2013 (10) TMI 1287 - HC - VAT and Sales Tax

Levy of CST on transfer of property inter state - whether CST is payable on the component of Central excise paid on such transactions in the event of full reimbursement by the Central Government under its scheme of encouraging deemed exports - Held that - In the absence of scheme/global contract which has been relied upon by Tax Board and when the learned counsel for the petitioner assessing officer has submitted that the Tax Board could not have relied upon the said scheme as facts of the said scheme were entirely different and this court is certainly entitled to have a look at the scheme relied upon by the assessee and cannot blindly follow the observation of the Tax Board particularly when serious challenge has been made since beginning by the Department and therefore in the interest of justice I feel that the terms and conditions of the global contract/scheme which has been relied upon by the Tax Board needs to be looked by the Tax Board again as the Tax Board is a final fact finding authority and this court cannot express any view on the questions answered by the Tax Board particularly when the petitioner assessing officer as referred to above is challenging and have challenged the same and when questions of law has been admitted by this court therefore unless and until the terms and conditions and the scheme/ global contract is not before the court the issue cannot be decided. - Matter restored back - Decided in favour of Revenue.

Issues involved:
1. Interpretation of provisions of law by Rajasthan Tax Board.
2. Justification of setting aside tax and interest levied by assessing authority on works contract.
3. Justification of setting aside tax and interest on excise duty.
4. Reversal of findings given by Deputy Commissioner (Appeals-II).

Analysis:
1. The revision petitions were admitted based on questions of law regarding the Rajasthan Tax Board's decision. The respondent, a limited company engaged in manufacturing, was involved in disputes related to tax levied on inter-State transfer of goods in works contracts and the payment of Central excise duty under a deemed export scheme.

2. The assessing officer found the respondent's claims incorrect regarding tax liability on transactions treated as inter-State sales and inclusion of Central excise duty in turnover for CST calculation. The Deputy Commissioner (Appeals-II) upheld the assessing officer's decisions, leading to the respondent's appeals to the Tax Board.

3. The Tax Board allowed the respondent's appeals, disagreeing with the assessing officer's stance. The petitioner argued that the Tax Board erred in granting relief on both claims, emphasizing the respondent's charging of CST and inclusion of Central excise duty in invoices.

4. The respondent contended that the Tax Board correctly analyzed the issues, determining that the transactions were not inter-State sales and fell under a deemed export scheme reimbursed by the Central Government. The respondent cited legal precedents to support their position.

5. The court noted the absence of the global contract/scheme relied upon by the Tax Board, leading to multiple adjournments for its submission. Due to the lack of this crucial document and the Department's challenge, the court decided to remand the matter to the Tax Board for a fresh decision within four months.

6. Consequently, both revision petitions were allowed, the Tax Board's order was set aside, and a direction was given for a fresh decision considering all aspects and the missing global contract/scheme. The Tax Board was instructed to decide within four months of receiving the court's order.

7. The judgment highlighted the importance of proper documentation and adherence to legal procedures in resolving tax disputes, ensuring a fair and thorough examination of all relevant factors before reaching a final decision.

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