Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2015 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 1016 - HC - VAT and Sales TaxWhether the Tribunal was correct in holding that, instead of the entry A47 waiving tax on purchase in excess of given percentage, the dealer was liable to purchase tax at two per cent and not at reduced amount of 0.5 per cent. or 1.55 per cent, as applicable at relevant time under the entry A47 while section 41 read with section 13AA of the Bombay Sales Tax Act - Importer/exporter of diamonds and manufacturer of gold jewellery - Assessee had transferred the manufactured jewellery to its branches and, therefore, in respect of purchase of gold bullion, which were used in the manufacture of said jewellery, the authority levied purchase tax under section 13AA at two per cent - Held that:- Sections 13 and 13B make a specific reference to the rate of purchase tax in respect of goods covered under Schedule B or Schedule C. Perusal of Schedule B and Schedule C would also reveal that the rate of tax is specifically provided for each of the entries. The relevant clause of the Schedule to the notification, would also reveal that the notification refers to sale or purchase by a registered dealer of goods covered by entry 10 in Part I of Schedule C. Part I of Schedule C specifies the rate of tax at two per cent. By applying the principles of harmonious construction, the notification will have to be construed to apply to the rate of tax as specified in entry 10 of Part I of Schedule C of the said Act. The rate is specifically prescribed at the rate of two per cent. It is found that, what has been provided by the notification is exemption of tax, in excess of what is provided under the said notification, from the tax payable as specified by entry 10 of Part I of Schedule C of the said Act. The Legislature has specifically provided for a purchase tax, at the rate of two per cent in addition to the tax payable under the other provisions of the Act, when the requirements as provided under the said section are fulfilled. The tax as provided in section 13AA, is an additional tax payable in certain circumstances as carved out in the said section, so as to compensate the loss of revenue. Therefore, there is no conflict between any of the provisions of the said Act if the principles of harmonious construction is applied thereto. Whether the Tribunal was justified in holding that the said exemption on purchase will not cover, purchase tax levied under section 13AA, unless specific exemption entry is inserted by Government, even though the entry A47 cover exemption from tax on purchase - Held that:- if the contention of the assessee is to be accepted, then the very purpose for which section 13AA is brought on the statute book would be defeated. By availing of the benefit of notification by paying the meager tax, the assessee would purchase the said goods, use them for manufacture by using State infrastructure and then take away finished goods, from the State to other State and thereby deprive the State its revenue, which it would have earned by way of sales tax, at much higher rates, if the goods were sold in the State. Also then the purchaser who purchases raw material at concessional rate, uses them for manufacture in the State of Maharashtra and also sells them in the State will be required to pay purchase tax at the rate of 0.5 per cent. and the sales tax at the rate of four per cent. as provided in entry 98 of Part II of Schedule C and thereby required to pay total tax of 4.5 per cent. for the financial year 1999-2000, whereas the purchaser like the assessee, who purchases raw material from the State of Maharashtra, manufactures goods in the State of Maharashtra using the State infrastructure, would be required to pay only 0.5 per cent. of purchase tax for the said assessment year. Therefore in view of the decision of Hon'ble Apex Court in the case of Hotel Balaji v. State of Andhra Pradesh [1992 (10) TMI 240 - SUPREME COURT OF INDIA], the tax as levied under section 13AA, is liable to be levied except in the three situations i.e., (i) sale of manufactured goods within the State, (ii) inter-State sale and (iii) export sale of manufactured goods, but dispatches it to his branch or to his agent, situated outside State, it cannot escape from the liability of tax at the rate of two per cent., as is leviable under section 13AA. - Matter disposed of
|