurred for loading, unloading, stacking, and transportation formed part of the taxable turnover or not - charges shown separately would make any difference or not - Jurisdiction of authority for clarification under Section 94 of the Kerala Value Added Tax Act, 2003 - HELD THAT:- Annexure A, the purchase order specified the price details fixed, including taxes, excise duty, other levies, freight, insurance, loading, and unloading at the site. It also contained a clause that insists that all the materials that are ordered will have to be fully insured from the time of despatch from the manufacturer to the destination station, including one month's storage, thereafter at the cost of the contractor.
The clauses in Annexures 1 and 2 clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer's place and the customer's obligation to effect payment would arise only after the delivery is effected. Also the provisions of Chapter 3 of the Sale of Goods Act, in particular, section 22 that applies where the contract of sale of specific goods in a deliverable state, including the conditions to do such acts with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done.
The law applicable has again been re-iterated in INDIA METERS LIMITED VERSUS STATE OF TAMIL NADU [2010 (9) TMI 878 - SUPREME COURT] where it was held that when the transfer of the property or the goods is to be at the place of the buyer to which the seller is under an obligation to transport the goods, the expenditure incurred by the seller on freight in order to carry the goods from his place of manufacture to the place at which he is required under the contract to deliver, would thus become part of the amount for which the goods are sold by the seller to the buyer and would fall within the scope of "turnover".
The discussions would lead to the irresistible conclusion that Annexure – C order of clarification calls for no interference, and the OT appeal is without merit, and the same is, accordingly, dismissed.
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2023 (3) TMI 291
Detention of goods - Under valuation - M.R.P. can be deciding factor at this stage to under value the goods by the respondents or not - action on the part of the respondents is violative of the Article 14 and 16 of the constitution of India?
HELD THAT:- The petition deserves to be allowed. Though on a perusal of contents of the impugned notice, a copy of which has been kept on record, it is revealed that the same had been issued on the grounds that the documents appeared to be suspicious and needed verification; that the goods needed physical verification and appeared to be undervalued; that VAT number was not mentioned/wrongly mentioned on the documents and that the required information had not been generated at any Information Collection Centre (ICC) in the State of Punjab but on perusal of the written statement, it is crystal clear that except the allegation that the maximum retail price (MRP) printed on the boxes containing fire works was more than the price mentioned in the invoices from which it appeared that the goods were undervalued, no other objection had been taken by the respondents to justify detention of the vehicle as well as the seizure of the goods. It is well settled proposition of law that undervaluation of seized goods in transit cannot be a ground to confiscate the goods and the vehicle. There cannot be any mechanical detention of a consignment in transit on the basis that the goods being transported are undervalued.
Reliance can be placed upon K.P. Sugandh Ltd. v. State of Chhattisgarh [2020 (3) TMI 890 - CHHATTISGARH HIGH COURT] wherein the detention of vehicle and seizure of goods merely on the ground that there was undervaluation was not held to be sustainable by holding that it was for the department to initiate appropriate separate proceedings with regard to the alleged undervaluation and that itself could not furnish a ground for detention of vehicle.
Thus, it is held that the detention of the truck and seizure of the goods carried therein, by respondent No.2 was illegal. The goods and the truck have, however, already been ordered to be provisionally released in pursuance of order passed by this Court on 07.08.2006. They are ordered to be released - petition allowed.
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2023 (3) TMI 275
Jurisdiction - suo motu revisional power of the Additional Commissioner of Sales Tax - Was the exercise of the suo motu revisional power by the Additional Commissioner of Sales Tax (Revenue) by way of the impugned order dated 10th May, 2016 under Section 18(1) of the Odisha Entry Tax Act, 1999 (OET Act) without jurisdiction inasmuch as an appeal filed against the Assessment Order sought to be revised, was already pending at the instance of the Assessee? - barred by time limitation or not.
HELD THAT:- It is a settled legal position that the suo motu revisional proceeding has to be concluded not beyond five years from the original order of assessment.
This Court has interpreted a similar provision contained in Section 23(1) of the Odisha Sales Tax Act, 1947 read with Rule 80 of the Odisha Sales Tax Rules, 1947 in the cases of M/S. SAGARMAL AGARWALLA VERSUS COMMISSIONER OF SALES TAX, ORISSA, CUTTACK AND 2 OTHERS [2018 (1) TMI 868 - ORISSA HIGH COURT] and vide Order dated 10th July, 2019 passed in the case of P.P. RICE MILLS VERSUS SPECIAL ADDITIONAL COMMISSIONER OF SALES TAX = [2019 (7) TMI 1969 - ORISSA HIGH COURT] - In P.P. Rice Mills, this Court held that On reading of the Rule in a joint manner would make it clear that for revising an order within a period of three years after providing opportunity to the assessee and calling for the records, the revision order itself has to be passed within a period of three years.
The impugned order dated 10th May, 2016 of the Additional Commissioner is hereby set aside - the questions framed by this Court are answered in favour of the Appellant-Dealer and against the Department - appeal allowed.
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2023 (3) TMI 274
Challenge to SCN before completion of enquiry - Proposal to levy tax under TNVAT Act - doctrine of mutuality - supply of liquor to the members of club - amounts to a transaction of sale of goods from one person to another attracting taxation under the TNVAT Act, or not - HELD THAT:- The consistent legal position has been reiterated by the Hon’ble Supreme Court of India in Union of India -vs- Kunisetty Satyanarayana [2006 (11) TMI 543 - SUPREME COURT] that a charge memo or show cause notice cannot be challenged before the completion of enquiry and the proceedings cannot be interdicted till it reaches its logical conclusion.
Having due regard to the aforesaid legal position, as there is nothing which precludes the Petitioner from raising the contentions in this Writ Petition in the reply to be submitted to the Respondents, who are bound to deal with the same before coming to any ultimate conclusion, there is no necessity for the Court to interfere at this pre-mature stage of the matter.
It shall be incumbent upon the Petitioner to submit its explanation to the show cause notice, which is impugned in the Writ Petition, if not done already, to the concerned authority by 31.03.2023 - Petition disposed off.
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2023 (3) TMI 273
Classification of goods - rate of tax - Choloromint Herbasol - Happydent White - Chatar Patar - liable to tax at 12.5%, as per Schedule ‘F’ of PVAT Act, 2005 or @ 4% tax under the residue entry? - HELD THAT:- In the present case, the issue that the goods in question namely ‘‘Choloromint Herbasol’’ and ‘Happydent’ are medicines have been examined and has attained finality as per the judgments by the Uttrakhand High Court, Allahabad High Court which has been affirmed by the Hon’ble Supreme Court by dismissing the SLP against the judgment passed by Allahabad High Court.
Reference can now be made to the observations made by the Uttarakhand High Court in the case of Commissioner Trade Tax Vs. Perfetti Van Mell [[2008 (7) TMI 870 - UTTARAKHAND HIGH COURT]] with respect to the appellant-Company itself, the Uttarakhand High Court has observed that the items ‘Choloromint with Herbasol’ and ‘Happydent White’ are manufactured by the assessee under the drug licence issued to it by the Directorate of Ayurvedic Medicines of State of Haryana. Even if, for the purpose of utility, ‘Choloromint with Herbasol’ as mouth freshners and that of ‘Happydent White’ (baking soda with mint flavor) to keep the teeth clean, these items will not be confectionary items, specially when these items are manufactured under a valid drug licence. The Uttrakhand High Court held the above-said two items, ‘Choloromint with Herbasol’ and ‘Happydent White’ being manufactured under a valid drug licence are ayurvedic medicines and trade tax payable on said items @ 4% as per clause (b) of the Sub-Section (2) of Section 4 of Uttranchal Value Added Tax, 2005.
In the present case, the Revenue-respondent has not led any evidence or produced any material to discharge the onus on it. Once the goods have been manufactured by the assessee under the Drugs Licence issued by the Directorate of Ayurvedic Medicines then the ayurvedic medicines would fall under Entry 31 of Schedule B attached with the Punjab Value Added Tax Act (PVAT), 2005 and is liable to be taxed @4% as per consistent view taken by the Uttarakhand High Court.
The question posed for consideration in this appeal is answered against the respondent-Revenue and in favour of the assessee-appellant - Appeal allowed.
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2023 (3) TMI 229
Classification of goods - rate of tax - sale of Wheat Bran (Chokad) - Taxable @ 4% treating the same as industrial input coming under SI No.74 of Part-II of Schedule-B particularly when Wheat Bran (Chokad) is generally exempted under Entry 3 of Schedule-A? - HELD THAT:- The fact remains that an entry in a taxation statute admits only of strict interpretation. If the legislative intent was that there should be some conditionality attached to granting exemption from VAT on the sale of ‘Chokad’, then it should have been expressly stated as has been done in Column 3 in regard to Entries 24 and 38. That there being no such conditionality as far as Entry 3 is concerned, the only conclusion that can be drawn is that sales of ‘Chokad’ irrespective of the purpose for which such ‘Chokad’ has been purchased by the buyer, would be exempt from VAT.
It is not even the Department’s case that any notification has been issued by the State Government stating that ‘Chokad’ is an Industrial input for the purposes of Entry 74 of Schedule ‘B’. Without noticing this requirement in Entry 74, both the STO as well as the JCST fell into error in drawing an ‘inference’ that ‘Chokad’ sold to NALCO must ‘naturally’ have been used as an industrial input. This cannot be a matter of surmise or conjecture. If Entry 74 of Schedule ‘B’ had to be made applicable in order that the sale of ‘Chokad’ to NALCO is amenable to tax at 4%, then it was necessary for the Department to show that there was a notification issued by the State Government identifying ‘Chokad’ as an ‘industrial input’. In the absence of such notification, no inference could have been drawn that ‘Chokad’ sold to NALCO was in fact an ‘Industrial input’.
The Court is, therefore, satisfied that the STO, the JCST and the Tribunal erred in treating the sale of ‘Chokad’ by the Petitioner to NALCO as an ‘industrial input’ attracting VAT at 4%.
The question framed is answered in the negative, i.e., in favour of the Petitioner-dealer and against the Department.
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