2012 (4) TMI 200 - SC - VAT and Sales Tax

Petition filed to defer liability of assessee to pay taxes in compliance with terms & conditions of Purchase Agreement - assessee registered under MP VAT Act and CST Act, 1956 purchased tendu leaves in bid organized by MP State MFP Co-operative Federation Ltd - assessee contending it to be inter-state sale and not exigible for the levy of tax under the relevant VAT Act - Held that - Applicants are expected to comply with the terms and conditions of the Purchaser s Agreement and accordingly deposit taxes to the Federation. We permit assessee to file appropriate appeals before the First Appellate Authority/revisions before the revisional authorities within a month s time from today and direct such authorities to dispose of the appeals/revisions on merits, without reference to the period of limitation, within four months from the filing of the appeals/revisions. Also, we direct the assessing authorities under the VAT Act to complete the assessments, within two months from today.

Summary

Issues:
1. Prayer for an injunction to restrain tax recovery under the VAT Act.
2. Permission to file appeals for completed assessments under VAT Act or Central Sales Tax Act.
3. Completion of assessments by assessing authorities under the VAT Act.

Analysis:
1. The applicants sought an injunction to prevent the Federation from recovering taxes under the VAT Act based on a specific condition in the Purchaser's Agreement. The court held that the applicants must adhere to the agreement's terms, which mandate tax deposits to the Federation when purchasing Tendu Leaves. Consequently, the request for an injunction was denied as it contradicted the agreement's provisions.

2. Regarding the request to file appeals for completed assessments under the VAT Act or Central Sales Tax Act, the court deemed it reasonable and allowed the applicants to submit appeals within a month. Additionally, the court instructed the appellate and revisional authorities to expedite the disposal of these appeals without considering the limitation period, ensuring a swift resolution within four months from filing.

3. The applicants also requested the assessing authorities under the VAT Act to promptly finalize assessments if not already done. The court found this request reasonable and directed the authorities to complete assessments within two months, provided the assessees cooperate. This directive aimed to expedite the assessment process for the benefit of all parties involved.

In conclusion, the court granted the request to file appeals for completed assessments while denying the injunction request against tax recovery. The judgment emphasized compliance with contractual obligations, timely appeal filings, and expeditious assessment completion to uphold fairness and efficiency in the legal proceedings.