9911796707
TMI Blog2014 (7) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ption was available to sugar falling under entry 42 only when levy and collection of additional duties of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not exempted on account of any exemption or drawback granted under that Act. Rate of duty had to be provided for sugar not falling in entry 42. Schedule-IIA pertains to goods, the sale or purchase of which is subject to sales tax or purchase tax and rates of tax. - Parallely, under exemption notification issued under section 49(2) of the GST Act, by virtue of entry 133, sugar covered under entry 3E in schedule-II part A of the GST Act was exempted from payment of whole of the tax. It may be noted that entry 3E of schedule-II part A referred to Sugar as defined in item no. 1 of the first schedule of Central Excises and Salt Act, 1944. Thus the definition of sugar for the purpose of entry 42 to Schedule I and entry 3E to schedule-II part A remained the same. By virtue of these entries, sugar falling under entry 42 would be exempt from payment of tax, if the condition contained in second column of entry was satisfied. If such condition was not satisfied, it would fall under entry 3E and wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the State Government challenging the judgement of the Gujarat Value Added Tax Tribunal ( the tribunal for short) dated 4.8.2009. 2. Since issues are repetitive in nature and are likely to arise in many similar cases, we have heard learned counsel for the parties at length and we propose to dispose of the petition finally by this judgement. 3. Briefly stated, the facts are as under : 3.1. The respondent, is a dealer registered under the Sales Tax Act. The respondent deals mainly in patasa, harada, sakaria and alchidana. In the returns for years 2002-2003 and 2003-2004, the assessee had claimed exemption from payment of sales tax under the Gujarat Sales Tax Act on the sale and purchase of such items namely, patasa, harada, sakaria and alchidana. His returns were assessed by the Commercial Tax Inspector. He passed orders of assessment on 18.2.2005 accepting the returns of the assessee making no additions. 3.2. The Deputy Commissioner of Commercial Tax was prima facie of the opinion that the respondent was not entitled to exemption. He therefore, after issuing notices passed two separate orders both dated 1.1.2009 levying tax on such transactions under entry no.16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items did not fall under entry 86, they would be covered under entry 8. By virtue of exemption notifications issued by the Government from time to time, the sales and purchases thereof would be fully exempted from payment of any sales tax. 3.4. The tribunal accepted the first two contentions of the petitioner. The tribunal held that in the notice in form45, the Deputy Commissioner had referred to all the items, but in the notice in form-49, he confined his case only to sale of patasa. He therefore, could not have passed the final order levying tax on all items. The tribunal held that by virtue of decision of Supreme Court in case of Sakarwala Brothers (supra), the products in question were sugar for the purpose of entry 86 and since the additional duty of excise was not exempted, the goods were covered under such entry. In light of such conclusion, the tribunal did not examine the alternative contention of the assessee that if the items did not fall under entry 86, they would be covered under entry 8 and by virtue of exemption notifications issued by the Government from time to time, no tax was leviable in any case. It is this judgement of the tribunal which the State has challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the expanded meaning given by the legislature. He pointed out that these items were not exempted from payment of additional duty of excise. They would therefore fall under entry 86. 3) In any case, the items would fall under entry 8 of schedule-IIA which is a successor entry of entry 3E of the same schedule. He took us through the legislative history and changes made from time to time to contend that at all points of time, the intention was clear namely, not to levy sales tax on sale and purchase of sugar including patasa, harada, sakaria and alchidana. 7. Section 67 of the GST Act pertains to revision. Clause(a) of sub-section (1) of section 67 provides that subject to the provisions of section 66 and any rules which may be made on this behalf, the Commissioner on his own motion within three years or on application made to him within one year from the date of any order passed by officer appointed under section 27, may call for and examine the record of any such order and pass such order as he thinks fit and proper within twelve months from the date of service of notice for revision. Sub-section (1) of section 67 thus empowers the Commissioner under the circumstances menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... likely to affect adversely to any person who is a party to such proceedings, he shall serve on such person a notice in form-49 and also grant him a reasonable opportunity of being heard. 10. It thus becomes clear that notice under rule 60 in form-45 is not a notice of Commissioner or his delegatee to take an order under revision. Such notice is to be issued in terms of rule 67 in form-49. It is meant to give person likely to be adversely affected by the appellate or revisional order, a reasonable opportunity of being heard. 11. Under the circumstances any mention of the items in form-45 would have no relevance for exercising revisional power by the Commissioner under rule 67(1) of the GST Act. Whether any reference was made to such items in the notice under form-45, the power of the Commissioner can be exercised under section 67(1) only if a notice has been given of reasonable opportunity of being heard to an assessee before the order is revised and such notice is prescribed in form-49. In the present case, admittedly in the notice under form-49 mention was made by the Commissioner only for taxing patasa and no other items. His final order therefore, could not have travelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42 Sugar as defined in Item No.1 of the First Schedule to the Central Excises and Salt Act, 1944. 15. It can thus be seen that as per entry 42, sugar falling in the said category would be exempt from payment of sales tax without any condition. The term 'sugar' was defined in the Central Excises and Salt Act, 1944 as under : 'Sugar' means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105 C, would be more than ninety. 16. Question whether items such as patasa, harada, sakaria and alchidana, would fall within the term 'sugar' for the purpose of entry 47 of schedule-A of the Bombay Sales Tax Act, 1959 came up for consideration before this Court. It is an undisputed position that the definition of term 'sugar' for the said entry was identical to one adopted under entry 42 of schedule-I to the GST Act. A division bench of this Court on a reference made by the Sales Tax Tribunal held that patasa, harda and alchidana were products of sugar and would be covered under the definition adopted for the purpose of said en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. Thus, after 10.04.1981, exemption was available to sugar falling under entry 42 only when levy and collection of additional duties of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not exempted on account of any exemption or drawback granted under that Act. Rate of duty had to be provided for sugar not falling in entry 42. Schedule-IIA pertains to goods, the sale or purchase of which is subject to sales tax or purchase tax and rates of tax. Simultaneously, therefore, entry 3E was inserted in Schedule IIA as under: Sr. No. Description of goods Rate of Sales Tax Rate of Purchase Tax 3E Sugar as defined in Item No.1 of the First Schedule to the Central Excises and Salt Act, 1944 to which entry 42 in Schedule I does not apply Four paise in the rupee Four paise in the rupee 19. Parallely, under exemption notification issued under section 49(2) of the GST Act, by virtue of entry 133, sugar covered under entry 3E in schedule-II part A of the GST Act was exempted from paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequential to the amendments made in the Central Excises and Salt Act, 1944 and introduction of newly enacted the Central Excise Tariff Act, 1985. 23. In essence the definition of term 'sugar' did not undergo any change. For the purposes of subheading Nos. 1701.10, 1701.20, 1701.31 and 1701.39, sugar means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105 C would be more than 90. Thus verbatim definition of term 'sugar' remained the same for these entries as contained in item no.1 in the first schedule to the Central Excises and Salt Act,1944. In effect for purposes, thus entry 42 underwent no change despite amendments made therein which are purely consequential in nature. Simultaneously entry 3E to schedule-IIA was also changed and read as under: Sr. No. Description of goods Rate of Sales Tax Rate of Purchase Tax 3E Sugar to which entry 42 in Schedule I does not apply Four paise in the rupee Four paise in the rupee 24. The significant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from all places out of India and sold within the State of Gujarat . Thus the tax structure remained the same. Entry 42 assumed no.86. Entry 3E was renumbered as entry 8. Exemption entry under entry 133 continued to grant exemption but excluded sugar imported from any place out of India and sold within the State. 27. By virtue of such provisions, contained in the schedules to the GST Act, it clearly emerges that case of the respondent is covered in entry 86 of schedule-I of GST Act. The fact that by virtue of decision in case of Sakarwala Brothers (supra), such items are considered as sugar for the purpose of sugar covered under sub-heading Nos. 1701.10, 1701.20, 1701.31 and 1701.39 of the schedule to the Central Excise Tariff Act,1985, there is no dispute possible in fact, not seriously raised. Such subheadings defined the term 'sugar' in the same manner as it was done under item no.1 of the First Schedule to the Central Excises and Salt Act, 1944. It was in this context interpreting the term 'sugar' defined in expansive manner, it was held that patasa, harada, sakaria and alchidana which contained more than 90% sucrose are sugar for the purpose of the said en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court rendered its decision. Only condition of entry 86 is that additional levy and collection of additional duty of excise should not be exempt. There is no additional onus cast on the dealer to establish that same was actually paid. 29. This discussion would be sufficient to dismiss the petition. However, when an alternative contention has been raised by the respondent and argued by both the sides, we consider it proper to entertain the same also. We may recall that the alternative contention of the assessee was that even if the goods were not covered under entry 86, same would fall under entry 8 of schedule-IIA to the GST Act and would be exempt from payment of tax by virtue of exemption notifications issued form time to time. The fact that sugar falling under entry 8, is exempt from payment of tax by virtue of exemption notifications is not in dispute. What the petitioner however, disputes is that the item in question would not fall under entry 8 since the term 'sugar' must be understood in common parlance term without giving it any artificial or expansive meaning, which is adopted for the purpose of entry 86. To our mind such contention is misconceived. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 42 in schedule-I did not apply and the term 'sugar' had a common meaning for both entry 42 as well as entry 3E. Very insertion and existence of entry 3E was to specify rate of tax for sugar to which entry 42 did not apply. In other words sugar which was defined in entry 42 but was not included in it because the condition for inclusion was not satisfied would be taxed as per entry 3E of schedule-IIA. 31. When seen in this light, we cannot accept the contention that for the purpose of entry 3E, we must discard definition of term 'sugar' as referred to in Central Excise Tariff Act, 1985 and must treat items such as patasa, harada, sakaria and alchidana as different from sugar as understood in common parlance. 32. We may notice that in a circular dated 3.4.1989 while explaining the changes made after 1.4.1989 in the GST Act, it was explained that in schedule-I in entry 37, 40, 42, 43 and 44, if additional duty of excise is paid, sales tax is not to be levied. The definition of these terms were adopted from Central Excises and Salt Act, 1944. Now with the introduction of Central Excise Tariff Act,1985 in place of Central Excises and Salt Act, 1944, definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
