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VAT and Sales Tax - Case Laws
Showing 41 to 60 of 81 Records
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2020 (2) TMI 682
Imposition of penalty under Section 54(1) (14) of UP VAT Act - sufficient compliance of section 50 of the Act or not - consignment was accompanied with unfilled Form-38 - intent to evade tax or not - HELD THAT:- As per scheme of the Act, 2008 any person, who intends to bring, import or otherwise receive, into the State from any place outside the State any goods other than goods named, and described in schedule-I in such quantity or measure or of such value, as may be notified by the State Government in this behalf, in connection with business, shall either obtain the prescribed form of declaration, in such manner as may be prescribed, from the assessing authority having jurisdiction over the area, where this principal place of business is situated or in case there is no such place, where he ordinarily resides or shall down load from official website of the department in the manner as may be prescribed under Rule 58 or 59.
In the instant case it is admitted fact that the revisionist had duly applied for and obtained Form 38 for import of goods and the Column 1 to 4 of the said Form was left blank on account of negligence of the revisionist. It is only on account of non filling of Column 1 to 4, penalty has been imposed upon the revisionist. It has been submitted on behalf of the revisionist that there was no intention to evade tax and the driver of the vehicle carrying the goods was carrying all the relevant documents including the bill/challan/bilty etc. from which the details of goods being carried on the vehicle could have been verified by the officer concerned and therefore there was no occasion for the assessing officer to pass penalty order and also that the grounds were non taxable, inasmuch as there was no intention on the part of the assesee to evade tax.
Non-filling up of column no. 1 to4 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008 - In the present case also the vehicle was accompanied by Form 38 and all other documents were being carried along with other documents and only due to human error column would remain unfilled. It was the duty of the Officer managing the Check Post who after discovering that some column of Form 38 found unfilled should have filled the same himself in the light of Circular dated 03.02.2009 and should have allowed the vehicle to proceed alongwith the goods.
The Tribunal has only observed that non-filing of various columns in Form 38 indicates that there was intention to evade tax and only this ground rejected the appeal of the assessee. The Tribunal has not correctly applied the law in this regard, as they have not given any finding about the intention to evade tax, which is a precondition for imposition of penalty - Revision allowed.
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2020 (2) TMI 681
Exemption under Entry No. 65 to Part B of the IV Schedule to the Tamil Nadu VAT Act, 2006 - sale of refined soya oil in the State of Tamil Nadu - Inter-state sales - It is the contention of the petitioner that during the period in dispute upto 12.7.2011, the dealers engaged in sale of refined oil were exempt from tax up to a turnover of ₹ 500 crores as per Entry No. 65 to Part B of the IV Schedule to the Tamil Nadu VAT Act, 2006 - HELD THAT:- It has been assumed in the impugned order that in the absence of the details of complete addresses of the local buyer’s/ purchaser of the petitioner and absence of their TIN number in the sale bills/invoice and in the absence of any receipt proof of payment for the sales effected in the State of Tamil Nadu, the claim of the petitioner in the sales tax return as local sales exempt could not be allowed and therefore the petitioner was liable to pay tax at 4% as not covered by “C” Form - It has been further stated that there were no stocks at the time of inspection on 26.9.2011 and 27.9.2011 and therefore petitioner was not only liable to pay tax as proposed in the notice but also penalty under Section 27 (3) (c) of the TN VAT Act, 2006.
In the impugned order, it has been mentioned that the petitioner has not produced any documents to substantiate receipt of goods from the state of Maharashtra on the strength of Form F issued by the respondent. However, the annexures appended to various Form F give the details of the vehicle number together with the date, challan number and the number of Tin which were allegedly transported - Since this issue would require a proper examination by the respondent, the impugned order cannot be sustained.
Appeal allowed by way of remand.
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2020 (2) TMI 680
Reversal of proportionate Input Tax Credit - credit of tax paid on purchase of Duty Entitlement Passbook (DEPB) - section 19 of the Tamil Nadu VAT Act, 2006 - HELD THAT:- It may be mentioned that an Assessing Officer cannot rely on clarifications and instructions of his superior as has been done in the present case - If assessing officers were follow such clarifications of their superior, their orders would be arbitrary. As such, such assessment cannot be completed based on clarifications as such exercise would amount to assessment by circular contrary to the view taken by the Honourable Supreme Court in ORIENT PAPER MILLS LTD. VERSUS UNION OF INDIA [1968 (5) TMI 15 - SUPREME COURT].
As an assessing officer, the respondent ought to independently come to a conclusion whether the provisions of the Tamil Nadu VAT Act, 2006 were to be invoked in the facts and circumstances of the case or not - Therefore, initiation of proceedings vide notices dated 15.6.2015 prima facie appears to be ill conceived and proceeds on a wrong assumption of jurisdiction by the respondent.
DEPB qualifies as ‘goods’ within the meaning of the Sales Tax laws and its sale is exigible to tax. DEPB scrips/licence is liable to tax at the rate prescribed under Entry 70 of Part B of the 1st Schedule of the Tamil Nadu VAT Act, 2006 - Since DEPB scrips/license is liable to tax at the rate prescribed under Entry 70 of Part B of the 1st Schedule of the Tamil Nadu VAT Act, 2006, the petitioner was entitled to input tax credit in terms of Section 19(1) of the Tamil Nadu VAT Act, 2006.
It must be remembered that DEPB Scrips were given by the Joint Director of General of Foreign Trade as an export incentive to an exporter under the Export Import Policy. Instead of giving cash refund on exports, the Central Government through the Minsitry of Commerce & Trade gave it in the form of credit of duty in the DEPB Scrips/licence which could be used for discharging the Customs duty at the time of import of goods. Such DEPB Scrips/licence could be either used by the exporter himself in whose name such scrips/licence were issued as an export incentive or it can be sold in the open market to be purchased by person like the petitioner like REP Licence.
Petition dismissed.
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2020 (2) TMI 601
Recovery of arrear of tax - charge was created in respect of the property - HELD THAT:- The facts are not in dispute that the registered dealer was in arrears of tax and therefore by virtue of section 24 of the Tamil Nadu General Sales Tax Act, 1959 and Section 42 of the TNVAT Act, 2006, a charge over the property of such defaulting dealer stood created in favour of the 1st respondent Commercial Tax Department Further as per Section 100 of the Transfer of Property Act, 1882 also a charge is said to have been created in favour of the 1st respondent as if the dealer had created simple mortgage in favour of the 1st respondent.
It was held that section 24 (2) of the Tamil Nadu General Sales Tax Act, 1959 does not provide anything contrary to section 100 of the Transfer of Property Act, 1882 and unless a provision is made in any statute contrary to the rule in Section 100 of the aforesaid Act, a bona fide purchaser for consideration without notice of charge is protected - On facts it was concluded that the appellant had no notice prior to the transfer. It also held that there was no material to show that the appellants had constructive notice of the charge and no submissions were made by the respondent on this issue. Under those circumstances, the Division Bench of this Court took a view that the property in the hands of the appellants for a value above consideration without notice of the sales tax arrears of the defaulting company or the subsequent charge created over the property was free in the hands of the appellant therein.
Coming to the facts of the present case, it is noticed that the vendor of the property from whom the petitioner’s vendor purchased the property was in arrears of sales tax to the 1st respondent. Though the property had been subject matter of encumbrance as early as 2011, at the behest of the 1st respondent Commercial Tax Department, it was not reflected in the encumbrance certificate obtained by the petitioner’s vendor on 19.4.2012 or by the petitioner himself on 12.10.2012 and on 6.12.2012. Only in the encumbrance certificate issued by the second respondent through online portal dated 24.6.2016 the charge has been reflected in favour of the 1st respondent - it is incumbent on the petitioner as purchaser to have also made a physical search in the records before taking a final decision as to whether the property was free from any encumbrance or not.
The present writ petition is liable to be dismissed - decided against petitioner.
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2020 (2) TMI 600
Demand of differential tax - imposition of penalty - settlement of disputes relating to arrears of tax, penalty or interest pertaining to sales tax - application of settlement rejected on the ground that the petitioner had not paid the amounts under section 7(1)(c) Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 - HELD THAT:- The provisions of Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 provides for an expeditious settlement of disputes relating to arrears of tax, penalty or interest pertaining to sales tax and the matters connected therewith or incidental thereto. The rate applicable in determining the amount payable for settling the dispute is provided in Section 7 of the said Act.
This is a case where the disputed tax is lesser than the penalty imposed as a result of which if the case is settled in Section 7(1)(b) of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002, amount payable by the petitioner is far below 15% of the penalty that would have been payable by the petitioner if the case was pertaining to penalty simplicitor and was to be settled under Section 7(1)(c) of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002.
The provision of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 is to be read plainly without any addition or deletion - Though the settlement of dispute is to prejudice of the revenue, nevertheless it is on account of the defect in the method prescribed under the provisions of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002. Therefore, the impugned order cannot be sustained.
Though, the petitioner benefits by being a lesser amount under Section 7(1)(b) of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002, nevertheless it is purely on account of the defect in the Act. The benefit which flows from such defective drafting of the Act cannot be denied based on the presumed and assured intention of the legislature. Unless the law was amended, the benefit of such enactment cannot be denied - the impugned order passed by the respondent is unsustainable - petition allowed - decided in favor of petitioner.
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2020 (2) TMI 599
Demand of VAT u/s section 5/6 of the TN VAT Act, 2006 - petitioner’s father had settled an immovable property along with an existing house in favour of the petitioner and her sister in the year 2004 - the impugned order has been passed without following principles of natural justice and without actually examining whether indeed the petitioner has rendered any works contract as has been confirmed the impugned order - HELD THAT:- The intention of the State Legislature was to levy and collect stamp duty at 1% was on the cost of the proposed construction or the value of construction or the consideration specified in the agreement whichever was higher relating to proposed construction of building at the stage of construction and not thereafter. Expression “building” included any unit proposed to be construct - It was not intended to cover situation where the building was already constructed. In the facts of the case, it is evident that there was indeed a sale of flat/apartment by the petitioner and therefore stamp duty payable would have been under Article 23 of the Schedule-I to the Indian Stamp Act, 1899.
The truncated valuation of UDS in the land for payment of stamp duty and registration of Construction Agreement on payment of stamp duty at 1% + 1% registration in the case of built up unit was not intended under the Stamp Act, 1899 - There was no works contract by the petitioner exigible to tax under the provisions of the TN VAT Act, 2006. At best, such a tax liability would have been payable only by the 3rd respondent and not on the petitioner.
The issue needs proper examination - appropriate action ought to have been taken only by the authorities under the Stamp Act, 1889 under Section 47 A of the Stamp Act, 1899, in accordance with law and not from the petitioner under the provisions of the TN VAT Act, 2006 - the impugned order demanding tax under the provisions of the TN VAT Act, 2006, is unsustainable.
Petition allowed.
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2020 (2) TMI 598
Maintainability of appeal - Section 46 of the Madhya Pradesh VAT Act, 2002 - fulfillment of condition of pre-deposit - correctness of the orders of assessment and rejection of applications for correction of error and further claiming exemption under Notification No.35 dated 23.10.1981 - HELD THAT:- The petitioner has already made the statutory compliance in terms of sub-section (6) of Section 46 of the Act by making payment of pre-deposit on 07.04.2018. The said predeposit has been made by the petitioner just on the next day after the two weeks’ time extended by this Court in review petition expired on 06.04.2018. Thus, there was delay of only one day in making the necessary pre-deposit. There is nothing on record to suggest that the delay on the part of the petitioner was intentional or for any ulterior purpose.
Taking the totality of facts and circumstances into consideration, there are no prejudice would be caused to any of the parties if the appeal is heard on merits - the delay of one day in making pre-deposit is condoned and thus, the impugned order passed by the Appellate Board is set aside.
The Appellate Board is directed to decide the appeal on merits in accordance with law - petition disposed off.
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2020 (2) TMI 596
Levy of tax on Trade discount - Petitioner submits that the discount offered by the manufacturer would actually reduce the price in the hands of the manufacturer who sold the cars to the Petitioner and such discount cannot be taxed in the hands of the Petitioner - HELD THAT:- There is no dispute that the Petitioner is a dealer in motor cars and had received trade discount from the manufacturer from whom it had purchased the cars for retail sales at its show rooms. The trade discount which has been offered by the dealer is an incentive given by the manufacturer based on the performance of the Petitioner in the retail market. The trade discount offered by the manufacturer to the Petitioner does not in any manner enhance the taxable value of the motor cars sold by the Petitioner to the retail buyer at its show rooms.
There is no basis on which the aforesaid amount of ₹ 3,48,08,441/- can be taxed as taxable turn over of the Petitioner. The two transactions are independent transactions. One transaction is between the manufacturer who is also a dealer who had passed on incentives to the Petitioner and the second transaction between the Petitioner and its buyers of its retail show room to whom the Petitioner has sold the cars. As these two are independent transactions there is no basis on which the trade discount passed to it by the manufacturer(dealer) to the Petitioner can be added in to the taxable turn over of the Petitioner for the purpose of assessment under the TNVAT Act, 2006.
The writ petition stands allowed even though the Petitioner has an alternate remedy by way of appeal.
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2020 (2) TMI 531
Recovery of tax arrears under CST Act - charge was created in favour of the respondent Commercial Tax Department against the property of the petitioner's vendor - HELD THAT:- Section 24 of the TNGST Act, 1959 is applicable to the recovery of tax under CST Act, 1956. If an assessee is in default of tax liability, automatically charge is created in respect of the property dealer. Under Section 24-A of the TNGST Act, 1959, a purchaser can claim the defence stating that the purchase was for adequate consideration and without notice of such tax or arrears.
In this case, the respondent Commercial Tax Department had not taken the trouble of registering the charge as was required under law. Therefore, the partner of the defaulting dealer took undue advantage and sold the assets unapologetically in a flagrant violation of the law. The petitioner purchased the property from the said person - Impugned notice calls upon the petitioner to pay for the arrears after a lapse almost four years from the date of purchase of the property shows negligence on the part of the Department in as much as the dealer was in arrears of tax from 2010 onwards.
Whether the petitioner had indeed paid ₹ 40 lakhs to the vendor without notice of the charge which was created by operation of law or whether the sale was made to defeat the interest of the respondent or bonafide cannot be decided in a writ court as it would require a detailed trial on facts. The petitioner has to satisfy that the requirement of proviso to Section 24-A of the TNGST Act, 1959 has been met to perfect his title to the property - The burden of proof as is required under the aforesaid provision can be established only in a civil court by filing a suit for a declaration and this would require a trial. As the courts exercising jurisdiction under Article 226 of the Constitution of India are not Civil Courts for the purpose of such determination, I am of the view that the present writ petition is liable to be dismissed.
Petition dismissed - decided against petitioner.
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2020 (2) TMI 526
Exemption under entry 57(v) of Part B of the Third Schedule to the TNGST Act, 1959 - interstate sales of wheat bran claimed to have been sold by the assessee as cattle feed - Circular issued by the Department dated 25.09.2002 - HELD THAT:- Before holding that the sale of wheat bran by the Assessee under specified conditions of specified circumstances, the Assessing Officer ought to have undertaken the exercise of returning the finding of facts as to whether the wheat bran sold by the Assessee in the course of interstate trade and commerce was a cattle feed or not. Since this exercise was not undertaken, the denial of exemption to the Assessee, without arriving at such finding of facts cannot be sustained. The higher appellate authority also did not seem to have undertaken any such fact finding exercise.
The matter deserves to be remanded back to the learned Assessing Authority for undertaking the said exercise of fact finding as to whether the wheat bran sold by the Assessee in the course of interstate sale was a cattle feed or not, which is obviously for the Assessee to establish such facts with relevant evidence before the Assessing Officer - Appeal disposed off by way of remand.
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2020 (2) TMI 476
Validity of order of enhancement of tax - revisionist's activity is under PDS Schemes of the Govt. - exemption under the Provisions of UP VAT Act - HELD THAT:- The controversy before the authorities was only with regard to the rate and price of wheat and rice. The Adjudicating Authority, the First Appellate Authority and the Commercial Tax Tribunal had accepted the rate fixed by Government of India. No evidence or material was produced by the revisionist before either of the authorities while adjudicating the said rate. Even before this Court no material or evidence has been placed for this Court to come to any other finding in favour of the revisionist.
Revision dismissed - decided against revisionist.
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2020 (2) TMI 475
Attachment of property/land of the petitioner - removal of charge of the sales tax department on the land/property - Section 49(2) of the Gujarat Sales Tax Act, 1969 - HELD THAT:- It is accepted in the affidavit-in-reply that the requisite amount for the assessment year 2001-2002 has been paid by the writ applicant. In the same manner, it has been accepted that the requisite amount for the year 2007-2008 has also been paid by the writ applicant. If we go by the prayer clause, there is a reference of two notices i.e. for the year 2001-2002 and 2007-2008. Pursuant to the impugned notices, an order of attachment came to be passed with respect to the land bearing survey Nos.3341/1/2/3/4/5, 3346/1/4, 3126, 3127, 3335, 3336/1/2/3, 3121, 3122, 3223, 3124, 3342 and 3343. Since the attachment of the aforesaid parcels of land owned by the writ applicant is directly connected with the two notices dated 18th January 2012 and 2nd February 2012 respectively and as the payment has been made, the attachment should go.
There should not be any difficulty in quashing and setting aside the two impugned notices. Once the impugned notices are quashed, the attachment as per such notices would no longer survive and once the attachment goes, the charge, which has been created over the property pursuant to such notices, would also not survive - application allowed.
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2020 (2) TMI 474
Levy of purchase tax - Valuation - freight charges or delivery charges paid by the Sugar Mills, Assessee to the Lorry Owners for getting the sugar cane from the fields of the sugar cane growers to the factory gate - TNGST Act - HELD THAT:- The controversy is no longer res integra as this very controversy came to be decided by a Full Bench of this court in the case of CHENGALVARAYAN CO-OPERATIVE SUGAR MILLS LTD. & OTHER VERSUS STATE OF TAMIL NADU & OTHER [1996 (7) TMI 522 - MADRAS HIGH COURT] which came to be affirmed by the Hon'ble Supreme Court in the case of EID. PARRY (I) LTD. & OTHERS VERSUS ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ANOTHER [1999 (12) TMI 708 - SUPREME COURT] and later on followed by the Hon'ble Supreme Court in the case of PONNI SUGARS (ERODE) LTD. VERSUS DEPUTY COMMERCIAL TAX OFFICER [2005 (11) TMI 247 - SUPREME COURT] where it was held that transport subsidy was a part of the consideration for which sugarcane was sold by the sugarcane growers to the appellants. Though the agreements between the parties provided for delivery by the sugarcane growers at the factory gate and though the transport charges paid by the appellants were not to the sugarcane growers but to third party lorry owners, they were made for securing regular supply of sugarcane as per the requirements.
Since the view of the learned Sales Tax Appellate Tribunal is in consonance with the decision of the Full Bench of this Court and that of the Hon'ble Supreme Court, we have no reason to take a different view as there is no distinction on facts in the present case and the purchase of sugar cane by the Assessee Sugar Mill during the period in question also happened in a similar way and therefore, the mere bifurcation of prices in the invoices to the extent of transport charges or plantation subsidy will not materially affect the aforesaid prevailing legal position.
The Tribunal is justified in imposing the purchase tax on the Assessee Sugar Mill on the entire purchase price including the components of price for the sugar cane, plantation subsidy and transportation charges paid by the Assessee for transportation of sugar cane from the sugarcane fields to the factory premises of the Petitioner - Appeal dismissed - decided against assessee.
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2020 (2) TMI 473
Levy of penalty u/s 10-A read with Section 10(b) of CST Act - purchase of diesel and fuel for generator set against the "C" forms at concessional rates - said items were not separately mentioned in the Registration Certificate of the Assessee under the CST (Registration and Turnover) Rules - HELD THAT:- The learned Appellate Tribunal was justified in holding that the Assessee was entitled to purchase the said fuel viz., diesel, for its generator set and even though the same was not separately included in the Registration Certificate of the Assessee, no mens rea can be attributed to the Assessee for purchase of the same at concessional rate against “C” Form and therefore, the question of imposition of penalty under Section 10(b) of the Act read with Section 10-A of the Act does not arise.
Petition dismissed - decided against Revenue.
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2020 (2) TMI 472
Demand of tax - goods manufactured and sold by the petitioner - inter-state sale - Residuary Entry No. 69, Part C to the 1st Schedule of the Tamil Nadu VAT Act, 2006 - HELD THAT:- Presence of Entry 25 to Part B to the 1st Schedule to Tamil Nadu Vat Act, 2006 can be explained and only justified for the above reasons as otherwise the said entry is of no relevance except for payment of tax at higher rate for it to be availed as an input tax credit for use in the factory for manufacture within the state.
In case of sale in the course of an inter-state sale or commerce to a registered dealer in another state, a registered dealer has to pay tax at the lower of the two rates whereas in the case of sale in the course of inter-state trade and commerce to a person who is not a registered dealer, CST is payable at the rate applicable to the goods within State - During the period in dispute, goods falling under Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006 were liable to tax at 4%. It is the contention of the petitioner that it sold “capital goods” as defined in section 2 (11) of the Tamil Nadu Vat Act, 2006 and therefore was liable to pay tax at the lower rate under Entry 25, Part B of the 1st Schedule of the Tamil Nadu Vat Act, 2006.
In the present case, neither the petitioner nor the respondent have clearly explained as to whether the goods traded and sold by the petitioner in the course of Inter-state sale fall under Sectioin 2(11) (a) or under Section 2(11) (b) to (g) of the Tamil Nadu Vat Act, 2006.
Matter remanded back to respondent for re-examination - appeal allowed by way of remand.
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2020 (2) TMI 404
Transitional credit of entry tax paid - whether the petitioner was entitled to avail transitional credit of entry tax paid by a local dealer under section 88 (6) (a) of the TNVAT Act, 2006? - HELD THAT:- While selling the vehicles to the petitioner and paying the tax under TNGST Act, 1959, the local dealer would have set off the entry tax paid against the TNGST and passed on only the net of the tax paid under TNGST Act, 1959 to the petitioner - Therefore, if at all, the petitioner would have been entitled to transitional credit under Section 88(6)(a) of the TN VAT Act, 2006 of only the net of the tax paid under TNGST Act, 1959 by such dealer and not on the burden of entry tax which was purportedly collected by the dealer from the petitioner illegally.
Even otherwise having purchased the motor vehicles from a local dealer in Tamilnadu, transitional input tax credit of entry tax paid under Tamil Nadu Tax on Entry of Motor Vehicles Into Local Areas Act, 1990 under section 88(6)(a) of the T.N. VAT Act, 2006 cannot be countenanced.
Transitional input tax credit of Entry tax on the closing stock is not permissible under Section 88(6)(a) of the TN VAT Act, 2006 even if the petitioner had actually imported motor vehicles and paid the entry tax on import of the motor vehicles from other state. If such tax was paid, such tax at best would be available for adjustment in terms of Section 4 of the Tamil Nadu Tax on Entry of Motor Vehicles Into Local Areas Act, 1990 - the petitioner had wrongly availed credit of the Entry tax paid by the local dealer who sold the motor vehicle to the petitioner. The entry tax paid by the selling dealer would have got subsumed into the TNGST Act 1959 paid by the dealer and only net of the TNGST would have been passed on to the petitioner.
There are no infirmity in the impugned orders passed by the 2nd respondent on 16.4.2015 and by the 1st respondent on 29.09.2015 - petition dismissed.
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2020 (2) TMI 403
Reversal of excesss input tax credit - capital goods - supplier of goods paid VAT @12.5% instead of 4% - whether the respondent was justified in directing the petitioner to reverse the input tax credit availed on capital goods in excess of 4% vide the impugned order? - Section 2(11) of the TNVAT Act, 2006.
HELD THAT:- The purpose of allowing input tax credit on capital goods and inputs are to reduce the cascading effect of the tax on the products / goods sold by a dealer under the provisions of the said Act. Under Section 19 (3) of the Act every registered dealer, is allowed into tax credit in the manner prescribed on the purchase of capital goods for use in the manufacture of taxable goods. The only restriction that is contained under the provision of Sub Section (6) of the Act.
In this case, it is not the case of the respondent that there was deliberate ploy on the part of the dealer who sold the capital goods to the petitioner by charging tax at 12.5% to liquidate accumulated credit - whether the tax was paid at 4% or 12.5% as the case may irrelevant as far as the respondent is concerned as the issue is revenue neutral.
Thus there is no reason why credit availed by the petitioner should be disallowed particularly in the light of the fact that intention of the legislature is to reduce the cascading effect of the tax the final product - impugned order do not sustain - petition allowed - decided in favor of petitioner.
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2020 (2) TMI 402
Rejection of Samadhan Application - settlement of arrears of tax under the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 - HELD THAT:- The object of the scheme under the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 is to give a quietus to an assessee to settle the disputes and therefore to the extent an assessee is in arrear of tax as defined under Section 2(b), the benefit of such scheme cannot be denied to the petitioner merely because the petitioner was also operating under the Interest Free Sales Tax Deferral Scheme. The said Scheme contemplates payment of liability which is deferred. Therefore, to that extent it cannot be said that the petitioner was in arrears of tax within the meaning of Section 24 of the Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002. However, to the extent the petitioner was in arrears of tax outside deferral scheme, the petitioner is entitled to the benefit thereof.
The Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 also does not expressly preclude an assessee from availing the benefit of the Samadhan Scheme, who were under the Interest Free Sales Tax Deferral Scheme for the amounts which were outside deferral period. Since the petitioner was in arrears of tax determined by the assessing officer for the non-deferral period, benefit of Tamil Nadu Sales Tax (Settlement of Disputes) Act, 2002 cannot be denied to the petitioner.
The petitioner is entitled to settle the arrears of tax qua non deferral amount alone - Petition allowed in part.
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2020 (2) TMI 375
Sales tax exemption or deferral of sales tax - Section 6 of the Karnataka Sales Tax Act, 1957 - HELD THAT:- Acquisition is the act by which a person acquires property in a thing. "Acquire" is to become the owner of the property. One can, therefore, acquire a property either by voluntary or involuntary transfer. But the Sales Tax Act applies only to "sale" as defined in the Act. Under clause (ff) of Section 2 of the Act it is defied as a transfer of property. As purchase is only a different, aspect of sale, looked at from the stand point of the purchaser, and as the Act imposes tax at different points in respect of sales, having regard to the purpose of the sale, it is unreasonable to assume that the Legislature contemplated different categories of transactions when the taxable event is at the purchase point. Whether it is sale or purchase the transaction is the same. If it was a transfer inter vivos, in the case of a sale, it must equally be so in the case of a purchase. Context, consistency and avoidance of anomaly demand a restricted meaning. That it must only mean transfer is also made clear by the nature of the transactions excluded from the acquisition, namely, mortgage, hypothecation, charge or pledge-all of them belong to the species of transfer. We must, therefore, hold that the expression "acquisition" in clause (ff) of Section 2 of the Act means only "transfer".
The fact remains that the appellant, after recall of the entire decision, participated in the appeal proceedings before the Division Bench and argued the matter on merits.
Appeal dismissed - decided against appellant.
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2020 (2) TMI 370
Exemption from VAT or not - Hank Yarn - exemption under Entry 44 of Part B of the Fourth Schedule to the Act - Tamil Nadu Value Added Tax Act, 2006 - taxability under Entry 3(a) of Part B of the First Schedule to the Act, 2006 - HELD THAT:- The intention, if any, of the State could have been very well expressed in clear terms of the Entry 44 itself. Nothing prevented the State from writing Entry 44 as 'Cotton Hank Yarn' or 'Hank yarn sold to Handloom Industries'. We cannot import external aids of interpretation where the plain meaning of the terms of the statute, namely the exemption Entry, is clear itself - The external aids for interpretation can be employed only if there is any ambiguity or confusion, but such external aids of interpretation cannot be applied to create a confusion or ambiguity unnecessarily.
The sale of cotton hank yarn is also equally exempted, but merely because the Assessee does not manufacture and sell cotton hank yarn, he cannot be deprived of the exemption on the other yarns sold in hank form, so long as Entry 44, in its present form, stands for interpretation by Courts. The Hank Yarn of others types of Yarns like Silk for Handloom Kancheepuram and Banarasi Silk Sarees, Khadi Slik, Linen fabric are also used by Handloom Industry. Therefore, we do not appreciate why exemption should be restricted only to Cotton Hank Yarn, as contended by Revenue. Entry 44 never meant a harm to be caused to other type of yarns sold in Hank form, by denying exemption to them.
In the light of the said Budget Speech of the year 2006-2007 also, there is nothing specifically mentioned to state that there was any intention to restrict the exemption of Hank yarn only to the cotton hank yarn and not others. Cotton hank yarn as well as other types of yarn in hank form are equally entitled to exemption under Entry 44 and therefore, Handloom Industry stood encouraged by said exemption. Was there any intention of State to harm Powerloom Industry by denying exemption to other types of Yarn sold in Hank form. The answer is an emphatic 'No'.
Merely because Cotton hank yarn is the chief raw material for Handloom Industry or merely because powerloom industry can have an overarch over the Handloom Industry in the textile sector, we cannot deny the exemption to the supply of raw material namely VSF and PF Hank yarn to powerloom industry in the face of the plain language of the plain words 'Hank Yarn' employed in Entry 44 of the Fourth Schedule to the Act - the alleged Clarifications issued by the Commissioner of Department on 14.02.2013 and 29.06.2017, on a review application too, were clearly incorrect and unsustainable in law and the same deserve to be quashed. We, accordingly, quash the both of these Clarifications.
Appeal allowed - decided in favor of appellant.
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