2023 (8) TMI 531 - HC - VAT and Sales Tax

Levy of entry tax on granites - tax levied on the premise that the goods viz., granites which were purchased from dealers across the State were exported as such or sold to exporters - non-application of mind - violation of principles of natural justice - HELD THAT - This Court finds that there is no finding in the assessment order with regard to the above objections which relates to the jurisdiction to levy tax. It is rudimentary that when objections are raised, the same ought to be dealt with by the Assessing Authority. Non-application of mind to the objection would vitiate the proceedings. The learned counsel for the Respondent would submit that they would redo the assessment. This Court is inclined to set aside the impugned order and remit the matter back to the Assessing Authority to redo the assessment. The petitioner is permitted to file fresh objections within a period of 4 weeks from the date of receipt of a copy of this order - It is also open to the petitioner to place reliance on the assessment completed under CST Act in respect of the above transactions wherein the transactions in issue is stated to be treated as export sales in terms of Sections 5(1) and 5(3) of the CST Act. Petition disposed off.

Summary

Issues Involved:
The judgment addresses the challenge against the levy of entry tax on granites exported or sold to exporters, citing violation of the Central Sales Tax Act, 1956 and constitutional provisions.

Comprehensive Details:

Challenge Against Entry Tax Levy:
The petitioner contested the imposition of entry tax on granites exported or sold to exporters, arguing that the tax is impermissible on goods brought into a local area for export or sale to exporters. The petitioner relied on the judgment of the Supreme Court in Tata Engineering & Locomotive Company Ltd. v. Municipal Corporation of the City of Thane, emphasizing that octroi is not leviable if goods are brought into the area for export purposes. However, these objections were not considered in the impugned order.

Lack of Consideration of Objections:
The Court noted the absence of findings in the assessment order regarding the objections raised, which pertain to the jurisdiction to levy tax. It highlighted that failure to address objections would vitiate the proceedings and emphasized the necessity for the Assessing Authority to deal with objections raised by parties.

Remittal of the Matter:
After hearing both sides and reviewing the material on record, the Court decided to set aside the impugned order and remit the matter back to the Assessing Authority for reassessment. The petitioner was granted the opportunity to file fresh objections within four weeks and instructed to rely on the Supreme Court judgment and the CST Act assessment. The Assessing Authority was directed to pass a speaking order addressing the objections within six weeks.

Disposition of the Writ Petition:
The Court disposed of the writ petition with the aforementioned directions, without imposing any costs. The connected writ miscellaneous petition was closed accordingly.