2016 (7) TMI 626 - HC - VAT and Sales Tax

Rate of tax on supply of LPG in cylinders - domestic supply versus commercial supply - Held that - The appellants are not doing any such activity, but are manufacturing gas and supplying it to HPCL. In such circumstances, the exemption could not have been claimed by the appellants before us. Once the underlying facts and which are undisputed have been correctly noted and appreciated, then, merely because some certificate issued by HPCL has not been taken into account will not enable us to interfere with the order of the Tribunal. Any Trade Circular and as is clarified therein, cannot control the interpretation of the exemption clause or the Schedule entry which carves out the same. - Decided against the appellant.

Summary

Issues:
Appeal under section 27 of the Maharashtra Value Added Tax Act, 2002 challenging the order of the Maharashtra Sales Tax Tribunal in Appeal No. 551 of 2013.

Analysis:
1. The appellant contended that the Tribunal overlooked crucial evidence in the form of a certificate from Hindustan Petroleum Corporation Limited and a Trade Circular regarding taxation of petrol, diesel, and LPG for domestic use. The appellant argued that LPG supplied for domestic use should be interpreted in light of the Trade Circular.

2. The State argued in support of the impugned order, stating that the Tribunal's view was consistent with the Schedule entry, which specified that LPG in cylinders for domestic use is eligible for exemption. The State emphasized that the appellant did not directly supply LPG for domestic use to consumers, as this was done by HPCL.

3. The Tribunal, after considering the arguments, noted that the Schedule entry required LPG to be supplied in cylinders containing up to 14.5 kg for domestic use to be eligible for exemption. The Tribunal concluded that the appellant failed to provide sufficient evidence to distinguish supplies meant for domestic use from commercial use.

4. Referring to a Supreme Court judgment, the Tribunal emphasized that the Schedule entry's plain words required LPG to be supplied in specified cylinders for domestic use to qualify for exemption. The Tribunal upheld the view that the appellant, as a manufacturer supplying gas to HPCL, was not eligible for exemption under the Schedule entry.

5. The Court dismissed the appeal, stating that the Tribunal's decision was not perverse and did not contain any error of law. The Court upheld the Tribunal's interpretation of the Schedule entry and concluded that the appellant was not entitled to exemption based on the facts and circumstances of the case.

6. The Court clarified that the appeal's dismissal was limited to the determination of the disputed question by the Commissioner in his order dated 3rd September, 2013, and did not cover any other issues not addressed in the appeal.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing that the appellant's failure to supply LPG directly for domestic use to consumers rendered them ineligible for exemption under the relevant Schedule entry. The Court found no merit in the appeal and dismissed it, restricting the decision to the specific issue determined by the Commissioner.