2016 (1) TMI 380 - HC - VAT and Sales Tax

Whether the appellant is entitled to produce the STDIV declaration and ST-14B Forms, even before the appellate authority - Held that - Petitioner therein is entitled to produce the tax invoices, Forms VAT C-4 and Forms VAT D-1 before the Assessing Authority who thereafter has to determine the tax liability by deciding the matter by passing a fresh order in accordance with law. In this view of the matter, the petitioner is entitled to produce the STD-IV declaration and ST-14B Forms before the Assessing Authority who shall thereafter examine the tax liability and decide the matter by passing a fresh order, in accordance with law Whether the amount of purchase tax can be demanded from the appellant under Rule 28B(3)(j) of the Rules especially when it had been granted exemption from payment of tax - held that - A plain reading of Rule 28B(3)(j) of the Rules clearly spells out that the beneficiary unit is entitled to exemption from payment of sales tax on the sale of finished products and not exemption from the payment of purchase tax. In other words, the unit is entitled to exemption from the payment of sales tax only on the sale of goods manufactured by it and any purchase tax leviable was recoverable from the said unit. Thus, the Tribunal was right in holding that the notional tax liability calculated for the purposes of setting off against the tax exemption limit shall be the amount of tax payable on the sale of furnished products under the Local Sales Tax Law and the Central Sales Tax Act, 1956 which does not include purchase tax and, therefore, the amount of purchase tax levied was recoverable from the appellant. - No illegality or perversity could be demonstrated in the aforesaid findings recorded by the Tribunal which may call for interference by this Court on this question - Appeal disposed of.

Summary

Issues:
1. Whether declaration forms possessed by the appellant dealer should be permitted to be taken on record and consequential benefit granted?
2. Whether declaration forms can be produced at the appellate stage and even at the High Court stage?
3. Whether the appellant dealer should be made to suffer for the fault of the counsel who did not press the issue at the final arguments before the Tribunal?
4. Whether the benefit given under Rule 28B covers purchase tax liability?
5. Whether the order deciding the purchase tax issue relied upon contradictory findings?
6. Whether the appellant is entitled to produce the STDIV declaration and ST-14B Forms before the appellate authority?
7. Whether the purchase tax can be demanded from the appellant under Rule 28B(3)(j) especially when exemption from payment of tax was granted?

Analysis:

Issue 1-5:
The appellant filed an appeal under the Haryana Value Added Tax Act, 2003 against the order passed by the Haryana Tax Tribunal. The appellant, engaged in the business of manufacturing and selling rubber footwears, was granted tax benefits under Rule 28B of the Haryana General Sales Tax Rules. The assessing authority finalized the assessment, which was revised disallowing adjustment of purchase tax against notional tax liability. The Tribunal partly allowed the appeal, upholding the disallowance of purchase tax adjustment. The issues involved substantial questions of law related to declaration forms, purchase tax liability, and contradictory findings. The Tribunal's decision was based on the interpretation of exemption certificates and tax liability under the relevant laws.

Issue 6:
The appellant's entitlement to produce the STDIV declaration and ST-14B Forms before the appellate authority was established based on a previous court decision, allowing the submission of necessary forms before the Assessing Authority for determining tax liability and passing a fresh order accordingly.

Issue 7:
Regarding the demand for purchase tax from the appellant under Rule 28B(3)(j), the Court clarified that the exemption certificate entitles the unit to exemption from payment of sales tax on finished products, not purchase tax. The Tribunal's decision to recover purchase tax from the appellant was upheld based on the legal provisions and previous judgments supporting the recovery of purchase tax from an exempted unit.

In conclusion, the appeals were disposed of based on the detailed analysis of the issues, legal interpretations, and previous court decisions, affirming the Tribunal's decision on the purchase tax liability issue and rejecting the appellant's contentions.