2019 (9) TMI 475 - HC - VAT and Sales Tax

Validity of assessment order - branch transfers - inter-state transfer or not - Section 29 (2) of Punjab Value Added Tax Act, 2005/Central Sales Tax Act, 1956 - HELD THAT - Concededly, against said orders dated 20.11.2017 (Annexure-P-7 and Annexure-P-8), appeal under Section 18A of the Central Sales Tax Act, 1956 was maintainable before the Punjab Value Added Tax Tribunal - Admittedly, the appeal stood filed before the Tribunal. However, the petitioner-Company was constrained to file present writ petition as Tribunal was not functioning at the relevant time due to absence of the Chairperson. The petitioner Company would be free to pursue its appeal already filed before Tribunal and parallel proceedings by way of present writ petition would thus not be maintainable.

Summary

Issues:
1. Assessment order raising tax demand based on branch transfers being considered as Inter State Sale.
2. Appeal under Section 18A of the Central Sales Tax Act, 1956 before the Tribunal.
3. Filing of writ petition due to Tribunal's non-functioning.
4. Resolution of the matter after the Tribunal became functional.

Analysis:

1. The petitioner, a Private Limited Company engaged in manufacturing drugs and medicines, received an assessment order from the Excise and Taxation Office-cum-Designated Officer, Roopnagar, under Section 29(2) of the Punjab Value Added Tax Act, 2005/Central Sales Tax Act, 1956 for the Assessment Year 2010-11. The order raised a tax demand notice to the tune of ?14,18,37,295 by treating branch transfers as Inter State Sale.

2. It was acknowledged that an appeal under Section 18A of the Central Sales Tax Act, 1956 was maintainable before the Punjab Value Added Tax Tribunal. The petitioner had indeed filed an appeal before the Tribunal. However, due to the Tribunal's non-functioning at the time because of the absence of the Chairperson, the petitioner was compelled to file a writ petition.

3. The petitioner, in response to the non-functioning of the Tribunal, filed the present writ petition. Subsequently, after notice, the State of Punjab submitted a reply. During the hearing, it was agreed by the learned counsel for both parties that the Chairperson of the Tribunal had been appointed, and the Tribunal was now fully operational.

4. Consequently, with the Tribunal being functional and the petitioner being able to pursue its appeal already filed before the Tribunal, the parallel proceedings through the writ petition were deemed unnecessary. As a result, the High Court disposed of the writ petition as infructuous, along with any pending applications. The resolution of the matter was achieved with the Tribunal's functionality, allowing the petitioner to continue its appeal process through the appropriate legal channel.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the events leading to the resolution of the matter at hand.