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2016 (1) TMI 1045 - HC - VAT and Sales TaxDemand of VAT on the material consumed in the job work - deemed sale - use of chemicals, fat liquors, dyes, syntans, sodium bicarbonate etc. for cleaning, washing and drying the leather. - Haryana Value Added Tax Act, 2003 (HVAT) - Held that - In the present case, no additional excise duty was leviable. The issue was how much chemical was transferred in processing of hides and skins as no chemical gets attached to the leather. The appeals of textile industry with regard to quantum of tax to be levied on dyes and chemicals are pending before the Tribunal. The present appeals have been wrongly disposed of by the Tribunal following its earlier decision in M/s Northern India Textiles Processors Association s case - Matter remanded back to tribunal.
Issues:
Identical issues in VAT Appeal Nos. 76 and 77 of 2014. Analysis: Issue i) Whether the disposal of the appeal by the Tribunal in terms of its earlier order, where the issue was distinct, is sustainable in law? The appellant, a partnership firm engaged in tannery business, challenged the assessment levied by the Assessing authority for the year 2006-07. The Tribunal disposed of the appeals in terms of its earlier decision in a different case related to the textile industry. The appellant argued that the issue in their case, involving the taxation of chemicals used in processing leather, was different from the textile industry case. The High Court agreed with the appellant, finding that the issues were not the same. Consequently, the impugned order was set aside, and the matter was remanded to the Tribunal for fresh consideration. Issue ii) Whether the present appeal could have been disposed of based on a decision from a different case, even though no additional excise duty was leviable in the present case? The appellant contended that the Tribunal wrongly disposed of their appeals by relying on a decision related to the textile industry, where additional excise duty was a key factor. In the present case, no additional excise duty was applicable. The High Court acknowledged this distinction and remanded the matter to the Tribunal for a fresh decision after hearing both parties. Issue iii) Taxability of chemicals, detergents, bleaches, etc., when there is no passing of such property in job work. The appellant argued that the Tribunal's decision to tax the chemicals used in processing leather was incorrect, as no chemical gets attached to the leather. The High Court noted the pending appeals in the textile industry regarding the quantum of tax on dyes and chemicals and found that the issues were not the same. Consequently, the Tribunal's decision was set aside, and the matter was remanded for fresh consideration. Issue iv) Tax levy on the entire value of dyes and chemicals when part of them is transferred to customers along with the leather. The appellant challenged the tax levy on the entire value of dyes and chemicals, arguing that only a part of them was transferred to customers with the leather. The High Court found discrepancies in the Tribunal's decision and remanded the matter for a fresh determination, emphasizing the need for a proper assessment based on the specific facts of the case. Issue v) Legality of charging interest when the taxability position is uncertain. The appellant raised concerns about the legality of charging interest when the taxability itself was unclear. The High Court did not delve deep into this issue but remanded the matter to the Tribunal for a fresh decision, ensuring that all legal aspects are considered in the new determination.
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