9911796707
TMI Blog2024 (10) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Authority on the appellant factory was done on 8.2.2013. The assessment year pertains to 2007-2008. The assessment should have been made within three years from the end of the year i.e. 31.3.2008 namely within 31.3.2011 The assessment order had been passed only on 12.12.2014 and therefore, the assessment order itself is non-est in law There is no explanation on the side of the Respondent in this context. It is seen that the assessment order had been passed after the period stipulated in Section 24(5) of PVAT Act, 2007. The proviso does not apply since it is no the case of the Respondent that the input tax credit has been availed wrongly or the dealer had produced false invoice, vouchers, declaration certificate or any other documents with a view to support his claim of input tax credit or refund or the assessing authority had reversed the input tax credit availed by the dealer/ appellant and determined tax due as contemplated u/s 24(6) of the PVAT Act, 2007. 10. In such circumstances, this court holds that the Assessment Order dated 12.12.2014 is hit by the provision u/s 24(5) of the PVAT Act, 2007. Therefore the tax due as assessed by the Assessment Officer besides imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier, the Respondent-Assessee had suffered adverse assessment orders for the Assessment Years 2007-2008 to 2009-2010 in the hands of the Commercial Tax Officer, - IAC as detailed above. 9. The aforesaid Assessment Orders also preceded a Pre- Assessment Notice dated 25.09.2014 which were replied by the Respondent-Assessee. In the notice dated 25.09.2014, it was proposed to reject the Nil returns filed by the Respondent-Assessee for the above said years and also to levy tax on the sale of goods involved in the execution of works contract at the rate specified in the schedule for such goods. The notices also proposed to levy penalty on the Respondent- Assessee as provided under Section 24(3) of the Puducherry Value Added Tax Act, 2007. 10. The dispute related to powder coating process on the products like yokes, links and tubes etc supplied by local industries like Lucas TVS, Rane Madas and Remi Electricals to the Respondent-Assessee. 11. The Respondent-Assessee had earlier filed Nil (Returns) stating that the activity carried out by it was only a job work and did not involve any sale i.e. works contract. The Respondent-Assessee was procuring materials, both from local dealer as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried by the Respondent-Assessee involved works contract and thus upheld that the Assessment Orders passed by the Assessing Officer for the respective Assessment Years. In so far as imposition of penalty under Section 24(3) of the PVAT Act, 2007, the Appellate Assistant Commissioner also held that it did not warrant any interference. 18. Aggrieved by the said order dated 29.06.2015 of the Appellate Assistant Commissioner (CT), the Respondent-Assessee has preferred Tax Appeal Nos.2 to 4 of 2016 before the Sales Tax Appellate Tribunal, Puducherry for the Assessment Years 2007-08 to 2009-10. These Appeals were allowed by the Sales Tax Appellate Tribunal, Puducherry, vide Impugned Order dated 02.03.2016, on the ground that the Assessment Order was passed after a period of three years from the end of the year to which returns relates and therefore the order passed by the Appellate Assistant Commissioner (CT), Commercial Taxes Department was set aside. 19. The Appellate Tribunal thus reversed the order of the Appellate Assistant Commissioner vide Impugned Order dated 02.03.2016 in Tax Appeal Nos.2 to 4 of 2016 and held that the Assessment Orders passed by the Commercial Taxes Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 24(3) of the Puducherry Value Added Tax Act, 2007. 25. The expression 'works contract' has been defined in Section 2 (zp) of the Puducherry Value Added Tax Act, 2007. It is an inclusive definition. It includes any agreement to carry out for cash, deferred payment or other valuable consideration, building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning, of any movable or immovable property. Section 2 (zp) of the Puducherry Value Added Tax Act, 2007 reads as under :- "Works Contract " - "includes any agreement to carrying out for cash, deferred payment or other valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning, of any movable or immovable property". 26. After the 46th Amendment to the Constitution, the Hon'ble Supreme Court, had initially, in the case of Rainbow Colour lab and Another vs. State of M.P. and Others (2000) 2 SCC 385 espoused the "dominant intention" of the contract, to hold an activity exigible under the extended definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry object of the transaction and the intention of the parties while entering into it." 15. Thus, it is clear that unless there is sale and purchase of goods, either in fact or deemed, and which sale is primarily intended and not incidental to the contract, the State cannot impose sales tax on a works contract simpliciter in the guise of the expanded definition found in Article 366(29-A)(b) read with Section 2(n) of the State Act. On facts as we have noticed that the work done by the photographer which as held by this Court in Kame case [(1977) 1 SCC 634 : 1977 SCC (Tax) 225 : (1977) 39 STC 237] is only in the nature of a service contract not involving any sale of goods, we are of the opinion that the stand taken by the Respondent State cannot be sustained. * Builders' Association of India vs. Union of India, (1989) 2 SCC 645 27. The ratio laid down in Rainbow Colour lab (supra) was doubted as running counter to the express provision contained in Article 366(29-A) of the Indian Constitution by the Hon'ble Supreme Court in the case of Associated Cement Companies Ltd. vs. Commissioner of Customs (2001) 4 SCC 593. Relevant portion of the decision reads as under:- 26. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sirable to put the matter beyond any doubt. Article 366 was therefore amended by inserting a definition of "tax on the sale or purchase of goods" in clause (29-A). The definition reads as under :- "366. (29-A) 'tax on the sale or purchase of goods' includes- (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments; (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd., (1958) 9 STC 353 : AIR 1958 SC 560 : 1959 SCR 379] (sic modified). The amendment especially allows specific composite contracts viz. works contracts [sub-clause (b)]; hire-purchase contracts [sub-clause (c)], catering contracts [sub-clause (e)] by legal fiction to be divisible contracts where the sale element could be isolated and be subjected to sales tax. 43. Gannon Dunkerley [State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd., (1958) 9 STC 353 : AIR 1958 SC 560 : 1959 SCR 379] survived the Forty-sixth Constitutional Amendment in two respects. First with regard to the definition of "sale" for the purposes of the Constitution in general and for the purposes of Entry 54 of List II in particular except to the extent that the clauses in Article 366(29-A) operate. By introducing separate categories of "deemed sales", the meaning of the word "goods" was not altered. Thus the definitions of the composite elements of a sale such as intention of the parties, goods, delivery, etc. would continue to be defined according to known legal connotations. This does not mean that the content of the concepts remain static. The courts must move with the times. [See Attorney General v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the term "works contract" in Article 366(29-A)(b) takes within its fold all genre of works contract and is not restricted to one specie of contract to provide for labour and services alone and nothing in Article 366(29-A)(b) limits the term "works contract", wherein a contract may involve both a contract of work and labour and a contract for sale, in such composite contract, the distinction between contract for sale of goods and contract for work (or service) is virtually diminished. It was further held that the dominant nature test has no application and the traditional decisions which have held that the substance of the contract must be seen have lost their significance where transactions are of the nature contemplated in Article 366(29-A). Relevant paragraph from the above decision is reproduced below :- 97. In light of the above discussion, we may summarise the legal position, as follows:- 97.1. For sustaining the levy of tax on the goods deemed to have been sold in execution of a works contract, three conditions must be fulfilled: (i) there must be a works contract, (ii) the goods should have been involved in the execution of a works contract, and (iii) the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are involved in the execution of the works contract. Such a deemed sale has all the incidents of the sale of goods involved in the execution of a works contract where the contract is divisible into one for the sale of goods and the other for supply of labour and services. In other words, the single and indivisible contract, now by the Forty-sixth Amendment has been brought on a par with a contract containing two separate agreements and the States now have power to levy sales tax on the value of the material in the execution of works contract. 97.9. The expression "tax on the sale or purchase of goods" in Schedule VII List II Entry 54 when read with the definition clause (29-A) of Article 366 includes a tax on the transfer of property in goods whether as goods or in the form other than goods involved in the execution of works contract. 97.10. Article 366(29-A)(b) serves to bring transactions where essential ingredients of "sale" defined in the Sale of Goods Act, 1930 are absent within the ambit of sale or purchase for the purposes of levy of sales tax. In other words, transfer of movable property in a works contract is deemed to be sale even though it may not be sale with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, to us, thus, appears to be correct. 33. We may notice that the concept of aspect theory which had found echoes in State of U.P. v. Union of India [(2003) 3 SCC 239] has expressly been overruled by a three-Judge Bench in BSNL [(2006) 3 SCC 1] stating: (SCC p. 39, paras 78-79) "78. But if there are no deliverable goods in existence as in this case, there is no transfer of user at all. Providing access or telephone connection does not put the subscriber in possession of the electromagnetic waves any more than a toll collector puts a road or bridge into the possession of the toll payer by lifting a toll gate. Of course the toll payer will use the road or bridge in one sense. But the distinction with a sale of goods is that the user would be of the thing or goods delivered. The delivery may not be simultaneous wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per Section 24(4), the Assessing Authority has to serve a notice, on completion of the Assessment and the dealer is required to pay balance of tax in accordance with terms of that notice. As per sub-section (5) to Section 24, no Assessment under Section 24 shall be made after a lapse of three years from the end of the year to which, the returns filed under the Act relates. Section 24 (5) of the PVAT Act, 2007 reads as under:- (5) Subject to sub-section (6) of this section, no assessment under this section for any year shall be made after a period of three years from the end of the year to which the return under this Act relates." 34. Sub-section 5 of Section 24, is however, subject to Subsection (6) to Section 24 of the Puducherry Value Added Tax Act, 2007. Section 24(6) of the Puducherry Value Added Tax Act, 2007, reads as under :- (6) Where, for any reason, the input tax credit has been availed wrongly or where any dealer produces false invoice, vouchers, declaration certificate or any other documents with a view to support his claim of input tax credit or refund, the assessing authority shall, at any time, within a period of five years from the end of the year to which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictus Dyeings (Supra) was distinguished. It was held that the assessment proceedings were not barred by limitation, as the notice seeking to revise the assessment had been issued in time for four Assessment Years except 2010-2011. Since the revision notices were within time, the notice could not be challenged based on few decisions of the Hon'ble Supreme Court. We are concurring with a view taken in the said decision and reiterate the legal position applied in M/s.Orient Fans (supra) respectfully following decisions of the Hon'ble Supreme Court in the following cases :- (i) Ghanshyam Das vs. Regional Assistant Commissioner of Sales Tax, Nagpur, 1963 INSC 171 (ii) The State of Punjab and Others vs. M/s.Tara Chand Lajpat Rai, (1967 )19 STC 493 (iii)The State of Punjab and Another vs. Murlidhar Mahabir Parshad , (1968) 21 STC 29 (iv) Additional Assistant Commissioer of Sales Tax, Indore Region, Indore vs. Firm Jagmohandas Vijay Kumar, (1970) 25 STC 74 40. In Ghanshyam Das vs. Regional Assistant Commissioner of Sales Tax, Nagpur, Limitation under Section 11 A (1) of the Central Provinces and Berar Sales Tax Act, 1947 . Section 11-A(1) of the Act, fell for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation and therefore without jurisdiction. The order passed by the High Court allowing the Respondent's writ petition has, therefore, to be set aside. The appeal succeeds and the writ petition is dismissed. In the circumstances of the case, however, we do not propose to pass any order as to costs. Appeal allowed. *M/s. Rameshwar Lal Sarup Chand v. Excise and Taxation Officer #Jagat Ram Om Parkash v. Excise and Taxation Officer, Assessing Authority, Amritsar 43. In The State of Punjab and Another vs. Murlidhar Mahabir Parshad, (1968) 21 STC 29, wherein the above case, the Court was concerned with limitation under Section 11 of the Central Tax Act which was amended by Section 7 of the East Punjab General Sales Tax (Amendment) Act, 1952 and later amended in the year 1955, by Section 3 of the East Punjab General Sales Tax (Amendment) Act( No.4 of 1955). Section 11 of the East Punjab General Sales Tax(Amendment) Act, 1952, reads as under:- "11. (1) If the Assessing Authority is satisfied without requiring the presence of a registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the expiry of the prescribed period, no question of limitation would arise." 45. In Additional Assistant Commissioer of Sales Tax, Indore Region, Indore vs. Firm Jagmohandas Vijay Kumar, (1970) 25 STC 74, the Court was concerned with Section 8 ((1)(a) and (b) of the Mahya Bharat Sales Tax Act, 1950. Section 8(1)(a) and (b) and Section 10 of the Mahya Bharat Sales Tax Act, 1950. 46. The dispute that arose in the above case was under the provision of the Madhya Bharat Sales Tax Act, 1950, which later stood replaced by Madhya Bharat General Sales Tax Act, 1959. There the Assessing Officer had issued a notice under Section 8(2) of the Madhya Bharat Sales Tax Act, 1950, to the dealer to assess the turnover which had escaped assessment. 47. Relevant provisions read as under :- Section 8 (1)(a)Assessment of taxable turnover and determination of tax due for any year shall be made after the returns for all the periods of that year have become due: Provided that in the case of Melas the assessment shall be made as soon as the return of turnover has been received. (1)(b): Notwithstanding anything contained in clause (a), if any dealer fails to submit a return under Section 7(1) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even after the expiry of the prescribed period, no question of limitation would arise. The view expressed by this court in Ghanshyam Das v. Regional Assistant Commissioner of Sales Tax, Nagpur has been followed by the court in two recent cases - Regional Assistant Commissioner of Sales Tax, Indore v. Malwa Vanaspati & Chemical Co. Ltd. [21 STC 431] and State of Punjab v. Murlidhar Mahabir Prasad [21 SC 29] in which the material facts are almost parallel to those in the present case. In view of the principle laid down by these decisions we hold that in the present case the proceedings for assessment to sales tax taken against the Respondent for the year 1955-56 by the assessing authorities are legally valid and the Respondent has made out no case for grant of a writ under Article 226 of the Constitution for quashing those proceedings or for quashing the notice issued on March 16, 1963 or the order of the appellant dated July 18, 1963." 50. As far as the present case is concerned, a limitation is prescribed under Section 24(5) of PVAT Act, 2007 for completing assessment. As per Section 24(5), no assessment shall be made after a period of three years from the end of the year to whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
