2019 (3) TMI 707 - HC - VAT and Sales Tax

Whether the point of taxation can be shifted to the respondent/assessee? - Held that - This aspect of the matter was considered by the First Appellate Authority by thoroughly examining the factual position. This factual finding was affirmed by the Tribunal. The Tribunal noted that the respondent/assessee has given the name of the selling dealer of the import license and import licence cannot be issued to any party and the authority who is issuing the import licence does so only after due verification and the address of the selling dealer has been furnished by the respondent/assessee and only the selling dealer has to be taxed as a first seller and the point of taxation cannot be shifted to the second seller namely respondent/assessee - there is no question of law arising for consideration in this Tax case - the Tax Case is dismissed.

Issues involved:
1. Challenge to the order of the Tamil Nadu Sales Tax Appellate Tribunal.
2. Substantial questions of law raised by the Revenue.
3. Assessment of taxable turnover for the assessment year 1994-95.
4. Dispute over the taxability of REP licenses.
5. Appeal to the Appellate Assistant Commissioner.
6. Interpretation of Section 7A of the Tamil Nadu General Sales Tax Act.
7. Point of taxation in the case of REP licenses.
8. Legal position post the Supreme Court decision in Vikas Sales Corporation case.

Analysis:
1. The Tax Case was filed by the Revenue challenging the order of the Tamil Nadu Sales Tax Appellate Tribunal. The primary contention raised was that the dealer did not disclose the taxable turnover of REP license in the monthly returns for the year 1994-95, rendering the returns incorrect and incomplete despite the availability of transactions in the books of accounts.

2. The Revenue argued that the Tribunal should have applied the legal precedent established in previous cases regarding the taxability of REP licenses and the imposition of penalties. The Tribunal's decision was questioned based on the failure to consider these precedents.

3. The assessment for the year 1994-95 involved a dispute over the taxable turnover, with the Assessing Officer identifying discrepancies in the expenditure incurred by the assessee towards the purchase of license and quota premiums. This led to a notice being issued to the assessee for non-disclosure of tax on certain turnovers.

4. The Appellate Assistant Commissioner allowed the assessee's appeal, stating that the Assessing Officer failed to establish a case of sale of licenses/quota by the assessee. The Appellate Authority concluded that the provisions of Section 7A of the Act were not applicable in this case.

5. The Tribunal upheld the decision of the Appellate Authority, emphasizing that the point of taxation cannot be shifted to the second seller (assessee) without proper verification. The Tribunal rejected the Revenue's appeal, noting the lack of evidence regarding the bonafide of the dealer.

6. The legal position on the taxability of transactions was referenced to a Supreme Court decision in a separate case, highlighting the need to examine the facts of the case to determine the point of taxation. The Tribunal's decision was based on factual findings regarding the selling dealer of the import license and the authority issuing the license.

7. Ultimately, the High Court dismissed the Tax Case, stating that there was no question of law for consideration. The decision was based on the factual examination conducted by the Appellate Authority and affirmed by the Tribunal, leading to the rejection of the Revenue's contentions.

This comprehensive analysis covers the various legal issues and arguments presented in the judgment, providing a detailed overview of the case and its implications.

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