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2015 (1) TMI 855 - HC - VAT and Sales TaxExemption from payment of sales tax - Whether surcharge is leviable on the amount paid by the assessee as a condition of exemption notification dated 30.04.1993 issued by the State Government at the relevant time under the extant Section 4(2) of the Rajasthan Sales Tax Act of 1954 pari materia to Section 15 of the Act of 1994. - Held that:- Language of notification dated 30.04.1993 issued under the extant Section 4(2) of the than Act of 1954 clearly resulted in exemption from payment of whole of the tax, albeit with conditions. Reference in this regard can be had to the succeeding Section 15 of the Act of 1994 which deals with “exemption of tax” and provides that notwithstanding anything contained in the Act, where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, exempt fully or partially, whether prospectively or retrospectively from tax the sale or purchase of any goods or class of goods or any person or class of persons, without any condition or with such condition as may be specified in the notification. The notification dated 30.04.1993 generally provides for an exemption from payment of tax under the Act of 1954 on the condition of payment of 1% of the total value of the works contract executed by the assessee in respect of works enumerated therein. Clearly the amount of 1% of the total value of contract in issue as paid by the assessee was not a payment of lump-sum in lieu of tax under Section 5 of the Act of 1994 as in fact has never been the case of the Department at any stage of the proceedings, but a payment to satisfy the condition for exemption from payment of tax. Even though the exemption notification does indeed refer to the payment of 1% of the work contract value as an “exemption fee”. Fee is a concept well known in law and has is own legal connotation. It would be desirable to note that nothing turns on the mere use of the word “fee” in a statute rule / circular / or notification. The nature and character of the impost is to be determined to conclude whether the charge is a fee or not. In the context of the legal connotation of a fee as enunciated by the Hon'ble Supreme Court, the payment of 1% of the total value of the works contract under the notification dated 30.04.1993 as a condition to avail the exemption from payment of tax otherwise leviable first under the Act of 1954 and then under the Act of 1994 can in no circumstance be described as a fee. - The charge of 1% of the value of the works contract for enumerated purposes was thus not a charge in lieu of fee or a lump sum in lieu of tax under Section 5 of the Act of 1994 but only a condition to avail an exemption from tax in whatever form on the transactions or events otherwise exigible to tax. It is settled that every charge levied by the Government need not necessarily be a tax or a fee or even one in lieu thereof. The Government has the power to require a payment as a consideration ( Commissioner of Income Tax, Udaipur, Rajasthan Vs. Mcdowell & Company Ltd. [2009 (5) TMI 28 - SUPREME COURT] ) and analogously as a condition of availing benefits its policy—of which exemption from tax is a part. Invoking of Section 13 of the Act of 1994 to levy a surcharge on the amount of 1% of the total value of the works contract paid by the assessee as a condition to avail the exemption on tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts relating to enumerated works was wholly misdirected and misplaced. Such a levy was not only on a narrow and erroneous understanding of the exemption notification dated 30.04.1993 but also against a wholistic construction of the statutory provisions of the Act of 1994. The Assessing Authority had made a fundamental error in interpreting Section 13 of the Act of 1994 and in seeking to visit the assessee with liability to surcharge on the amount of 1% of the value of the works contract paid under the exemption notification dated 30.04.1993. The Appellate Authority exercised its jurisdiction justly and fairly in setting aside the aforesaid order. The Tax Board rightly concurred with the Appellate Authority. - There is thus no occasion to interfere in this revision petition - Decided against Revenue.
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