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TMI Blog2023 (4) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in doing so. Section 4(3) read in harmony with Rule 8 and 9 and the interpretation given by the Tribunal while extending the benefit of Rule 9(1)(e) to the dealer and denying the benefit of computation of tax as per the formula provided under Section 4(3) of the Act does not hold good. The finding recorded by the Tribunal to the extent of non-applicability of Section 4(3) of the Act is hereby set aside and the revisions filed by the assessee/dealer challenging the order passed by the Tribunal are hereby allowed. The revisions filed by the Revenue challenging the benefit extended to the dealer/assessee under Rule 9(1)(e) stand dismissed - matter is remitted back to the Tribunal to compute the tax component as per Section 4(3) of the Act giving the benefit to the dealer/assessee under Rule 9(1)(e) - the question of law raised through these revisions stands answered i.e. in favour of the assessee and against the revenue. - Sales/Trade Tax Revision No. - 346 of 2022, 345 of 2022, 347 of 2022, 348 of 2022, 349 of 2022, 3 of 2023, 4 of 2023, 5 of 2023, 6 of 2023 And 7 of 2023 - - - Dated:- 4-4-2023 - Hon'ble Rohit Ranjan Agarwal, J. For the Revisionist : Aditya Pand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the figure of the amount for the five assessment years in question. 6. The assessee before this Court is a civil contractor, the dispute relates to the Assessment Years 2011-12, 2012-2013, 2013-2014, 2014- 2015 and 2015-16. The question through these two sets of revisions raised by the assessee and the revenue are that whether the turnover of the assessee has to be assessed as per Section 4(3) of the Value Added Tax Act, 2008 ( hereinafter called as VAT Act ), but at the same time it has to be assessed as per Rule 9 of the Value Added Tax Rules. 7. The assessee on the basis of work contract for the five different assessment years had carried out contract and was assessed by the assessing authority and an assessment order was passed under Section 28(2)(i) for the various assessment years wherein a tax liability was created and the assessing authority after granting 30% rebate as provided under Rule 9(3) from the total turnover declined to give benefit for the goods brought through Form 38 into the State of U.P. by contractor and levied the tax. The first appellate authority proceeded to hold that the levy of tax on turnover of sale in case of a dealer, selling any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate authority, two appeals were filed before the Tribunal one by the Revenue and the other by the assessee. The Tribunal found that the ex-U.P. purchase made by the dealer was to be given benefit under Rule 9(1)(e) and allowed the appeal of the dealer to that extent while it also allowed the appeal of the Revenue holding that the computation of turnover of sale cannot be done under Section 4(3) of the Act and can only be done under Rule 9. Hence, the present revision. 12. Before adverting to decide the issue in hand, a cursory glance of Section 4(3) of the Act and Rule 8(ix) Rule 9(1)(e) and 9(3) is necessary and are extracted here as under:- Section 4(3). Where a dealer, selling any goods, is not entitled to realize or has not realized if entitled amount of tax, payable by him on the turnover of sale of such goods, separately on tax invoice, sale invoice, cash memo or bill from the purchaser of the goods, amount of tax payable by him on the turnover of such sale shall be computed using the formula- Amount of tax payable = Rate of tax X Aggregate of sale prices 100 + Rate of tax Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 10% 4. Fabrication and installation of elevator(lifts) and escalators 10% 5. Supply and installation of air conditioning equipment including deep freezers, cold storage plants, humidification plants and dehumidifier 10% 6. Supply and installation of air conditioners and air coolers 10% 7. Supply and fitting of electrical goods, Supply and installation of electrical equipment including transformers 10% 8. Supply and fixing of furnitures and fixtures, partitions, including contracts of interior decorations 10% 9. Construction of railway coaches and wagons on under carriages supplied by railways 10% 10. Construction of bodies of motor vehicle and construction of trailers 10% 11. Fabrication and installat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract as a result of sale in the course of inter-State trade or commerce. Thus, all the goods brought by a dealer used in the works contract through ex-U.P. purchase has to be deducted from the gross amount received. 17. Rule 9(3) provides for deducting the value of labour and service and amount of profit from the accounts maintained by the contractor which do not show separately the same, and through this rule the Legislature has provided a deduction of 30% from such amount received or receivable. 18. The dealer before this Court who is a civil contractor and admittedly he received an amount of Rs.116,43,08,297/- for the assessment year 2014-15 for the contract executed by him. The said amount not only included the labour and service charge, profit but also the cost of goods and the VAT. As per the agreement executed between the parties, the dealer could not realise tax thus the payment which was made included cost of the goods and the tax component (VAT). 19. Thus, after the deduction given by the assessing authority under Rule 9(3) for the labour and service charge and profit the remaining amount left included tax. The amount which was received by the dealer durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion No. - 346 of 2018 , decided on 01.02.2019, this Court had also taken a view that, as a result of sale in the course of inter-state trade or commerce appearing in Rule 9(1)(e) of the Rules has to be read to include in its cover all transactions covered under section 3 of the Central Sales Tax Act, 1956. Thus, from the conjoint reading of Section 4 of the VAT Act, Rule 8 and 9 of the Rules, it is clear that Section 4 being the charging section and the only section under the VAT Act which prescribes levy of tax on turnover of sales. 25. Moreover, Sub-Section (3) of Section (4) prescribes the formula for computation of tax payable by dealer on the turnover of sale. While Rule 8 prescribes for the determination of taxable turnover of sales and Sub- Rule (ix) of Rule 8 prescribes for amount of tax leviable for the dealer who is not entitled to realise or has not realised the amount of tax if entitled to realise in the invoice from purchaser separately, the tax has to be calculated in accordance with formula provided therein. Proviso to Sub-Rule (ix) of Rule 8 provides that a turnover of sale in case of transfer of property in goods involved in the execution of works contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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