2023 (4) TMI 255 - HC - VAT and Sales Tax

Levy of Entry Tax - stainless steel scrap was a ferrous metal and alloy - liable to be taxed at the rate of 2% under the Himachal Pradesh Tax on Entry of Goods into Local Area Act, 2010 - HELD THAT - The clear mandate of law, thus, is that this Court can exercise revisional jurisdiction under Section 48 of the Act only against the orders passed by Tax Tribunal either under Section 45(2) or Section 46(3) of the VAT Act. Such jurisdiction can be exercised if the person aggrieved applies to this Court within 90 days of the communication of the order and also if the involvement of any question of law arising out of erroneous decision of law or failure to decide a question of law is found to exist - The impugned order passed by the Tax Tribunal in rectification application filed by the petitioners under Section 47 of the VAT Act is not open to challenge by the petitioners before this Court under Section 48 of the VAT Act. Petitioners can also not be allowed to assail the order dated 20.6.2017, passed by the Tax Tribunal being clearly beyond the period of limitation, as prescribed under Section 48 of the Act. There is no denial to the fact that no distinction has been made in the Entry Tax Act between ferrous metal and alloys and non ferrous metal and alloys. The Tax Tribunal has rightly interpreted the terms of the Entry Tax Act as decipherable from its provision and entries in the Schedule appended thereto. The alloys have been included in Entry 19(b) of Schedule-II to the Entry Tax Act, which has been declared to be taxed at the rate of 0.25%. The Tax Tribunal had rightly interpreted the terms of Schedule-II appended to Entry Tax Act by holding that the tax statutes have to be read as it is without inferring anything extra. There are no erroneous decision of law or failure to decide a question of law in the impugned order dated 20.6.2017 passed by the Tax Tribunal, therefore, no question of law has arisen for consideration of this Court - the petition fails and the same is dismissed.

Summary

Issues:
The issues involved in the judgment are the challenge to the orders passed by the Tax Tribunal under the Himachal Pradesh Value Added Tax Act, 2005 (HP VAT Act) regarding the classification and taxation of stainless steel scrap under the Himachal Pradesh Tax on Entry of Goods into Local Area Act, 2010 (Entry Tax Act).

Classification of Stainless Steel Scrap:
The respondent was assessed by the revenue to pay an additional sum based on the classification of stainless steel scrap as a ferrous metal and alloy, taxable at 2% under the Entry Tax Act. The Tax Tribunal, in its order dated 20.6.2017, held the stainless steel scrap to be a non-ferrous alloy, subject to tax at the rate of 0.25% under Entry No. 9 of Schedule-II of the Entry Tax Act. Consequently, the demand raised against the respondent was quashed and set aside by the Tax Tribunal.

Rectification Application and Revision Jurisdiction:
The petitioners filed a rectification application under Section 47(1) of the VAT Act against the Tax Tribunal's order dated 20.6.2017, which was dismissed by the Tribunal. Subsequently, the petitioners sought revisional jurisdiction of the High Court under Section 48(1) of the VAT Act, challenging the order dated 29.7.2022 passed by the Tax Tribunal in the rectification application, as well as the principal order dated 20.6.2017. However, the Court clarified that revisional jurisdiction can only be invoked against orders passed under Section 45(2) or Section 46(3) of the VAT Act, and not against orders passed under Section 47.

Interpretation of Tax Statutes:
The Court observed that the Tax Tribunal's interpretation of the terms of the Entry Tax Act, specifically Schedule-II, was correct. The inclusion of alloys in Entry 19(b) of Schedule-II, taxed at 0.25%, was deemed appropriate by the Tribunal. The Court emphasized that tax statutes must be interpreted as they are, without adding any extraneous elements. As no erroneous decision of law or failure to decide a question of law was found in the Tax Tribunal's order dated 20.6.2017, the Court concluded that no question of law merited consideration. Consequently, the petition was dismissed.