2025 (2) TMI 1 - AT - VAT / Sales Tax

Dismissal of appeal - appeal dismissed on the ground that the appellant had opted for composition under section 6 of the Delhi Sales Tax on Works Contract Act and so there was no need to examine whether the transaction of Rs. 2, 59, 19, 818/- was in connection with inter-State sale or not - HELD THAT - The preliminary objection raised by learned counsel for the State of Delhi is that this appeal is not maintainable since an appeal shall lie only against an order passed by the highest Appellate Authority of a State under the CST Act determining issues relating to stock transfers or consignment of goods in so far as it involves a dispute of inter-State nature. The preliminary objection has merits. An appeal would lie to this Tribunal only against any order passed by the highest Appellate Authority of the State under the CST Act. Authority has been defined under section 19 of the CST Act. Prior to 31.03.2023 an appeal would lie to the Central Sales Tax Appellate Authority but after the amendment made by Finance Act No. 08 of 2023 w.e.f. 31.03.2023 appeal would lie to this Tribunal namely The Customs Excise Service Tax Appellate Tribunal. The assessment order was passed under the provisions of the Delhi Sales Tax on Works Contract Act against which the appellant filed an appeal under section 43(1) of the Delhi Sales Tax Act before the Deputy Commissioner (Appeal) as the provisions of section 16(1) of the Delhi Sales Tax on Works Contract Act make applicable the provisions of appeals under the Delhi Sales Tax Act. A further appeal was filed by the appellant before the Appellate Tribunal under section 43(2) the Delhi Sales Tax Act. The said appeal was dismissed by order dated 30.06.2014. The order dated 30.06.2014 was certainly not passed by the Appellate Tribunal under the provisions of the CST Act - the appellant did have a remedy against the order dated 30.06.2014 of the Appellate Tribunal under section 45 of the Delhi Sales Tax Act by requiring the Appellate Tribunal to refer the matter to the High Court on any question of law arising out of such order but that remedy was not exercised by the appellant and instead this appeal was filed under section 20 of the CST Act which appeal is clearly not maintainable. Conclusion - i) The appeal was dismissed as not maintainable under Section 20 of the CST Act. ii) The appellant was held liable to pay tax under the composition scheme without deductions for inter-State sales. This appeal would therefore have to be dismissed as not maintainable and is accordingly dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

• Whether the appellant's appeal against the assessment order under the Delhi Sales Tax on Works Contract Act is maintainable before the Tribunal.
• Whether the appellant, having opted for the composition scheme under Section 6 of the Delhi Sales Tax on Works Contract Act, can claim deductions for inter-State sales.
• The applicability of Section 20 of the Central Sales Tax Act for filing an appeal against the order of the Appellate Tribunal.

ISSUE-WISE DETAILED ANALYSIS

1. Maintainability of the Appeal

Relevant legal framework and precedents: The appeal was filed under Section 20 of the Central Sales Tax Act, 1956, which allows appeals against orders passed by the highest appellate authority of a State under the CST Act concerning inter-State disputes.

Court's interpretation and reasoning: The Tribunal noted that the appeal in question was not against an order under the CST Act but under the Delhi Sales Tax on Works Contract Act. The Tribunal emphasized that Section 20 of the CST Act applies only to orders passed under the CST Act.

Conclusions: The Tribunal concluded that the appeal is not maintainable under Section 20 of the CST Act as it was not against an order passed by the highest appellate authority under the CST Act.

2. Composition Scheme and Inter-State Sales

Relevant legal framework and precedents: Section 6 of the Delhi Sales Tax on Works Contract Act allows dealers to opt for a composition scheme, paying a fixed percentage of the total contract value as tax, without deductions for inter-State sales.

Court's interpretation and reasoning: The Tribunal observed that the appellant had opted for the composition scheme, which precludes claiming deductions for inter-State sales. The appellant's argument that the lifts were manufactured and moved from Ghaziabad to Delhi as inter-State sales was not considered because the composition scheme was chosen.

Key evidence and findings: The appellant's application for the composition scheme was timely, and the scheme was applied correctly by the assessing authority.

Application of law to facts: The Tribunal applied Section 6 of the Act, which clearly states that no deductions are allowed except for payments to sub-contractors.

Conclusions: The Tribunal upheld the assessment order, confirming that the appellant could not claim deductions for inter-State sales under the composition scheme.

SIGNIFICANT HOLDINGS

Core principles established:

• Appeals under Section 20 of the CST Act must pertain to orders passed under the CST Act, not under other state-specific acts.
• Opting for a composition scheme under the Delhi Sales Tax on Works Contract Act limits the ability to claim deductions for inter-State sales.

Final determinations on each issue:

• The appeal was dismissed as not maintainable under Section 20 of the CST Act.
• The appellant was held liable to pay tax under the composition scheme without deductions for inter-State sales.