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2015 (10) TMI 2406 - HC - VAT and Sales TaxBack to Back transactions - exemption of sales of motor spirit made at the retail outlet. - The shipping vessel places an enquiry for required quantity of HSD with the Petitioner - Petitioner in turn places a back to back purchase order/nomination of the same quantity on any of the Oil Marketing Companies - After the delivery of the HSD to the nominated vessel is complete, the Petitioner raises an invoice on the shipping line, based on the BDN - Recovery of sales dues from the bankers and debtors of the petitioner. Whether the sales made and subject matter of the order of assessment in the first Petition are within the State of Maharashtra so as to be taxable under the Maharashtra Value Added Tax Act, 2002 and therefore the action of the Respondents treating it as such can be said to be exfacie illegal. - Held that:- It is the goods which have been produced or manufactured or refined by the oil companies and which are drawn from their storage tanks in fixed quantity that are supplied on demand to the Petitioner. The manufacturers as also the refineries are very much within the State of Maharashtra viz. at Mumbai. The Petitioners are at Mumbai. Meaning thereby, their place of business is at Mumbai. It is from that place that the Petitioner requests the oil companies to supply to it the high speed diesel. It is received by the Petitioner from the oil companies at Mumbai. It may be that the Petitioner treats this as a contract on which they paid the sales tax as a component of the price. However, it is that very high speed diesel and supplied to the Petitioner at Mumbai which is carried from Mumbai in furtherance of a contract with parties like M/s. Leighton, which contract is also placed and finalised from Mumbai, through the barges of the Petitioner to the vessels of M/s Leighton and which may be stationed in territorial waters. There is sufficient territorial nexus for the Maharashtra Value Added Tax Act to apply and to be invoked to the later sale by the Petitioner of the same goods to M/s. Leighton and other entities similarly placed. We do not see how the Petitioner can escape compliance with this legislation and by contending that the contract of M/s. Leighton being a distinct contract, the sale taking place in territorial waters that the sales tax legislation or the VAT legislation of the Maharashtra State would be applicable. Its applicability has to be tested by applying the above principles and particularly the nexus theory. After having found sufficient territorial connection, namely, between the back to back transaction and the taxing authority that we are not in a position to agree with Mr. Sridharan that MVAT Act is inapplicable. Without expressing any opinion on the rival contentions as far as the exemption Notification is concerned, we would leave the Petitioners to pursue their remedies under the Act. - no relief can be granted to the Petitioners in these petitions. Rule in each of these petitions is discharged, but without any order as to costs. - Decided against assessee.
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