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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 47 Records
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2022 (11) TMI 739 - MADRAS HIGH COURT
Validity of assessment order/best judgemnet assessment - alleged difference in sales turnover as per invoices - alleged difference in consideration on sales of old vehicles - penalty under Section 27(3) of the Tamilnadu Value Added Tax Act - HELD THAT:- The mere fact that the assessment was made to the best of judgment of the authority would not be sufficient for the imposition of penalty, as the degree of proof required for imposition of penalty is quite different from, and much higher, than that required for the purpose of framing a best judgment assessment.
It is an admitted position that none of the assessment orders or, for the matter, the show cause notices, reveal any application of mind to the aspect of wilful suppression. The officer merely proceeds on the fact that there was a difference in turnover between the books of accounts and the monthly returns and this, according to him, justifies the invocation of Section 27(3).
An additional factor in this matter is that the petitioner has admittedly remitted the difference in tax along with interest even at the time of inspection. This aspect of the matter is not disputed by the learned Government Advocate. Bearing in mind the conspectus of facts and available precedents, the conclusion arrived at by the appellate authority, that the imposition of penalty under Section 27(3) is automatic, is erroneous in law.
Petition allowed.
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2022 (11) TMI 689 - GUJARAT HIGH COURT
Input tax credit - non-quoting of Section 16(2)(c) of the CGST Act in the show cause notice - It is the case of the petitioner that all conditions prescribed under Section 16 of the CGST/GGST Act are fulfilled and the claim is made of the Input Tax Credit (ITC) on the supplies by the petitioner - HELD THAT:- Issue Notice returnable on 24.11.2022. Learned Assistant Government Pleader waives service of notice for and on behalf of respondent no.3. Qua rest of the respondents, over and above the regular mode of service, service through speed post is permitted.
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2022 (11) TMI 688 - DELHI HIGH COURT
Inter-state sales/branch transfers or not - requirement of production of various documents - Stock Register - audited balance sheet - DVAT-31 Form - C and F Forms in original - copies of bank statements showing transactions and relevant extracts from party ledger - HELD THAT:- The intent, with which reference is made to the material that the petitioner needs to produce, is to enable the petitioner to establish its claim, that the subject interstate sale transactions took place, and thus assist the assessing officer to reach a conclusion, as to whether or not the said assertion is factually correct. - The assessing officer will permit the petitioner to place on record, all such evidentiary material, which will enable it to establish its stand - Illustratively, the petitioner can, if deemed necessary, also place affidavits of the transporters and the recipients of the subject goods.
The assessing officer would be free to summon the affiants, if such affidavits are placed on record - The assessing officer will complete this exercise, within the next eight weeks.
For this purpose, the petitioner’s authorized representative will appear before the assessing officer on 11.11.2022, at 12:00 PM - writ petition is disposed off.
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2022 (11) TMI 687 - TELANGANA HIGH COURT
Violation of principles of natural justice - Seeking declaration that the action of the respondents in not considering the various documents submitted by the petitioner as proof of inter-State trade in dals and pulses and insisting on submission of C-Forms as illegal - HELD THAT:- It is evident that if a dealer seeks to avail concessional rate i.e., 2% of the tax on his turnover he has to produce/file Form-C. If he fails to furnish Form-C, subsection (2) of Section 8 of CST Act would be attracted and the dealer would be liable to pay tax at the rate applicable to the sale or purchase of goods inside the appropriate State under the sales tax law of that State - It is true that State Government had exempted furnishing of C-Forms for the period upto 31.3.2015. But there is no such exemption for the period thereafter till coming into force of GST regime with effect from 1.7.2017. In the absence of such exemption, petitioner is bound to furnish the C-Forms if it wants to avail concessional rate of tax under sub-section (1) of Section 8. Since it failed to do so, for whatever reason, the rigour of sub-section (2) of Section 8 comes into play. Mere submission of representation cannot confer any right on a dealer to seek waiver of filing C-Forms. Principle of legitimate expectation cannot be invoked in a taxing statute.
That apart, if the petitioner is aggrieved by the orders of assessment dated 11.3.2019 and 31.3.2019, petitioner had the remedy under Section 9 (2) of the CST Act read with Section 31 of the VAT Act to file appeal. In a writ proceeding under Article 226 of the Constitution of India, legality and validity of the assessment proceedings are not ordinarily examined when the statute provides for adequate and efficacious alternative remedy. It is not a case of violation of the principles of natural justice or violation of any law to invoke the writ jurisdiction in spite of having adequate and efficacious alternative remedy. That apart, there cannot be any equitable consideration in so far taxation statutes are concerned.
There are no merit in the writ petition - petition is dismissed.
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2022 (11) TMI 686 - MADRAS HIGH COURT
Validity of assessment order - additions were made based on the slips and books recovered from the petitioner - sale suppression of rubber thread - addition of 50% to taxable turnover - HELD THAT:- The petitioner has not made out any case for interference of the order of the Tribunal, upholding the order of the Assessing officer, by reversing the order of the Appellate Commissioner, in so far as addition of Rs.1,95,000/- and therefore to that extent we are not inclined to interfere with the order of the learned Tribunal. However, as far as addition of 50% of the Assessing Authority is contrary to the law settled by this Court in the Judgment THE STATE OF TAMILNADU REP. BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES VERSUS SRI VINAYAGA AGENCIES [2009 (8) TMI 1072 - MADRAS HIGH COURT] where it was held that The Tribunal has rightly applied its mind, verified the contents, compared the details and finally given a finding that the stock verification was arrived at only on the basis of money value of the goods and not on the quantitative basis, which has not at all been taken into consideration either by the Assessing Officer or the first appellate authority in deciding or in coming to the conclusion in so far as the stock variation is concerned - thus in the present case, the deletion of 50% as ordered by the Assessing authority is upheld.
The Second Respondent is directed to issue a fresh order calculating the tax liability and a proportionate penalty within a period of three months from the date of receipt of a copy of this order - petition allowed in part.
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2022 (11) TMI 685 - MADRAS HIGH COURT
Validity of assessment order - sales suppression - Tamil Nadu General Sales Tax Act, 1959, read with the relevant rules - HELD THAT:- The order passed by the Appellate Tribunal is well considered and requires no interference. This Court, in exercising the power under Article 226 of the Constitution of India, is only concerned with decision making process and not decision per se. The fact on record also indicates that the attempt of the petitioner to distance himself from the liability was made only before the Appellate Commissioner by producing few affidavits of persons whose names were in the slip. This is long after the assessment notice was issued on 31.12.1998. Further, Section 38B clearly stipulates that reasons has to be recorded in writing by the Appellate Assistant Commissioner that he has considered such document as genuine and failure to produce the same before the Assessing Authority was beyond the control of the dealer.
Thus, the Appellate Assistant Commissioner committed an error in allowing the petitioner's appeal based on affidavits of so called persons whose name were there in the slips - the order of the Tribunal does not warrant any interference.
The Writ Petition is dismissed.
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2022 (11) TMI 594 - MADRAS HIGH COURT
Attachment of property - recovery of sales tax arrears - non-suiting the appellants without considering the fact that the appellants are bonafide purchaser for consideration without notice - transfer in favour of the appellants was hit by Sec.24A of the Sales Tax Act or not - Whether the courts below are correct in law in nonsuiting the appellants when Sec.100 of Transfer of Property Act prohibits that no charge shall be enforced against any property in the hands of a transferee for consideration with the notice of charge?
HELD THAT:- Knowingfully well about the pendency of the said surcharge proceedings, the said K.Muthusami executed a gift deed in favour of his 2nd daughter clearly denotes that to defraud the claim of defendant, such document was executed. So, neither Muthusami nor plaintiffs entitled to get any protection under Sec. 24-A (i) of the Act and the same was rightly appreciated by the courts below, which needs no interference.
Furthermore, the 1st plaintiff has no title over the property for the reason that the alleged gift deed stands in the name of 2nd daughter of K.Muthusami itself void under law. Hence, based upon the void document, the 2nd and 3rd plaintiffs are not entitled to get any better title. Apart from that, the 2nd and 3rd plaintiffs also contended that they are bonafide purchasers and they are entitled to get benefits under Sec.24-A (i) of the Act. Admittedly, they have purchased the property in the year of 2004 and they were not aware of the proceedings initiated by the defendant - the alleged gift deed executed by K.Muthusami in favour of his 2nd daughter is void under law and subsequently, she sold the property in favour of 1st plaintiff and though the plaintiffs 2 and 3 have purchased the property from the 1st plaintiff in the year of 2004, till 2010, they have not taken any steps to transfer the names in the revenue records. Furthermore, before they purchased the property, they ought to have made enquiry about the ownership of the property, but no evidence placed before this court that they have made valid enquiry. Hence, the courts below have rightly appreciated this aspects, which needs no interference.
Though the attachment was effected only in the year of 2009, but the tax due from the year of 1993 was under challenge by the Kaveri Agencies before the Tax Appellate Tribunal and the same was negatived by this court in the appeal proceedings. Thereafter, the defendant took steps to attach the property, which is valid under law and the same cannot be questioned by the plaintiffs, as they have no locus standi and the alleged document stands in their name also void and non-est in law.
Appeal dismissed.
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2022 (11) TMI 496 - CHHATTISGARH HIGH COURT
Levy of VAT (Value Added Tax) - lease charges paid by the Railways Department to the Petitioner Company - Deemed sale or not - right to use goods or the use of goods - HELD THAT:- From the authoritative decision of the Hon'ble Supreme Court in 20th Century Finance Corpn. Ltd. [2000 (5) TMI 980 - SUPREME COURT], it is evidently clear that the Hon'ble Supreme Court had in its mandate held that in respect of transfer of right to use any goods, the situs of the sale would be placed where the written agreement transferring the right to use any goods was executed and it is only that State where the written agreement was executed which is empowered to levy tax.
The High Court of Orrisa in M/s Shrei International Finance Ltd. Vs. State of Orissa & Ors. [2008 (3) TMI 638 - ORISSA HIGH COURT] in somewhat identical set of facts has held that since the sale or purchase was in the course inter-state trade and commerce, the State of Orissa has no jurisdiction to levy tax on the lease rent received. The taxable event is the transfer of right to use goods and not the right to use goods or the use of goods. Therefore, the right to use goods or the use of goods is not the relevant factor to justify the levy of tax. Thus, the entire assessment made by the Assessing Officer and the acceptance of the same by the Revisional Authority is per se bad and illegal.
This Court is of the firm view that the Order passed by this Court does not seem to be proper, legal and justified and a strong case for allowing the Review Petition accordingly has been made out - Review Petition is allowed.
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2022 (11) TMI 495 - MADRAS HIGH COURT
Imposition of penalty under Section 12(5)(iii) of Tamil Nadu General Sales Tax Act, 1959 - inclusion of cylinder holding charges and delivery charges in the taxable turnover - It was the specific case of the petitioner that both these amounts were not liable to be included in the taxable turnover and therefore, the petitioner and the department were in dispute for the assessment years 1987-88, 1988-89, 1990-91, 1991-92, 1992-93 and 1994-95.
HELD THAT:- The decision in the case of State of Tamil Nadu V. Indian Silk Traders [1991 (10) TMI 302 - MADRAS HIGH COURT], followed where it was held that Since a finding on this crucial aspect is necessary to find out whether penalty can be levied under section 12(3) or 12(5) of the Act, we are constrained to remand the case back to the assessing authority to render a finding on this aspect as to whether the assessment is based on the books of accounts or de hors the books of accounts.
Though the views expressed in State of Tamil Nadu V. Indian Silk Traders, [1991 (10) TMI 302 - MADRAS HIGH COURT] are fraught with contradictions and require for a re-consideration, we are refraining from taking a different view, as the view of this Court in the aforesaid case was followed by this Court in State of Tamil Nadu vs. Periyar District Cooperative Milk Producers United Ltd. [1992 (4) TMI 236 - MADRAS HIGH COURT] and State of Tamil Nadu vs. Papco Offset Printing Works [1998 (1) TMI 508 - MADRAS HIGH COURT].
Petition allowed.
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2022 (11) TMI 494 - ANDHRA PRADESH HIGH COURT
Recovery of tax and penalty - excess input tax credit availed - arithmetical mistake in the order - HELD THAT:- A perusal of the averments in the counter affidavit of the 4th respondent would show that the Commercial Tax Officer, Puttur has noticed arithmetical mistakes in the consequential order dated 11.01.2018, as CTO has taken opening Input Tax Credit of Rs.26,50,970/- instead of ‘Nil’ opening Input Tax Credit and passed revised order for the tax periods from October 2012 to March 2014 and determined balance tax of Rs.44,75,595/-. Suppressing the said fact, the petitioner filed an application for collection of the tax at Rs.26,82,906/- instead of Rs.44,75,575/- The said authority had granted stay on a condition of deposit of 50% of the tax of Rs.26,82,906/-. The petitioner had paid Rs.6,70,727/- only.
It is further stated that the Deputy Commercial Tax Office had issued several notices requesting the petitioner to pay the amounts payable by the petitioner as per the stays granted by this Court, as well as Additional Commissioner (CT) (Legal), but no amounts have been paid. The 4th respondent also issued notices, but in vain. Since the petitioner failed to pay the entire amount due towards tax and penalty, consequential proceedings came to be initiated. It is further specifically stated in the counter that the revisional authority i.e., Deputy Commissioner of Commercial Taxes, Chittoor has not revised the entire orders passed by the assessing authorities and the revised and restricted Input Tax Credit claimed by the petitioner is only based on the revisional orders of the Deputy Commissioner of Commercial Taxes, Chittoor - the jurisdiction Commercial Tax Officer is said to have passed the effectual orders and determined the balance tax payable by the petitioner and also levied penalty.
Since there is dispute with regard to payments made by the petitioner and as issue involves factual aspects also apart from the orders passed, it would be just and proper to direct the assessing authority-1st respondent to consider the matter afresh after giving an opportunity of personal hearing to the petitioner, as early as possible - petition disposed off.
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2022 (11) TMI 434 - KARNATAKA HIGH COURT
Open purchase order - agreement to sell - inter-state sale or not - stock transfers - argument of Shri Sridharan in substance, is open purchase orders do not stipulate any specified quantity and therefore, it cannot be construed as an agreement to sell - whether in the facts of this case, inter-state transfer of goods under Form-F to petitioner's depots situated in different states amounts to inter-state sale under Section 3(a) of the CST Act?
HELD THAT:- The Open Purchase Orders do not mention the quantity of the goods supplied. We may record that in order to avoid inventory, manufacturers have been using the 'JIT' (Just in time) supply model. It was argued on behalf of the assessee that to ensure prompt delivery of the goods as and when called upon, the assessee transfers the goods and stocks it in its depot. Shri. Sridharan also urged that the automobile manufacturing Industries nor the ancilliary units had any obligation to place purchase orders. In case the paint had remained unsold, the option for the assessee is to either destroy it or to take it back to its Manufacturing unit.
It is not in dispute that goods were transferred from Mangaluru to various depots situated in different States under Form-F and assessments for the years 2006-07 and 2007-08 were concluded by accepting the Statutory declarations filed in Form-F.
The Open Purchase Orders do not constitute any Contract. The Purchase Orders issued from time to time for supply of goods constituted Contract between parties. Thus, the sale effected pursuant to such Purchase Orders is an Intra-State sale in that State. It is so because, whilst Goods were stored in various States, the ownership and title of goods vested with the assessee. Pursuant to the Purchase Orders received from time to time, assessee has delivered the goods from its depot in that State to the respective purchasers.
Order dated 27th June 2019 Annexure-A is quashed holding that Open Purchase Orders are only standing offers and do not constitute a confirmed 'Agreement to sell' and movement of goods are mere stock transfers - petition allowed.
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2022 (11) TMI 433 - KERALA HIGH COURT
Application for condonation of delay - Power of review - maintainability of the review - HELD THAT:- When it came to the power of review under sub-section (8) of S.s 60 & 62 & sub-section (9) of S. 63, a larger time of one year i.e., 365 days was provided for institution without any provision for condonation of delay - The declaration in Hongo India (P) Ltd [2009 (3) TMI 31 - SUPREME COURT] squarely applies in the above case, there can be no condonation of delay under Section 62 (8) of the KVAT Act.
Suffice it to notice that the assessee claimed input tax credit for the raw materials purchased by its manufacturing unit at Vadavathur, Kottayam; for reason of the tyres manufactured having been exported from its godown at Puzhal in Tamil Nadu; to which godown the finished products were transferred from Vadavathur, on stock transfer. This Court, in the order sought to be reviewed, categorically held that there can be no such clarification granted by the authority without examination of the facts and without production of sufficient documents to prove that the taxable purchases made were in pursuance of an export order - The assessee having not established an export order prior to the stock transfer, it is obvious that there cannot be taxable purchases of raw materials having been made, based on an export order at its manufacturing unit at Vadavathur.
There is no discovery of a new or important fact which after due diligence was either, not within the knowledge of the applicant or could not have been produced by the assessee, when the order was made - What is attempted by the petitioner is to have a clarification that the export made from their godown at Tamil Nadu is of the manufactured goods at Vadavathur, Kottayam, enabling the manufacturing unit to claim input tax credit within the State of Kerala, which blanket order cannot be made under the clarificatory power and the consideration has to be on the individual facts of every transaction with documentary evidence produced to substantiate a claim.
The Review Petition stands rejected on the aspect of delay and on the ground of the review petition not coming within the contours of a review, as contemplated by the statute.
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2022 (11) TMI 432 - KERALA HIGH COURT
Validity of assessment order - recovery of arrears of tax - applicable rate of tax - Ujala Supreme - Ujala Stiff & Shine - Section 25(1) of the KVAT Act - HELD THAT:- The Hon'ble Supreme Court in MP Agencie's case [2015 (3) TMI 787 - SUPREME COURT] held that the goods (Ujala Stiff and shine) remain in List A of Third Schedule which is taxable at 4%/5% and the inclusion of the goods in the residuary Entry 103 by the Revenue by no stretch of imagination can be made applicable. It was further held that if the assessee/appellant therein has paid the amount of VAT in excess of 4%/5% to the State Government, they will not be entitled to get refund of the said amount.
Article 141 of the Constitution of India commands to follow the decision of the Hon'ble Supreme Court, if there is a law declared by the Hon'ble Supreme Court which obviously would be binding on all courts in India and the parties thereto. In the light of Articles 141 and 142, it is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court has laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, but also mandate of the Constitution as provided under Article 141, that the law declared by Supreme Court shall be binding on all courts within the territory of India. In this context, it is also relevant to look into Article 142 of Constitution of India.
Admittedly, the petitioner has not challenged the judgment of this Court before the Apex Court but the respondents are not entitled to proceed with the recovery proceedings for recovery of the amount which is not authorized by law. When the Hon'ble Supreme Court has held that taxes paid by the assessee/appellant will not be refunded, it does not allow the Department to collect the differential taxes in the case of assessees who have not met the demands already made - It is trite that even though all statutory remedies are exhausted and held against the petitioner, it is legal to invoke powers under Article 226 to challenge the same as it vitiates the old law.
The Exts.P3 and P4 revenue recovery notices demanding an amount of Rs.6,43,079/- is illegal and unenforceable and has to be set aside - petition allowed.
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2022 (11) TMI 399 - DELHI HIGH COURT
Benefit of concessional rate of tax - rectification of C-Forms - principal grievance of the petitioner as articulated in the writ petition is, that the petitioner is not being permitted to revise its VAT/CST returns concerning Financial Years 2016-2017 and 2017-2018 - HELD THAT:- This writ petition is disposed of, with the consent of the learned counsel for the parties, with a direction to the respondents/revenue to issue the rectified C-Forms, subject to the verification of entitlement on merits, without being burdened with the issue concerning limitation.
The writ petition disposed off.
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2022 (11) TMI 398 - MADRAS HIGH COURT
Validity of assessment order - mismatch between the purchasing and selling dealer - ITC claimed by the purchaser does not match with the output tax due paid/payable by the seller - Mismatch of purchase/ sales transactions resulting in purchase and/or sales suppression - Mismatch of transactions because of a dealer whose registration To anolem certificate has been cancelled - HELD THAT:- After referring to the verification to be undertaken by the Assessing Authorities in regard to the materials in his possession, the Assessing Authority is required to issue notice along with all details connected to the assessment and seek objections from the assessee concerned. Thereafter, a personal hearing shall be afforded, either physically or virtually, granting adequate opportunity to the dealer to put forth its objections.
The Circular also envisages a request of the assessee for cross examination of the third party dealer and provides for such an opportunity of cross examination to be granted suo motu, if the Assessing Authority believes that it would be so appropriate. The assessment will thereafter be concluded within a period of 180 days from date of issue of show cause notice.
Let this procedure be followed in the present matter as well. Show cause notice, as indicated in the Circular will be issued to the petitioner within a period of four (4) weeks from today with all necessary enclosures. The assessments will be completed thereafter within a period of 180 days, in accordance with law, after hearing the petitioner - It is made clear that if the amount volunteered as per affidavit dated 11.10.2022 is not so remitted within the time stipulated as above, then it shall be as though the impugned order has not been interfered with, and the same shall stand confirmed.
Writ petition disposed off.
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2022 (11) TMI 287 - SUPREME COURT
Levy of entry tax - Interpretation of “local area” occurring under Entry 52 of List II of the Seventh Schedule to the Constitution - whether the exclusion of an industrial area or areas from the limits of municipal councils or municipalities under the state laws in exercise of statutory power or by virtue of a declaration under proviso to Article 243-Q, would result in that area ceasing to be a “local area” within Entry 52 of List II and consequently precluding State from levying and collecting entry tax from those areas?
HELD THAT:- In the present case, two or more sets of law, operate within the two states. The first set of statutes are the enactments, that impose the levy, which is entry tax. The incidence is entry into a local area. A “local area” is defined as including industrial establishments, or estates. The second set of laws that are involved, are the concerned municipalities laws, such as the Orissa Act of 1950- which by proviso to Section 4 (1) excludes industrial areas, from the rigours and requirements of the municipalities’ enactments - the provisions in Part IX-A of the Constitution provide for constitution of municipalities, their duration, powers and responsibilities of authorities of the municipalities. Municipalities were conceived as vibrant democratic units of self-governance. Their term or duration was provided to be for five years; regular elections, to elect representatives of municipalities was contemplated. The special features of the municipalities contemplated by the provisions contained in Part IX-A, however need not be present in other bodies created by law, such as Boards, etc. Such statutory bodies, like industrial estates may perform some municipal functions. However, that some municipal functions are performed by such bodies ipso facto does not result in their acquiring the features of municipalities which are contemplated by Part IX-A of the Constitution.
The burden of the appellants’ song, so to say, is that when a notification is issued, excluding industrial areas or estates from municipal areas, they cease to be local areas, and cannot be treated as such for the purpose of levy of entry tax - The focus of provisions of Part IX-A of the Constitution inserted through the 74th Amendment was on local self-governance and all provisions concerning it. It had no relevance to the issue of State taxation. Furthermore, the exercise of power by the Governor to exclude from the limits of a municipal area, industrial estates or large areas that were predominantly industrialised areas is upon the condition that such areas provided a minimum modicum of municipal services. The pattern of State enactments – which emerges from a reading of various decisions of this Court is that every State has a set of municipal or local self-governance laws, such as those dealing with municipalities, cantonments, panchayats, gram panchayats, etc., on the one hand, and those that deal with industrial areas – as for instance, the UPIAD Act, Gujarat Industrial Development Act, 1962 etc. on the other.
The object of the levy, i.e., entry tax, is the regulation of entry of goods in a regular area for consumption, i.e., manufacture, use or sale. There is no dispute that entry of goods into an industrial area or estate is for their use for manufacturing or for processing or for the purposes of their delivery as their ultimate point of destination, i.e. for the purpose of their “consumption, use or sale” within that area. It could even be that the goods enter within the industrial area or estate, as the ultimate point of destination for their use. In any case, the levy would be attracted because the incidence is the entry into the local area.
SLP dismissed.
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2022 (11) TMI 286 - JHARKHAND HIGH COURT
Validity of assessment order - enhancement of gross turnover - petitioner contended that Assessing Officer, by merely taking into consideration one or the other figures from books of account of the petitioner, have alleged concealment of sales without any evidence - HELD THAT:- It is an admitted fact that the Assessing Officer has accepted the books of account of the petitioner and, in the Assessment Order, no adverse evidence has been recorded demonstrating concealment of sale. However, the Assessing Officer, by comparing the Statement of Sales as reflected in the books of account (Annexure-5 at page 61) with the Consumption account (at Page 45) treated the difference of the amount of Rs. 10,46,08,885.86 (-) Rs. 9,63,41,597 = Rs. 82,67,288.86 as the concealed sale turnover of iron ore. From the Tax Audited Report submitted to Income Tax Department (Annexure-4), it would be evident that cost of goods sold was clearly reflected as Rs. 10,46,08,886/-, whereas, from the Sales Statement, it was evident that said goods were sold at Rs. 9,63,41,597/-. Thus, the differential amount was not the concealed sales amount of the petitioner, but was the loss suffered by the petitioner on sale of iron ore, which is evident from the books of account of the petitioner itself.
The Assessing Officer, on one hand, treated the loss suffered by petitioner as concealed sale amount of iron ore, and, on the other hand, by comparing the gross profit shown in books of account of the petitioner, and, by stating, inter alia, that gross profit has been shown less by the exact amount of Rs. 82,67,288/-, proceeded to levy tax again on the said amount by treating it as concealed sale. It appears that the Assessing Officer has completely misconceived itself while passing Assessment Order, as, on one hand, the loss suffered on sale of sponge iron was treated as concealed sale amount, and, on the other hand, exact sale figure was treated to be the concealed sale amount of sponge iron by stating, inter alia, that petitioner has shown less gross profit in the books of account.
The order passed by Revisional Authority dated 07.03.2017, Appellate order and Assessment Order including consequential Demand Notice dated 02.02.2011are, hereby, quashed and set aside - matter is remanded to the Assessing Officer to pass de novo Assessment Order after giving opportunity of hearing to the petitioner and further to enable the petitioner to explain the figures mentioned in its books of account.
Petition allowed by way of remand.
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2022 (11) TMI 285 - ANDHRA PRADESH HIGH COURT
Validity of assessment order - execution of Works Contracts - Composition Scheme - territorial jurisdiction to assess the case of the Petitioner - HELD THAT:- It is an undisputed fact that, the dealer opted for Composition Scheme and filed Form VAT 250 on 10.06.2015, wherein, the dealer opted for payment of tax by way of composition, for the full value of the contract of Rs.4,35,00,000/-. The dealer commenced its activity of contract by purchasing the goods to a tune of Rs.94,16,538/- for the purpose of construction and development activities at his apartments and by selling the apartments to a tune of Rs.10,00,000/-. Having regard to the filing of Form VAT 250 and opted for Composition Scheme by filing VAT 250, the Petitioner would come under the purview of Section 4(7)(d) and Rule 17(4) of VAT Act.
It may be true that the second Respondent is the territorial Assessing Authority, but it is not in dispute that the first Respondent is having territorial jurisdiction over the dealer. The G.O.Ms. No. 503, dated 08.05.2009, which came into effect from 01.05.2009, which is referred to in the affidavit filed in support of the Writ Petition, would show that, if the Deputy Commercial Tax Officer is having territorial jurisdiction over the dealer, he can deal with the case of the dealer irrespective of the fact whether the original order under Appeal or Revision order has been passed by him or not - the argument of the learned Counsel for the Petitioner that the first Respondent has assessed the case of the Petitioner without having territorial jurisdiction, cannot be accepted, when it is a fact that the Petitioner also falls within the territorial jurisdiction of the first Respondent.
Whether the findings given by the Assessing Authority vis-à-vis finding given by the Appellate Authority are correct? - HELD THAT:- The purchases made prior to declaration of VAT 250 and the sale made [apartments], the Appellate Authority found that the method adopted in levying tax is totally incorrect. The Appellate Authority categorically held that, when the Petitioner has opted for Composition Scheme and not claimed ITC, then the Assessing Authority has to levy tax under Rule 17(4) of the VAT Act. Having said so, the Appellate Authority further said that the Assessing Authority, without verifying the records properly, levied tax on purchases also, which is against the spirit of VAT Act and, accordingly, remanded the matter back.
It is very clear that the Assessing Authority has once again levied tax on the purchases made before filing of VAT 250 period, though tax was paid on them at the time of sale of the apartments, which, as urged by the learned Counsel for the Petitioner, prima facie, may amount to double taxation.
The argument that the first Respondent has no power to assess the case of the Petitioner is rejected, but, however, on the second issue, the matter is remanded back to the first Respondent to deal with the same in accordance with law by taking into consideration the observations made by the Appellate Authority - the Writ Petition is allowed by way of remand.
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2022 (11) TMI 262 - BOMBAY HIGH COURT
Principles of natural justice - validity of assessment order - impugned order observations and allegations about fake invoices and fake forms have been made against petitioner but show cause notice issued was without any of these allegations and without any details - opportunity not provided to petitioner to effectively deal with the allegations - HELD THAT:- It is difficult to understand why Respondent No.3 could not have provided all the details alongwith the show cause notice. This is a serious lapse and we find in many matters the concerned officers do not provide all the details. Perhaps, they do not have proper training on adjudication matters or they are not even aware about the legal provisions or need to follow principles of natural justice.
The impugned order alongwith show cause notice is hereby quashed and set aside. Respondent No.3 may issue a fresh show cause notice to petitioner containing every detail by which Respondent No.3 feels tax is sought to be evaded by not recording or recording in an incorrect manner or petitioner has claimed or deducted incorrectly.
Petitioner shall file detailed reply within two weeks of receiving the show cause notice - Respondent No.3 may then pass final assessment order within eight weeks of receiving reply after giving personal hearing to petitioner, notice whereof shall be communicated atleast seven working days in advance. The assessment order shall contain all reasons for arriving at the findings there in and if the Assessing Officer does not agree with petitioner’s contentions, detailed reasons as to why he disagrees shall also be given in the Assessment Order.
Petition disposed off.
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2022 (11) TMI 261 - TELANGANA HIGH COURT
Violation of principles of natural justice - Legality and validity of the revisional order - challenge on the ground that the revisional authority had granted seven days’ time to the petitioner to file objection to the notice proposing revision but without exhaustion of the aforesaid period, the revisional order has been passed - HELD THAT:- When the 1st respondent had granted seven days’ time to the petitioner to submit written objection on the proposed revision of assessment, he ought to have waited till expiry of the aforesaid period. Without the aforesaid period being completed, 1st respondent hastily passed the order dated 16.07.2022 thereby pre-empting the petitioner from filing written objection.
When the show cause notice itself clearly says that petitioner should file written statement within seven days of receipt of the notice, we fail to understand as to how 1st respondent could have arrived at such a conclusion - We are not satisfied with such an explanation. However, in the present proceeding we are not inclined to delve into this aspect of the matter but in an appropriate case we may consider awarding exemplary costs if we are of the view that such mistakes are not bona fide.
The revisional order dated 16.07.2022 is set aside - matter remanded back to the 1st respondent. Petitioner shall submit written objection to the show cause notice dated 08.07.2022 within seven days from the date of receipt of a copy of this order whereafter 1st respondent shall pass fresh order in accordance with law after giving due opportunity of hearing to the petitioner - petition allowed by way of remand.
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