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2013 (5) TMI 60 - HC - VAT and Sales TaxInter state v/s Intra state sale - Claim of refund of VAT deposited with interest - U.P. Vat Act - allegation of dept. of inter state sale of natural gas in Uttar Pradesh treating the sale within the State of U.P., therefore eligible to tax under U.P. Vat Act - Held that - It is not in dispute that instant writ petitioners are also purchasing natural gas from Reliance Industries Ltd. and VAT was charged by the State of U.P., which was assailed by the Reliance Industries Ltd. by filing writ 2013 (5) TMI 32 - ALLAHABAD HIGH COURT recording a finding that the sale transaction which is the subject matter of the instant case, is not an intra-state sale but is an inter-state sale and State of U.P. lacks jurisdiction to impose tax (VAT), allowed the bunch of writ petitions with all consequential benefits quashed the impugned order and directed the State Government to refund the tax realized to the assessees expeditiously. Thus the State Government also in the present case is directed to refund the tax realized to the assesses, expeditiously.
Issues Involved:
1. Challenge to orders dated 25.10.2012 and 09.11.2012 passed by respondents. 2. Claim for refund of VAT deposited by petitioner. 3. Declaration regarding the actions of State Authorities. 4. Request for additional relief as deemed appropriate by the Court. 5. Application for clarification/modification of the judgment dated 7.9.2012. Analysis: Challenge to Orders: The petitioner sought writs to quash orders dated 25.10.2012 and 09.11.2012 passed by respondents. The petitioner contended that the State Authorities' actions were ultra vires and violated Article 265 of the Constitution of India and other statutory provisions. The Court noted that common questions of facts and law were involved in the petitions, which were decided by a common order at the admission stage. The Court examined the facts of the case, including the petitioner's engagement in the manufacturing of Urea Fertilizer using natural gas purchased from Reliance Industries Ltd. The Commercial Tax Department treated the sale of natural gas as intrastate, leading to VAT imposition under the U.P. Value Added Tax Act. Claim for Refund: The petitioner requested a refund of VAT deposited for natural gas purchased from respondents. The Court referred to a previous order dated 7.9.2012, which quashed the assessment order imposing VAT and directed the State Government to refund the tax realized to the assessees. The petitioner's claim for refund was rejected by the Deputy Commissioner and Commissioner of Commercial Taxes, prompting the filing of the writ petitions. The Court observed that the State lacked jurisdiction to impose VAT on the sale transactions, as they were deemed inter-state sales, not intra-state. Declaration Regarding State Authorities: The Court declared that the State of U.P. lacked jurisdiction to impose VAT on the sale transactions, emphasizing that the sale of natural gas was inter-state, not intra-state. The Court reiterated that the State Authorities' actions were ultra vires and directed the State Government to refund the tax realized expeditiously. The Court dismissed the State's argument that no refund could be made without a provisional or final assessment order, emphasizing the lack of jurisdiction to impose VAT on the transactions. Additional Relief and Application for Clarification: The petitioner sought further relief deemed appropriate by the Court and filed an application for clarification/modification of the judgment dated 7.9.2012. The Court rejected the application for modification but allowed the petitioner the option to approach the appropriate forum for any cause of action. The Court noted that the benefit of the judgment dated 7.9.2012 should be extended to the petitioner, as the sale transactions were inter-state, and the State lacked jurisdiction to impose VAT. Conclusion: The Court allowed all the writ petitions, quashed the challenged orders, and directed the State Government to refund the tax realized to the assesses expeditiously. The Court emphasized the inter-state nature of the sale transactions and the lack of jurisdiction of the State of U.P. to impose VAT, providing relief to the petitioners based on the previous judgment dated 7.9.2012. The Court's decision upheld the petitioner's claims for refund and declared the State Authorities' actions as ultra vires.
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