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2011 (2) TMI 1308 - HC - VAT and Sales TaxWhether value added tax is different in nature from sales tax? Whether the requirement of furnishing of sales tax clearance certificate in a tender process would, since after enactment of the Value Added Tax Act, mean VAT clearance certificate or not? Whether sales tax clearance certificate is, by its very nature, different from VAT clearance certificate? Whether the requirement of submission of VAT clearance certificate on supply of woollen blankets can be said to be fulfilled on the submission of VAT registration certificate granted under a scheme of composition of the fiscal statute in respect of a works contract? What is the scope of interference in a writ appeal with an order passed in the writ petition dismissing the appeal where a new plea is wholly barred from being raised in a writ appeal if the plea was not taken in the writ petition? What is the scope of judicial review in contractual matters? Held that:- Since the sum of the value added, at each successive stage, is equal to the final value or price of a commodity or service, the sum of tax collected, at the successive stages, will be equivalent to the tax, which would be payable if it were to be charged once on the final value or price of the produce. Section 2(56) of the Assam VAT Act, 2003, defines VAT to mean a tax on sale of any goods, at every point, in the series of sale made by the registered dealer, with the provisions of credit of input tax paid at the points of previous purchase thereof. In short, VAT is nothing, but a modern system of sales tax. By quoting a rate "exclusive of VAT", the writ petitioner had not only failed to fulfil the terms of the tender notice, but it also goes without saying that since the writ petitioner had itself mentioned its rate as "exclusive of VAT", the rate, quoted by the writ petitioner, shall have to be calculated by taking into account the element of VAT. On taking into account the element of VAT, when the rate, quoted by the writ petitioner, becomes higher than the rate quoted by the appellant, the finding of the learned single judge, that the rate quoted by the writ petitioner was lower than that of the appellant, cannot, but be termed as erroneous and calls for interference therewith. In the case at hand, considering the fact that the tender notice specifically provided for submission of VAT registration certificate, the same must be treated to be with regard to the item sought to be purchased. We have, therefore, no hesitation in holding that the writ petitioner-respondent No. 1 herein had not fulfilled the condition of submission of VAT registration certificate as was required to be done under the tender notice and, hence, the writ petitioner’s tender was not a valid tender. As petitioner-respondent No. 1 had not fulfilled the essential conditions of the tender notice, the writ petitioner’s tender was not a valid tender and was rightly rejected by the State respondents/ authorities concerned. Extended logically, it would mean, and we hold, that the learned single judge erred in law in treating the writ petitioner’s tender as a valid tender and also in treating the writ petitioner as a tenderer, who had quoted, for supply of blanket, a rate lower than that of the appellant.
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