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VAT / Sales Tax - Case Laws
Showing 781 to 800 of 27514 Records
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2023 (3) TMI 228
Violation of principles of natural justice - denial of opportunity to cross-examine the third party whose papers constitutes the basis of assessment - HELD THAT:- In the present case the computer records which reflect the name of a dealer which is identical to that of the Petitioner. However, in view of the plea of the Petitioner that he did not indulge in those purchases, the Petitioner ought to have been given the chance of cross-examining the alleged sellers in order to defend itself effectively in the assessment proceedings. The justification put forth by the STO that such an exercise would result in ‘squandering away of the time’ or that would to prolong the proceedings, appears not to be justified since the STO could have made the entire exercise of summoning those selling dealers and allowing an opportunity to the Petitioner to cross-examine them, time bound.
This is not practical or realistically feasible considering the long lapse of time. At the same time there has clearly been denial of an effective opportunity to the Petitioner-dealer by refusing it the right to cross-examine the selling dealers.
While in similar cases it might have been possible for the Court to remand the matter to the STO to complete the above exercise, in the present case, considering that more than two decades have elapsed since those transactions, an opportunity being provided at this stage to the Petitioner to cross-examine the selling dealers might not even be practical. There was no requirement of the selling dealers to preserve any records or to produce such records even if summoned. The entire exercise would certainly at this stage be a pointless one.
The Court is unable to sustain the impugned order of the Tribunal and the corresponding orders of the JCST and STO - the revision petition is disposed off.
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2023 (3) TMI 227
Demand of additional demand - tax disputes relating to the period before amendment in Section 33 of the HVAT Act - right of appeal - vested right or not - HELD THAT:- Learned counsel for the State has referred to a Division Bench judgment of this Court in KHAZAN CHAND NATHI RAM VERSUS STATE OF HARYANA AND OTHERS (AND OTHER CASES) [2004 (3) TMI 720 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that the right of appeal is a vested right and it will exist on the date of commencement of lis - The lis can be said to commence under the Haryana General Sales Tax Act (HGST) on the date when return is filed or is required to be filed. Therefore the provisions of Section 39(5) of the HGST Act would continue to govern the right of appeal vested in the petitioners which is saved in terms of Section 4 of the Punjab General Clauses Act (As applicable to State of Haryana).
A perusal of the judgment of Khazan Chand Nathi Ram's case further shows that this Court had examined Section 61(2) of the Haryana Vat Act 2003 and concluded that Section 61(2) of the Haryana Vat Act does not give any retrospective effect to the provisions of the aforesaid Act either expressly or by necessary implication. Section 61(2) of the HVAT Act contemplates transfer of pending proceedings pertaining to application, appeal, revision or other proceedings to the authorities constituted under the HVAT Act and it is to be disposed of by the authorities so constituted.
Appeal dismissed.
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2023 (3) TMI 226
Interpretation of statute - non-obstante clause - Levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax, 2006 - exemption granted on the basis of the turnover of a dealer - conditional exemption or not - HELD THAT:- The non-obstante clause contained in Section 12 of the TNVAT Act, is limited in its operation only with reference to definition of Input Tax Credit under Section 2(24) of the TNVAT Act. Apparently, there was an need to provide for a non-obstante clause with reference to Sub-section (24) to Section 2 of the TNVAT Act, inasmuch as “input tax” was defined to mean tax paid by a registered dealer to another registered dealer on the purchase of goods. However in the case of purchase tax under Section 12 of the TNVAT Act, the taxes are not paid by the purchasing dealer to the selling dealer instead the levy/ charge is on the purchasing dealer and he is required to discharge the obligation/liability. But for the non-obstante clause in sub-section (2) to Section 12 of the TNVAT Act the taxes paid under section 12 of TNVAT Act may not qualify as Input Tax Credit within the meaning of Section 2(24) of the TNVAT Act.
As a matter of fact, there are provisions under the TNVAT Act which provides for a non-obstante clause which are much wider in its scope and operation. It may also be relevant to note that there are instances/provisions under the TNVAT Act where the legislature intended to give an over-riding effect over more than one provision, it had been expressly provided for as would be evident if one gleans through the TNVAT Act.
Statue to be Constructed to make it Effective and Workable - HELD THAT:- A statute or any enacting provision therein must be so construed as to make it effective and operative. If one construes the non-obstante clause in sub-section (2) to Section 12 as extending to Section 19 which governs the conditions for claiming input tax credit, it would result in taxes paid under Section 12 of the TNVAT Act, being automatically available as credit thereby neutralizing the charge and thus the provisions meaningless. The above construction thus ought to be avoided.
Avoiding additional or substitution of words/Judicial Legislation - HELD THAT:- The attempt by the revenue to extend the operation of the nonobstante clause in Section 12 (2) of the TNVAT Act, would result in rewriting sub-section (2) to Section 12 which reads as “notwithstanding anything contained in sub-clause (2) to Section 2” as “notwithstanding anything contained in sub-clause (2) to Section 2 and 19” - Such construction ought to be avoided for the Court cannot aid the legislature, it cannot add or amend the provision. It is contrary to all rules of construction to read words into an Act. Similarly it is wrong and dangerous to proceed by substituting some other words for words of the statute. The court cannot re-frame the legislation for the reason that it has no power to legislate.
Different words different meaning - HELD THAT:- This Court had found that the legislature has employed the non-obstante clause differently through the Act, while in some provisions the non-obstante clause is very wide, in some cases it is limited to a particular provision or provisions. The non-obstante clause under sub-section (2) to Section 12 of the TNVAT Act, is limited in its operation to section 2 (24) of the TNVAT Act. If the intention of legislature of employing the non-obstante clause in sub-clause (2) to Section 12 of the Act, was to override Section 19 of TNVAT Act it would have provided for it expressly in sub-section (2) to Section 12, as done in various other provisions of the Act. It is settled rule of construction that if in relation to the same subject-matter different words are used in the same statute, there is a presumption that they are not used in the same sense.
The exemption under Entry 68 Part B to the Schedule IV is conditional and the said goods on being despatched to places outside the State would attract the levy of purchase tax under Section 12 of the TNVAT Act. Thus the challenge to the levy of purchase tax is liable to be rejected. Input tax credit of the purchase tax would be subject to Section 19 of the TNVAT Act - the impugned orders insofar as it imposes penalty are liable to be set-aside.
Petition disposed off.
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2023 (3) TMI 225
Finalisation of assessment and creation of extra demand - extension of the period of limitation - main grievance of the appellant is that the initial assessment order dated 19.11.2015 which he received on 21.01.2016 was void ab initio as the assessment framed was barred by time - HELD THAT:- The assessment order was passed on 19.11.2015 and as per the amendment made in Section 29(4) of the Punjab Vat Act, an assessment order under sub- section (2) or sub-section (3) can be passed by the Commissioner within a period of six years after the date when the annual statement was filed or due to be filed whichever is later. Even the amended sub-section(2) or sub-section (3), also extended time for passing the assessment order for the assessment year 2006-07 till 20.11.2014. In the present case, the assessment year is 2008-09 and the assessment order was passed on 19.11.2015. The period of six years would come to an end in the year 2016.
Since the period of limitation got extended from three years to five years and the assessment order with respect to assessment year 2001-02 was made on 10.07.2006 which was held to be within the limitation as provided by amended Section 11-CC. Therefore, the appeal filed by the State of Punjab was dismissed, however, it was held that the assessee was liable to pay only the principal amount of sales tax and no interest of penalty was to be paid by him.
Thus, the amendment in Section 29(4) of Punjab VAT Act was made by notification No. 49-Leg./2013 (Punjab Act No. 38 of 2013) dated 15.11.2013. Even the proviso of Section 29(4) had extended the period of limitation for the assessment year 2006-07 till 20.11.2014. In the present case, since the assessment year is 2008-09, the period of limitation of 6 years had not expired when the proceedings were pending before the Commissioner when he passed order dated 28.04.2016. The Tribunal, vide order dated 26.11.2021 had rightly partly allowed the appeal of the assessee by setting aside the order of the Designated Officer imposing interest u/s 32(3) amounting to Rs.15624220/- and the imposition of penalty u/s 53 to the tune of Rs.20832293/- and the tax calculated had to be paid by the assessee.
Appeal dismissed.
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2023 (3) TMI 168
Application for rectification of the assessment orders rejected - challenged to impugned orders on the ground of violation of principles of natural justice as the reply sent, has not been considered by the respondent in the impugned orders - seeking grant of opportunity of being heard (audi alterem partem) - HELD THAT:- While dealing with a similar issue, this Court in the case of TVL SRI RAGAVA MEDICAL AND GENERAL STORES, REP. BY ITS PROPRIETOR MR. ARIVAZHAGAN VERSUS THE DEPUTY SALES TAX OFFICER, THIRUKOILUR ASSESSMENT CIRCLE, THIRUKOILUR., THE COMMISSIONER OF COMMERCIAL TAXES EZHILAGHAM, CHEPAUK, CHENNAI [2023 (1) TMI 1102 - MADRAS HIGH COURT], after extracting section 84 of the Act, 2006 which deals with the rectification application held that as per the provisions of Section 84 of the Act, only in cases of enhancement of Assessment or Penalty, the respondents will have to afford an opportunity of hearing to the petitioner. Since the respondents have confirmed the Assessment made in the year 2016 for the Assessment Year 2013-14 in the impugned order, the question of granting an opportunity of hearing to the petitioner will not arise.
In the case on hand in the impugned orders passed under section 84 of the Tamil Nadu Value Added Tax Act, 2006, there is no enhancement of assessment or penalty and therefore, there is no necessity for the respondent to adhere to the principles of natural justice as claimed by the petitioner in these writ petitions.
Petition dismissed.
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2023 (3) TMI 167
Club or Association Service - Principles of mutuality - sale taking place between the member and the club or not - HELD THAT:- Since the issue raised in the present Revision Cases is squarely covered by the law laid down by the Hon’ble Supreme Court in Calcutta Club Limited [[2019 (10) TMI 160 - SUPREME COURT]], wherein it was held that "the doctrine of Mutuality continues to be applicable to incorporated and unincorporated member’s clubs even after the 46th Constitutional Amendment and sub-clause (f) of Article 366(29-A) to the Constitution of India has no application to member’s clubs", which binds this Court under Article 141 of the Constitution of India and also since it is not shown any subsequent deviation from the above position, the question of law raised in the present Revision Cases in favour of the petitioners-assessee.
Tax Revision Cases are allowed.
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2023 (3) TMI 124
Doctrine of promissory estoppel - Prayer for a writ of mandamus (To compel a court or judicial tribunal to exercise its jurisdiction when it has refused to exercise it), commanding the respondents to allow remission of sales tax - HELD THAT:- In the case on hand the petitioners have failed to prove that there exists a legal right which is to be enforced against the State and that the State has failed to perform its legal or statutory duty. No mandamus can, therefore, be issued commanding the State to exercise the power of relaxation in a manner so as to fulfill the desire of the unit to avail remission of sales tax - This Court has already observed that the petitioners have failed to demonstrate that the investment of Rs. 23 crores made by the unit was pursuant to any promise made by the government to allow remission of sales tax on such investment. Therefore, the question of reversing the promise by the State does not arise in the case on hand. Under such circumstances, the necessity to assign reasons for not allowing the remission as argued by the learned Senior Counsel for the petitioner does not arise as it is not a case of claiming exemption from liability.
This Court is of the considered view that the State action in the case on hand cannot be said to be arbitrary. The learned Tribunal rightly observed that no right accrued in favour of the petitioners to claim remission of tax. The Tribunal was also right in observing that the unit was granted benefit as a special case. This Court accordingly holds that the impugned order passed by the learned Tribunal do not suffer from any infirmity. Therefore, no interference with the said order is called for.
The issue that fell for consideration in K.M. Refineries [[2019 (9) TMI 522 - BOMBAY HIGH COURT]] was whether the Commissioner of Sales Tax had the power to curtail the validity period for enjoyment of incentives and other benefits under the relevant Incentive Scheme and also whether such reduction could have been made in the name of the policy of GST. On such facts it was held that no authority was given to the Commissioner to modify, enlarge or curtail the validity period and also that the benefits under the Incentive Scheme cannot be curtailed in the name of the new GST policy - In the case on hand it cannot be said that the validity period for enjoyment of the Incentive Scheme has been curtailed or that the unit was deprived from enjoying the benefits of remission of tax for the investments made on Fixed Capital Assets within 31.03.2004. Thus, the reported decision in K.M. Refineries, being distinguishable on facts, do not have any manner of application to the case on hand.
In Brahmputra Metallics [[2020 (12) TMI 1241 - SUPREME COURT]], the curtailment of the validity period as promised by the State was in issue. It was found on facts that though the State made a representation in the relevant Industrial Policy that a rebate/ deduction in electricity duty would be offered for a specified period, the units were deprived from enjoying such benefit for such specified period due to unexplained delay in issuance of notification as contemplated under the scheme. On such factual background, the Hon’ble Supreme Court held that the State action is arbitrary and violative of Article 14 - In the case on hand, this Court has already observed that State action is not arbitrary and therefore, the said reported decision is not applicable.
This Court, holds that the writ petition is devoid of any merit and the same is liable to be dismissed - Petition dismissed.
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2023 (3) TMI 123
Recovery of dues - Attachment of Bank Account of petitioner - attachment on the ground that a Statutory Appellate Authority has quashed the assessment order and remanded the matter for fresh consideration - non-application of mind - violation of principles of natural justice - HELD THAT:- Admittedly, in respect of the assessment year 2016-17, the assessment order was in entirety quashed and remanded back to the first respondent for fresh consideration, on merits and in accordance with law and in respect of the assessment year 2015-16, some of the operative portion of the assessment order was quashed and without giving any notice to the petitioner, prior to the attachment and the dues of the recovery notice, the first respondent has attached the back account, lying in the bank account of the petitioner and maintained with the fourth respondent Bank, which in the considered view of this Court, is arbitrary and has been passed by total non application of mind.
Insofar as the second submission made by the learned counsel for the petitioner with regard to the refund of the money, lying in the petitioner's bank account, maintained with the fourth respondent Bank, is concerned, the petitioner will have to give a representation for the same to the respondents - No prejudice would be caused to the respondents if the said representation is directed to be considered by the first respondent, on merits and in accordance with law within a time frame to be fixed by this Court.
The impugned recovery notice as well as the consequential bank attachment in Form U in respect of the bank account of the petitioner, maintained with the fourth respondent are hereby quashed - Petition allowed.
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2023 (3) TMI 122
Validity of assessment orders - no personal hearing was afforded to the petitioner prior to the passing of the respective impugned assessment orders - impugned assessment orders are dated 29.10.2019, the petitioner has received the same only on 30.01.2023 - violation of principles of natural justice - HELD THAT:- The date of dispatch of the impugned assessment orders by the respondent is disclosed as 27.01.2023, though the assessment order is dated 29.10.2019. Therefore, the statement of the petitioner that they had received the assessment orders all dated 29.10.2019 only on 30.01.2023 has to be believed - Further as seen from the impugned assessment orders, no personal hearing was afforded to the petitioner.
Learned Government Advocate appearing for the respondents has produced the written instructions received by the learned Special Government Pleader (Taxes) from the Assistant Commissioner, (ST), Anna Salai Assessment Circle, Chennai - 6 dated 15.02.2023, wherein they have stated that they are prepared to re-do the assessment. The said instructions received by the learned Special Government Pleader (Taxes) from the respondents is recorded.
The matters have to be remanded back to the first respondent for fresh consideration on merits and in accordance with law - the impugned assessment orders are quashed - petition allowed by way of remand.
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2023 (3) TMI 121
Recovery of dues - Attachment of property (secured asset) - absolute owner of the property - legal and valid title or not? (as once purchased under the public auction) - HELD THAT:- It is a settled position of law that the debts due to any secured creditor shall be paid in priority over all other debits and all revenues, taxes, cesses and other rates payable to the Central Government or state Government or local authority.
Reference made to the case of KALUPUR COMMERCIAL CO-OPERATIVE BANK LTD. VERSUS STATE OF GUJARAT [2019 (9) TMI 1018 - GUJARAT HIGH COURT] where it was held that We have no hesitation in coming to the conclusion that the first priority over the secured assets shall be of the Bank and not of the State Government by virtue of Section 48 of the VAT Act, 2003.
In the instant case, it is an undisputed fact that respondent No.2 – Bank of Baroda is a secured creditor. Therefore, the Bank has valid first charge over the property in question by way of mortgage and has first right to sell the same in view of priority under Section 31B of the RDDBI Act, so also Section 26E of the SARFAESI Act and recovered its dues from it. The petitioner is a bona fide purchaser, purchased the property in question from the public e-auction held by the Recovery Officer and paid full and total sale consideration and the Recovery Officer has issued sale certificate in favour of the petitioner. The debts due to Bank – a secured creditor shall be paid in priority over other debts/taxes payable to the State Government. The petitioner has no concern with the dues of the State Authorities - now it is well settled legal position that the mortgagor bank has priority to recover the dues against any charges of the State Government or Central Government, more particularly the mortgage is created prior to the registration of such charge by the Authority.
Thus, it is held that the RDDBI Act is meant for enforcement of security interest which is created in favour of the secured creditor – financial institution, and provides specific mechanism / provision for the financial assets and security interest.
Petition allowed.
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2023 (3) TMI 120
Validity of reassessment order - demand of pre-deposit - non-availment of any opportunity of hearing because of the Pandemic due to COVID-19 virus - Whether The Gujarat Value Added Tax Tribunal is justified in demanding pre-deposit without assigning any reasons or by overlooking the prima facie case of the appellant?
HELD THAT:- This Court in case of KAVYA MARKETING VERSUS STATE OF GUJARAT [2022 (4) TMI 1202 - GUJARAT HIGH COURT] has also needed to deal with the order where the Tribunal had directed to pre-deposit and hearing of the matter was prolonged on the aspect of pre-deposit. It had chosen not to address the prima facie case of the writ applicant at the stage when the directions had been issued for pre-deposit. This Court had frowned upon such approach on the part of the Tribunal by holding that This Court has time and again in identical cases has held that Tribunal is obliged to consider a prima facie case, which the appellant may be in position to highlight. It a strong prima facie case is made out, then in such circumstances, there should not be any difficulty in entertaining the appeal even without insisting for payment of tax penalty or even smaller amount.
In the instant case, as can be noticed from the chronology of events, the original reassessment order which was passed after the provisional attachment order and the audit assessment was placed upon the provisional assessment order and also considering the very material which was taken into consideration during the audit assessment - It is not the final reassessment order and the amount quantified is necessary to be looked into. It is essentially the chronology of events, coupled with the fact that there is complete absence of the any opportunity at the time of reassessment which shall need to be regarded.
The matter is remanded back to the original authority for passing reassessment order on quashing and setting aside that order - the reference of carried forward input tax credit of Rs.5,86,000/- to the credit of the appellant shall continue to act as as pre-deposit - petition allowed.
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2023 (3) TMI 61
Under-pricing of goods/colourful transactions - Determination of sale price of Iron Ore sold by the petitioner on the basis of average I.B.M. rate in exercise of the powers under Section 35 (7) read with Section 40 (1) of the JVAT Act - HELD THAT:- After going through the proviso to Section 35 (7) of the Act it appears that the statute specifically postulates that prescribed authority shall record his reason before initiating the proceedings and no order shall be passed under this sub section without giving the dealer an opportunity to be heard. Section 40(1) provides for Assessment in cases where turnover has escaped assessment on account of reasons indicated under Clause (a) to (e). In cases of concealment or failure to disclose willfully etc. the penal provisions under proviso to 40(1) provide imposition of three times the amount of additional tax assessed - the proviso to Section 35 (7) of the JVAT Act firstly stipulates that the reasons must be recorded by the prescribed authority for initiating the proceeding and secondly, the principles of natural justice should be followed.
Though in the instant case the second ingredient of the proviso has been fulfilled; however, there is no document to suggest that the assessing officer has recorded his reason before initiating the proceeding - it is noteworthy that even after remand by the appellate authority in the revised assessment order the assessing officer has not correctly applied its mind to the requirement of law under Section 35(7) of the Act and rather observed that it is not a case where the assessee has sold the goods at a price higher than what is shown by him.
In the case of GIRDHARI LAL NANNELAL VERSUS SALES TAX COMMISSIONER, MP [1976 (3) TMI 51 - SUPREME COURT], the Apex Court, held that for the purpose of levy of Sales Tax it would be necessary not only to show that the source of money has not been explained but also to show existence of some material that such acquisition of money has resulted from transactions liable to Sales Tax and not from other sources.
The Assessing Officer has come to the finding that it is a case of ‘underpricing’. The finding with respect to “underpricing” of the goods sold by the petitioner recorded by the assessing officer is not tenable in the eye of law. Further, assessing officer in its revised order has stated that “underpricing” of the petitioner has been occasioned due to connivance of the seller and the purchaser, but no details of such enquiry has been mentioned in the revised order. The lower court records do not show that any such enquiry was conducted by the learned assessing officer to conclude underpricing done by the petitioner before proceeding to impose tax and penalty under Section 40(1) based on the IBM rates - In the absence of tangible materials to support such a finding, it is difficult to assume that a purchaser of petitioner would purchase minerals at a lesser price under an invoice in order to evade payment of tax especially when the said purchaser is entitled to avail ITC under the JVAT Act, 2005. It is only after recording of reasons for initiation of proceedings under Section 35(7) the exercise for determination of value of goods at the time of sale and assessment of tax on such price is to be done by giving the dealer an opportunity of being heard.
Though several contentions have been raised by the parties on the merits of the matter regarding the levy of tax and penalty but since the matter is being remanded for the assessing officer on the point of recording of satisfaction under Section 35 (7) of the JVAT Act before initiation of the proceedings, it is refrained from making any observation on the merits of the case regarding the levy of tax and penalty upon the petitioner under Section 35 (7) r/w Section 40 (1) of the JVAT Act.
The judgment relied upon by the learned Advocate General i.e. VEENA THEATRE, PATNA VERSUS THE STATE OF BIHAR [1970 (4) TMI 169 - SUPREME COURT] relate to cases of best judgment assessment after the rejection of Books of Account of the Assessee - Since in the present case the requirement of law for initiation of the proceedings have not been fulfilled, these decisions are not of assistance to the present cases.
Petition disposed off.
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2023 (3) TMI 60
Entitlement to avail reduced CSA @ 2% on the interstate sales of yarn, against submission of ‘D’ Forms to the Government Departments, by taking recourse of Notification dated 13.07.2001 - Declaration in Form ‘C’ were submitted as specified in the Central Sales Tax) Registration & Turn Over) Rules, 1957 at the time of assessment - HELD THAT:- A perusal of the notifications shows that intention of the Legislator was to provide benefit of 2% tax on the inter-state sales to all the dealers outside State of Punjab and this included the Government dealers as well. However, at the time of issuing final notification, words “declaration in Form D” could not be mentioned. This omission in itself cannot alter the meaning of the notification as a whole, whereby it is clearly mentioned that benefit of this notification is to be given to any dealer having his place of business outside the State of Punjab. Any dealer would include private as well as Government dealer. Only declarations in Form ‘C’ and Form ‘D’ were to be provided by the private and Government dealers respectively. Guidelines for presenting Form ‘C’ and ‘D’ by the private as well as Government dealers have also been laid down separately.
This is only a procedural declaration and omission of mentioning the words Form ‘D’ cannot be made a ground to deny the benefit of this notification to the Government dealers outside the State of Punjab.
The present appeal was admitted way back in the year 2012. Learned counsel for the petitioner-State has not been able to cite any instance, where even after 2012, the State has not extended this benefit to any dealer outside State of Punjab being a Government department - Petition dismissed.
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2023 (3) TMI 59
Constitutional Validity of Section 17(5)(b) of AP VAT Act and charging Section 4(2) of AP VAT Act - ultra vires to Section 17(2)(3)(4)(7) - petitioner is to be assessed as ToT dealer only for his single transaction of purchase of goods from outside the State and for that single transaction or not - time limitation under Section 21(4) of the AP VAT Act - penalty can be imposed at 25% only on the tax due as per Section 49 of AP VAT Act or not - maintainability of writ petition.
Whether Section 17(5)(b) without reference to quantum of turnover is ultra vires to Section 17(2)(3)(4)(7) as well as charging Section 4(2) of AP VAT Act and liable to be struck down? - HELD THAT:- When Section 17 is comprehensively studied, it does not appear that 17(5)(b) has totally negated the operation of Sub Sections (2)(3)(4) and (7), rather it has limited their operation by carving out an exception. In other words, Sub Sections (2)(3)(4) and (7) are still operable so long as they do not fall within the groove of exception. Therefore, the petitioner cannot contend that Section 17(5)(b) has taken away the right conferred under Sub Sections (2)(3)(4) and (7). We find no conflict or inconsistency between sub-section (5) and other sub-sections and therefore, vires of Section 17(5) cannot be questioned.
Whether the petitioner is to be assessed as ToT dealer only for his single transaction of purchase of goods from outside the State and for that single transaction the petitioner shall be assessed to tax as a casual trader under relevant provisions of the AP VAT Act? - HELD THAT:- A tax is imposed for public purpose for raising general revenue of the State. As per Article 366(28) of the Constitution of India, the term “taxation” includes the imposition of any tax or impost, whether general or local or special and the tax shall be construed accordingly. The term “impost” means a compulsory levy. Since imposition of tax involves a compulsory levy or exaction of money by Government, the same is not permissible except by or under the authority of a statutory provision.
The petitioner shall be treated as a TOT dealer only irrespective of his involvement in a single transaction of purchase from outside the State. The said single transaction of purchase is concerned, the same is liable to be taxed under Section 6 of the CST Act, 1956 but not under the provisions of AP VAT Act, 2005 for the reason that as per Section 5 of AP VAT Act, the said Act has no application to impose tax on sale or purchase of any goods which took place outside the State. The petitioner cannot be treated as casual trader also for the reason that U/s 2(7) of AP VAT Act a casual trader is a person who carries on occasional transactions of a business nature involving buying, selling or distribution of goods in the State, whether as petitioner made a single purchase from outside the State.
Whether the assessment for the period April, 2013 to July 2014 is barred by limitation under Section 21(4) of the AP VAT Act? - HELD THAT:- According to the petitioner the impugned Assessment for the period April, 2013 to July, 2014 is barred by limitation under Section 21(4) of AP VAT Act since the assessment for the aforesaid period exceeded four years. The plea cannot be accepted, for the reason that for the aforesaid period, the petitioner has wilfully underdeclared his sales turnover and evaded payment of the tax to a tune of Rs.3,030/-. Therefore, following Section 21(5) of the AP VAT Act the 3rd respondent has rightly levied the tax. It is relevant at this juncture to mention that for the subsequent period also, for any undervaluation of sales and consequent evasion of tax, the petitioner will be liable to pay tax at 1% as a TOT dealer but not 14.5% as a VAT dealer
Whether penalty can be imposed at 25% only on the tax due as per Section 49 of AP VAT Act? - HELD THAT:- The petitioner shall be treated as TOT dealer only but not as VAT dealer. As such, he need not pay tax as a VAT dealer. Consequently, Section 49 of the Act which deals with penalty for failure to registration does not apply to the instant case. On the other hand, the petitioner for his act of undervaluing the tax as a TOT dealer, shall be liable to pay penalty as per Section 53 of AP VAT Act.
Whether the writ petition is not maintainable due to availability of alternative, efficacious remedy of appeal? - HELD THAT:- In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai [1998 (10) TMI 510 - SUPREME COURT] the Apex Court held that the alternative remedy will not operate as a bar in the contingencies namely where the writ petition has been filed for the enforcement of fundamental rights or where there has been a violation of principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In the instant case the petitioner challenged the validity of Section 17(5)(b) of AP VAT Act. As such the writ is maintainable.
The impugned Assessment Order dated 04.08.2018 penalty proceedings dated 23.11.2018 and Appellate Order dated 22.10.2020 are hereby set aside - Petition allowed.
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2023 (3) TMI 6
Classification of goods - KINLEY WATER - falls within the scope of Entry No.4 of Taxable List or within the ambit of Entry 39 of Tax-free List - dealer had collected sales tax from its customers/consumers - whether the finding of fact by the learned Odisha Sales Tax Tribunal is based on no evidence and/or erroneous appreciation of evidence and the conclusion arrived at by the Tribunal is untenable in the eye of law?
HELD THAT:- It is admitted by the Revenue that the dealer-company has added only sodium and magnesium salts to the treated water. The description of commodity as is given by the opposite party-company shows that the water is the potable water which is subject to treatment such as decantation, filtration, demineralization, re-mineralisation, reverse osmosis. These processes are as per the requirements of specification of the Bureau of Indian Standards as also the Prevention of Food Adulteration Act.
On comparison of definitions of “mineral water” and “packaged drinking water” as defined in the Prevention of Food Adulteration Rules, 1955, it is but clear that the process undertaken by the opposite party conforms to the “packaged drinking water”. Mere addition of sodium and magnesium salts may not convert “water” into “mineral water” unless other ingredients as specified in the Prevention of Food Adulteration Rules, 1955 are demonstrated to be present. The Revenue has utterly failed to bring on record that the product which is sold by the opposite party does contain other contents as enumerated in Appendix-B to the said Rules - If the Revenue could bring on record the fact that the product in question contained the ingredients specified for water to fall within the comprehension of “mineral water” as per A.32 of Appendix-B appended to the Prevention of Food Adulteration Rules, the matter would have been different. On the contrary, the opposite party-company having demonstrated that it has produced “packaged drinking water” in conformity with the specification of A.33 of Appendix-B of said Rules, it has discharged its onus.
The Hon’ble Delhi High Court in Bottled Water Processors Association Vrs. Union of India, [2010 (5) TMI 956 - DELH HIGH COURT], held that it is mandatory for packaged drinking water to be manufactured, sold or exhibited for sale only with a BIS Certification Mark. Packaged drinking water has to conform to the stipulated Indian Standards Specification as per IS 14543:2004. Rule 37 of the Prevention of Food Adulteration Rules requires the label to state that it is packaged drinking water and the label shall not contain any statement, claim, design, device, fancy name or abbreviation which is false or misleading in relation to the place of origin of the drinking water - Consequently, if packaged drinking water is sold without the usage of the BIS Mark, then the offence under Section 14 read with Section 33 of the Bureau of Indian Standards Act, 1986 stands attracted, which prescribes for the punishment.
Test commonly applied to such cases where the statute is silent in respect of definition of a particular commodity, is how the product gets identified by the class or section of people dealing with or using the product. This is a test, which is attracted whenever a statute does not contain any definition. It is a matter of common experience that the identity of an article is associated with its primary function. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between an article and the need it supplies in his life. It is the functional character of the article, which identifies it in his mind.
The competing entries, viz., Entry 39 of the Tax-free List vis-a-vis Entry 4 of Taxable List, do not confine the item to “water” simpliciter for classification. This Court is called upon to adjudicate whether packaged drinking water sold in the brand name “KINLEY WATER” falls within the sweep of expression “water but not aerated or mineral water sold in bottles or sealed containers”. The key words are “sold”, “aerated water” and “mineral water”. The word “sold” in the entry is indicative that it is the trade circle in which the commodity is traded or understood by the manufacturer, the trader and the consumer. In the trade “mineral water” and “packaged drinking water” are understood in the same sense in which Bureau of Indian Standards and the Prevention of Food Adulteration Act have specified/defined. Thus considered, the contention of the petitioner-Revenue deserves to be rejected.
Only conclusion that can be arrived at when Entry 39 of Tax-free List and Entry 4 of the Taxable List are pitted against each other is that what is taxable is sale of aerated water or mineral water. The scope of taxability cannot be expanded by giving the extended meaning to the excepted expressions for the purpose of narrowing down the exemption granted to “water” which falls within the ken of Entry 39 of Tax-free List - it is held that sale of packaged drinking water in the brand name KINLEY WATER falls within the expression “water but not aerated or mineral water sold in bottles or sealed containers” vide Entry No.39 of Tax-free List.
The issue is answered in the negative, i.e., in favour of the opposite party-assessee and against the Revenue.
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2023 (3) TMI 5
Constitutional Validity of Entry No.25 of the 6 Schedule to the Karnataka Sales Tax Act, 1957 - assessment order, reopening of assessment, barred by limitation or not - time limitation as per Section 12-A(1) of the KST Act - whether the proviso to Section 12-A(2) of the KST Act is applicable to the facts of the instant case?
HELD THAT:- The proviso to Section 12-A(2) of the KST Act is not applicable to the instant case and the impugned assessment orders are barred by limitation.
It is a matter of record that the petitioner was not one of the parties in PRO Lab’s case [[2015 (2) TMI 388 - SUPREME COURT]] and consequently, would not come under the expression ‘assessee’ contained in the proviso to Section 12-A(2).
The petitioner can also not be considered, construed or treated as ‘any person’ as contemplated in the said proviso since the same means, only a person who is intimately connected or interlinked or has a nexus to the parties in PRO Lab’s case and not to anyone else, much less, the petitioner herein, who was neither a party to PRO Lab’s case nor had any connection / link / nexus with the parties to the said case; to put it differently, in order to apply the judgment of the Apex Court in PRO Lab’s case, which would enable the respondents to initiate the impugned re-assessment proceedings, pursuant thereto, it is absolutely essential that the petitioner herein has to be ‘any person’ within the meaning of the proviso to Section 12-A(2); it follows there from that if the petitioner cannot be construed, considered or treated as ‘any person’ in terms of the said proviso, the same would be inapplicable to the petitioner and the benefit of exclusion of the period of 8 years prescribed in Section 12-A(1) would not be available to the petitioner.
In ITO, Sitapur vs. M/s.Muralidhar Bhagwan Das case [[1964 (1) TMI 5 - SUPREME COURT]], the Apex Court held that the said proviso would not save the time limit prescribed under sub-section (1) of Section 34 of the Act in respect of an escaped assessment of a year other than that which is the subject-matter of the appeal or the revision, as the case may be. It follows that the notice under Section 34(1) of the Act issued in the present case was clearly barred by limitation.
In Mysore Cements Ltd., case [[1999 (7) TMI 641 - KARNATAKA HIGH COURT]], the coordinate Bench of this Court while dealing with proviso 12- A(2) of the KST Act, under identical circumstances, held that Section 12-A(2) has extended the time-limit during which the stay was granted by any court or any other authority. It is only the time during which the stay granted is extended. But in a case where the stay is not granted and ultimately the matter is decided against the assessee requiring to make the assessment on the basis of the ultimate order or judgment given then the proviso further extends the time but, if a judgment is given in other case, then it would justify reopening of the assessment only within the time prescribed under section 12-A(1) and if it is in the case of the same assessee or person then, proviso to sub-section (2) of section 12-A thereof extends the time-limit for initiation of the assessment/reassessment of that assessee.
The impugned re-assessment orders for the years 1998-99 to 2004-05 dated 15.04.2016 and consequent demand notices dated 15.04.2016 passed by the 3rd respondent at Annexures-K, L, M, N, P, Q and R respectively - petition allowed.
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2023 (3) TMI 4
Validity of assessment order - sufficient opportunity of hearing has been provided or not - scope of the word 'reasonable opportunity of hearing' under Section 31 of the Tripura Value Added Tax Act, 2004 - respondents has contended that since a show cause notice was given, the same itself was sufficient in respect of providing of reasonable opportunity of hearing - HELD THAT:- The Assessing Officer cannot pass an order on the basis of pure suspicion and surmised without giving reasonable opportunity of hearing the case which is sought to be made out in the assessment order. In other words, though the Assessing Officer can make such inquiries, he must give an opportunity of being heard which is not an empty formality or ritual or a pretence. It is a valuable right granted to the assessees and, in fact, is an important safeguard against arbitrary assessments. It cannot be taken lightly by the authorities. The opportunity must be real and reasonable. If an assessee, who is asked to furnish certain particulars or submit explanations within a specified time, prays for further time stating his difficulties or reasons, his prayer should be considered judiciously. Sometimes, as in the present case, for assessment for a number of years are taken up together and the assessee is asked to appear and produce evidence in support of his returns. On consideration of the evidence produced by the assessee, the Assessing Officer might require some further particulars or information which might not be possible for the assessee to submit instantaneously, for various reasons.
The Assessing Authority cannot pass an order merely on the basis of pure guess and suspicion and surmises - the petitioner in this case was asked to furnish certain information for which he wanted time on the ground that assessments for four years were being taken up at a time and it was not possible during COVID period to bring the original invoices from Mumbai and thus his prayer was rejected. The petitioner was thus denied reasonable opportunity of hearing and on that score itself, the impugned order of assessment cannot be sustained as the same being made in violation of principles of natural justice.
The impugned orders of assessment dated 26.03.2021 as well as the notice of demand for the assessment years 2015-16 to 2017-18 stands set aside and the matter is remanded back to the concerned authorities to issue a fresh proceeding in accordance with law - Petition allowed by way of remand.
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2023 (3) TMI 2
Classification of goods - packaged drinking water or natural mineral water - HELD THAT:- Copies of the documents have been handed over to learned counsel for the Department who needs some time to examine them and make submissions.
List on 7th February, 2023.
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2023 (2) TMI 1302
Validity of remand order - Revenue states that the Tribunal went wrong in setting aside the order passed by the Tribunal to the extent of remanding the matter - HELD THAT:- A perusal of the order passed by the Sales Tax Appellate Tribunal, in clear and unequivocal terms, reveals that the Tribunal after extensively discussing various issues and taking into consideration the relevant provisions of the Act passed the order under challenge, by setting aside the portion to the extent of remand by assigning cogent and convincing reasons. As per Section 22(1) of the Act, the Tax Revision case lies to this Court only on question of law.
In the considered opinion of this Court, no question of law could be pointed out by the petitioner in the present Revision - this Court is not inclined to meddle with the well-articulated order passed by the Tribunal, which is impugned in the present Revision.
This Tax Revision Case is dismissed.
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2023 (2) TMI 1231
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - whether attracts tax at the same rate as applicable to "mobile phone" only and it cannot be taxed at higher rate separately? - HELD THAT:- This Court has considered the above question in STRP No.8/2022 & connected matters [2023 (2) TMI 1228 - KARNATAKA HIGH COURT] and answered the question in favour of the assessee and against the Revenue holding that definition contained in the Notification issued under the KVAT Act includes the ‘Charger’ which is sold along with the mobile phone in one set and accordingly taxable at 5%.
Revision dismissed.
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