2016 (3) TMI 1151 - HC - VAT and Sales Tax

Import of stone chips from Bangladesh - this case is squarely covered by the judgment of this court rendered in Sri Swapan kumar Saha vs. The State of Tripura 2014 (7) TMI 1228 - TRIPURA HIGH COURT wherein the question was with regard to imposition of tax on stone chips imported into Tripura from Bangladesh - Held that - as the issue is similar the decision of the said case would apply where it was held that import of stone chips from Bangladesh into India will not be exigible under the TVAT Act and therefore the assessment order and notices are bound to be quashed - further the Department is free to take further action to collect tax on subsequent sale if found to have taken place - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment order and dismissal of revision due to non-deposit of pre-requisite money; Taxability of stone chips under TVAT Act; Jurisdiction of State legislature to tax goods imported into Tripura; Interpretation of TVAT Act provisions regarding levy of tax on import of goods; Applicability of Section 41 of TVAT Act on sales during import of goods; Quashing of assessment orders and notices.

Analysis:
The petitioner challenged the assessment order and dismissal of revision for not depositing required money. The main issue was the taxability of stone chips under the TVAT Act. The court referred to a previous judgment involving stone chips from Bangladesh, emphasizing the interpretation of relevant provisions. The court discussed the applicability of Entry No.67 and Entry No.193 of Schedule II(b) of the TVAT Act. Even if stone chips were not covered under a specific entry, they fell under the residual Entry No.193, making them taxable. The court rejected the argument that the legislature intended to exempt stone chips from tax, citing the absence of stone chips in the exempted goods schedule.

The court addressed the jurisdiction of the State legislature to tax goods imported into Tripura. It analyzed Section 5(2)(b) of the TVAT Act, which excludes sales during import/export of goods from taxable turnover. Additionally, Section 41(1) of the Act clarified that sales during import of goods into India were not liable to tax. Referring to a Division Bench judgment, the court emphasized the importance of Section 41 in interpreting the Act. Consequently, the import of stone chips from Bangladesh was deemed non-taxable under the TVAT Act, leading to the quashing of assessment orders and notices.

The court highlighted that the department could investigate if the petitioner sold the imported goods within Tripura, potentially making him liable for subsequent sales tax. Despite quashing the assessment orders, the court allowed the department to take further action within the provisions of the law. By concluding that the issues were identical to a previous writ petition, the court held that the import of stone chips from Bangladesh was not taxable under the TVAT Act. The judgment disposed of the writ petition accordingly.