9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 139 - HC - VAT and Sales TaxDetermination of sale price - Inclusion of mandi fees payable by the purchaser to the market Committee and not the seller albeit accounted for through him under Rule 59 of the Rajasthan Agricultural Produce Marketing Rules, 1963 (hereinafter the 1963 Rules ) promulgated under Rajasthan Agricultural Produce Marketing Act, 1962 - Held that - Sub-rule (2) of Rule 59 of the 1963 Rules thus categorically states that market fees shall be paid by the purchaser. What follows is only a mode for collection of mandi fee. In my considered opinion the mode of collection of mandi fee cannot alter its very character and be considered as a levy on the seller. Mandi fee is to be paid by the purchaser under the Rules of 1963 to the Mandi Samiti for the infrastructure created by it for facilitating a transaction i.e. it is a charge independent of the privity of contract between the seller to the purchaser and not a part of the consideration paid to the seller by the buyer. The market fee charged by the Mandi Samiti is not a levy on the seller and thus cannot constitute statutory levy within the meaning of Section 2(36) of the RVAT Act, 2003 liable to be included in the sale price. Further in case of M/s. George Oakes (P.) Ltd. v. State of Madras 1961 (4) TMI 78 - SUPREME COURT OF INDIA a Constitution bench of the Hon ble Supreme Court has observed that where in law tax is on the buyer and the dealer a mere collecting agency, it would remain outside the sale price. - No Substantial question of law arises - Decided against Revenue.
Issues:
1. Interpretation of the term "sale price" under Section 2(36) of the Rajasthan Value Added Tax Act, 2003. 2. Inclusion of Mandi Fee in the sale price for VAT calculation. 3. Liability of the seller for statutory levies like Mandi Fee. 4. Applicability of judgments from other states to the RVAT Act, 2003. 5. Validity of penalty under Section 61 of the RVAT Act, 2003. Analysis: 1. The primary issue in this case revolves around the interpretation of the term "sale price" as defined in Section 2(36) of the Rajasthan Value Added Tax Act, 2003 (RVAT Act). The court analyzed the definition of "sale price," emphasizing that it includes any statutory levy or sum charged for services rendered at the time of delivery, except the VAT itself. The court interpreted that a statutory levy must be payable by the seller and be part of the consideration between the seller and buyer to be included in the sale price. 2. The court examined the inclusion of Mandi Fee in the sale price for VAT calculation. It was observed that the Mandi Fee, even if reimbursed by the purchaser, was a liability of the purchaser and not the seller. The court held that the Mandi Fee paid by the seller on behalf of the purchaser should not be considered as part of the sale price under the RVAT Act, 2003. The court referred to relevant rules and judgments to support this conclusion. 3. Another crucial aspect addressed in the judgment was the liability of the seller for statutory levies like the Mandi Fee. The court emphasized that the Mandi Fee is to be paid by the purchaser as per the rules, and the mode of collection should not alter its character. It was established that the Mandi Fee is a charge independent of the contract between the seller and buyer, and hence, cannot be considered a statutory levy on the seller for inclusion in the sale price. 4. The court also deliberated on the applicability of judgments from other states to the RVAT Act, 2003. It was argued by the Revenue that the judgments relied upon were not directly relevant to the provisions of the RVAT Act, 2003. However, the court found that the principles established in those judgments regarding statutory levies and sale price were applicable and aligned with the interpretation of the RVAT Act, 2003. 5. Lastly, the judgment addressed the validity of the penalty under Section 61 of the RVAT Act, 2003. The court concluded that the levy of penalty with reference to Section 61 was unwarranted and illegal in this case, especially considering that the transaction was disclosed in the books of the assessee. The court dismissed the revision petitions based on the precedents set by the Supreme Court and the specific provisions of the RVAT Act, 2003.
|
