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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 65 Records
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2021 (2) TMI 972 - JHARKHAND HIGH COURT
Maintainability of refund claim - Realization of the amount without authority of law - rejection of claim holding that in absence of any statutory provision under JVAT Act the learned JCCT had no jurisdiction to allow the refund application of the petitioner - HELD THAT:- It is the case of the petitioner, undisputed by the respondent that petitioner is not a registered dealer under JVAT Act, 2005 nor has been assessed to tax under the Act. No demand notices were raised against the petitioner as such to the effect that any tax is due against him. Petitioner claims to have made deposit of ₹ 61,74, 899/- in order to ensure continuity of business and to avoid coercive action without any demand of tax since the goods transported by the petitioner were already excisable to Central Sales Tax to the tune of ₹ 58,05,157/- which were paid in the State of Origin. No sale took place in the State of Jharkhand within that period - The principles regarding maintainability of writ petition seeking refund in case the levy is unauthorized or without jurisdiction or is unconstitutional is well settled by the decisions of the Apex Court. In the case of HMM LTD. VERSUS ADMINISTRATOR, BANGALORE CITY CORPORATION [1989 (10) TMI 180 - SUPREME COURT], the Apex Court has held that realization of tax or money without the authority of law is bad under Article 265 of the Constitution of India.
The claim of refund has been denied on the plea that there is no provision under the JVAT Act since the petitioner is not a registered dealer and no assessment proceedings have been held. Under the Scheme of JVAT Act, assessment proceedings can be held against dealers, who have failed to get themselves registered. However, no assessment can be made under Sections 37 or 38 after expiry of 5 years from the end of the tax period, to which the assessment relates. On the face of the pleadings on record and the stand of the respondents brought through their counter affidavit, the rejection of claim for refund only on the ground that there is no provisions under the JVAT Act, 2005 for entertaining such a claim is not sustainable in law. Whether the contention of the petitioner that the entire sale transaction originated in a different State after payment of central sales tax to the tune of ₹ 58,05,157/- and there was no sale transaction originating within the State of Jharkhand for the respondent to retain the amount so deposited is a matter of verification upon assessment.
The order of rejection of claim of refund by respondent no. 3 dated 1st September, 2016 (Annexure-4) and the order of learned Commercial Taxes Tribunal dated 31st October, 2017 (Annexure-8) upholding the same cannot be sustained in the eye of law Accordingly, they are set aside. The matter is remitted to the respondent no. 3, Joint Commissioner of Commercial Taxes (Admin), Ranchi to consider the claim of refund of the petitioner in accordance with law within a period of six weeks from today. Petitioner should appear before the respondent no. 3 on 15th February, 2021 with the relevant records.
Petition allowed - decided in favor of petitioner.
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2021 (2) TMI 968 - GUJARAT HIGH COURT
Seeking directions to the respondents to disburse the refund amount alongwith interest - reduction of admissible ITC on purchase of coke - Section 38 of the Gujarat Value Added Tax Act, 2003 - HELD THAT:- It is not in dispute that the writ applicant-Company was given an incentive on tax for the relevant period as mentioned in the petition by the authority, as sanctioned for the respective years - In view of the determination order passed under Section 80 of the GVAT Act, the full amount of refund has not been disbursed by the respondents. It is an admitted fact that the respondents-authorities have not invoked the Section 39 of the GVAT Act, which provides the powers to withhold the refund in certain cases.
The time limit to initiate proceedings under GVAT Act is lapsed. It is required to be noted that Section 35 gives power to the authority to determine the amount of tax in respect of input tax credit etc after following the mandatory procedure as provided under the GVAT Act. However, the powers conferred under Section 35 cannot exercise after the expiry of 5 years from the end of the year in respect of which tax is assessable. Therefore, in view of the Section 35, the time limit is over and the authority now cannot initiate any proceedings in respect of refund.
The writ applicants are entitled to get the refund amount and the authorities have no legal justification to withholding the same, which is otherwise refundable to the writ applicants – Company, as the action of the respondents – authorities is contrary to the provisions of GVAT Act - respondents are directed to disburse the refund amount along with 6% interest within a period of 6 weeks from the date of receipt of this order - application allowed - decided in favor of assessee.
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2021 (2) TMI 967 - GUJARAT HIGH COURT
Refund - Seeking return the amount of tax collected from the different parties during the said period of assessment - non-communication of the cancellation of registration at the end of the respondents - It is the case of the writ applicant that after some business transactions, later on he came to know about his cancellation of registration with effect from 12.04.2010 and accordingly, he was duty bound to return the amount of tax collected from the different parties during the said period of assessment - HELD THAT:- It appears that at the time of search, it was informed by the writ applicant that he had made the payment to different parties to the tune of ₹ 8,14,250/- by way of cheque. Despite of this, the authorities had collected the tax to the tune of ₹ 9,05,318/-. Also, since 2014, the respondent authorities have not issued any assessment order after serving notice of provisional assessment in the prescribed form. Even no notice has been issued by the respondent authorities invoking provisions of Section 8A(a) of Section 34 of the GVAT Act, 2003.
The writ applicant is entitled to get the refund of amount. The authorities have no legal justification for withholding the amount, which is otherwise refundable to the writ applicant and the action of the respondent authorities could be said that such withholding of refund is contrary to the provisions of Section 36 of the GVAT Act, 2003.
Reliance can be placed in the case of SHILPA INDUSTRIES VERSUS STATE OF GUJARAT [2020 (2) TMI 297 - GUJARAT HIGH COURT] where it was held that In the facts of the case, no notice has been issued till date by the respondent authority invoking provisions of Section 8(A)(a) of Section 34 of the VAT Act, 2003. Therefore, in contemplation of invoking such provision for assessment without there being any satisfaction of the prescribed authority that the tax has been evaded etc. by the petitioner, the refund cannot be withheld.
The respondents are directed to pay to the writ applicant a sum of ₹ 9,05,318/- together with statutory interest at the rate of 6% p.a. within a period of six weeks from the date of communication of this order - application allowed.
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2021 (2) TMI 965 - MADRAS HIGH COURT
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- Petitioner fairly submits that the issue involved in this Writ Petition is squarely covered by a decision of this Court in, M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER & COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [2019 (2) TMI 1850 - MADRAS HIGH COURT] wherein it was held that till such time the order of this court in the case of M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [2018 (10) TMI 1529 - MADRAS HIGH COURT] is either stayed or reversed it is incumbent upon all Assessing Authorities within the State of Tamil Nadu to apply the rationale of the decision to all pending assessments. The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the ‘C’ forms from the websites as the same stand blocked from use.
The State has, after the date of the above order, filed a Writ Appeal in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [2020 (3) TMI 450 - MADRAS HIGH COURT] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court holding that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu.
Mr.Jaya Pratap submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition - As on date, however the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed.
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2021 (2) TMI 964 - MADRAS HIGH COURT
Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT:- Petitioner fairly submits that the issue involved in this Writ Petition is squarely covered by a decision of this Court in, M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER & COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) [2019 (2) TMI 1850 - MADRAS HIGH COURT] wherein it was held that till such time the order of this court in the case of M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [2018 (10) TMI 1529 - MADRAS HIGH COURT] is either stayed or reversed it is incumbent upon all Assessing Authorities within the State of Tamil Nadu to apply the rationale of the decision to all pending assessments. The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the ‘C’ forms from the websites as the same stand blocked from use.
The State has, after the date of the above order, filed a Writ Appeal in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED [2020 (3) TMI 450 - MADRAS HIGH COURT] challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court holding that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu.
Mr.Jaya Pratap submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition - As on date, however the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed.
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2021 (2) TMI 959 - CHHATTISGARH HIGH COURT
Doctrine of Promissory Estoppel - Withdrawal of subsidy granted on account of change of opinion - whether the benefits already granted to the petitioner as promised under the Industrial Policy 2004-09 can be withdrawn later on only in the light of change of opinion of the respondents? - definition of captive power plant - benefit of exemption of capital investment made in the captive power plant.
Whether the petitioners would be entitled for the benefit of promised subsidy as per the industrial policy of 2004-09 is concerned? - HELD THAT:- In order to attract more and more Business Enterprises establishing industrial units in the State of Chhattisgarh, the State Government had given certain incentives in the industrial policy. One such policy was that of granting State Infrastructure Cost Fixed Capital Investment Subsidy. Granting of the subsidy is a sort of financial assistance provided to the new establishment which is to be setup and the financial assistance is in the from of subsidy. Initially the Government decided to grant 25% of total capital investment made in the establishment of a Captive Power Plant as subsidy. Finding the industrial policy and the incentives provided therein, the petitioners sought of setting of a plant in the State of Chhattisgarh and which they did foreseeing the incentives so provided in the policy - The petitioners thereafter having made the investment in a Captive Power Plant approached the authorities claiming for the benefit of subsidy. The State Level Committee in its meeting on 18.02.2009 took a decision to grant eligibility certificate entitling the petitioners the benefit of subsidy to the extent of ₹ 12,81,44,310/- as subsidy. Though the State Level Committee took a decision and the authorities in the State Government issued eligibility certificate, but the petitioners were never provided with the refund of subsidy or adjustment of the same against the subsequent liability. The petitioners had been repeatedly approaching the authorities claiming for adjustment of the tax liability against the incentives that the petitioners are entitled for, which the respondents did not respond and meanwhile the respondents raised the demand notice against the assessment order dated 27.02.2009 and later on the authorities also were able to get a revenue recovery certificate issued against the petitioners against the assessment order dated 27.02.2009 and similar demand notices have raised by the respondents in the subsequent years also.
The provisions regarding grant of subsidy subsequently stood amended on 10-08-11, to the extent of the State Government introducing an upper cap of ₹ 300 Lacs (i.e. ₹ 3 Crores) as subsidy to the companies. Later on the State Level Committee in its 23rd meeting held on 31.05.2013 reviewed its earlier decision dated 18.02.2009 and recalled the order and held that the petitioners would not be entitled for the benefit of subsidy at all.
Whether the decision of the State Level Committee concluding that subsidy to a captive power plant would be paid only to those captive power plants where the generated electricity is only for its own use and not as defined under Central Legislation i.e. Electricity Act 2003 and Electricity Rules framed thereunder of 2005? - HELD THAT:- What has to be visualized at this juncture is that the power that is generated cannot be stored. Whatever power that is generated has to be consumed or else the power would get wasted. What is also to be visualized is the fact that the requirement of power may fluctuate from one month to another depending upon various factors primarily the climatic conditions and also the production, that is to be made in a particular period of time and therefore it would not be possible for any establishment to decide the fixed amount of power that has to be generated and in a given month in case, if the demand falls, the only option available to the petitioner would be to give it to some third agency, which could also be the State Government and in that circumstances if the arguments advanced by the respondents are to apply then this Court has no hesitation in presuming that the benefit of subsidy would not be reaped by any person or any establishment. The policy thus framed would be a redundant or a policy only for name sake, the benefit of which cannot be availed by any establishment as such - in the opinion of the Court was never the intention and the object, firstly while framing the industrial policy, 2004-2009 and secondly while also framing the aforementioned Vidyut Aapurti Nivesh Rules, 2004.
There being no specific definition of captive power plant in the industrial policy under which the petitioner’s claims were being processed, the safest recourse that could be resorted to was to rely upon the definition of captive power plant as is provided under the Electricity Act as also the Rules framed therein.
It is always a legitimate expectation of an investor of getting certain extra benefit in the course of making huge investment in a particular State. At the same time, the benefit so extended is for giving the booster to the investors by the State Government and while framing the policy, the respondents have not felt that the definition of captive power plant would not be what it is under the Electricity Act or it would be a different interpretation that would be given. Therefore it was assumed by the petitioner that the meaning would be the same as that is reflected in the Electricity Act and to add with it applying the same interpretation the State authorities at the first instance had issued the eligibility certificate.
Another aspect which needs consideration is that it is not a case of the respondents of the petitioner playing fraud of any manner while seeking the benefit or while obtaining the eligibility certificate. Having granted the eligibility certificate once, it could not have been lightly recalled without a fair and reasonable opportunity of explanation to the petitioner. From the proceedings drawn by the authorities it clearly reflects that though there is a reference of notice having been issued, there is no evidence of the notice being duly served and further it would also reflect that even on the admitted factual dates that are reflected when the notice was issued and the date of the impugned order would again give a clear indication that the authorities had not granted reasonable time to the petitioner to explain - Yet another ground which needs consideration is the fact that there cannot be a definition given to a captive power plant contrary and violative to the definition as provided under the Electricity Act and the Rules framed therein.
The withdrawal of the benefit granted to the petitioner by the State level committee through its decision dated 31.5.2013 (Annexure P-7) and the order of the State Appellate Forum dated 9.10.2015 (Annexure P-21) is illegal and unjustified and is liable to be and is accordingly set aside/quashed with consequences to flow - Petitioner would be entitled for the benefit of subsidy in terms of the policy prevalent on the date of issuance of the eligibility certificate, that is, to the extent of ₹ 12,81,44,310/- - Petition allowed.
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2021 (2) TMI 958 - KERALA HIGH COURT
Classification of goods - rate of tax - Brass fittings i.e., Elbow, Tee, Socket, Union, Hex Nipples, Hose Colour, Pillar tap Inner fittings, etc. - Bib Cocks Brass or C.P., Brass Ball cock, brass Long body Bib cock C.P., Brass Short Body Bib Cock C.P., Brass Sink Cock C.P., Brass Angle Cock C.P., Brass Wall Mixers C.P., Brass Showers C.P., Brass shower Arm C.P., Brass Foot valve, etc - taxable at the rate of 12.5% or to be treated as items coming under Entry 3(2) of Third Schedule of the KVAT (Amendment) Act, 2005 and taxable at the rate of 4%? - Validity of Clarification under Section 94 of the KVAT Act, 2003 -
HELD THAT:- Chapter 74 deals with “Copper and articles thereof”. The Note at the beginning of the Chapter says that it would take in alloys of copper also. Several items of copper are dealt with under different four digit HSN Codes bearing Nos. 7401 to 7419. HSN 7418 specifically deals with sanitaryware and parts thereof of copper. The four digit code HSN 7419 says other articles of copper. From the use of the word ‘other’ in the heading of HSN 7419, it is amply clear that it refers to articles which are not mentioned elsewhere. When it comes to HSN 7419.99, again it is shown as ‘other’, so as to mean that the items mentioned subsequently are not items specified earlier. Therefore, HSN 7419.99.30 with which Entry 3(2) of the Third Schedule of the Act is aligned, cannot be deemed to include the specific products of the assessee being taps, valves and other fittings made of brass which also are used as sanitary-wares, especially for reason of the items mentioned under HSN Codes 7412.20 and 8481, 8481.80 and 8481.80.20 - Chapter 74 of the Explanatory Notes that specific items of copper and its alloys have been identified in eight digit HSN Codes. For example, HSN 7418.10.21 refers to utensils of brass. So also HSN 7418.20.10 refers to sanitaryware of copper. It can be seen that though sanitaryware of brass is not specifically mentioned the products dealt with by the assessee comes under the above extracted entries of 7412 and 8481. When we look at Entry 3(2) in Third Schedule, it can be seen that it does not take in all articles of brass. Entry 3 going by the heading takes in only such articles and other utensils of aluminium, brass, bronze, copper, etc. other than those specified in any other Schedule of the Act. HSN Code 7419.99.30 to which Entry 3(2) of the Third Schedule is aligned, speaks of “Articles of brass” under HSN 7419.99 with heading “Other” which takes in only those Articles not mentioned elsewhere - Thus this part answered against the assessee and in favour of the Revenue.
HSN Codes - HELD THAT:- The products of the assessee though can be used as sanitarywares, also are used in general water supply and are covered under the various HSN codes as tubes or pipe fittings, taps, cocks, valves and similar appliances for pipes respectively coming in HSN Codes 7412 & 8481 - The products dealt with by the assessee cannot be covered as sanitaryware under 7418.20.10. The answer however does not interfere with the tax effect of the products which we have held to be covered, otherwise, under the SRO itself. The inclusion of the products under Entry 101 does not fall foul of Annexure-D judgment, since we found that it does not declare specifically as to under which entry the brass products of the assessee fall.
Appeal dismissed - decided against appellant.
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2021 (2) TMI 907 - MADRAS HIGH COURT
Rectification of mistake - compounding scheme under Section 7-C of the Tamil Nadu General Sales Tax Act, 1959 - According to the authority, the act of the petitioner fell foul of 7-C of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- Section 55(3-A) of TNGST Act categorically states that the power of rectification can be exercised by the assessing authority even though the original order of assessment was subject matter of an appeal or revision. It is true that the appeal filed by the petitioner was dismissed and the same was also confirmed. It appears that the order passed by the appellate authority dismissing the rectification petition was also confirmed - That again will not come in the way of Section 55(3-A) of the Act from having its statutory effect. Notwithstanding any of the adverse orders, which the petitioner suffered, the original assessing authority can still exercise the power of rectification, since such a jurisdiction has been specifically conferred under the aforesaid provision.
In the case on hand, the assessing authority has declined to exercise her jurisdiction by citing the earlier orders. This in my view amounts to abdication of the statutory jurisdiction vested in her. In this view of the matter, the order impugned in the writ petition is set aside and the matter is remitted to the file of the second respondent to pass orders afresh in accordance with law - Petition allowed by way of remand.
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2021 (2) TMI 835 - MADRAS HIGH COURT
Levy of penalty under Section 10-A of the Central Sales Tax Act, 1956 - alleged offence committed by the petitioner under Section 10(b) and Section 10(d) of the said Act - concessional rate of tax against Form C under Section 8(3)(b) of the Central Sales Tax Act, 1956 - it was alleged that the dyeing units were dyeing the yarn or fabric supplied by their customers. It was therefore stated that the dyeing units were not engaged in any manufacturing activity - job work/works contract or not - HELD THAT:- In the present case, the endorsement in certificate of registration given to the petitioner in Form B under Central Sales Tax Act, 1956 is confined for re-sale and/or for manufacture or processing of goods sale. Admittedly, there was no re-sale of the goods purchased by the petitioner. The petitioner was also not engaged in mining or in the generation or distribution of electricity or any other form of power - Therefore, to justify the use of Form C, the activity of the petitioner should come within the purview of the expression “manufacture or processing of goods for sale” in Section 8(3)(b) of the Central Sales Tax Act, 1956.
In Union of India Vs. J.G. Glass Industries Ltd., [1997 (12) TMI 110 - SUPREME COURT], the Hon’ble Supreme Court laid down the test as to when an activity amounts to manufacture and when an activity amounts to processing of goods. If the test laid therein is applied, the activity undertaken by the petitioner would amount to processing of goods.
The petitioner has provided a taxable service within the meaning of Finance Act, 1994. The service provided as a Common Effluent Treatment Plant Operator for treatment of effluent was exempted from Service Tax w.e.f. 01.04.2015 vide Notification No.6/2015-ST dated 01.03.2015. The exemption was added to entry mega exemption Notification No. 25/2012-ST dated 20.06.2012. Prior to this exemption, services provided by an association of dyeing units in relation to common effluent treatment plants was exempted from payment of Service Tax vide Notification No. 42/2011- ST dated 25.07.2011. The scope of the exemption was expanded with retrospective effect from 16.06.2005 vide Section 145 of the Finance Act, 2012. It validated exemption given to clubs or association including co-operative societies engaged in provision of service in relation to projects, i.e., common facility set up for treatment and recycling of effluents and solid wastes, with financial assistance from the Central Government or State Government.
Today, the presence of Common Effluent Treatment Plant is a must in areas where there are clusters of industries which have the propensity to discharge effluents and pollute environments and water bodies and land - It is not only propagated and encouraged under various laws to protect the environment but also assiduously encouraged by the Government and the Courts to deal with the menace of water pollution due to rampant discharge of effluent into water bodies by polluting industries and local bodies.
In Paryavaran Suraksha Samiti Vs. Union of India, [2017 (2) TMI 1476 - SUPREME COURT], the Hon’ble Supreme Court recognised the importance of Common effluent Treatment Plant and the duty cast on the local bodies to preserve the environment.
Coming to the facts of the case, the activity undertaken by dyeing unit is a part of the manufacturing activity for textile units. It is one of the intermediate stage process, whereby, grey yarn or grey fabrics as the case may be are sent for dyeing to such units before they are sent back for being used in the further manufacturing process of textile products.
The business model followed by textile units appears to be outsource the dyeing process to dyeing units. However, dyeing units are mostly small units and are rarely endowed with the capital to install Common Effluent Treatment Plants. This is where the demand for persons like petitioner had arisen in absence of Common Effluent Treatment Plants. Independent Common Effluent Treatment Plants are neither manufacturer nor processors of goods for sale. They are merely service provider. If a liberalized interpretation is given in the light of the above decisions, they will be entitled to the benefit of Section 8(3)(b) of the Central Sales Tax Act, 1956 as was claimed by the petitioner - However, the scheme of the concession is specific under Section 8(3)(b) of the Central Sales Tax Act, 1956. Therefore, the Courts cannot aid evasion of tax by reading down the express language of Section 8(3)(b) of the Central Sales Tax Act, 1956.
The petitioner obtained registration under the provisions of the Tamil Nadu General Sales Tax Act, 1959 and later under Tamil Nadu Value Added Tax Act, 2006 and under the provisions of the Central Sales Tax Act, 1956 only for the purpose of taking unfair advantage of concession available under these enactments by making it seem as if the petitioner was engaged in processing of goods for sale when indeed it was not engaged in such activity of sale - Even otherwise, it was also not open for the petitioner to transfer the goods procured at concessional rate of tax against Form C to its sister concerns contrary to the requirements of Certificate.
If the goods cleared against invoices in Annexure II(A),( B) and (C) were exempted, the petitioner was not required to issue Form-C. There is no proper explanation forthcoming either in the reply or in the affidavit filed in support of the present writ petition as to why the petitioner issued Form-C No.TN-2006-C-BB-728640 (Annexure I) to the supplier. It shows complicity on the part of the petitioner to facilitate evasion of Central Sales Tax - As the petitioner was not entitled to issue Form C to the supplier, there is no error in the impugned order seeking to impose penalty under Section 10-A of the Central Sales Tax Act, 1956.
The petitioner was not entitled to procure goods at concessional rate of tax under Section 8(3)(b) of the Central Sales Tax Act, 1956. The respondent has however not proposed to impose penalty on the petitioner for facilitating evasion of tax on the entire value of goods procured against Form C. The imposition of penalty is confined to diversion of the goods to the petitioner’s sister concerns alone in the impugned order.
The imposed penalty is upheld and is not required to be increased - In so far as the imposition of penalty under Section 10-A of the Central Sales Tax Act, 1956 on the proportionate tax on the goods cleared to its sister companies is concerned, there are no infirmity in the impugned order imposing penalty on the petitioner on proportionate value of goods diverted.
Petition dismissed.
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2021 (2) TMI 812 - DELHI HIGH COURT
Period of limitation for completion of assessment in remand proceedings - Vires of Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 - notice of default assessment of tax and interest as well as notice of assessment of penalty - Section 34 of the DVAT Act - HELD THAT:- The assessment had to be completed within a period of four years. The impugned order relates to the year 2010-11 for which limitation expired on 31st March, 2015. The date of the impugned order is 15th January, 2021, which indicates that the same is ex-facie barred by limitation.
We are not impressed with the submission advanced by Mr. Satyakam that the impugned order is within limitation in terms of Sub-section (2) of Section 34. The said provision is entirely inapplicable in the present facts and circumstances. The impugned order has not been passed in consequence of, or to give effect to, any decision of this court which requires the re-assessment of the Assessee/Petitioner. Further, it may be noted that this Court, while disposing of the miscellaneous application vide order dated 17th January, 2020, could not have extended the period of limitation contrary to the statute. On a plain reading of the same, it is evident that this Court only permitted the Respondents to take recourse to further proceedings consistent with the extant laws and the law laid down by this Court in the judgment noted therein. This liberty cannot be construed to mean that the limitation period was extended beyond statutory confines. The contention of the Respondents is untenable.
In the present case, the notice is clearly barred by limitation in terms of Section 34 of the DVAT Act and accordingly, we have no hesitancy in setting aside the same on the ground of limitation.
Petition allowed - decided in favor of petitioner.
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2021 (2) TMI 802 - MADRAS HIGH COURT
Benefit of Section 5(3) of the Central Sales Tax Act, 1956 - Non-fulfilment of export obligation - case of the State is that the respective dealers would not be entitled to the benefit of Section 5(3) of the Act because what were exported, were not those goods, which were purchased - HELD THAT:- The Tribunal considered the entire factual matrix, took note of the documents, which were filed, which established that the coffee seeds were purchased and what was exported was instant coffee. The Tribunal had to consider as to whether the goods purchased by the exporter were actually exported as such or as a different commodity - After taking note of all the features as well as documents, the Tribunal held that the dealers were entitled to exemption under Section 5(3) of the Act, as the coffee seeds supplied by the dealers were roasted, ground, extracted and spray dried, which did not alter the character of the goods supplied by the dealers.
In the instant case, the transaction between the dealers and the exporter and the transaction between the exporter and the foreign buyer are inextricably connected and this has been clearly brought out by the Tribunal after examining the documents, which were placed by the dealers before it. Therefore, in terms of the decision of the Hon'ble Supreme Court in the case of STATE OF KARNATAKA VERSUS AZAD COACH BUILDERS PVT. LTD. AND ANOTHER [2010 (9) TMI 879 - SUPREME COURT], the 'same goods' theory would have no application to the case on hand.
There are no error committed by the Tribunal warranting interference with the common impugned order - petition dismissed.
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2021 (2) TMI 761 - MADRAS HIGH COURT
Compounding of Offence - detention of goods - allegation is that invoice raised by the supplier declared the name of the consignee, which was an unregistered place of business of the petitioner and therefore the documents were construed as invalid - HELD THAT:- An Adjudication Notice dated 20.07.2015 was issued to the petitioner. It stated that that the petitioner had not declared No. 48, Bye pass Road, Kalavasal, Madurai as additional place of its business and therefore, there was a violation of Rule 5(5)(c) of the Tamil Nadu Value Added Tax Rules, 2007 and therefore, the petitioner had wilfully evaded payment of tax under Section 71(1)(b) of the Tamil Nadu Value Added Tax Act, 2006 - The petitioner replied to the said Adjudication Notice dated 20.07.2015 vide its reply/objection dated 19.08.2015. In the said reply/objection, the petitioner questioned the jurisdiction of the respondent and stated that only jurisdictional Assessing Authority was empowered under the Act to adjudicate tax liability and hence requested for dropping of the proceeding.
The impugned order dated 20.01.2016 was passed by the respondent. In the impugned order, the respondent has merely stated that the reply of the petitioner was an afterthought and as such deserves no consideration. In the impugned order, it has also been observed that the explanation of the petitioner cannot be accepted as there was an offence committed by the petitioner under Sections 71(3)(a) and 71(7) of the TNGST Act, 2006 and therefore, an opportunity was given to the petitioner to compound the offence under Section 72(1)(a) of the TNVAT Act, 2006.
In the case of Vestas Wind Technology Vs. The Commercial Tax Officer, Enforcement and Ors. [2020 (5) TMI 500 - MADRAS HIGH COURT], the Court dealt with identical situation and observed that Failure to obtain separate registration for the site office attracts penal provision Section 71(1)(b).
Thus, this Writ Petition is allowed by restricting the compounding fee to be paid by the petitioner for a sum of ₹ 2,000/- under Section 72(1)(b) of the Tamil Nadu Value Added Tax Act, 2006 - respondent shall adjust the amount paid by the petitioner and refund the balance amount to the petitioner or in the alternative, permit the petitioner to adjust such amount for discharging its tax liability under the current tax regime - petition allowed.
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2021 (2) TMI 759 - MADRAS HIGH COURT
Jurisdiction - Validity of impugned VAT Audit Report - challenge on the ground that the VAT Audit was conducted by the second respondent Commercial Tax Officer/Senior Audit Officer, Enforcement (North), Chennai, based on an authorization of the first respondent Joint Commissioner (CT), Enforcement-I, Chennai which is impermissible under Section 64(4) of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- It is noticed that by a communication dated 21.08.2013, the Commissioner of Commercial Taxes has identified the dealers whose business were to be audited and common letter was addressed to all the Joint Commissioners (CT), Enforcement. The Commissioner has sent a list of dealers whose business were to be audited in terms of Section 64(4) of the Tamil Nadu Value Added Tax Act, 2006. The VAT Audit was carried out by the first respondent in presence of a Commercial Tax Officer as is evident from the signature and seal in the VAT Audit Report. The Commercial Tax Department depends on officers to conduct the Audit. It cannot mean that Audit has to be personally carried out by an officer not below the rank of Deputy Commercial Tax Officer.
The fact that the statements were recorded in the presence of a Commercial Tax Officer, by itself, will not mean that there is violation of Section 64(4) of the Tamil Nadu Value Added Tax Act, 2006. It merely explained that a Commissioner may order for audit of the business of any registered dealer by an officer not below the rank of Deputy Commercial Tax Officer. In this case, authorization to conduct the Audit was based on the order of the Commissioner of Commercial Taxes to all the Joint Commissioners (Enforcement). The first respondent had in turn conducted the Audit with the help of the second respondent. Merely because the statements were recorded in front of the second respondent, by itself, will not mean that the Audit was carried out by the second respondent in contravention of 64(4) of the Tamil Nadu Value Added Tax Act, 2006 - In any event, no prejudice or harm will be caused to the petitioner merely because the Audit Report was generated after an Audit held on 14.03.2014. After the Audit is completed, a notice is to be sent for revision of assessment under Section 27 of the Tamil Nadu Value Added Tax Act, 2006. It is therefore not open for the petitioner to disown and distance itself for the liability that may be eventually fastened under Section 27 of the Tamil Nadu Value Added Tax Act, 2006.
The respondents are directed to issue appropriate Notice in accordance with law and complete the proceedings and pass appropriate order, within a period of six months from the date of receipt of a copy of this order - petition disposed off.
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2021 (2) TMI 749 - MADRAS HIGH COURT
Revision/reopening of regular assessment - Section 16 of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- While the petitioner has tried to distance from the liability by shifting the burden on the respondent, the respondent on the other hand has passed an order without proper discussion and has merely reiterated the content of the revision notice - It was for the petitioner to have properly explained the case as to why the documents that were collected by the Department during inspection would not justify a revision of the assessment for enhancement of tax liability of the petitioner. In absence of a proper explanation from the petitioner there is a strong presumption that the petitioner deliberately did not account for those transaction in the books of accounts/bills and the sales were clandestine in nature to evade tax. They prima facie indicate that the conduct of the petitioner was to suppress the facts with a view to evade tax.
The respondent was therefore entitled to pass a speaking order by drawing adverse inference and confirm the liability as the officers acting under the provisions of the Tamil Nadu General Sales Tax, 1959 are expected to pass orders based on the principles of preponderance of probabilities. However, there is no proper discussion in the impugned order. Nevertheless, the petitioner ought to have filed an appeal before the Appellate Commissioner under the provisions of the Tamil Nadu General Sales Tax Act, 1959. If the petitioner had filed an appeal under the provisions of the Act, petitioner would have pre-deposited 25% as a condition for filing the appeal and another 25% at the time of stay petition before the appeal was taken up for final hearing. Instead, the petitioner present writ petitions and prolonged the litigation for the last 18 years and thereby deprived the revenue to the state - The petitioner has abused the jurisdiction of this Court by filing the writ petitions the present writ petition even though the petitioner had a choice to approach the Appellate Commissioner against the impugned order. By filing the present writ petition, the petitioner has gained time and postponed the liability.
The matter is remitted back and the petitioner is directed to deposit 50% of the disputed tax with the respondent within a period of one month from the date of receipt of this order - petition allowed by way of remand.
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2021 (2) TMI 747 - MADRAS HIGH COURT
Principles of Natural Justice - validity of assessment order - availability of alternative remedy of appeal - HELD THAT:- It appears that the Department did not agitate the matter further and they accepted the order passed in the writ petition and the Assessing Officer took up the matter for denovo adjudication in terms of the order of remand and the proceedings have ultimately culminated in an assessment order dated 29.04.2019, which according to the learned counsel for the appellant is in favour of the appellant.
Thus, taking note of the factual situation qua the prayer sought for by the petitioner and also taking note of the earlier orders passed by this Court remanding the matter back to the Assessing Officer and also the fact that the Assessing Officer has passed consequential orders dated 29.04.2019, we are inclined to follow the same procedure for the subject assessment years as well - Appeal allowed by way of remand.
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2021 (2) TMI 744 - RAJASTHAN HIGH COURT
Direction to issue C-Forms in respect of the High Speed Diesel procured/purchased by the Petitioner Company from the Oil Companies - seeking permission to procure the High Speed Diesel through the inter-State purchase under the Concessional CST rate - HELD THAT:- The issue involved in the present writ petition is no more res integra in view of the judgment passed by the Division Bench of this Court in THE STATE OF RAJASTHAN, THROUGH ITS PRINCIPAL SECRETARY, DEPARTMENT OF FINANCE, JAIPUR, THE COMMISSIONER, COMMERCIAL TAXES DEPARTMENT, GOVERNMENT OF RAJASTHAN, JAIPUR AND THE COMMERCIAL TAXES OFFICER, COMMERCIAL TAXES DEPARTMENT, SPECIAL CIRCLE-II, KOTA VERSUS ASI INDUSTRIES LIMITED, (FORMERLY KNOWN AS ASSOCIATED STONES INDUSTRIES KOTAH LIMITED) , UNION OF INDIA, NEW DELHI AND INDIAN OIL CORPORATION LIMITED [2019 (11) TMI 1061 - RAJASTHAN HIGH COURT], which has been followed by this Court as well as the other Coordinate Benches of this Court where it was held that this Court is of the opinion that denial of C Forms is purely on account of exigencies of advent of the GST regime which compelled the assessee to migrate to and obtain GST Registrations which rendered at the same time its CST registrations ineffective. This was inadvertent and beyond its control.
The present writ petition is allowed and the respondents are held liable to issue C-Form in the purchase of High Speed Diesel procured by the petitioner-company for mining purposes from inter-State trade - In the event of the petitioner having paid any amount on account of respondents wrongfully refusal to issue C-Form, the petitioner would be entitled to refund/adjustment of the same from the concerned authorities and collect the taxes. The concerned authorities are directed to process the claim within 12 weeks from today.
Petition allowed.
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2021 (2) TMI 616 - BOMBAY HIGH COURT
Validity of assessment order - Revenue submits that since an assessment order has been passed with regard to the petitioner and the appeal was dismissed, the respondents were well within their right to initiate steps for recovery of dues as well as for prosecution - HELD THAT:- The appeals should be heard and decided on merit.
Matter is remanded back to respondent No.5 for taking up the appeal of the petitioner for hearing and to decide the same in accordance with law. Representative of the petitioner shall appear before respondent No.5 on 01.02.2021 at 11:00 a.m. whereafter respondent No.5 shall proceed with the hearing of the appeal and decide the same in accordance with law within a period of three months therefrom - Petition allowed by way of remand.
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2021 (2) TMI 511 - TRIPURA HIGH COURT
Raising unpaid tax demands - recovery of short paid tax - levy of penalty in terms of Section 75A of the TVAT Act - assessment period 2010-11, 2011-12 and 2012-13 - HELD THAT:- There is a clear misconception on part of the Assessing Officer as to his powers under sub-section (1) of Section 25 of the TVAT Act. Clause (a) of sub-section (1) of Section 25 can be activated when a dealer has not paid the tax at prescribed rate without sufficient cause which tax liability emerges from the return filed by him. If there is any legal dispute about the declaration of the taxable turnover or any other element of any of the claims made by the assessee in the return, the same cannot be a subject matter of a demand by the Assessing Officer under Clause (a) of sub-section (1) of Section 25 of the TVAT Act. Any dispute as to correct taxable turnover, any claim of exemption or deduction or any other disputed item under the return filed by a registered dealer, has to be first adjudicated by the Assessing Officer in the assessment proceedings. Clause (a) of sub-section (1) of Section 25 cannot be termed into an assessment which in the present case the Assessing Officer has done. According to him, the petitioner could not have excluded the discounts passed on to the dealers from his taxable turnover and to that extent the assessee had declared turnover less than the actual turnover. Even if the Assessing Officer is correct in so contending, it is not under Section 25(1)(a) of the Act that he can bring such turnover to tax. Allowing him to do so, would not only be expanding the boundaries of the powers under sub-section (1) of Section 25 of the TNVAT Act but also overriding the limitation provisions contained in the said chapter.
The impugned orders of tax demands raised by the Assessing Officer under Section 25 of the TVAT Act are set aside - attachment or attachments on the petitioner’s bank accounts are lifted - Petition allowed.
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2021 (2) TMI 502 - ALLAHABAD HIGH COURT
Rectification of Mistake - HELD THAT:- The cause shown in the affidavit filed in support of application is sufficient. The application is allowed. Order dated 27.2.2020 is corrected.
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2021 (2) TMI 498 - MADRAS HIGH COURT
Levy of penalty under Section 27(3)/27(4) of TNVAT Act - whether the First Appellate Authority could have admitted documents for the first time and as to whether there was an embargo under Section 63 of the Act? - HELD THAT:- The finding recorded by the Tribunal that the documents could not be taken into consideration at the appellate stage is unsustainable. On facts, we find that the documents were not admitted by the First Appellate Authority for the first time, but the documents were already available on record. Upon perusal of the said documents, the First Appellate Authority found that the receipts did not relate to any sale. Therefore, the Tribunal did not go into the factual position to ascertain as to whether the First Appellate Authority admitted fresh documents or were the documents available on record even when the assessment was completed. This aspect has been clearly brought out by the First Appellate Authority in his orders dated 31.12.2014, which aspect has not been examined by the Tribunal. Hence, on the said score also, the petitioner - assessee is bound to succeed.
Levy of penalty under Section 27(3) and (4) of the Act - HELD THAT:- The levy of penalty under Section 27(3) of the Act arises for all the five years. However, the levy of penalty under Section 27(4) of the Act arises for the assessment years 2009-10 and 2010-11 alone.
No specific ground was raised as to how the penalty was imposable. The First Appellate Authority granted relief to the assessee by setting aside the penalty, which was levied by the Assessing Officer. In doing so, the First Appellate Authority referred to Section 27(2) of the Act and held that the levy of penalty was provided under the said provision on the actual availing of input tax more than admissible input tax and found that the petitioner – assessee reversed the input tax, which was availed owing to Section 19(20) of the Act much before finalization of the assessment. Therefore, the First Appellate Authority held that there was no excess availing of input tax and also reversal of input tax was not detected and not based on any suppression of fact or bogus claim - Ultimately, the penalty levied under Section 27(3)/27(4) of the Act was set aside.
The Tribunal did not assign any reasons as to why the finding written by the First Appellate Authority setting aside the penalty was not justified. The Tribunal proceeded on the basis that during the VAT Audit, the assessment came to light and therefore, the willfulness on the part of the assessee was established. Any alleged admission before the Inspecting Authority cannot be put against the assessee because the Assessing Officer is an independent Authority, who will deal with the matter upon receipt of the report from the Inspecting Wing. Hence, it hardly matters as to what stand was taken by the assessee when the inspection was conducted. Accordingly, so far as the levy of penalty under Section 27(4) of the Act for the assessment year 2009-10 is concerned, the same cannot be sustained.
The question, which arose for consideration namely as to whether Section 63 of the Act contemplates a total embargo on the First Appellate Authority or the Tribunal to admit documents is answered in favour of the petitioner/assessee - The other questions, which have been raised, are all factual in nature and as we have upheld the orders passed by the First Appellate Authority deleting penalty under Section 27(3)/27(4) of the Act as well as equal time addition, those questions do not arise for consideration.
Revision allowed.
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