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2016 (4) TMI 1210 - HC - VAT and Sales TaxIntra-state sale - Jharkhand VAT - it is the petitioner's case that instead of Central Sales Tax @ 5% it should have been Jharkhand Value Added Tax @ 5% as the sale between this petitioner and respondent no.5 is an intra-State Sale i.e. respondent no.5 has treated first sale between this petitioner and respondent 5 as a inter-State sale Held that: - the petitioner is an auction purchaser of the coal from respondent-C. C.L. Petitioner is also a registered dealer within the State of Jharkhand. Respondent no.5 has sold the commodity viz. coal to this petitioner within the State of Jharkhand . Thus, it is intra-State sale and hence, under the Jharkhand Value Added Tax Act the petitioner is liable to make payment of Jharkhand Value Added Tax @ 5% of the sale price. The coal is not a consumable commodity by the petitioner. Coal is bound to be resold by the trader like this petitioner - in 2nd sale the coal is sold by this petitioner to Kamakhya Traders, Gorakhpur, Uttar Pradesh and to another party which is also situated in the State of Uttar Pradesh - Thus, the movement of the goods from one State to another i.e. from the State of Jharkhand to the State of Uttar Pradesh is not because of the first sale (intra-State sale), but, the movement of the goods from one State to another State is because of 2nd sale between the petitioner and the purchaser in the State of Uttar Pradesh (inter-State sale). The present matter is between A and B i.e. the first sale which is inter-State sale, whereas transaction between B and C i.e. from the petitioner and Uttar Pradesh Sale, which is the second sale - there is no privity of facts between A and C i.e. between respondent no.5 and the purchaser of the Uttar Pradesh, nor from one sale or purchaser of coal, there is a movement of goods from one State to another State. Coal is not such a commodity which will be consumed by the purchaser, always. He may purchase for captive consumption or he may not. Sometimes, petitioner may be a trader also. A trader is bound to further sell the coal, within the State, outside the State or even outside the country. In the fact of the present case, in the second sale, the movement of goods has taken place from one State to another State and, therefore, respondent no.5 could not have levied Central Sales Tax under Section 3 of the Central Sales Tax Act, 1956. This aspect of the matter has also not been properly appreciated by respondent no.5 while levying Central Sales Tax at the rate of 5% as stated in Tax cum Excise Invoice (Annexure 3). The movement of goods from one State to another is not due to incidence of e-auction of coal between respondent no.5 and petitioner. Therefore, Central Sales Tax cannot be levied, by respondent no.5, but, only Value Added Tax can be levied. The movement of goodscoal from Jharkhand to Uttar Pradesh is independent of incidence of e-auction. The Central Sales Tax levied at the rate of 5% by respondent no.5 is impermissible in the eyes of law. Instead of that, it should have been Value Added Tax under the Jharkhand Value Added Tax Act, 2005 - petition allowed - decided in favor of petitioner.
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