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TMI Blog2022 (5) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... f this writ petition C-Forms have been already furnished to the petitioner. The petitioner is at liberty to submit such C-Forms before the assessing authority in so far as high rate of tax demanded from the petitioner for not having been submitted the C-form earlier. The Hon ble Supreme Court in a case of HOTEL ASHOKA (INDIAN TOURISM DEVELOPMENT CORPN. LTD.) VERSUS ACCT AND ANR. [ 2012 (2) TMI 62 - SUPREME COURT] has held that, no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the territory of India. If any transaction of sale or purchase takes place when the goods are imported in India or they are exported from India, no State can impose any tax thereon. The Supreme Court considered the situation whether the goods brought from foreign countries by the assessee had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. It is held by the Supreme Court that, when the goods are kept in bonded warehous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding on the ground that tax demanded from the petitioner by the assessing officer is in excess of jurisdiction, without authority of law and unsustainable as the transaction is inter state (within Maharashtra) - Though an alternate remedy against the impugned assessment order is available to the petitioner since the impugned order is in excess of jurisdiction, bar to the maintainability would not apply to the facts of this case. The impugned assessment order thereby imposing a levy of fresh tax at this stage on the same transaction which has been already paid by M/s ASK Agencies is contrary to and in the teeth of Articles 265, 286 and 300A of the Constitution of India and thus deserves to be quashed and set aside on this ground also - Petition allowed. - WRIT PETITION (LODGING ) NO. 10092 OF 2020 - - - Dated:- 29-4-2022 - R. D. DHANUKA S. M. MODAK, JJ. Mr. Rohan P. Shah with Mr. Srisabari Rajan, Mr. Cyrus Jal, Mr. Pravin Musalia, Mr. Mohd. Anajwala and Ms. Alya Khan i/b Vashi Vashi for the Petitioners. Ms. Jyoti Chavan, AGP for the State Respondent Nos.1 to 3. Mr. Vikram Naik i/b M/s. VOX Law for the Respondent No.4. Mr. Anupam Dighe with Ms. Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said sales.. The Chartered Accountant issued a certificate confirming payment of MVAT by M/s ASK Agencies with respect to the goods in question. 6. The said M/s ASK Agencies issued an undertaking to the Deputy Commissioner of Sales Tax in respect of the purchase made from the petitioner from the customs bonded warehouse to the effect that the tax paid shall be treated as due discharge and tax liability of the petitioner on the subject products (if any). 7. It is the case of the petitioner that during the relevant period, the petitioner effected the sales to Damania Enterprises at Rs. 8,35,87,125/-. It is the case of the petitioner that in the VAT returns of the said Damania Enterprises for the assessment year 2015-16 and 2016-17, provided by the said Tax Consultants, the goods purchased from the petitioner had been shown to have resold and the tax had been paid by Damania Enterprises. 8. It is the case of the petitioner that the representatives of the petitioner visited the offices of Daman VAT authorities to examine the tax payments made by Damania Enterprises in respect of the subject transactions. The concerned authorities however, refused to provide any details on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent no.4 filed the reply on 22nd October, 2020. 12. Mr. Rohan Shah, learned counsel for the petitioner invited our attention to various documents annexed to the petition and submits that the petitioner has impugned the assessment order for the financial year 2015-16 only to the extent that it imposes (a) tax upon the petitioner in respect of the Bond to Bond sales on which VAT has been already paid on first point of sale by another entity and (b) their right of tax on the petitioner despite the tax being paid by the Purchasing Dealer (Damania Enterprises) in the Designation State (Daman) on account of non-issuance of C Forms. He submits that the said relief is not pressed in view of the C Form having been already issued. Learned counsel for Daman Vat Authority made a statement before this Court on 17th September, 2020 that Damania Enterprises has paid the tax in question on re-sale of goods. C forms were subsequently issued by Daman Vat Authorities and upon directions of this Court, C forms were served upon the respondents. 13. In so far as the tax demanded from the petitioner in respect of Bond to Bond sales is concerned, it is submitted by the learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2020 respectively. He submits that the respondent no.2 has disallowed the claim of the petitioner for sale in the course of import in light of these subsequent judgments of this Hon ble Court and the Hon ble Supreme Court in case of Commissioner of Sales Tax vs. M/s. Radhasons International (supra). 17. It is submitted by the learned counsel that the levy of tax by the respondent no.2 upon the petitioner is ultra vires section 3 of MVAT Act read with Notification Vat- 1511-C.R.-57/Taxation-1 dated 30th April, 2011 on the ground that the levy could be only at the first point of sale . 18. It is submitted by the learned counsel that as per the scheme of taxation prescribed under sections 3 and 41 of the MVAT Act read with notification No. Vat- 1511-C.R.-57/Taxation-1 dated 30th April, in relation to sales of liquor which are purchased from the registered dealers on or after 1st May, 1011, tax was required to be paid only at the first point of sale . He relied upon Exhibit D to the said notification issued under section 41(5) of the MVAT Act, 2002. 19. Learned counsel for the petitioner also placed reliance on Trade Circular 4T of 2013 dated 26th June, 2013 issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw subsequently declared by this Court or the Hon ble Supreme Court in case of Grandsons International (supra) or Nirmal Kumar Parsan (supra). The levy on the petitioner amounts to double taxation which is impermissible as per the law settled by the Hon ble Supreme Court in the case of Union of India vs. Tara Iron and Steel Co. Ltd. 1977 (1) ELT J61 (SC) and the judgment in case of Bravura Distributors (P) Ltd. vs. Collector of Customs CC, New Delhi 2004 (170) ELT 513 (SC). 23. It is submitted by the learned counsel that in the impugned order, the respondent no. 2 had taken the notice of the fact that the VAT had been already paid on the goods in question by M/s ASK Agencies. The fact of the payment of such tax is not refuted by the respondents. M/s ASK Agencies has already executed an undertaking confirming payment of VAT and also requested the respondents that the such tax payment would be considered as due discharge of the tax liability of the petitioner on the goods in question. He submits that adjudication of tax liability on the petitioner by the respondents to recover tax from the petitioner is contrary to and in the teeth of Articles 265 and 300-A of the Constitution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India Section 5 of Central Sales Tax Act, 1956 5. When is a sale or purchase of goods said to take place in the course of import or export. (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwithstanding anything contained in sub-section (1) the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Government Notification, Finance Department No. VAT-1511/C.R.-57/Taxation-1, dated the 30th April 2011 as follows, namely:- In Schedule I, appended to the said notification, in entries at serial No. 1, 2, 4 and 5, in column (4), for the letters, sign and figures MRP x 30/130 wherever they occur, the letters, sign and figures MRP x 35/135 shall be substituted. Section 23 (2) of the MVAT Act Where the return in respect of any period is filed by a registered dealer by the prescribed date and if the Commissioner considers it necessary or expedient to ensure that return is correct and complete] and he thinks it necessary to require the presence of the dealer or the production of further documents, he shall serve on such dealer, a notice requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced all documents on which such dealer relies in support of his return or to produce such documents or evidence as is specified in the notice . Notice in such cases is issued in Form 301 calling the dealer to attend to produce or cause to be produced evidence i.e. books of account other documents/evidence in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other law for the time being in force. Section 15 of the Customs Act Date for determination of rate of duty and tariff valuation of imported goods. - (1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, (a) in the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section; (c) in the case of any other goods, on the date of payment of duty: Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be. (2) The provisions of this section shall not apply to baggage and goods imported by post. 28. Ms. Chavan, the learned A. G. P. for the respondents on the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be eligible to get these goods at concessional rate. She submits that, no such C Form has been produced. If, however, the petitioner produces the declaration in C Form even before the Appellate Authorities, the same can be considered even at this stage. 31. It is submitted by the learned A. G. P. that, the respondents are not assessing the said M/s ASK Agencies and the said assessment order is even otherwise not the subject matter of this writ petition. In this writ petition, the petitioner has impugned the assessment order passed by the respondents in its own case which was passed by the assessing officer U/Sec. 23 of the MVAT Act. Notice was issued by the assessing officer to the petitioner before passing assessment order of the petitioner for the assessment year 2015-2016. The respondents have complied with all the provisions of law before passing the impugned assessment order and, thus no interference of this Court is warranted. 32. The learned A. G. P. invited our attention to the judgment dated 21st January, 2020 of the Hon ble Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others in Civil Appeal No. 7863 of 2009 and the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the said Act, to this extent the order being erroneous, the assessing officer is considering to pass an order of rectification. 37. The learned A. G. P. makes an attempt to distinguish the judgment of the Hon ble Supreme Court in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) on the ground that the Supreme Court had considered the issue in respect of the sale of liquor in a duty free shop. She submits that, the petitioner cannot rely upon assessment order passed by the assessing officer in case of M/s ASK Agencies. 38. Mr. Rohan Shah, the learned counsel for the petitioner in his rejoinder argument submits that, the respondents cannot be allowed to pass any order of rectification at this stage. He invited our attention to the impugned assessment order and would submit that the assessing officer has also proceeded on the premise that the impugned transaction which is subject matter of said assessment order was inter-state sale and had levied tax accordingly under the provisions of the Central Sales Tax Act. He submits that, the learned A. G. P. has however, advanced arguments befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner has already filed separate writ petition impugning said assessment order passed by the assessing officer against the petitioner for the assessment year 2016-2017. 43. The learned counsel for the petitioner relied upon Section 3(2) of the MVAT Act and would submit that the levy under the said provision qua goods is in the hands of the dealer. U/Sec. 41(5) of the MVAT Act levy is only licensor. The levy of tax on the transaction has been already extinguished in view of the payment thereof already made by M/s ASK Agencies. He submits that the said transaction between the petitioner and M/s ASK Agencies was second point of sale. 44. It is submitted by the learned counsel for the petitioner that, the assessing officer in case of M/s ASK Agencies has accepted the stand of the said Agencies in its assessment order and has accepted the said assessee as an importer of the said goods transacted which were the subject matter of assessment order of the petitioner. He submits that, the tax on the first point sale was already discharged by M/s ASK Agencies. There was no question of further tax payable by the petitioner for the same transaction. He tendered copy of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) delivered on 30th January, 2013 did not deal with identical facts and it is clearly distinguishable in the facts of this case. The Supreme Court did not consider issue of single point levy and discharge of liability already paid by the importer. He submits that, once the said M/s ASK Agencies has been already taxed by respondents, the respondents have no power to tax the petitioner for the same goods which amounts to double taxation. Reasons and Conclusions : 48. The questions that arise for consideration of this Court are as under : (i) Whether levy imposed by respondent Nos. 1, 2 and 3 is ultra virus Section 3 of the MVAT Act read with notification No. VAT/1511/C.R.-57/Taxation-1 dated 30th April, 2011 ? (ii) Whether transaction between the petitioner and M/s ASK Agencies and others were governed by the provisions applicable on the date of transaction and also the principles of law laid down by the Hon ble Supreme Court in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another reported in 2012 (276) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) to treat as a sale in the course of import would apply and tax was rightly not paid by the petitioner accordingly. Under notification dated 30th April, 2011 issued U/Sec. 41(5) of the MVAT Act, when the said goods were subsequently sold by M/s ASK Agencies to M/s Damania Enterprises, VAT was duly discharged at the applicable rate on the full value, first point of sale . The certificate relied by the petitioner and annexed at Exhibit D to the petition acknowledges the fact that the VAT had been paid by M/s ASK Agencies in respect of goods in question. 51. M/s ASK Agencies has submitted an undertaking to the Deputy Commissioner of Sales Tax in respect of purchase made from the petitioner from the customs bonded warehouses in the sum of Rs. 15,45,23,314/- for the financial year 2015-2016. The said M/s ASK Agencies confirmed that as per their VAT return filed, they had not charged any VAT/CST by the petitioner. M/s ASK Agencies had paid MVAT to the tune of Rs. 13,95,21,605/- in the financial year 2015-2016 and Rs. 1,71,82,455/- in the financial year 2016-2017 on subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner and the respondent No. 4 as well as the return filed by the respondent No. 4 are accepted by the respondent Nos. 1 to 3. 55. The respondent No. 5 i.e. Damania Enterprises has also filed an affidavit in this petition on 15th October, 2020. It is stated in the said affidavit that, during the financial year 20152016, it had purchased liquor worth Rs. 8,35,87,125/- from the petitioner. Since it was a inter-state sale from the petitioner in Maharashtra to the respondent No. 5 in Daman made for the purpose of resale by the respondent No. 5 under the provisions of Section 8 of the CST Act and lower rate of tax was paid by the petitioner in the origin state i.e. Maharashtra. The respondent No. 5 upon further sale of the goods purchased form the petitioner has paid full tax in Daman. It is reflected in the VAT Return filed by the respondent No. 5 during the relevant period. 56. The respondent No. 5 confirmed that it had purchased the goods from the petitioner during the relevant period for further sale in Daman and not for home consumption. The respondent No. 5 further confirmed that the respondent No. 5 has paid the entire tax, as payable, on the resale made by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) delivered on 21st January, 2020, the Supreme Court considered the question, Whether the subject sales (of goods imported from foreign country and after unloading the same on the land mass of the State of West Bengal, kept in the bonded warehouse without payment of customs duty) to foreign bound ships as ship stores can be regarded as sale within the territory of the State and amenable to sales tax under the West Bengal Sales Tax Act, 1954 or the West Bengal Sales Tax Act, 1994. 60. In the facts of that case, the assessee after importing foreign goods cigarettes had stored the same in the customs bonded warehouse within the land mass of the State of West Bengal and some of those articles were sold to the Master of a foreign going ship as ship stores, without payment of customs duty. Those goods were escorted to the stated ship under the supervision of the officials of the Customs authority. The Supreme Court held that the sale to be in the course of import, must be a sale of goods and as a consequence of such sale, the goods must actually be imported within the territory of India and further, the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty free shop situated at the international airport of Bengaluru. The further admitted fact was that the goods were kept in bonded warehouse by execution of bond. When the goods were kept in bonded warehouse, it cannot be said that, they had crossed customs frontiers. 63. The assessing officer in the impugned assessment has wrongly placed reliance on the judgment of the Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) while levying the Central Sales Tax Act to the petitioner. We shall now consider the issue whether the respondent Nos. 1 to 3 could have levied the Central Sales Tax Act to the petitioner relying upon the judgment of the Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) taking a view contrary to the view taken by the Supreme Court earlier in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra). The learned counsel for the revenue could not dispute that as per the scheme of taxation prescribed U/Sec. 3 and 41 of the MVAT Act read with notification No. VAT/1511/C.R.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The Supreme Court in a case of Ram Bai Vs. Commissioner of Income Tax (supra) considered a situation where the revenue had pressed in service the subsequent judgment delivered much after reopening of the assessment taking a view different than the view taken by the Full Bench of Andhra Pradesh High Court and was holding the field. 67. The Supreme Court held that Income Tax Officer could not have applied the tax different than held by the said Full Bench for determination whether land in that case was an agricultural land. In our view, the principles laid down by the Hon ble Supreme Court in the said judgment would apply in the facts of this case. Merely because the Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) and this Court in a case of Commissioner of Sales Tax Maharashtra State Vs. M/s Radhasons International (supra) took different view much later, on the basis of such different view taken subsequently the assessing officer could not press in service the later judgment. We are respectfully bound by the principles laid down by the Hon ble Supreme Court in a case of Ram Bai Vs. Commissioner of Income Tax (supra). 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t point of sale . The said M/s ASK Agencies had already paid the tax applicable on the said transaction and that the assessing officer of the said M/s ASK Agencies had also accepted the return as filed by said M/s ASK Agencies. In our view, the assessing officer, thus could not have imposed any levy on the same goods on which tax has already been collected on the first point of sale from said M/s ASK Agencies. Such levy imposed upon the petitioner for the tax already paid by M/s ASK Agencies at the first point of sale would amount to double taxation, which is not permission in law. The Supreme Court in a case of Union of India Vs. Tata Iron and Steel Co. Ltd. (supra) has held that, there cannot be double taxation on the same article. Similar view is taken by the Supreme Court in a case of Gaurav Distributors (P) Ltd. Vs. CC New Delhi (supra). 71. A perusal of the impugned assessment order indicates that the assessing officer has rendered a finding that the sale made by the petitioner from its bonded warehouse to the bonded warehouse of M/s ASK Agencies would be first point of sale . If the respondent Nos. 1 to 3 have to recover tax from the petitioner, it would be the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner is already impugned on this ground by the petitioner as without jurisdiction. We cannot allow the assessing officer, now to pass any order of rectification of the order which is already impugned in this petition at this stage and more particularly after concluding the arguments. 74. So far as the submissions of the learned A. G. P. that the respondent Nos. 1 to 3 are not assessing said M/s ASK Agencies and that the said assessment is not the subject matter of this writ petition is concerned, the learned A. G. P. could not dispute that the tax recovered by the assessing officer of the said M/s ASK Agencies was in respect of the same transaction between the petitioner and the said M/s ASK Agencies. It is not the case of the respondent Nos. 1 to 3 in this matter that in respect of same transaction, the petitioner as well as said M/s ASK Agencies both were liable to pay tax. 75. In our view, if according to respondent Nos. 1 to 3, the transaction between the petitioner and said M/s ASK Agencies does not fall U/Sec. 5(2) of the Central Sales Tax Act, the levy under the Central Sales Tax Act upon the petitioner made by the assessing officer in the impugned assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and others (supra) and more particularly paragraph Nos. 17, 24 and 26. Per contra, Mr. Rohan Shah, the learned counsel for the petitioner placed reliance on the judgment of the Supreme Court in a case of Assistant Commissioner State Tax and others Vs. Commercial Steel Ltd. (supra) and more particularly paragraph No. 17 thereof. The Supreme Court in the said judgment of Assistant Commissioner State Tax and others Vs. Commercial Steel Ltd. (supra) has held that, the existence of an alternate remedy is not an absolute bar to the maintainability of the writ petition under Article 226 of the Constitution of India. But a writ petition can be entertained in exceptional circumstances where there is (i) a breach of fundamental rights, (ii) a violation of the principles of natural justice, (iii) an excesss of jurisdiction or (iv) a challenge to the vires of the statute or delegated legislation. 80. The petitioner in this case has impugned the assessment order on various grounds including on the ground that tax demanded from the petitioner by the assessing officer is in excess of jurisdiction, without authority of law and unsustainable as the transaction is inter state (within Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X
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