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VAT / Sales Tax - Case Laws
Showing 1 to 20 of 27696 Records
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2025 (4) TMI 1593
Recovery of arrears of sales tax - priority of claims of secured creditor bank's equitable mortgage created in 1991 over the claims of the Commercial Taxes Department arising from sales tax arrears under the Tamil Nadu General Sales Tax Act, 1959 - interpretation and applicability of Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) - HELD THAT:- The records make it clear that this arrangement has been on-going since December 1991. The impugned notices/communications have been issued only in December 2002 and hence, the arrangement between the bank and the defaulters was already in place for more than a decade when the impugned notices were received. On a careful perusal of the records of the Commercial tax Department as well as DRT/DRAT, it is concluded that the available documents establish the legitimacy of the factual position of the bank in these writ petitions.
As far as the question of priority is concerned, Section 26E of the SARFAESI Act is a specific provision which states that notwithstanding anything contained in any other law for the time being in force and after the registration of security interest, it is the debts due to the secured creditor that shall have priority over all other debts and revenues, including those payable to the Central or State Government or local authority. Hence, as far as SARFAESI Act is concerned and with respect to the question of priority, it is Section 26E, which is a specialized section, that would apply. The provisions of Section 34 of the RDB Act are, by contrast, general in nature - in the juxtaposition of Section 26E of the SARFAESI Act with Section 34 of the RDB Act, it is Section 26E of the SARFAESI Act that will provide the necessary impetus for determining the priority of a charge of security interest in favour of the Financial Institution, as Section 34 of the RDB Act is, by comparison, only a general provision.
It is very clear that it is the provisions of Section 26E of the SARFAESI Act and Section 34 of the RDB Act would prevail over the provisions of Section 24 of the TNGST Act. Additionally, this is a case where security interest has been created by the bank as early as in 1991, prior to the charge imposed by the Sales tax Department. Section 24 of the TNGST Act does not provide for priority by creation of a first charge in respect of the demands raised under that Act. Hence, Section 26E of the SARFAESI Act and Section 34 of RDB Act would prevail, in public interest.
Conclusion - Section 26E of the SARFAESI Act and Section 34 of the RDB Act would prevail over the provisions of Section 24 of the TNGST Act, in public interest.
The impugned notices and communications are quashed and both writ petitions are allowed.
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2025 (4) TMI 1389
Entitlement for concessional central sales tax - respondent despite falling in the negative list would still be entitled to the tax rebate as set out in the notification dated 01.04.2013, that too, for the period 2015-16, especially, when it was not disputed before the authorities below that the industrial unit of the respondent falls in the ‘negative list’ - failure to take into consideration the judgment of the Hon’ble Supreme Court in Lloyd Electric and Engineering Limited vs. State of Himachal Pradesh & Ors, [2015 (9) TMI 370 - SUPREME COURT], wherein the Hon’ble Supreme Court has held that the State Government cannot speak in two voices - principles of natural justice - HELD THAT:- In Ambica Quarry Works v. State of Gujarat and others [1986 (12) TMI 365 - SUPREME COURT], the Hon’ble Supreme Court held that the ratio of any decision must be understood in the background of the facts of that case. Relying on Quinn v. Leathem, it has been held that the case is only an authority for what it actually decides, and not what logically flows from it.
In Union of India v. Amrit Lal Manchanda and another [2004 (2) TMI 361 - SUPREME COURT], it has been stated by the Hon’ble Supreme Court that observations of courts are neither to be read as Euclid’s theorems nor as provisions of the statute and that too taken out of their context. The observations must be read in the context in which they appear to have been stated. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.
It was not disputed before the Hon’ble Supreme Court that the appellant therein was found eligible for said concession since it satisfied the parameters prescribed in the notification till 31.03.2009. These incentives were thereafter extended not only for five years up to 19.05.2009 but were thereafter extended vide notification dated 29.05.2009 upto 31.03.2013 or till the time CST is phased out or whichever is earlier.
This notification clearly excluded the industrial units specified in the negative list from the concessional rate of 1.5% of the taxable turnover of such goods w.e.f. 01.04.2013 for a period of five years or till the implementation of the Goods and Services Tax Act, whichever is earlier - the notification clearly excluded the industrial units specified in the negative list from the concessional rate of 1.5% of the taxable turnover of such goods w.e.f. 01.04.2013 for a period of five years or till the implementation of the Goods and Services Tax Act, whichever is earlier.
Conclusion - i) The respondent's industrial unit, being part of the negative list, is not entitled to the concessional CST rate of 1.5% under the notification dated 01.04.2013. ii) The assessment imposing CST at the rate of 2% and associated interest and penalty is valid and rightly upheld by the assessing and appellate authorities.
Appeal allowed.
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2025 (4) TMI 1388
Dismissal of Second Appeal for non-payment of pre-deposit, especially when the Appellant has already made pre-deposit in the First Appeal - Tribunal exceeded the pre-deposit amount to an extent of the entire tax demand - increasing the pre-deposit amount in Second Appeal in comparison with the pre-deposit amount of first appeal, when the tax demand has been reduced in comparison of the first appeal.
HELD THAT:- The appellant submitted that total demand disputed by the appellant in the Second Appeal before the Tribunal is around Rs. 4,50,000/- whereas the appellant has already deposited Rs. 1,80,000/- (Rs. 1,30,000/- before the First Appellate Authority and Rs. 50,000/- before the Tribunal) and therefore, the appellant has also prayed for waiver of remaining amount of pre-deposit before the Tribunal but the Tribunal did not consider the request of the appellant and dismissed the appeal of the appellant and as such, the appellant is prevented from availing the opportunity to make submissions on merits of the case.
In view of above submission by the appellant, the interest of justice would be served, if the order passed by the Tribunal for pre-deposit of Rs. 3,00,000/- is modified.
The order of the Tribunal is modified by giving credit of Rs. 1,30,000/- deposited by the appellant before the First Appellate Authority, reducing the pre-deposit amount to Rs. 1,70,000/-. As the appellant has deposited Rs. 50,000/- before the Tribunal, the Appellant is directed to deposit Rs. 1,20,000/- towards pre-deposit within a period of four weeks from today. On deposit of Rs. 1,20,000/- within four weeks, the Second Appeal No. 610/2021 shall stand restored to file of the Tribunal.
Appeal is disposed off.
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2025 (4) TMI 1317
Validity of assessment orders - variation of 317.64 Cubic meters of granite - appeal dismissed on the ground that the said appeals are beyond the period of limitation permissible under the provisions of the A.P. Value Added Tax Act, 2005 - HELD THAT:- The orders of assessment passed by the Commercial Tax Officer state that the petitioners had not produced any material before the Commercial Tax Officer to demonstrate that there was no variation in the quantity of granite quarried and the quantity of granite sold by the petitioners. On that basis, the Assessing Officer had passed the orders of assessment. The petitioners do not choose to file any appeals, against the said orders of assessment, within the period of limitation stipulated under the provisions of the VAT Act. The appeals were filed, with an inordinate delay, and beyond the period of time, which could be condoned by the appellate authority.
The maximum period within which the appeals could have been filed and the further period, which can be condoned by the Appellate Authority, had expired even before the Covid outbreak in March 2020. As such, the order of the Appellate Authority also cannot be faulted.
Conclusion - The writ petitions are clearly barred on account of laches. Apart from that, no cogent reasons are set out for challenging the orders of assessment or the orders of appeal.
Petition disposed off.
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2025 (4) TMI 1316
Interest on delayed refunds - entitlement for enhanced rate of interest - relevant date for calculation of interest - HELD THAT:- As per the provisions of the JVAT Act, 2005, the amount of interest starts accruing automatically after 90 days from the date of submission of application of refund, which was submitted by the petitioner on 16.09.2020 and 90 days therefrom expired on 15.12.2020, hence interest will start accruing w.e.f. 16.12.2020.
In the instant case the interest is calculated as per Rule-19 (2) (a) of the Jharkhand Value Added Tax Rules, 2006. However, taking a clue from the order of Alok Shankar Pandey [2007 (2) TMI 329 - SUPREME COURT] that had the Revenue paid the interest to the Petitioner at the right time, the Petitioner could have invested that amount. Thus, the Petitioner is certainly entitled for enhanced rate of interest. Accordingly, the Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs. 3,54,21,551.00.
The ground of the respondents with regard to payment of less interest in the background of Suo Moto Writ Petition (C) No. 3 of 2020) [2022 (1) TMI 385 - SC ORDER] that the period from 15.03.2020 to 28.02.2022 excluded while calculating the interest amount, is untenable and without any legs to stand in the eye of law. The Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs. 3,54,21,551.00.
The Respondent Department is directed to pay the differential amount of interest @ 9% p.a. to the petitioner on account of interest accrued on the principal amount of Rs. 3,54,21,551/- after deducting Rs. 20,43,775/- which was refunded belatedly to the petitioner on 21.03.2023 i.e., after delay of 826 days from the date of refund application filed by the Petitioner. It is made clear that the Respondent department shall make payment of such interest @ 9% after proper calculation within a period of 10 weeks from the date of receipt/production of a copy of this order.
Conclusion - i) Application for refund was submitted by the petitioner on 16.09.2020 and 90 days therefrom expired on 15.12.2020, hence interest will start accruing w.e.f. 16.12.2020. ii) The Petitioner is certainly entitled for enhanced rate of interest.
The instant writ application stands allowed.
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2025 (4) TMI 1284
Classifiation of goods - revision in the rate of tax - liquid carbon dioxide - taxable at 5% or 14.5%? - to be classified within Entry-100 (190) in Schedule-IV of the VAT Act or under Entry 100(190)? - time limitation for passing revisional order - revision order was passed after about six years from the date of service of the assessment order.
Time limitation for passing revisional order - HELD THAT:- In S. Kasi vs. State through the Inspector of Police, Samaynallur Police Station, Madurai District [2020 (6) TMI 727 - SUPREME COURT], the petitioner had sought statutory bail, available under Section 167 (2) of the Code of Criminal Procedure, on the ground that the charge sheet, in his case, had not been filed within 60 days of his incarceration or of his being placed in judicial custody. The State contended that the period stipulated under Section 167 (2) Cr.P.C., would stand extended by virtue of the judgment of the Hon’ble Supreme Court dated 23.03.2020. The Hon’ble Supreme Court, after going through the order passed by the Hon’ble Supreme Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER] held that 'To obviate the difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.'
In view of the observations of the Hon’ble Supreme Court in S. Kasi vs. State through the Inspector of Police, Samaynallur Police Station, Madurai District, which was followed by the Hon’ble High Court of Calcutta and High Court of Delhi, it must be held that the extension of time granted by the Hon’ble Supreme Court in the order dated 23.03.2020 and order dated 10.01.2022 would only extend limitation to litigants, who are seeking to approach the appropriate Courts and tribunals and such extension of limitation is not available to an authority acting under any statute. In the circumstances, the order of revision is beyond the period available under Section 32 of the VAT Act and is consequently non est.
Classification of goods - HELD THAT:- What is required to be seen is whether carbon dioxide, whether in liquid form or in gaseous form, would fall under Heading No.2811. As submitted by the learned counsel for the petitioner, the description of goods in Entry 100(190) of Schedule-IV is other inorganic acids and other inorganic oxygen compounds of non-metals and carbon dioxide definitely would fall within such a category. The fact that there are other products mentioned under the main Heading No.2811 would not mean that carbon dioxide does not fall within Heading No.2811. In any event, Heading No.2811 21 specifically mentions carbon dioxide, it may however be noted that there is no qualification that carbon dioxide should be in a gaseous form. In the absence of any such qualification, carbon dioxide in gaseous form or liquid form, would fall under HSN Heading No.2811 and also in Entry No.100(190) of Schedule-IV of the VAT Act.
Conclusion - i) The order of revision is beyond the period available under Section 32 of the VAT Act and is consequently non est. ii) Carbon dioxide in gaseous form or liquid form, would fall under HSN Heading No.2811 and also in Entry No.100(190) of Schedule-IV of the VAT Act.
The order of revision requires to be set aside and is accordingly set aside - Petition allowed.
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2025 (4) TMI 1181
Challenge to assessment order - invocation of extended period of limitation - absence of willful evasion of tax by the petitioner - Section 21 (5) of the A.P VAT Act - Penalty order - HELD THAT:- A best judgment order, of assessment, in the case of willful evasion of tax, by the dealer, would mean that the period of assessment, of six years, for every month would commence from the 20th day of the succeeding month, where returns have been filed in time. As there is no dispute that the returns have been filed, by the petitioner, within the prescribed time, the limitation of every month would have to be taken into account. In such circumstances, the order of assessment, dated 31.03.2021, is beyond the period of limitation set out for the months of April to February of the financial year 2014-15. Since the assessment order is beyond the period of limitation, the order of assessment, dated 31.03.2021, passed by the 1st respondent is to be set aside for the period April, 2014 to February, 2015.
The fact remains that the period beyond limitation would have to be excluded and a fresh computation of the tax that would have paid would have to be undertaken. For this purpose, it would be more appropriate that the entire order is set aside and the matter is remanded for a fresh assessment, by the Assessing Officer, for the period which is within limitation. Apart from this, the petitioner has also raised a ground that the levy of tax @ 14.5%, without giving the benefit of the composition scheme, is impermissible as the Assessing Authority had not verified the forms of composition given by the petitioner and endorsed by the 1st respondent.
Penalty order - HELD THAT:- The order of Penalty, dated 21.05.2021, is based upon the order, dated 31.03.2021. Once the order of assessment itself has been set side, the order of penalty would not survive.
Conclusion - Since the assessment order dated 31.03.2021 is beyond the period of limitation set out for the months of April, 2014 to February, 2015, the order of assessment passed by the 1st respondent is to be set aside for that period.
The order of assessment, passed by the 1st respondent on 31.03.2021 as well as the order of penalty, passed by the 1st respondent on 21.05.2021 set aside - petition allowed.
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2025 (4) TMI 1180
Refund of excess tax credit - applicability of provisions of Rule 18(3)(b) of the Andhra Pradesh VAT Rules, 2005, read with Section 22 of the A.P. Value Added Tax Act, 2005 (the VAT Act) - HELD THAT:- While Section 22 (3) would be applicable to the Central Government, the State Government and the organizations mentioned in Section 22 (3), the provisions of Section 22 (3-A) would be applicable only to the Government of A.P., or any local authority. It would not be applicable to the Central Government - The State is relying upon the provisions of Rule 18 (3) (b) to contend that any payments made in excess of tax liability of the dealer, by a Government authority, can be forfeited under Rule 18 (3) (b).
A closer look at Rule 18 would show that the said Rule specifically stipulates that it would be applicable for payments made under Section 22 (3-A). As the Central Government is not covered under Section 22 (3-A), the provisions of Rule 18 (3) would not be applicable. Consequently, the State cannot refuse refund of amounts to the credit of the petitioner on the ground of Rule 18 (3) of the VAT Rules.
Concluson - Excess tax credits arising from contracts executed for the Central Government are refundable and cannot be forfeited under the provisions invoked by the Revenue in this case.
This writ petition is allowed setting aside the assessment order, dated 30.10.2023, passed by the 3rd respondent with a consequential direction to the 3rd respondent to refund the amount of Rs. 20,19,710/- along with interest under the provisions of the APVAT Act and the Rules made thereunder.
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2025 (4) TMI 1108
Rejection of second Restoration Application filed by the petitioner seeking restoration of Restoration Application No. 1 of 2023, which in turn sought restoration of Second Appeal No. 1172 of 2018 - non-appearance of the petitioner's advocate before the Tribunal due to being occupied in High Court proceedings and other work commitments - HELD THAT:- It appears that the Tribunal ought not to have rejected the Restoration Application No. 12 of 2023 on the ground that the matter is pending for ten years and the applicant has not paid any amount towards tax demand. The Tribunal should have considered the facts of the case to grant the relief to the petitioners for benefit of production of Form-F in accordance with law so as to grant relief during the course of hearing of Second Appeal No. 1172 of 2018. The matter is pending before the Tribunal prior to 2018 and still pending for adjudication and therefore, the Tribunal should not have dismissed the restoration application on that ground of pendency of the litigation.
Conclusion - The Tribunal ought not to have rejected the Restoration Application No. 12 of 2023 on the ground that the matter is pending for ten years and the applicant has not paid any amount towards tax demand.
This petition is disposed off by imposing a cost of Rs.25,000/- on the petitioner to be deposited with the Tribunal within a period of two weeks from the date of receipt of a copy of this order and on that condition, the impugned order of the Tribunal dated 21/08/2023 passed in Restoration Application No. 12 of 2023 is quashed and set aside and Restoration Application No. 1 of 2023 in Second Appeal No. 1172 of 2018 is ordered to be restored to file.
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2025 (4) TMI 1062
Recovery of amount on account of the defendant's failure to furnish Form-C for availing concessional Central Sales Tax (CST) rates - non-compliance with the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015 - HELD THAT:- The plaintiff had, unequivocally, denied receiving copies of Form-C in question. Thus, the onus to prove that copies of Form-C had been provided to the plaintiff was required to be discharged by the defendant. The defendant had not produced any document on record to show that it had forwarded Form-C in question to the plaintiff. Although the defendant has now sought to produce the copies of Form-C in these proceedings by filing an application for producing additional evidence, the defendants have not produced any letter or communication forwarding the said Form-C to the plaintiff.
There is no reason for the plaintiff to have suffered an additional liability of tax in the event Form-C was provided by the defendant to the plaintiff as claimed. Producing Form-C, at this stage, is of little assistance to the plaintiff as the plaintiff has already entered into a settlement for payment of the differential tax for seeking waiver of the interest on the said sum as demanded by the concerned tax authorities.
The plaintiff is entitled to receive the amount of Rs. 3,88,294/- along with remaining consideration as differential tax along with the balance consideration.
Whether the suit is liable to be dismissed for non-compliance with the provision of Section 12A of the CC Act? - HELD THAT:- Undisputedly, the plaintiff had filed an application under Order XXXVIII Rule 5 of the CPC for seeking attachment of the amount claimed. In terms of the Agreement, the defendant was required to deposit the remaining consideration of 5% in a fixed deposit, which would be withdrawn by the plaintiff on expiry of the warranty period of three years. During this period, the plaintiff was required to be secured by a bank guarantee. Admittedly, the bank guarantee had been withdrawn. Thus, it is understandable from the stand point of the plaintiff that it required to be urgently secured in respect of its claim - the suit could not be dismissed as barred by law on account of Section 12A of the CC Act.
It is also relevant to note that the Supreme Court in M/s Patil Automation Private Limited and Ors. v. Rakheja Engineers Private Limited [2022 (8) TMI 1494 - SUPREME COURT] had held that the provisions of Section 12A of the CC Act are mandatory. However, it was clarified that the decision would be prospective.
Conclusion - i) The plaintiff is entitled to recover Rs. 9,54,094/- along with interest, including Rs. 3,88,294/- as differential tax paid due to non-furnishing of Form-C by the defendant. ii) The suit is not barred or liable to be dismissed for non-compliance with Section 12A of the CC Act.
Appeal dismissed.
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2025 (4) TMI 1061
Challenge to revisional show-cause notices - power of Revisional Authority, under Section 32 of the Telangana Value Added Tax Act, 2005, to issue revisional show-cause notices challenging the appellate order passed in favor of the petitioner - HELD THAT:- A plain reading of Section 32 (1) of VAT Act makes it clear that the Revisional Authority is competent to initiate proceedings to revise, modify or set aside the order. Pertinently, the learned counsel for the petitioners has not assailed the show-cause notices on the ground of competence. The provision in no uncertain terms makes it clear that the Revisional Authority is indeed competent to take a different view from the view taken by the Appellate Authority.
There are substance in the argument of learned Special Government Pleader for State Tax that scope of interference at the stage of show-cause notice is very limited.
The necessary ingredients on which interference can be made at the stage of show-cause notice are absent in the present cases. At the cost of repetition, the question of competence/jurisdiction is not involved in the present matters. Whether the appellate order discloses necessary ingredients to show that it is prejudicial to the interest of Revenue or not can also be raised while filing objection/response to the show-cause notice. This is said, in view of the principles laid down by the Supreme Court in Mohd. Ghulam Ghouse [2004 (1) TMI 378 - SUPREME COURT].
The impugned show-cause notices cannot be interfered with. Resultantly, interference is declined. The petitioners may file their reply to the show-cause notices by taking all possible grounds within three weeks from today. The Competent Authority shall consider the reply and decide the matters, in accordance with law, expeditiously.
Conclusion - The revisional show-cause notices issued under Section 32 of the VAT Act are valid and maintainable.
Petition disposed off.
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2025 (4) TMI 1060
Legality of remanding the matter while recording the finding in favour of the revisionist - HELD THAT:- It is not in dispute that against the assessment order, first appeal was filed by the revisionist, which was partly allowed. Against the first appellate order, both the revisionist and revenue preferred second appeals out of which, the appeal filed by the revisionist was allowed and the appeal filed by the revenue was dismissed by remanding the matter back for fresh innings to the assessing officer to adjudicate the case as fresh while fresh material was available on record before the Tribunal to take the decision.
This Court in the case of Sugar & General Engineering Corporation has held that 'all the materials relating to the nature of transaction are available and on the basis of such materials, decision is only required to be taken. Therefore, in my view, remand of the case is not justified. Deputy Commissioner (Appeals) in my opinion should decide the appeal on merits as its own stage.'
Conclusion - The Tribunal erred in remanding the matter for fresh assessment despite having recorded findings in favor of the revisionist and dismissing the revenue's appeal.
The impugned order passed by the tribunal is set aside. The matter is remanded to the Tribunal to decide the matters by passing reasoned and speaking order, after hearing all the stakeholder - revision allowed by way of remand.
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2025 (4) TMI 952
Challenge to validity of subrule (20) of rule 17 of the Central Sales Tax (Rajasthan) Rules, 1957 - misrepresentation of fact or by fraud or in contravention of the provisions of the Central Sales Tax Act, 1956 - HELD THAT:- Coming back to sub-sections (3) and (4) of Section 13, the rule-making power conferred on the State Government under sub-section (4) is for any or all of the specific purposes laid down in clauses (a) to (j). As stated earlier, none of these clauses provide for making a rule to enable the authorities to cancel a declaration in Form C. It is true that under sub-section (3) of Section 13, the State Government has power to frame rules to carry out purposes of the CST Act. However, power of sub-section (3) is circumscribed by its first part which provides that the rules made to carry out the purposes of the CST Act should not be inconsistent with the provisions of the CST Act and the rules made by the Central Government in exercise of powers under Section 13(1) of the CST Act.
The Central Registration Rules do not vest power in any authority to cancel the declaration in Form C. Therefore, if the State Government exercises the rulemaking power under sub-section (3) of Section 13 by making rules providing for cancellation of a declaration in Form C as provided in Central Registration Rules, the State Rules will be inconsistent with the Central Registration Rules framed by the Central Government in exercise of power under Section 13(1)(d) of the CST Act. The State Government cannot frame rules in exercise of power under Section 13(3) which will be inconsistent with the rules framed by the Central Government in exercise of powers under Section 13(1) of the CST Act.
Conclusion - It is not possible to find fault with the view taken by the High Court that sub-rule (20) of Rule 17 of the Rajasthan Rules is inconsistent with the Central Registration Rules framed in exercise of power under clause (d) of sub-section (1) of Section 13 of the CST Act.
Appeal dismissed.
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2025 (4) TMI 951
Levy of penalty u/s 10-A of the CST Act - inter-State purchase of Xray, Xan 250, hp CPU, which commodity was not permitted to purchase or sales against Form 'C' under the Central Sales Tax Act, 1956 - HELD THAT:- Under the 'C' Form issued, certain declarations have to be made. On asking counsel to produce copies of the 'C' Forms, the same were not available. Counsel stated that his instructions are the 'C' Forms have been given to the dealer who sold the goods and, hence, petitioner does not have copies of the 'C' Forms.
In the matter at hand, the Tribunal has only remanded the matter for fresh consideration. The grievance of petitioner is that the remand is for limited purpose to ascertain what is the actual tax paid in the other State and that may be taken into account to ascertain the balance of penalty of 150%. Counsel stated that no penalty is in fact payable.
The fact that the 'C' Form itself is not made available to this court for verification makes to draw adverse inference. Therefore, the appeal is dismissed.
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2025 (4) TMI 751
Failure to appreciate the entries made in the Schedules of the HP VAT Act, 2005 in respect of goods / articles / commodities/items to be taxed as per the rates prescribed in the Schedules appended to the H.P. VAT Act, 2005 - failure to interpret the contents of the judgment in Nokia India Pvt. Ltd. [2014 (12) TMI 836 - SUPREME COURT] case by the Hon'ble Supreme Court and the orders passed by the Authorities below without adhering to the legal proposition settled down by the Hon'ble Supreme Court - wrongful treatment of mobile battery charger - entry No. 60 (f) (vii) of part-II A of schedule-A of the HP VAT Act., 2005 - cell phone charger is an accessory to the cell phone or not.
HELD THAT:- It is not in dispute that in Nokia India Pvt. Ltd.’s case [2014 (12) TMI 836 - SUPREME COURT], the Hon’ble Supreme Court had rendered judgment in context of Punjab Vat Act, wherein entry 60 (6) (g) of Schedule B did not mention accessories for the purpose of taxing the item/product @4% and thus are liable for being charged @ 12.5%.
The pivotal issue before the Allahabad High Court in M/s Samsung India’s case [2018 (1) TMI 911 - ALLAHABAD HIGH COURT] revolved around whether a mobile charger, when sold as part of a composite package with a mobile phone, could be made subject to separate taxation under the U.P. VAT Act, 2008. The Department contended that the charger should be taxed separately based on the judgment of Hon’ble Supreme Court in Nokia’s case whereas the petitioner argued that the composite package should be treated as a single entity for tax purposes.
In the case before the Allahabad High Court, Entry No.28 of the U.P. VAT Act was under consideration which provides “cell phones and its parts but excluding cellphones with MRP exceeding Rs. 10,000/-” and the VAT charged was @4%, therefore, the plea of the U.P. State that the charger should be charged at higher rate was held to be misconceived, as a charger was part of the cellphone. The petitioner therein, a prominent manufacturing company was engaged in the production of consumer electronics, IT, and telecom products, operates multiple offices across India. The petitioner therein had filed a writ petition challenging two notices issued under the U.P. VAT Act on February 2, 2016 and March 18, 2016. These notices were issued for reassessment of tax liability for the same period and products previously assessed by the tax department. The impugned order resulting from these notices was passed on March 30, 2016.
Division Bench in aforesaid case had failed to notice number of judgments rendered by learned Single Judge of the same High Court in case titled as M/s Lava International Ltd. versus State of Karnataka and others, [2016 (12) TMI 60 - KARNATAKA HIGH COURT] upholding the separate rate of tax on the ‘Mobile Battery Chargers’ (MBC) sold alongwith the mobile phones itself, under the provisions of the Karnataka Value Added Tax act, 2003.
As regards the dominant nature test as heavily stressed upon by learned counsel for the respondent and taken note in the case before Allahabad High Court, is conceptually flawed in application. The dominant nature test or “degree of intention” or overwhelming component test or decree of labour and service tax came to be developed with the progress of law and applies to dominant composite contracts goods plus service tax, as evolved over to determine whether the contract is a work contract or a contract for sale of goods or both. Whether the contract could be treated as divisible or not.
In the instant case what is sold is a phone with the charger which is a pure sale of goods and containing no self-service element. It is common knowledge that today majority of the mobiles are being sold with charger and wherever there are two different products being sold in same retail package.
Conclusion - i) The learned Tribunal failed to appreciate the entries made in the Schedules of the H.P. VAT Act, 2005 in respect of goods/ articles/commodities/ items to be taxed as per the rates prescribed in the Schedules appended to the H.P. VAT Act, 2005 in its right perspective and thereby reached at a wrong conclusion. ii) The learned Tribunal wrongly interpreted the judgment in Nokia India’s case and thereby, reached at a wrong conclusion. iii) The order passed by the learned Tribunal is perverse and contrary to the provisions of law laid down in the VAT Act and law settled by the Hon’ble Supreme Court in Nokia India’s case. iv) The learned Tribunal has wrongly treated the mobile battery charger taxable @5% instead of 13.75%. v) The learned Tribunal was not justified in passing the impugned order ignoring entry No. 60 (f) (vii) of part-II A of schedule-A of the H.P.Vat Act, 2005 which does not include mobile charger and other accessories. vi) The learned Tribunal erred in not considering the cellphone charger as an accessory to the cellphone and is not a part of the cellphone. Therefore, battery charger cannot be held to be a composite part of cellphone but is an independent product which can be sold separately without selling the cellphone.
Petition allowed.
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2025 (4) TMI 750
Disallowance of claim of deduction towards sub-contractors for the lack of producing certificates mandated under Rule 3(2)(i-1) of KVAT Rules, 2005 - absence of particulars of tax collected - invocation of powers of suo moto revision under section 64 of the Act - levy of tax on receipt for land cost i.e., immovable property, which does not constitute consideration for works contract under Composition Scheme of KVAT - reopening of assessment proceedings by invoking revisional powers under section 64 of the Act - HELD THAT:- With respect to exemption claimed on sub-contractor payment of Rs. 75,63,738/-, the reassessment order itself had disallowed the same. Added, there is no material to show that the turnover was different from the one declared by the Assessee and the same turnover has been used by both the authorities. In respect of URD purchases that were disallowed, the Assessee had filed its reply specifically stating that there was no URD purchase. The re-assessment order though does not in so many words give any finding but does not deny or disallow the claim of Assessee. Therefore, question of error or prejudice does not arise.
It hardly needs to be stated that the change of opinion cannot be a ground for invoking suo moto revisional powers vide COMMISSIONER OF INCOME-TAX. VERSUS. JAIN CONSTRUCTION CO. [2012 (11) TMI 1071 - RAJASTHAN HIGH COURT]. In the instant case, when all the documents were already submitted by the Assessee at the time of reassessment, what the revisional authority has done is nothing but a mere change of opinion, which is impermissible - What is contemplated by the statute is that the former agreement for sale of land would not be a subject matter of the tax, and the aggregate of works contracts agreements only would be taken into account as they represent the total consideration for the works contract. Further, in terms of section 15 (4) of the Act, the only item that is excluded is input tax credit as composition schemes are normally done to tax turnover without input tax as a simple alternative to regular tax payments. Composition schemes cannot be converted into a scheme to tax turnovers not falling within the legislative competence.
In the instant case, obviously there is no JDA inasmuch as the Assessee himself has undertaken construction activity on his own land, as recorded in the reassessment order dated 25.09.2019. Further, documents for purchase of land and the entire set of agreement to sell and agreement for construction along with copy of invoices were produced at the time of reassessment - The assessment proceedings for the period 2015-16 has attained finality under comprehensive Karasamadhana Scheme 2019 (CKSS 2019), the same cannot be reopened by invoking revisional powers in terms of Section 64 of the Act.
Conclusion - i) VAT cannot be levied on immovable property. ii) Finalized assessments under the Karasamadhana Scheme cannot be reopened.
The questions of law framed in these appeals, are answered in favour of the Assessee and against the Revenue.
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2025 (4) TMI 687
Dismissal of the appeal against the levy of VAT @ 13.75%, as against the claim of 5% - Capital goods or not - failure to appreciate that mechanical bodies and pre-fab shelters, sheets, metals, parts etc. is capital goods and taxable @ 5% - applicability of residual entry when once good falls under any of Harmonized System of Nomenclature (HSN) classification - levy of penalty is totally against the basic principles of interpretation of provision of Act and law - HELD THAT:- It would be noticed that the goods manufactured by the petitioner do not fall within the definition of capital goods, therefore, these goods cannot be charged @5% under ‘Part-II-‘A’ of Schedule ‘A’ and are required to be charged @13.75% of ‘Part-III of the above schedule. Therefore, the authorities below have rightly held the petitioner to be liable to pay an additional demand in respect of the differential amount of VAT @8.75% for the year 2012-13 and 2013-14 upto 30.06.2013.
Additionally, it is found that the petitioner while making a declaration in form VAT-XXVI-A had described the goods as ‘sheet metal parts’ and was thus rightly assessed under the residuary articles as it was the petitioner’s case itself that goods supplied by him were highly specialized goods made to order and, therefore, in this manner, while not mentioning the same in the invoice and giving it a different nomenclature, the petitioner obviously has concealed the particulars of sale of these goods and had also furnished false and incorrect information in his returns as well as in the declarations submitted by him in form VAT-XXVI-A.
Conclusion - The goods manufactured by the petitioner do not fall under the capital goods so as to attract tax @5% and were rightly taxed under the residuary entry. The authorities below have correctly interpreted the provisions of the Act and law and thereby rightly imposed not only the tax liability, but also the penalty upon the petitioner.
Petition dismissed.
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2025 (4) TMI 630
Maintainability of writ petitions - whether this Court should entertain these petitions despite there being alternative remedy or direct the petitioners to approach the competent authority as per Section 49 (4) of the Act of 2005? - substratum of arguments of the Counsel for the petitioners is based on the premise that once a writ petition was entertained, the petitioner cannot be relegated to avail alternative remedy - HELD THAT:- The petitioners cannot take a plea that the respondent authority has not provided any opportunity of hearing before passing the impugned order. While deciding these petitions earlier, this court has found that the alleged “amended notice” does not contain the new dispatch number, therefore, it cannot be said that the alleged notice was issued under sub-section (3) of Section 49 of the Act of 2005 and, in consequence, the order impugned passed in pursuance thereof has been declared to be as null and void but the Hon’ble Division Bench in Genpact India Private Limited [2019 (11) TMI 1118 - SUPREME COURT] and Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti [2008 (5) TMI 642 - SUPREME COURT] has held that the petitioners were fully aware of the intention of the respondent-department for initiation of such a proceeding under sub-section (3) of Section 49 of the Act of 2005, and direction was issued to decide these petitions in accordance with law.
In the case of Assistant Commissioner of State Tax & Ors. Versus M/s Commercial Steel Limited [2021 (9) TMI 480 - SUPREME COURT], the Hon’ble Apex Court has observed that respondents therein had a statutory remedy under Section 107 of the CGST Act.
The question is not about the maintainability of writ petition under Article 226 of the Constitution of India but about the maintainability of writ petition against the order passed under section 49 (3) of the VAT Act 2005, bypassing the statutory alternative remedy - There is a difference between the entertainability and maintainability of a writ petition. Even if the alternate remedy is available to the Petitioner, that cannot be a ground to hold the writ petition under Article 226 of the Constitution of India against an administrative authority as “not maintainable”. The powers under Article 226 of the Constitution of India can be exercised even if there exists an alternate remedy; however, it is in restricted circumstances, within well-defined parameters. As a matter of settled judicial practice, the jurisdiction under Article 226 of the Constitution of India is not exercised if there is an alternative efficacious remedy available, and in such circumstances, the writ court may decline to “entertain” the writ petition. There is, therefore, a difference between maintainability and entertainability of a writ petition.
Conclusion - The writ petitions dismissed, directing the petitioners to pursue their grievances through the statutory appellate process provided under the Chhattisgarh Value Added Tax, 2005.
Petition dismissed.
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2025 (4) TMI 564
Disallowance of the input tax credit for the purchase tax paid on sales turnover made to a manufacturer-exporter - Applicability of exemption provisions under Section 7(c) and the restrictions under Section 13(7) of the Act - HELD THAT:- Plainly interpreting and applying section 7(c) provides that no tax under the Act shall be levied and paid on the turnover of sale or purchase of such goods by such class of dealers as may be specified in the notification. The said exemption applies to the goods and also to the class of dealers who satisfy the conditions and fall within the notification issued under section 7(c) of the Act. The controversy is not over the exemption from levy and collection of tax between the dealer and the department, since the subject turnover falls admittedly under section 7(c) of the Act, read with notifications dated 24.02.2010 and 25.03.2010. The said admitted position takes to the entitlement or eligibility of the dealer for the input tax credit. It is axiomatic, particularly in tax jurisprudence, that distinct concepts, such as taxable persons, taxable goods and taxable events, are established for levying and collecting the tax. Similarly, the scheme of availing input tax credit is determined by section 13 of the Act. Section 13(1) provides for allowing credit of an amount as input tax credit to the extent provided by or under the relevant clause to which the applicable condition is attracted.
Section 13(7) outlines the circumstances under which such a benefit cannot be allowed. Section 13(7) also sets out that no facility for input tax credit shall be allowed to a dealer with respect to the purchase of any goods where the sale of such goods by the dealer is exempt from tax under Section 7(c) of the Act. The prohibition from allowing input tax credit is a statutory mandate, and the view taken by the orders impugned, in the facts and circumstances of this case, is available and correct.
Conclusion - The appellant is not entitled to input tax credit for the sales turnover made to the manufacturer-exporter, as the sales are exempt under Section 7(c), and Section 13(7) prohibits input tax credit in such cases.
Appeal dismissed.
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2025 (4) TMI 563
Rejection of account books of the applicant - legality of accepting survey report which is inadmissible in the eyes of law in view of the law laid down by this Hon'ble Court in the case of M/s Girja Ispat Pvt. Ltd. Vs. Commissioner of Trade Tax U.P. Lucknow [2013 (5) TMI 1014 - ALLAHABAD HIGH COURT] - justification in relying on the stock noted by surveying authority on estimate basis without actual weighment ignoring the law laid down by this Hon'ble Court in the case of M/s Girja Ispat Pvt. Ltd. - HELD THAT:- Perusal of the order impugned reveals that the books of account as produced by the petitioner at the time of survey were disbelieved on the basis of the survey carried out and the goods which were found based upon eye estimation.
Considering the fact that it is well settled that the calculation of goods cannot be done only on the basis of eye estimation as held in the case of M/s Girja Ispat Pvt. Ltd. and also in the case of Maa Mahamaya Alloys Private Limited vs. State of U.P. & Ors.[2023 (3) TMI 1358 - ALLAHABAD HIGH COURT], a judgment of this Court, the order impugned based upon eye estimation cannot be upheld, more so, when provision of Section 28(5) of U.P. Value Added Tax Act empowers passing of an order of assessment, which has to be based upon credible material as prescribed under Section 28(2)(ii).
Conclusion - In the present case, weighing all the goods merely on the basis of eye estimation cannot be termed as a credible material and cannot be judged as foundation for passing the order under the best judgment assessment powers conferred upon the Assessing Authority.
Petition allowed.
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