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2014 (7) TMI 278 - HC - VAT and Sales TaxConstitutional validity of certain provisions of the Tripura Value Added Tax Act, 2004 - provisions which are applicable in respect of works contract are beyond the legislative competence of the State of Tripura - provisions of the TVAT Act and the rules are contrary to the constitutional provisions inasmuch as they impose tax on inter-State transfer of goods and also impose tax on goods which are imported from outside India - Whether imposition of tax under the TVAT Act is in violation of sections 14 and 15 of the CST Act - Held that:- Section 14 of the CST Act declares certain goods to be of special importance in inter-State trade or commerce. Section 15 of the CST Act provides that every sales tax law of a State insofar as it authorizes or imposes tax on the sale and purchase of declared goods should comply with certain conditions. The first condition is that the tax leviable under the State law should not be more than five per cent (earlier four per cent). Section 15(b) provides that where a tax has been levied under the State law on any declared goods and later such goods are sold in the purchase of inter-State trade or commerce and tax is paid under the CST Act for the inter-State transaction, then the dealer shall be entitled to get the amount of tax paid under the State law reimbursed. A bare reading of the provisions of the CST Act clearly shows that sections 14 and 15 of the CST Act do not prohibit the State from imposing tax on goods declared to be of special importance in inter-State trade or commerce. Therefore, the State can levy the tax, but the tax shall not be above five per cent (earlier four per cent). In the TVAT Act, Schedule II of the Act deals with goods taxable at five per cent. Prior to May 4, 2011, the rate was four per cent. Entry 35 provides that declared goods as specified in section 14 of the CST Act, 1956 will be taxed at five per cent. Therefore, this is in consonance with the provisions of the CST Act and we see no conflict whatsoever. Whether the definitions of "sale", "sale price" and "turnover" under sections 2(25), 2(26) and 2(35) under the TVAT Act do not exclude sales which have taken place outside Tripura and is, therefore, illegal. - Held that:- it is apparent that section 41 has to be read into each and every definition. Section 41(2)(i) of the TVAT Act specifically excludes sales which have taken place outside Tripura and, therefore, on this ground the definition of "sale" cannot be held to be invalid. Not only section 41, but section 5(2) also excludes sales which have taken place outside Tripura and, therefore, there is no merit in this contention. The similar contention with regard to the constitutional validity of sale price (section 2(26)) and turnover (section 2(35)) are without any merit because the State legislation has taken care to ensure that it has not levied tax on those sales which it was not competent to do so. Whether the definitions of "sale", "sale price" and "turnover" are ultra vires inasmuch as they do not exclude labour and services and other charges - Held that:- As far as sale price is concerned, the definition of "sale" itself provides that in respect of transfer of property in goods involved in execution of a works contract, the value of the sale price shall be calculated by deducting from the amount of valuable consideration paid or payable, the amount representing labour and other charges incurred and profit occurred not in connection with transfer of property in goods for execution of such works contract. Thus, the definition itself excludes labour and other charges. Section 5(2)(c) which is specifically applicable to works contract specially provides that charges towards labour, services and other like charges shall be deducted from the gross turnover while calculating the taxable turnover. Tax is to be imposed on the taxable turnover. No tax is leviable on the sale price, but only on the taxable turnover and the same is in consonance with the judgment in Gannon Dunkerley's case [1992 (11) TMI 254 - SUPREME COURT OF INDIA]. Whenever tax is deducted at source, some sort of calculation has to be done by the person liable to deduct the tax. In case, the dealer places material before the person making the payment claiming deductions, then the person making the payment should give the dealer benefit of such deductions and would not be liable to any penalty, criminal or otherwise, if later the deduction claimed by the dealer is found to be false. The dealer would, however, in such a case be liable to both civil and criminal liability under law. The petitioner in the present case is obviously a big contractor. The petitioner has been approaching the court time and again filing one petition after another. That is his legal right and he is entitled to file a writ petition every time he is aggrieved by any action of the State. At the same time, the writ petitioner must at every stage disclose the pendency of each and every petition which has even the remotest bearing of the case. He cannot himself choose what facts to state and what not to state. If the petitioner does so, he takes the risk of falling foul of the court. In the other connected matters, the stay orders were vacated because a Division Bench of this court found that there was non-disclosure of material facts. In the present case, we are not non-suiting the petitioner since we are dealing with the constitutional validity of the legislation, but we are definitely of the view that the petitioner should have been more careful and the facts which he now seeks to bring in by way of amendment should have been stated in the writ petition itself. This would have avoided any unnecessary controversy. Therefore, we propose to burden him with exemplary costs - Decided against assessee.
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