9911796707
TMI Blog2011 (3) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 16-3-2011 - MUKUNDAKAM SHARMA DR. AND ANIL R. DAVE JJ. R. Nedumaran, Advocate, for the appellants. Shyam Diwan, Senior Advocate, (B. Raghunath and Vijay Kumar, Advocates, with him) for the respondent. -------------------------------------------------- ORDER Delay condoned. Leave granted. This appeal arises out of the judgment and order passed by the Division Bench of the Madras High Court Reported as Commissioner of Commercial Taxes v. Chitrahar Traders [2010] 30 VST 165 (Mad). dismissing the writ appeal filed by the appellants herein whereby the Division Bench affirmed the judgment and order passed by the learned single judge Reported as Chitrahar Traders v. Commissioner of Commercial Taxes [2008] 14 VST 439 (Mad). allowing the writ petition filed by the respondent herein. Since the facts leading to the filing of the aforesaid writ petition by the respondent are not disputed, we are not required to set out herein the entire factual position at length. However, for the purpose of deciding the present appeal, whatever facts are required to be dealt with and stated are being stated hereinafter. The N.L.C., namely, Neyveli Lignite Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s accepted on as-is-where-is basis for purchase of B and C plant one lot and machinery as a whole lot as per the terms and conditions of the e-auction. In the said document it was also indicated that sales tax would be charged at 12 per cent with surcharge at five per cent. It was also made clear therein that the sales tax which is being levied would be provisional one and subject to any change. It was also specifically indicated therein that the material value along with taxes and duties including income-tax and educational cess on income-tax would be paid on total value of the scrap. However, a dispute arose thereafter as to whether sales tax is leviable and payable on the said articles at four per cent as the plant and machinery was sought to be sold as scrap or whether the respondent is liable to pay sales tax at 12 per cent with five per cent surcharge also. In view of the aforesaid dispute which arose, the respondent wrote a letter dated April 7, 2005 to the sales tax authorities mentioning therein about the details and manner of the transaction that had taken place regarding purchase of the scrap by the respondent pursuant to the e-auction conducted by MSTC. In the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is-where-is basis, and sales tax and surcharge was mentioned at 12 per cent and five per cent, respectively. There is an alleged reference to more than 100 delivery notes-cum- gate passes. This issue was never discussed and the preponderance of materials is entirely to the contrary. It is respectfully submitted that initial delivery notes of the despatch section issued from May 5, 2005 to May 19, 2005 bearing up to serial Nos. 52, the description was mechanically states as B and C plant as-is-where-is with 12 per cent sales tax (based on the sale order). The buyers were all along contesting the rate of tax since the goods under sale was only condemned machinery disposed as scrap. Therefore, from delivery note Nos. 53 dated May 20, 2005, apart from the pre-printed words B and C plant and machinery , it was, inter alia, specifically remarked by hand iron scrap . It was also mentioned that the goods were delivered in lots even from delivery note No. 1 dated May 5, 2005 with corresponding loads in the lorry. The finding that the sale was a plant and machinery as if there was intention to buy and sell plant and machinery is perverse and overlooks the dispute with regard to 12 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent with five per cent surcharge. Counsel appearing for the appellants also relies upon the decision of this court titled Rainbow Steels Ltd. v. Commissioner of Sales Tax, Uttar Pradesh, Lucknow reported in [1981] 47 STC 298 (SC). Counsel appearing for the respondent, however, drew our attention to the various documents on record and on the basis thereof submitted before us that the documents on record clearly indicate that what was sought to be sold was scrap and not a functional plant and machinery and therefore there should be no interference with the judgment and order passed by the Madras High Court. In the light of the submissions of the counsel appearing for the parties, we have ourselves scrutinized the records. We have already extracted the relevant portion of the agreement between Neyveli Lignite Corporation and MSTC. The said agreement clearly proves and establishes that what was sought to be sold was iron and steel scrap and rejected/condemned and obsolete secondary arisings, etc. The said position is also reiterated in clause 4.1 which also indicates that what was being sold through the e-auction was scraps and secondary arisings. The acceptance letter on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the judgment relied upon by the counsel appearing for the appellants. A perusal of the aforesaid decision on which reliance is placed would indicate that the factual situation in which the said judgment was rendered was completely different from the facts of the present case. In the said case, the decision was rendered in the context of sale of an old thermal power plant which was in perfect working and running condition. The same, however, is not the case here. Here is a case of sale of a plant and machinery which were condemned. It is also established from the contemporaneous documents that the plant and machinery had outlived its utility and had no value except as scrap. Therefore, the aforesaid decision is clearly distinguishable on facts and has no application to the facts and circumstances of the present case. The respondent has paid sales tax and surcharge at the higher rate of 12 per cent and five per cent while taking the goods out of the factory premises. In view of the present order passed today, the respondent becomes entitled for refund of overpaid amount which shall be assessed by the Department within a period of three months from today and the amount found due a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
