2017 (1) TMI 962 - HC - VAT and Sales Tax

Levy of purchase tax - whether the petitioner-sugar mill was liable to pay the purchase tax on the sugarcane purchased by it from the growers - Held that - the matter is no longer res integra. The issue involved in these appeals stands concluded against the appellant by this Court in M/s AB Sugars Ltd s case 2015 (8) TMI 62 - PUNJAB & HARYANA HIGH COURT , where Analyzing the provisions of the Finance Act, the Supreme Court observed that it provides for levy of different types of commercial taxes which are generally leviable in the State of Bihar and that the object of the Sugarcane Act was to regulate the production, supply and distribution of sugarcane intended for use in sugar factories and for taxation of sugarcane and matters incidental thereto - The legislature has imposed the tax. The amounts collected may well be available to the legislature to be spent for the purposes mentioned therein and in the statement of objects and reasons. These are aspects which can be gone into only by the Supreme Court and not by this Court for accepting these submissions would in effect result in this Court holding that the judgment of the Supreme Court in Jagatjit Sugar Mill s case (1994 (10) TMI 259 - SUPREME COURT OF INDIA) is not good law. Appeal dismissed - decided against assessee.

Summary

Issues involved:
- Condonation of delay in payment of court fee under Section 149 of the Code of Civil Procedure
- Appeal under Section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Value Added Tax Tribunal
- Assessment of purchase tax liability on a sugar mill
- Availability of Input Tax Credit (ITC) and calculation of additional demand
- Interpretation of legal provisions and precedents regarding tax liability on purchase of sugarcane

Analysis:

1. Condonation of Delay in Payment of Court Fee:
An application was filed under Section 149 of the Code of Civil Procedure for condonation of delay in payment of the shortfall in court fee. The deficiency in court fee was rectified, leading to the application being allowed, and any delay in rectifying the deficiency was condoned.

2. Appeal under Punjab Value Added Tax Act:
The appellant, a sugar mill, filed an appeal under Section 68 of the Punjab Value Added Tax Act against the order of the Value Added Tax Tribunal. The Tribunal had upheld the assessment order of the Assessing Authority, which included levying purchase tax on the appellant. The appellant raised substantial questions of law regarding the legality of the orders and the denial of input tax credit.

3. Assessment of Purchase Tax Liability:
The Assessing Authority had assessed the purchase tax liability of the sugar mill based on the purchase price of sugarcane. The appellant's gross purchases, inter-state purchases, and tax-free goods purchases were considered in determining the tax liability. The Assessing Officer allowed only a portion of the Input Tax Credit claimed by the appellant, resulting in the creation of an additional demand.

4. Interpretation of Legal Provisions and Precedents:
The High Court examined the legal issues in light of previous judgments, particularly the M/s AB Sugars Ltd case. The Court considered the applicability of different enactments and legal provisions governing the tax liability on the purchase of sugarcane. The judgment highlighted the importance of statutory provisions and the constitutional framework in determining tax utilization and legislative authority.

5. Final Decision:
After reviewing the record and legal precedents, the High Court concluded that the issues raised in the present appeals had already been settled in the M/s AB Sugars Ltd case. Consequently, the appeals were dismissed in line with the decision in the aforementioned case, affirming the tax liability assessment on the sugar mill and the denial of input tax credit based on the applicable legal provisions and precedents.