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2020 (8) TMI 136 - HC - VAT and Sales TaxReopening of assessment - levy of tax on turnover - tax on sale of Duty of Entitlement Pass Book (DEPB) - it was claimed that since the relevant exports have been transacted at Chennai, the transfer of DEPB credit had to be in Tamil Nadu - HELD THAT:- The object of DEPB scheme is to neutralize the incidence of customs duty of the import content of the export product. The neutralization is granted by way of grant of duty credit against the export product, thereby enabling the exporter to claim set-off of the customs duty component at the time of import. The petitioner was granted the DEPB under the provisions of the MVAT Act at Mumbai and the sale and delivery of the pass book was completed in Maharashtra - Section 2(33) of the Tamil Nadu Value Added Tax Act restricts levy of tax on sales that takes place outside the State of Tamil Nadu. The petitioner's right to claim set-off had originated by grant of the DEPB in the State of Maharashtra and delivered for sale in Maharashtra. The petitioner was also subjected to sales tax in the State of Maharashtra. The issue with regard to respondent's right to levy tax for a sale that takes place outside the state of Tamil Nadu was the subject matter in PREMIER MARINE PRODUCTS VERSUS THE ASSISTANT COMMISSIONER (CT) (ADDITIONAL) [2020 (6) TMI 546 - MADRAS HIGH COURT], whereby this Court, had answered the issue in favour of the assessee, by holding that there being no dispute on the position that the goods in question, the DEPB, and additionally, the seller as well as the buyer were all located in Bombay at the time when the transaction in question was finalised, the turnover from the transaction is liable to tax only in Maharashtra. The aforesaid order is self explanatory. As such, the respondent herein will not have jurisdiction to levy tax on sale of a Duty Entitlement Pass Book for a sale and delivery, which was completed in Maharastra. As such, the levy of tax itself is liable to be quashed. Petition allowed - decided in favor of petitioner.
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