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VAT and Sales Tax - Case Laws
Showing 1 to 20 of 526 Records
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2023 (12) TMI 1286
Seeking grant of regular bail - input tax credit claimed on bogus billings during the assessment period of 2011-2012 - fraudulently obtaining refund by using false and fabricated documents - HELD THAT:- It transpires that the petitioner is behind the bars since 29.05.2023 and has been granted bail by learned Sessions Judge, Sirsa vide order dated 27.10.2023 (Annexure P-4) in one of the FIR’s i.e. FIR No. 650 dated 24.10.2020 and this Court granted regular bail to the petitioner in FIR No. 657 dated 24.10.2020 (Annexure P-3) vide order dated 09.10.2023 passed in CRM-M-49998-2023. The Investigating Agency has already completed the investigation and filed the final report under Section 173 of Cr.P.C. on 25.09.2023 and the trial has not made any progress as none of the 30 prosecution witnesses, as cited by the prosecution, has been examined so far.
In view of the ratio of law laid down by Hon’ble Supreme Court in Prabhakar Tiwari Vs. State of UP and Anr. [2020 (1) TMI 1528 - SUPREME COURT] and Maulana Mohd. Amir Rashadi Vs. State of U.P. and Others [2012 (1) TMI 407 - SUPREME COURT], it has been held that pendency of any other criminal case against the accused cannot be the sole ground to deny him the concession of bail.
The petitioner -Gopi Chand Chaudhary is ordered to released on regular bail in this case only, if not required in any other case, subject to his furnishing requisite bail bonds/surety bonds to the satisfaction of the concerned trial Court/Chief Judicial Magistrate/Duty Magistrate - petition allowed.
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2023 (12) TMI 1205
Seeking release on regular bail - claiming bogus refund on account of input tax credit - use of false and fabricated documents - HELD THAT:- A Co-ordinate Bench of this Court in Ashwani Kumar Vs. State of Punjab [2023 (6) TMI 188 - PUNJAB AND HARYANA HIGH COURT] examined the provisions of Sections 57 & 58 of the Punjab Value Added Tax Act, 2005, providing for penalty for failure to issue invoices and use of false invoices and observed that allegations of the FIR are squarely covered under the provisions of Sections 57 & 58 of the 2005 Act. It was further observed that the 2005 Act is a complete Code in itself and there is no provision provided in the 2005 Act for registration of the FIR. It was further observed that the 2005 Act only provided for imposition of penalty in case there is any contravention of its provisions and since the 2005 Act is a special law, principle of generalia specialibus non derogant would apply, meaning thereby it would operate in exclusion to the general law i.e., the IPC.
However, this Court notices that in the absence of factual matrix in Ashwani Kumar’s case, it is not possible to comment as to whether in those cases also, there were allegations regarding bogus refund of input tax credit based on false and fabricated documents. In these circumstances, it will be a debatable issue as to whether the provisions of IPC shall be applicable to the present case or not.
No explanation is given in the FIR about the delay of more than 5 years so as to write a letter to the Superintendent of Police, Sirsa on 11.12.2019 to take action against the culprits and then another approximately one year for getting the FIR registered on 24.10.2020.
Thus, no purpose shall be served by keeping the petitioners detained, particularly when no apprehension has been expressed by ld. State counsel that if released on bail, petitioners may abscond from justice - petition allowed.
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2023 (12) TMI 1204
Addition of Truck, Tripper, Dumper, JCB, Crane, Dozer, etc. to the registration certificate - Rule 13 of the Act, 1957 read with Section 8(3)(b) of the Act, 1956 - HELD THAT:- A registration certificate was issued to the petitioner according to Rule 5(1) of CST (R&T) Act, 1957 on 09.02.2011. It is not in dispute that the petitioner is indulged in the construction of roads etc. and in that process, he had plied various types of equipment, machinery including Trucks, Trippers, Dumpers, JCBs, Cranes, Dozers, Mixers etc. whereas, in the registration certificate, these articles were not included earlier, therefore, he moved an application to include these commodities which was declined by the Commercial Tax Officer, Durg and only Soil (Murum) was allowed to be included in the certificate as the same is the raw material used for construction of the road - Section 8(3)(b) of the Act, 1956 says that a dealer would be entitled to get a rebate in the tax for goods of the class or classes specified in the certificate of registration according to rules made by the Central Government to be used by him in manufacture or processing of goods for sale or mining or in general or distribution of electricity.
The Hon’ble Supreme Court in J.K. Cotton [1964 (10) TMI 2 - SUPREME COURT] while dealing with Section 8(3)(b) of Act 1956 and Rule 13 of the Act, 1957 has clearly held that the intention must be to use the goods as raw materials, as processing materials, as machinery, as plant, as equipment, as tools, as spare parts, as stores, as accessories, as lubricants, as fuels etc. and the restricted interpretation is not warranted. The Hon’ble Supreme Court further held in no uncertain terms that articles used in the process of manufacture would be liable for concessional tax, even though such articles may not be incorporated in the manufactured end-product.
The High Court of Patna in the matter of M/s Larson & Toubro [1994 (12) TMI 313 - PATNA HIGH COURT] and the High Court of Calcutta in the matter of Nagarjuna Constructions [2014 (3) TMI 1043 - CALCUTTA HIGH COURT] while dealing with similar issues included machinery, plant, equipment, tools, spare parts, stores, accessories, fuels, lubricants etc. in the registration certificate according to the provisions of Section 8(3)(b) of Act, 1956 and Rule 13 of Act, 1957.
Thus, the authorities have committed an error of law in rejecting the application moved by the petitioner to include the articles mentioned in the application - the order passed by Deputy Commissioner, Commercial Tax, Durg is hereby set aside and the application moved by the petitioner under Section 8(3)(b) of the Act, 1956 is hereby allowed.
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2023 (12) TMI 997
Constitutional validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002 - validity of the provisions of requirement of pre-deposit as introduced by sub-section (6A), (6B) and (6C) to Section 26 of the 2002 Act, as incorporated by Maharashtra Act 31 of 2017 w.e.f. 15th April 2017 - HELD THAT:- In the case of THE STATE OF TELANGANA & ORS. VERSUS M/S TIRUMALA CONSTRUCTIONS [2023 (10) TMI 1208 - SUPREME COURT] it was held that The amendments in question, made to the Telangana VAT Act, and the Gujarat VAT Act, after 01.07.2017 were correctly held void, for want of legislative competence, by the two High Courts (Telangana and Gujarat High Court). The judgment of the Bombay High Court Court is, for the above reasons, held to be in error; it is set aside; the amendment to the Maharashtra Act, to the extent it required pre-deposit is held void.
Considering the finality now having reached in regard to the issue of pre-deposit being put to rest by the decision of the Supreme Court in The State of Telangana & Ors. Vs. Tirumala Constructions, it is opined that the request of the Petitioners to approach the Appellate Authority/Tribunal needs to be accepted.
The Petitioners shall approach the Appellate Authority/Tribunal by filing their respective appeals along with applications praying for condonation of delay and also waiver of pre-deposit within a period of four weeks from today. If such appeal alongwith application are filed as permitted such proceedings be considered by the Appellate Authority/Tribunal in accordance with law and appropriate orders be passed on the application as also on the appeals - petition disposed off.
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2023 (12) TMI 898
Validity of Circular No.VII-12-1-2016-Rev-Sec-CCT-17265/CT dated 16.11.2016 under Annexure-8 issued by Commissioner of Commercial Taxes, Government of Odisha, Cuttack - circular was within authority or not - challenge to audit visit report in Form VAT-303, notice in Form VAT-306 for assessment under Section 42 of the Odisha Value Added Tax Act, 2004, order of assessment in Form VAT-312 which is the result of aforesaid circular dated 16.11.2016 issued by the Commissioner of Commercial Taxes, Government of Odisha, Cuttack - HELD THAT:- The assessment order has been passed on 29.06.2017 under Section 42 of the OVAT Act, 2004 for the periods from 01.04.2014 to 30.09.2015 which was based on Audit Visit Report restricting tax periods prior to aforesaid amendment. Though aforesaid circular has been quashed by this Court, the assessing authority while passing the final order of assessment has taken into account the Audit Visit Report submitted restricting the period till 30.09.2015 by issue of intimation vide Annexure-2. Thus, in the fact situation, it appears, the circular dated 16.11.2016 had no impact on the assessment order dated 29.06.2017 passed under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015.
This Court finds no infirmity in amending the impugned notice dated 26.09.2016 vide Annexure-1 wherein the authority rectified the notice limiting the tax periods for tax audit from 01.04.2014 to 30.09.2015 instead of 01.04.2014 to 31.03.2016.
In consequence thereof such tax audit being conducted and the assessing authority having passed assessment order under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015, this Court is not inclined to entertain this writ petition. However, if the Petitioner is so advised, may avail the remedy available under the OVAT Act.
The writ petition stands disposed of.
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2023 (12) TMI 838
Scope of contract - contract of services or a contract of supply and/or sale of software - requirement to follow decision of the Hon'ble Karnataka Sales Tax Tribunal in the case of M/s. IBM India Pvt. Ltd. vs. State of Karnataka and the judgment of the Hon'ble Karnataka High Court in the case of Saskan Communication Technologies Limited vs. Joint Commissioner of Commercial Taxes [2011 (4) TMI 566 - KARNATAKA HIGH COURT] - failure to take into account the Affidavit dated 18.12.2014 as relevant evidence of conduct of the parties to the Agreement dated 1.1.2006 and to determine the nature of the services and the work performed thereunder - for removing or fixing of bug/error within the basic software, which is in the nature of repair of the basic software, amounts to development/enhancement/customization of the existing software or not.
HELD THAT:- It is clause 4 of the agreement that has been totally misunderstood and misread by both the Commissioner as well as the Tribunal. The lower authorities have purported to hold that the said clause shows that there is a transfer of software that has come into existence. On the contrary the aforesaid clause appears to be, when the contract is read as a whole, a standard clause inserted into such contracts for repair and service and is a clause, it appears, to have been inserted by way of abundant precaution to overcome a situation where the service provider would misuse the QAD software or claim ownership over the same.
In fact, this clause shows that appellant had neither any ownership of the original software nor ownership of anything that came into existence whilst resolving customer issues. The said clause, on the contrary, shows that from the very inception everything belongs to QAD and the moment anything comes into existence by virtue of any work done by appellant's employees the same is deemed to have always been owned by QAD and appellant is not deemed to be the author of anything done. In fact, appellant was not even entitled to utilize any such work or material or product that may have come into existence and there could have been no question of any sale, as nothing belongs to appellant. When nothing belongs to appellant it is not possible to come to the conclusion that there was a transfer of goods or a sale as held by the lower authorities.
Assuming that any software has been developed or there is some change in the source code, no new or saleable software comes into existence. Appellant's employees had merely worked on the old software remotely as the same is located on QAD USA's server situated in the USA. The alteration in such software is to meet the requirements of the QAD India's customer, which at all times belonged to the QAD India. There is no sale to QAD India, and no sale was involved in the contract. In fact, the terms of the contract makes it clear that the contract was one for rendering service. In fact, even before rendering any service, appellant had given up their right to any development to the software. The consideration involved is not for the sale of any software but for the services rendered by appellant's employees. All IT property rests with QAD India.
Mastek Limited case relied upon by the Tribunal is not applicable to the facts and circumstances of the case. In the case of Mastek Limited, Mastek was required to use its professional intelligence to solution the requirements of HDFC for its Home Loan Applications; evolve a software programme to meet the requirement of the HDFC and encode a programme on its medium. HDFC’s source codes were shared, unlike in appellant’s case, to do the required alteration and modification to develop a programme which will meet functional requirement of HDFC. The software programme so developed was owned by Mastek and was then subsequently sold to HDFC through a medium. Hence there was clearly a sale in this case.
Even the judgments in the matter of Direction Software Solutions V/s. Income Tax Officer [2008 (4) TMI 332 - ITAT BOMBAY-E] and ISBC Consultancy Services Ltd. V/s. Deputy Commissioner of Income Tax [2002 (8) TMI 840 - ITAT MUMBAI] relied upon by the Tribunal are not applicable to the facts and circumstances of the case. The reliance by the Tribunal on these two decisions is totally misplaced. These were cases where the assessee(s) contended that they had developed software and were entitled to a deduction in terms of Section 10A of the Income Tax Act, 1961 which defined “computer software” to mean inter alia any customised electronic data or any product or service of any similar nature which is transmitted or exported from India to any place outside India by any means.
It has been clarified by appellant that other activities captured side agreement development of Just in Time Sequencing Product or development of any other OAD product was never undertaken by appellant. The Karnataka Appellate Tribunal in IBM India Private Limited, Bangalore when discussing levy of VAT by activity performed by ERP Implementation Specialists noted that the codes which such Professionals insert in that software are not proprietary codes, having a marketability of their own which the concerned customer can possess or transfer or sell. In other words, there is no marketable commodity in existence to be sold and unless such commodity, whether tangible or intangible, exists there cannot be a sale or a works contract. This aspect was summarily dismissed by the Tribunal and the proprietary nature of the ERP software was not duly considered - The case at hand is also similar to the one dealt by the Hon'ble High Court of Karnataka in the case of Sasken Communication Technologies Ltd. The Tribunal distinguished this judgment on the ground that in this particular case, the ownership vested with the customer from the very inception. A true and proper reading of Clause 4 of appellant’s agreement with QAD India, it would be absolutely clear that from the very inception all property is owned by QAD India and vests with QAD India. No doubt that at the end of the day, the software, which is developed is embedded on the material object that exclusively belong to QAD. In the entire contract there is nothing to indicate that appellant after developing any software has to embed the same on a material object and then deliver the same to the customer so as to affect title to the project which is developed. The title in any case, always lived and vested with QAD.
The pith and substance of the contract or true nature of the transaction shows that the contract is a contract for service simplicitor and is not a works contract or composite contract consisting of 2 contracts - one for service and one for sale, but is an indivisible contract for service only. On examination of the contract as a whole, it becomes obvious that the contract is essentially an agreement to render service. The theory of works contract or the concept of aspect theory is not attracted.
The questions of law as framed by this Court on 8th December 2015 are answered in favour of appellant. The agreement dated 1st January 2006 between appellant and QAD is a contract of service and would not be a contract for sale as defined under Section 2(24) of the MVAT Act.
Appeal disposed off.
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2023 (12) TMI 778
Levy of penalty u/s 60(4) of Bihar Value Added Tax Act, 2005 - presence of mens rea or not - invoice number not tallied - human/clerical error - detention of a truck carrying goods at the integrated checkpost, Dhobi, Gaya - HELD THAT:- In the present case, there was a mistake in the invoice number as indicated in the declaration form which was accompanying the transport. A reasonable ground of attempt to carry out multiple transport arise, since if there was no checking at the check-post then there could have been a further transport made under the same invoice, thus, enabling an inter-State sale of the goods transported by the subject invoice and SUVIDHA Form, which could go unnoticed by the Department. Section 60(4) enables a seizure of goods along with the carrier if the authority suspects the transport to be in contravention of the provisions of Section 60(2). Section 60(4) (b) makes Section 56 applicable mutatis mutandis. Penalty is imposable under Section 56(4) (b) if the person in charge of the goods fails to satisfy the officer regarding the proper accounting of goods. The ingredients of Section 60(4) (b) read with Section 56(4) (b) are available in the instant case.
There are absolutely no reason to interfere with the penalty imposed - petition dismissed.
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2023 (12) TMI 743
Application for condonation of delay dismissed - provisions of Section 12-B of the J&K GST Act, 1962 ignored, which provide that the provisions of Sections 5 & 12 of the Limitation Act, Samvat 1995 shall apply to the appeals, revisions, filed under this Act before Appellate, Reviewing Authorities or the Tribunals - HELD THAT:- A conjoint reading of Section 12(D) along with first proviso shows that the maximum time within which reference could be filed by the dealer or the Commissioner should not exceed 90 days (including the grace period of 30 days) from the date of communication of appellate order.
Admittedly, the order passed by the appellate authority is 22.02.2022 and indisputably the same was communicated to the Commissioner on 29.02.2022 as per the own admission of petitioners in the writ petition. Therefore, 29.02.2022 is the date which is to be taken for consideration for the purposes of calculation of period of limitation for filing reference. The Commissioner, therefore, was required to file reference within 60 days, i.e., on or before 29.04.2022 or before 29.05.2022 (including the extended/grace period of 30 days subject to sufficient cause). However, no such reference was filed within 90 days; as such it has become barred by Section 12(d) of the J&K GST Act. Thus, the order passed by the appellate authority has attained finality because in view of the provisions of Section 12(d) of the J&K GST Act, which is a special Act, has excluded the applicability of Section 5 of the Limitation Act.
The order of learned Tribunal upheld - petition dismissed.
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2023 (12) TMI 742
Refund of excess tax alongwith interest - Power to re-quantification or re-adjudication after the sanction of refund - it is contended that in spite of refunding the excess amount in terms of the order dated 22.09.2022, the refund Officer had issued the said impugned notice beyond his jurisdiction - HELD THAT:- It appears that the refund order was passed on 22.09.2022 whereby the 1st respondent had determined the excess tax amount available with them to an extent of a sum of Rs.2,06,22,234/-. Pursuant to the said refund order, the petitioner had filed a refund application before the 1st respondent. At this juncture, the respondent had once again issued a notice to the petitioner and called for the particulars, as if, he is going to revise his own order.
As far as the 1st respondent is concerned, he has already assessed the excess tax amount and passed the refund order dated 22.09.2022. Having passed the same, the 1st respondent cannot issue the impugned notice dated 24.01.2023 without any provision of the law much less in terms of the Section 42(5) of the Act, and thereby the petitioner is entitled for the refund - there is no doubt that the first respondent had issued the said notice beyond the scope of his jurisdiction, since in the course of processing of the refund application, the 1st respondent is not empowered to re-adjudicate or re-quantify while passing the refund order.
This Court is inclined to direct the 1st and the 2nd respondent to refund the excess tax amount lying with the department to an extent of a sum of Rs.2,06,22,234/- along with interest as per the refund order in CST No.50806/2013-14 dated 22.09.2022. The said exercise is directed to be completed on or before 05.12.2023.
Post this matter on 08.12.2023 under the caption 'for reporting compliance'.
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2023 (12) TMI 728
Time limit for finalising of redoing the assessment - issuance of notice after 12 years from the date of the order - compliance with the time prescribed under Section 17D of KGST Act - HELD THAT:- The limitation prescribed for passing the assessment/revised assessment would not be applicable to the facts of the present case inasmuch as the high Court had set aside the original assessment and remanded the matter back to assessing authority to redo the assessment. Therefore, the proposed assessment is neither the original assessment nor the revised assessment and the limitation prescribed for assessment and revised assessment would not be applicable to the facts of the case. The question whether on remand also the limitation period prescribed for revised assessment would be applicable does not call for consideration in the facts of the present case inasmuch as it is not known that when the petitioner had supplied the copy of the judgment passed by the high Court before the assessing authority. The final order yet to be passed in pursuance to the proposed assessment in Ext. P8. This Court had directed the petitioner to file reply to Ext. P8 proposed assessment order and the petitioner has not filed the reply.
There are no substance to interfere in this writ petition at this stage - petition dismissed.
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2023 (12) TMI 672
Constitutional validity of the definition of the term ‘dealer’ as defined under Clause (j) of Sub-section (1) of Section 2 of the Delhi Value Added Tax Act, 2004 - Explanation to Sub-clause (vii) of Clause of Section 2(j) of the DVAT Act, inasmuch as it also includes any corporation or company engaged in commercial banking - HELD THAT:- In terms of Sub-section (2) of Section 3, VAT is payable at the rates as specified under Section 4 of the DVAT Act. Section 5 of the DVAT Act, explains the term ‘taxable turnover’ as the turnover during the tax period subject to adjustments. Sections 6 and 7 of the DVAT Act contains provisions regarding sales that are exempted from tax and certain sales that are not liable to tax. Section 9 of the DVAT Act contains provisions regarding the tax credit.
The adjustments of tax credit in essence encapsulates the VAT regime. The machinery provisions, subject to other provisions, restrict the aggregate VAT to the tax at the last point of taxation. Thus, the petitioner’s contention that the Scheme of the Act does not entail a charge on sale of goods, is erroneous. The DVAT Act expressly provides for charge of tax on sale of goods subject to certain exemptions and adjustments provided for under the DVAT Act. The scheme of DVAT Act does provide for credit for the taxes already borne to avoid the cascading effect of tax on sale of goods. However, it would be erroneous to assume that charge of tax in not on the sale of goods.
The contention that the petitioner is not liable to pay any tax on sale of goods on the ground that there is no value addition, is insubstantial. The petitioner’s challenge to the constitutional validity of the definition of the ‘dealer’ is founded on ex facie erroneous premise. The same is, accordingly, rejected.
In HDFC Bank v. Commissioner of Value Added Tax, Delhi [2016 (10) TMI 1345 - DELHI HIGH COURT], another Coordinate Bench of this Court had, following the decision of M/s Citi Bank v. Commissioner of Sales Tax M/s Citi Bank v. Commissioner of Sales Tax [2015 (12) TMI 1040 - DELHI HIGH COURT], rejected an appeal against the decision of the VAT Tribunal holding that sale of such re-possessed vehicles was subject to the charge of VAT. The said two decisions cover the petitioner’s challenge to the impugned notices demanding VAT, interest, and penalty under the DVAT Act.
Petition dismissed.
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2023 (12) TMI 671
Penalty order u/s 67(1) of the Kerala Value Added Tax Act, 2003 - turn over suppression - tax evasion - this Court in exercise of the power of judicial review under Article 226 of the Constitution of India can interfere order of penalty or not - HELD THAT:- It is well settled that the High Court, in exercise of power of judicial review, under Article 226 of the Constitution of India, would interfere with an order or the proceedings under a statute against which the statutory remedy of appeal etc. is provided only when the proceedings taken under provisions are ultravires, in violation of principles of natural justice, assumption of jurisdiction which is not otherwise vested in the authority or where there is infringement of fundamental rights or in clear evidence of abuse of process of law.
It is also well settled that even when grounds on which the jurisdiction can be invoked by the High Court are present, it should be invoked sparingly and only when there is something which goes to the route of the matter and it would be injustice to the petitioner to relegate to alternate forum.
From the facts, as narrated in the show cause notice and the order impugned, it is evident that the petitioner/assessee has not made true and correct disclosure, and there has been a pattern of untrue and incorrect returns for all the quarters for the year 2013-14 suppressing substantial volume of taxable contract receipts evading the tax. Therefore, there is little substance in the submission of the learned counsel for the petitioner that there was no deliberate suppression of the contract receipts as recorded in the impugned order - The assessment proceedings have also been completed under Section 25 of the Act for the year 2013- 2014 and a demand of Rs. 5,53,85,288/- has been issued against the petitioner. The petitioner has filed an appeal against the said order before the first appellate authority and paid 20% of the tax amount.
The impugned order passed by respondent No. 1 is neither without jurisdiction nor in violation of the principles of natural justice as alleged and therefore, this Court would not like to exercise its jurisdiction under Article 226 of the Constitution of India. The petitioner's appeal against the assessment order is already pending and therefore, if the petitioner files appeal within a period of 15 days against the impugned penalty order Ext. P12 dated 30.11.2014, the appellate authority should consider the appeal on merits, without going into the question of limitation in accordance with law.
Petition disposed off.
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2023 (12) TMI 607
Levy of penalty u/s 86 of the Delhi Value Added Tax Act, 2004 - case of appellant is that the Tribunal has not only misconstrued the earlier orders of remit as framed by this Court, it has also proceeded in complete ignorance of the ambit of the penalty provision - principles of natural justice - HELD THAT:- A reading of the order dated 26 September 2016 clearly establishes that the Court had not only accepted the contention of the appellant that the levy of penalty was unjustified since the question of taxability itself was contentious, but also that imposition of penalty at 200% was unjustified and disproportionate. It was in the aforesaid backdrop that it was pertinently observed that since the point had remained arguable, the levy of penalty at 200% would not sustain. It was on an overall conspectus of the aforesaid conclusions that the Court ultimately proceeded to remit the mater for the consideration of the Tribunal - It is opined that the order of 26 September 2016 cannot possibly be interpreted or understood as confining the challenge of the appellant to the issue of proportionality alone.
There are other sub-sections of Section 86 which embody the principles of a statutory penalty. For instance, sub-section (5) deals with the contingency of an assessee failing to comply with Section 21(1). The aforesaid provision obliges a registered dealer to apprise the Commissioner of circumstances which may warrant amendments in its registration. A similar example of a statutory penalty stands embodied in sub-section (6) and which authorises the levy of a penalty in case a dealer violates Section 22(2). An assessee becomes liable to be penalized under Section 86(9) consequent to a failure to furnish a return or failing to append requisite documents with a return or its refusal to comply with a direction to revise a return. As would be manifest from a close scrutiny of sub-sections (5), (6) and (9) of Section 86, those provisions envisage the levy of penalties consequent to a failure on the part of a registered dealer to discharge certain obligations or a failure on the part of an assessee to comply with statutory duties as imposed. In such situations, the Act envisages penalty to be imposed as a necessary corollary. The aforenoted provisions do not vest the Assessing Officer with any discretion in the matter of imposition of a penalty.
Sections 86(10), (14) & (15) of the Act cannot by any stretch of imagination be construed or viewed as provisions pari materia to Sections 45(6) and 47(4A) of the 1969 Act, which formed the bedrock for the ultimate decision rendered by the Supreme Court in STATE OF GUJARAT AND ANR. VERSUS M/S SAW PIPES LTD. (KNOWN AS JINDAL SAW LTD.) [2023 (4) TMI 761 - SUPREME COURT] - the conclusion of the Tribunal cannot be sustained to the contrary and when it proceeded to observe and interpret Sections 86(10), (14) & (15) of the Act as provisions embodying the principles of statutory penalty.
Turning then to the merits of the imposition of penalty itself, it is found that the same is not based on any “false, misleading or deceptive” statement or disclosure made by the appellants. The appellants had while furnishing their returns proceeded on the bona fide belief that revenues generated from the sale of reprocessed vehicles would not be exigible to tax under the Act.
In fact, the invocation of the Proviso placed in Section 34(1) lends further credence to our conclusion that the order of the Court dated 26 September 2016 cannot possibly be interpreted as restricting the scope of inquiry to the question of proportionality alone. Accepting such a contention as advanced by the respondents would compel to construe the aforesaid decision as intending to empower the respondents to levy a penalty even though the same may not find sanction under the provisions of the Act. This too leads to the irresistible conclusion that the order of 26 September 2016 did not detract from the right of the appellant to question the very basis for invocation of the penalty provisions.
The question of law as framed is answered in favour of the appellant/assessee and against the Department - appeal allowed.
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2023 (12) TMI 599
Rebate claim - purchase of food grains from the State agency on which 4% trade tax was paid - Notification dated 21.05.1994.
Tribunal while rejecting the said revision has noticed that the revisionist could not produced any document to indicate that the wheat sold to the roller flour mills was from the wheat on which tax had already been paid and merely on the said basis rejected the revision preferred by the revisionist.
HELD THAT:- The goods supplied to the roller flour mills were in fact goods on which tax had already been paid tax @ 4%. This fact is also evident from the order of assessing authority, but relevant documents could not be produced by the revisionist before the assessing authority. In the said situation, it would be in fitness of things that an opportunity is given to him to demonstrate that the goods supplied to the roller flour mills is covered by Notification dated 21.05.1984 and the conditions made therein are fulfilled.
With a view to giving opportunity to the revisionist to demonstrate the fulfillment of the conditions prescribed in the aforesaid order, the matter is accordingly remitted to the Trade Tax Tribunal. In the remand proceedings, the Tribunal if thinks proper may further remit the matter for the limited purpose to the assessing authority or may call for a report from the assessing authority to satisfy himself that the conditions mentioned in the Notification dated 21.05.1994 are either fulfilled or not. In case the revisionist is able to demonstrate that all the conditions of notification dated 21.05.1994 are fulfilled then the Tribunal shall proceed to pass orders accordingly.
Considering that much time has lapsed since pendency of the present revision, it is provided that necessary orders may be passed expeditiously, say, within a period of six months from the date of a certified copy of this order is produced before him.
Revision allowed.
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2023 (12) TMI 598
Default assessments - recovery of demand was stayed upon the payment - HELD THAT:- Considering the time gap between the hearing of the petitioner and the passing of the impugned order, the same is liable to be set aside. It is also liable to be set aside on the ground that the concerned officer, who had passed the impugned order, had not heard the petitioner.
The present petition has been pending as the petitioner also seeks to resist an order remanding the matter to the concerned authority for considering it afresh. It is the petitioner’s contention that the impugned order was void and, therefore, now the option of the Department to proceed against the petitioner stands foreclosed by lapse of time. However, the learned counsel does not press this issue.
The impugned order is set aside and the matter is remanded to the OHA to decide afresh. The concerned OHA shall pass a speaking order uninfluenced by the impugned order, after affording the petitioner, sufficient opportunity to be heard - Petition allowed.
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2023 (12) TMI 561
Enhancement of turnover - Best Judgement assessment affirmed - rejection of books of accounts - first appellate authority has not given any basis of fixing the turnover - undisclosed purchase of cloth and tailoring material - benefit of ITC not given - HELD THAT:- From perusal of the finding recorded by the Tribunal, it is evident that the Tribunal being the last court of fact has recorded a finding that authorities have not given any substantial reason for enhancing the turnover. On the said finding, the books of account can be rejected but it is not necessary to enhance the turnover.
Again this Court in the case of RATAN HARI ROLLING MILLS LTD. VERSUS COMMISSIONER OF TRADE TAX, UP., LUCKNOW [2007 (1) TMI 539 - ALLAHABAD HIGH COURT] have categorically held that estimate for whole year is not justified when suppression was found in a particular period.
Once the findings of fact has been recorded in favour of the petitioner, there is no cogent reason for enhancing the turnover. The tribunal was not justified in confirming the enhancement of turnover in view of the fact that at the time of survey loose papers were found which have been explained by the revisionist and merely on that ground the books of account can be rejected but enhancement should not be made.
The revision is partly allowed and the order of the tribunal is modified to the extent that taxable turnover of the revisionist relating to the assessment year in question, is hereby accepted.
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2023 (12) TMI 518
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - it was held by High Court that question answered in favour of the assessee and against the Revenue holding that definition contained in the Notification issued under the KVAT Act includes the ‘Charger’ which is sold along with the mobile phone in one set and accordingly taxable at 5%.
HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petitions are, accordingly, dismissed.
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2023 (12) TMI 431
Levy of tax on 25% of chemicals used as consumables in the process of job work of dyeing of fabric by assuming that property in the goods has passed on to the principals - levy of tax on the entire value of dyes used by the appellant in the job work process of dyeing of fabric ignoring the quantity of dyes which are wasted during the process in which property is not transferred to the principals - dyes and chemicals is transferred to the principals in the job work of dyeing the fabric - HELD THAT:- The issue having already been decided against the State and the matter being covered by the judgment of the Apex Court in THE STATE OF HARYANA & ANR. VERSUS M/S. A.P. PROCESSORS [2023 (7) TMI 942 - SC ORDER], order passed by the Tribunal and the Authorities below are not sustainable.
The matter is remanded to the Assessing Officer to conduct the factual enquiry by giving liberty to the parties to take all the pleas in support of their respective case as observed in M/s. A.P. Processors case.
Appeal allowed by way of remand.
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2023 (12) TMI 366
Maintainability of revision petition - application seeking condonation of delay of 136 days in filing the Revision Petition before the High Court was not filed along with the Revision Petition but subsequently - HELD THAT:- No doubt the application seeking condonation of delay has to be filed along with the Revision Petition. But if the same had not been filed by the learned advocate appearing for the appellant, the appellant cannot be prejudiced on account of the failure of the advocate in not filing it along with the memorandum of Revision Petition.
Therefore, the Revision Petition not being heard on merits, on that short ground alone, the impugned order is set aside - Appeal allowed.
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2023 (12) TMI 365
Refund of duty deposited - Constitutional validity of proviso to Section 3(1) and sub-section (5A) of Section 3 of the Bombay Entertainment Duty Act, 1923, inserted by the Bombay Entertainment Duty (Amending) Act, 1998 - whether the Petitioner can justify in invoking Article 14 of the Constitution of India, to claim refund of duty deposited on the ground that the respondents have not collected duty from similarly placed persons?
HELD THAT:- There are separate provisions dealing with the amusement park and the water sports activity. If the legislative intent was to cover only water sports activity by amusement park then the Acts would not have made a distinction between the amusement park and water sports activity. The levy is on the activities and not on the entity carrying on the activities. Therefore, whether water sports activity is carried on by amusement park or by non amusement park, both would be liable to pay the entertainment duty - It is also important to note that third proviso to Section 3(1) expressly provides that water sports activity whether situated within or outside the amusement park would be liable for entertainment duty. Therefore, the scheme of the Act clearly negatives the contention raised by the petitioners by relying on legislative debate that only water activities by amusement park are liable for duty.
It is important to note that the petitioners have admitted that they are covered by the Entertainment Duty Act. After having admitted the same, the petitioners cannot turnaround and contend at the fag end of the proceedings that since the intention of the legislature is to cover water activities in amusement park and since their activities are not in amusement park, they are not liable for duty. Section 3(1) of the Act which is charging section imposes levy, not only on entertainment as defined by Section 2(a) of the Act but also covers various other activities including water sports activity and admittedly, the activities of the petitioners like water sking, wind surfing, sailing, kayaking, Jet boating etc. are water sports activities and hence covered by charging section.
The petitioners having made an application and having taken benefit of no duty for the first three years now cannot turnaround, on expiry of three years when they are liable to pay duty at the rate of 50% and full amount thereafter, that their activities are not covered by the Bombay Entertainment Duty Act and therefore, the petitioners rightly began the arguments by stating that they are covered by the provisions of the Bombay Entertainment Duty Act. The petitioners are now estopped from contending otherwise. The claim of refund by the Petitioner is made of the duty which they themselves and rightly so paid. On these facts, in our view, the petitioners now cannot contend that their activities are not covered by the Entertainment Duty Act.
The Supreme Court in case of Supreme Court in case of THE STATE OF TRAVANCORE-COCHIN AND OTHERS VERSUS THE BOMBAY COMPANY LTD., ALLEPPEY AND OTHERS [1952 (10) TMI 28 - SUPREME COURT] held that speeches made by the Members of Constituent Assembly in the course of debates on the draft constitution is unwarranted. The Supreme Court observed in the said judgment that this form of extrinsic aid cannot be used for interpreting any provisions of the statute and same has been generally accepted in England and in the construction of Indian Statutes as well.
The petitioners are not justified in relying upon the views of some members in the course of the debates in the Legislative Assembly for interpretation of provisions of Entertainment Duty Act when the Act itself is clear on this issue - Petition dismissed.
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