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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 61 Records
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2023 (1) TMI 845
Exemption from Entry tax - Whether the applicant was covered within the expression 'Manufacturing Dealer' as used in the Notification dated 18.2.2003 (Annexure-2 to the Revision Application) issued under Section 4-B of the Uttar Pradesh Tax on Entry of Goods Act, 2000?
HELD THAT:- The words “Manufacture” and “Manufacturer” have not been defined under the Entry Tax Act either of the year 2000 which was repealed and subsequently, enacted by the Act of 2007. The word “Manufacturer” has been defined under the Act of 1948 which means in relation to any goods, the dealer who makes the first sale of the goods in State after their manufacture. The Notification dated 18.02.2003 which provides benefit to a manufacturing dealer of entry on capital goods, plant, machinery and spare parts into local area from any place outside the local area for use in their manufacturing has to be construed in harmony with the Act of 2000/2007 read with Act of 1948 - “Dealer” encompasses any person who carries on in the State the business of buying, selling, supplying or distributing goods directly or indirectly, for cash or deferred payment or for commission, remuneration or other valuable consideration and includes the persons mentioned in Section 2(c)-i to viii.
This Court in Bulbu Prasad Amarnath [1963 (10) TMI 19 - ALLAHABAD HIGH COURT] way back in 1963 while considering that converting oilseeds into oil which was a manufacturing process has been done at the instance of manufacturer dealer by another owner of the mill. The Court held the owner of mill to be not a manufacturer because he did not own the oilseeds or oil produced by him, as he did not buy the oilseeds from the Assessee nor sold the oil to him, but only charged the labour of crushing the oilseeds into oil. The Court held that in order to be a manufacturer, it is not necessary that person himself must manufacturer.
In the instant case, the Assessee had brought capital goods inside the State, which was used for manufacture of catalyst on basis of job work done by M/s ICI, who was manufacturing catalyst only for the Assessee and for no other party. M/s ICI was charging for the manufacture of catalyst from the Assessee and was not making the sale and thus, cannot be termed as manufacturer defined under Section 2(ee) of the Act, 1948. It is the Assessee who had made the first sale and shall be deemed to be a manufacturer dealer and liable to claim benefit of the exemption Notification dated 18.02.2003.
The reasoning given by the Tribunal and argument raised by the State counsel cannot be accepted, as it would amount to doing injustice and interpreting the word “Manufacture” defined under the Act.
The finding recorded by the Tribunal is unsustainable in the eye of law and the Assesseee-revisionist is entitled for the benefit claimed by him.
Revision allowed.
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2023 (1) TMI 844
Maintainability of appeal for rectification before the Trade Tax Tribunal - error apparent on the face of record or not - order in assessment proceedings have been upheld in a revision before the Hon'ble High Court under Section 11 of the U.P. Trade Tax Act - Tribunal is competent to rectify the order of assessment by exercising powers under Section 22 of the U.P. Trade Tax Act, 1948 on the basis of declaration of law by the Hon'ble Supreme Court at a later stage or not - maintainability of application under Section 22 of the U.P. Trade Tax Act, 1948 for rectification of its own order passed under Section 11 of the U.P. Trade Tax Act, 1948.
Whether in the garb of rectification under Section 22, the judgment and order of the Tribunal, having been confirmed by the High Court, can be set aside on merit? - HELD THAT:- It is not in dispute that the assessment order upheld by the Tribunal on 31.8.2004 was confirmed by this Court on 09.11.2004 in the revisions filed by the assessee. As no challenge was made to the order passed by this Court, it attained finality. Reopening of the case by the assessee in garb of Section 22 of Act of 1948 cannot be permitted as there is no error apparent on the record.
Language employed in Section 22 is clear and authorises the officers of authority, Tribunal or High Court to rectify the mistake on its own motion or on application of the dealer within the period prescribed therein - In Thungabhadra Industries Ltd. vs. The Government of Andhra Pradesh [1963 (10) TMI 25 - SUPREME COURT], the Apex Court held that a review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected, but lies only for patent error.
Similarly, in Satyanarayan Laxminarayan Hegde and Ors. vs. Millikarjun Bhavanappa Tirumale [1959 (9) TMI 52 - SUPREME COURT], the Apex Court held that an error apparent on the face of the record for acquiring jurisdiction to affect rectification must be such an error which may strike one on a mere looking at the record and would not require any long-drawn process of reasoning.
The rectification under Section 22 of the Act of 1948 was maintainable. The language used in Section 22 is plain and simple and there is no ambiguity so as to give a different meaning, which only provides that in case of error apparent on the record an order for rectification of such mistake can be passed.
This Court finds that no interference is required in the order of the Tribunal dated 23.09.2009 - revision dismissed.
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2023 (1) TMI 799
Validity of assessment order - whether the works contract awarded to assessee for the year 1989-1990 could be divided into two parts i.e. supply of goods and works contract? - HELD THAT:- It is not in dispute that a written agreement was executed between the assessee - revisionist and Auraiya Gas Power Project. Clause 2.4 categorically provided that the cost included the material and the labour for laying pipeline, the work was to be executed by the assessee. Clause 3 read with Clause 3.1 of the Contract mentioned the total value of the contract as Rs.10,67,517/-. The Tribunal had noted the relevant clauses of the agreement in its judgment but relying upon specification of work/tender had segregated the contract awarded to the assessee between the work done by the assessee and the material supplied/purchased for the execution of work contract. Further, the notification dated 27.4.1987 has provided for levying of tax where the works contract has been executed over Rs.1 lakh and the description has been mentioned in the schedule of the notification.
In the instant case, the agreement, which was arrived between the parties, did not segregate between works contract and the material to be supplied. The agreement specifically provided for the payment of lump-sum money to the contractor for the material as well as the works contract. The interpretation given by the Assessing Authority and Tribunal cannot be sustained in view of the agreement arrived between the parties. The notification dated 27.4.1987 is not applicable in the case of assessee - revisionist.
The finding recorded by the Tribunal as to the segregation of the work done by the assessee, pursuant to the agreement entered between the assessee and the Auraiya Gas Power Project, the order passed by the Tribunal is unsustainable in the eyes of law and the same is hereby set aside - revision allowed.
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2023 (1) TMI 798
Seeking restoration of assessment order - appellate order is non speaking order or not - validity of seeking restoration when the Tribunal ought to have remanded the case to appellate authority for passing fresh order - HELD THAT:- It is a case where a survey was made on 26.09.2015 which is not disputed to both the parties. At the time of survey, 16 persons were having food in the dhaba at around 12.40 p.m. in the afternoon which is also not disputed. As no book of accounts was produced before the survey team by the Assessee, the Assessing Authority calculated the sale made by the Assessee relying upon the survey report. The first appellate authority has reduced the quantum of tax, which the Tribunal had restored back and upheld the order passed by the Assessing Authority after giving the elaborate reasoning to arrive at the finding.
The Tribunal is the last fact finding Court and has recorded a categorical finding that as per the admitted rent and the salary being paid to the employees and the electricity charges, the total expenses incurred by the Assessee was arrived at by Tribunal, which this Court cannot interfere and re-appreciate exercising revisional jurisdiction.
The finding so recorded is finding of fact and the Assessee could not bring on record any thing so as to demonstrate that the Assessing Authority or the Tribunal exceeded its jurisdiction vested in it and passed the order without any material on record.
The finding of fact recorded by the Tribunal needs no interference by this Court exercising revisional jurisdiction - Revision dismissed.
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2023 (1) TMI 797
Time bound supply scheme - branch transfers - interstate sales - Section 3(a) of the Central Sales Tax Act, 1956 - Whether in the facts and in the circumstances of the case, the Tribunal has ignored the fact of absence of any conceivable links with the customers and the despatch of the goods to the Branch? - HELD THAT:- There can be no manner of doubt that an AO is required to examine each transaction forming the subject matter of the assessment proceedings to determine whether it amounts to a branch transfer as contended by the Assessee or an interstate sale as contended by the Department. Therefore, the decision in any particular year, even involving the same Assessee and the same scheme, need not necessarily form a precedent for a subsequent year since the transaction in each subsequent year will have to in any event be examined on a case by case basis. Therefore, there need not be any apprehension entertained by the Department that if the Court for the present year i.e. 1988-89 decides that the transactions in question do not amount to interstate sales then in all subsequent years ipso facto, without anything more, all the transactions for those years will also be termed only as branch transfers and not interstate sales.
While the Assessee has discharged its initial burden of showing that the transaction was only a branch transfer, the Department has been unable to discharge its burden of showing that in fact the transaction was not merely a branch transfer but was a movement of goods by way of interstate sale occasioned by a concluded contract - the Court is not persuaded that the matter pertaining to 1988-89 should again be sent to the Tribunal for verification of each transaction to determine whether it is an interstate sale as contended by the Department. The Court notes that nearly 35 years have already elapsed since the year 1988-89 and these proceedings cannot interminably carry on.
The impugned order of the Tribunal and the corresponding orders of the First Appellate Authority and the AO are hereby set aside - issue answered in favour of the Assessee and against the Department.
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2023 (1) TMI 796
Reversal of Input Tax Credit - interstate sale of goods - applicability of proviso to Section 19 (2) (v) of the TNVAT Act to manufacturers also or not - HELD THAT:- The issue decided in the case of THE STATE OF TAMIL NADU REPRESENTED BY ITS SECRETARY COMMERCIAL TAXES DEPARTMENT, THE DEPUTY COMMISSIONER (CT) (FAC) VERSUS M/S. EVEREST INDUSTRIES LIMITED [2022 (4) TMI 1204 - MADRAS HIGH COURT] where it was held that When the power to the statutory authority is granted upto five years to modify the order, it cannot be said that the constitutional authorities would not have power to review the action. Therefore, concurring with the Division Bench, we do not concur with the decision of the Learned Judge to dismiss the writ petitions on the technicality of limitation, that too, when the batch was pending.
Appeal disposed off.
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2023 (1) TMI 735
Levy of penalty - levy based on on conjectures and surmises - transaction was duly recorded in books of accounts and accompanied by Form C and payment were made through Banking channel - HELD THAT:- This Court finds that merely on the basis of presumption and statement of the truck driver which was carrying the goods, penalty proceedings have been initiated by the assessing officer. The taxing department did not have any material on record so as to hold that there was any violation by the dealer in bringing the goods from outside the State of U.P. The Form 38 which was accompanying the goods was filled and all the tax invoice alongwith the bilti and transporter's bill was there when the truck was intercepted by mobile squad on 04.08.2016.
Moreover, the statement of a truck driver cannot be the basis for initiating the penalty proceedings. The statement of truck driver which has been recorded by the officer of the department is not corroborated by any proof and the said statement cannot be relied upon for initiating the penalty proceedings. This Court finds that the action of the taxing department was not justified in initiating penalty proceedings without any material on record - The statement of a driver cannot be sole basis for initiation of penalty proceedings and no intention to evade the tax can be established from the statement of driver when the entire documents are there on record.
This Court further finds that the Tribunal itself has recorded a finding that it could not be ascertained whether the truck was unloaded at Mathura or not. Once the department has not shown whether the goods were being brought at Mathura from outside the State of U.P. no question of penalty proceedings can arise.
The order of Tribunal is unsustainable in the eyes of law and same is hereby set-aside - Revision allowed.
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2023 (1) TMI 734
Doctrine of merger - Recovery of dues (secured debt) - secured creditor has priority over the right claimed by the Revenue over secured debt or not - Section 26E of the SARFAESI Act and Section 31B of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act, 1993) - sum and substance of the contention therefore advanced by the learned Special Government Pleader is that the findings rendered by the Hon’ble Apex Court in CENTRAL BANK OF INDIA VERSUS STATE OF KERALA AND OTHERS [2009 (2) TMI 451 - SUPREME COURT] is clearly applicable to the cases on hand.
HELD THAT:- Hon’ble Apex Court has held in Central Bank of India that in none of the judgments pointed out by the financial institutions in the said case, held that by virtue of the provisions contained in the DRT Act or the SARFAESI Act, 2002, first charge has been created in favour of Banks, financial institutions etc., and further that in none of the judgments, either called upon nor it decided competent priorities of statutory first charge created under Central Legislations (S) on the one hand and State Legislations (S) on the other, nor it proved that statutory first charge created under a State Legislation is subservient to the dues of Banks, financial institutions etc., even though statutory first charge has not been created in their favour - It was finally held therein that the High Court was right inholding that the Tahsildar was entitled to give effect to the primacy of statutory first charge created on the property of the dealer under Section 26B of the KGST Act, 1963; and therefore held that the State has got prior charge over the property of the dealer and there is no valid ground to interfere with the order passed by the Division Bench of this Court.
In KUNHAYAMMED AND OTHERS VERSUS STATE OF KERALA AND ANOTHER [2000 (7) TMI 67 - SUPREME COURT] a Three Judge Bench of the Hon’ble Apex Court had occasion to consider the doctrine of merger, binding precedent under Article 141 vis-a-vis Articles 132 to 136 and the Supreme Court Rules. The issue with respect to dismissal of Special Leave Petition by speaking or reasoned order was considered by the Hon’ble Apex Court in the said judgment - It was held therein that the law stated or declared by the Hon’ble Apex Court in its order shall attract applicability of Article 141 of the Constitution. It was also held that the reasons assigned in the order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by the court because permitting to do so would be subversive of judicial discipline and an affront to the order of the court.
If and when any amounts have fallen due as per the provisions of the KGST Act, 1963 and the KVAT Act, 2003 and the proceedings start, consequent to which a charge is created on the properties of the assessee and the said charge created would continue to run with the property even if the Banks / financial institutions conduct the sale to recover the amounts due under the mortgage - It is quite clear and evident from Section 26E of the SARFAESI Act 2002 that it creates only a priority in favour of the financial institutions in the matter of payment over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or the State Government or local authority. But the priority in payment is in no manner in conflict with the first charge created over the properties as per the provisions of the KGST Act, 1963, and the KVAT Act, 2003.
Section 26E states only the nature of the priority for payment; whereas Rules 8 and 9 of Rules 2002 deals with the manner in which the sale of the secured assets to be carried out, and which makes it specific how a notice is to be issued; how an encumbrance is to be removed; how a delivery of the property is to be effected to the purchaser free from encumbrances known to the secured creditor; and how a sale certificate is to be issued free of encumbrances - there is no case for the Banks / financial institutions that the notices were given by the Bank after making due enquiries with respect to any encumbrance or that the purchasers have come forward to purchase the property after making due enquiries with respect to any encumbrance on the property.
The statutory charge created as per the provisions of the KGST Act, 1963 and the KVAT Act, 2003, prior to any mortgage made, against the dealers would remain intact, even if the property is sold by the Bank, by the rights conferred under Section 26E of the SARFAESI Act, 2002, and Section 31B of the RDB Act 1993 read with the Rules to it, till such time the encumbrances are cleared as per the provisions of the said enactments and the rules thereto - Appeal allowed.
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2023 (1) TMI 686
Validity of assessment order - proper perusal/checking of records not done - non-application of mind in passing the impugned order - violation of principles of natural justice - HELD THAT:- The Commissioner of Taxes, respondent No.2, has not properly appreciated the documents on record and could have more vigilant while passing the order and as such, it would be appropriate to remand the matter back for fresh consideration.
Petition allowed by way of remand.
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2023 (1) TMI 637
Violation of principles of natural justice (audi alterem partem) - valid SCN not issued - service of notice at the address of the corporate office nor done - HELD THAT:- Since the petitioner had given intimation of closure of business by submitting VAT Form 121, it is incumbent on the part of the 1st respondent authority to effect service of notice at the address of the corporate office and not by resorting to sending show cause notice either by registered post as claimed or by affixture at the last known address. Thus, the claim of the respondents in the counter-affidavit as well as the findings recorded in the impugned order of revision as to service of show cause notice on the petitioner, cannot be accepted as valid service and is liable to be rejected.
Since the impugned order has been passed by the 1st respondent, without causing valid service of show cause notice, the impugned order of revision as also the consequential order passed by the 2nd respondent authority giving effect to the order of the 1st respondent, suffers from violation of principles of natural justice and is liable to be interdicted - the impugned order dated 13.03.2017 passed by the 1st respondent and the consequential order dated 14.03.2017 passed by the 2nd respondent are hereby set aside - the matter is remitted back to the 1st respondent authority for fresh consideration - Petition allowed by way of remand.
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2023 (1) TMI 636
Validity of revisional order - time limitation - seeking stay of revisional order during pendency of appeal - HELD THAT:- Having regard to the fact that petitioner has already deposited 25% of the disputed tax and considering the fact that the larger issue is pending consideration before this Court, we are of the view that insisting on further payment by the petitioner during the pendency of the appeal would not be just and proper.
The order dated 05.11.2022 is set aside. Further demand on the basis of the revisional order dated 23.03.2020 shall remain stayed and would be subject to outcome of the appeal - Petition disposed off.
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2023 (1) TMI 635
Refund of Tax paid on beer - unsold stock due to Covid Pandemic - Constitutional Validity of retention by the respondents, of the amount paid as import and countervailing duties on the stock whose shelf life has expired and which is not to undergo removal for retail-sale - vires of Articles 14, 19 (1)(g), 265 and 300A of the Constitution of India - refund of the amount paid as import and countervailing duties on the stock - HELD THAT:- The undisputed facts from the pleadings on record reveal that the petitioner supplied beer in the State of Jharkhand kept in the warehouse of the Respondent No. 3 from its factories situated outside the State. Substantial quantity of which said to be 1,84,725 cases of beer valued at Rs. 14.00 crores could not be removed for sale from warehouses due to restriction on sale imposed by the Government during the lockdown which started due to Covid in March 2020. The prescribed shelf life of beer of six months expired in the meantime. Petitioner claimed refund of excise duty paid by it on the stock of beer which could not be removed for sale.
The sheet anchor of the petitioner is that the excise duty / countervailing duty (CVD) under the Jharkhand Excise Act, 1915 was paid in advance as no liquor can be brought into the State of Jharkhand without payment of duties as per the restrictions imposed under the provisions of Chapter III of the Act. In view of proviso to Section 28(1) of the Act, duty is levied only on issuance of the goods from the warehouse and as such, payment made prior to the date of issuance is only an advance liable to be refunded, if no duty is leviable at all due to non-removal of beer from the warehouse for sale - According to the petitioner, the amount collected from the Respondent No. 3 was only an advance paid, which is subject to the final determination of duties on the date of removal of the goods from the warehouse. Charging provision cannot be effectuated at all before the event of removal takes place. Therefore, State cannot unjustly enrich itself by claiming duties on products which are destroyed on account of their action. It is the case of the petitioner that since retention of the said amount by the State was in contravention of Article 265 of the Constitution of India, it is liable to refund the amount paid when there was no liability. Therefore, writ petition is also maintainable.
There is no uncertainty or vagueness in defining the taxable event. Proviso to Section 28(1) only indicates the rate of tax which is to be levied at the time of removal for sale from the warehouse - The decision in the case of Sree Balaji Enterprises, Bangalore [2007 (1) TMI 645 - KARNATAKA HIGH COURT] does not fit into the case of the petitioner as the dispute was whether excise duty i.e. goods manufactured inside the State could be levied when the goods were destroyed.
In the present case, as per the provisions of the Act, CVD is levied at the time of import itself and only a facility for postponement of collection is provided - it is apparent that a licence for distributorship in Form 19C can be issued only if the licence holder undertakes to make payment of countervailing duty in advance. Further, condition-8 of the said licence stipulate that such distributor, for import from outside the State shall also obtain an import permit for payment of countervailing duty and import fee. In Rule 8-A, liquor can only be imported by way of an import pass granted by the Collector on prepayment of duty as well as any import pass fee into the Treasury of the importing district. Under licence as also under Rule 7(3), import can be done only on payment of countervailing duty and on obtaining an import permit. As such, the plea of the petitioner that non-removal of beer from the warehouse during the period of its shelf life on account of Covid lockdown would not make it liable for payment of countervailing duty in terms of proviso to section 28(1) of the Act, does not hold good in the eye of law since the taxable event occurs on the import of liquor into the territory of the State, as per the provisions of Section 27 (1) (a) of the Act.
The principles applicable on levy of countervailing duty upon import of liquor in the State under the Bihar and Orissa Excise Act, 1915 and the decisions on the point, the plea of the petitioner for refund of the amount to the tune of Rs. 1,53,68,480/- paid as import and countervailing duty on the stock, is not tenable in law and on facts - petition dismissed.
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2023 (1) TMI 587
Refusal to grant concession under Section 4-AA UP VAT Act - non-submission of From-C against the transaction on inter-State sale - whether non-production of form 'C' could be taken to be a ground to deny set-off of such higher rate of tax than the payable rate of tax from the limit prescribed in the eligibility certificate under Section 4A of the Trade Tax Act? - HELD THAT:- The issue is no more res-integra as Division Bench in case of Yamaha Motor Escorts Limited [2010 (9) TMI 1243 - ALLAHABAD HIGH COURT] has settled the issue that non-production of form C/D, cannot be taken to be a mere ground to deny the setoff of higher rate of tax from the limits prescribed in the eligibility certificate under Section 4A of the Trade Tax Act, subject to other conditions, namely, the maximum limit for particular year or period and maximum amount for which such exemption is provided.
The order passed by the Tribunal dated 16.02.2010 is unsustainable in the eyes of law and the same is hereby set aside - revision allowed.
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2023 (1) TMI 586
Rejection of claim of set off in respect of raw material used in the manufacturing of M.S. Ingot for the relevant assessment year - year 2005-06 - whether the benefit of set off as envisaged under Section 4-BB of UP Trade Tax Act, 1948 could be passed upon the assessee/dealer or not? - HELD THAT:- Though the raw material has not been defined under the Act but the Section provides for giving the benefit of set off to a manufacturer using raw material and packaging material. The controversy relating to set off has been engaging the attention of this Court as well as Apex Court in various judgments. The Apex Court has considered on number of occasions the matter relating to the grant of set off for various states and in one of the matter M/s. Vam Organic Chemicals Ltd. Vs. State of U.P. & others [2003 (3) TMI 672 - ALLAHABAD HIGH COURT] where it was held that for use in manufacture of notified goods which finds place in Section 4-B (2) of the Act of 1948 it would take within its compass 'diesel oil' used by the manufacturer in generators installed in factory premises to produce electricity. The Division Bench had held the 'diesel oil' used in the generator to be one of the raw material and had extended the benefit to the assessee.
The explanation to Sub-section 2-A of Section 4-B defines the goods required for use in manufacture as well as the notified goods in Sub-clause (a) and (b) of the explanation to the aforesaid provision. From the reading of Section 4-B and Section 4-BB, it is clear that the intention of Legislature was clear to the extent of giving certain relief to the manufacturer while they were using raw material and packaging material in the manufacture of goods. Section 4-BB, in particular, provides for set off taxes paid on the raw material and packaging material - In the present case, the natural gas purchased by a dealer from GAIL whether comes under the purview of word 'raw material' or not.
In Shree Bhawani Paper Mills Ltd. [2015 (11) TMI 48 - ALLAHABAD HIGH COURT] the Division Bench had held the diesel oil to be raw material used for running the generator for production of electricity - In Rajasthan Taxchem Ltd. [2007 (1) TMI 187 - SUPREME COURT] the Apex Court while considering whether the diesel used in running of the generator was also a raw material or not, held that the assessee was entitled to the relief as provided under Rajasthan Sales Tax Act for concessional rate of taxes.
Iron steel has been notified by the State Government by notification dated 22.05.1998 to be notified goods under Section 4-BB of the Act of 1948. In the process of manufacture of M.S. Ingot the fuel which is used by the manufacturer is the natural gas which is a raw material. The fire which is ignited for making the M.S. Ingot is by the use of natural gas. Thus, the process of manufacture of M.S. Ingot requires certain raw materials and natural gas fits into the definition of raw material, as provided under Section 4-BB of the Act of 1948.
This Court finds that the gas used by the assessee in the manufacture of M.S. Ingot is one of the raw material, as mentioned in Section 4-BB of the Act - Revision allowed.
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2023 (1) TMI 585
Levy of tax - transfer of right to use the bus - Whether the Commercial Tax Tribunal was justified in imposing the tax upon the applicant under Section 3- F of the U.P. Trade Tax Act, for plying the vehicle on behalf of UPSRTC, when there is no transfer of right to use the bus? - HELD THAT:- It transpires that the question of law framed in the revisions has already been dealt with by co-ordinate Bench in case of Ashok Kumar Gupta[2009 (7) TMI 1381 - HIGH COURT OF ALLAHABAD], wherein this Court after taking into consideration the agreement entered between the assessee and UPSRTC had held that it was a case of transfer of right to use the bus by the bus owner to UPSRTC through which the UPSRTC had effective control over the bus. Thus, the provisions of Section 3-F was attracted.
Once the matter has been settled by co-ordinate Bench in Ashok Kumar Gupta, the controversy stands no more resintegra and the Tribunal had rightly held that by the agreement reached between the bus owner and the UPSRTC, it is clear that transfer of right to use the buses by the bus owners to UPSRTC through which the UPSRTC has effective control over the buses, and thus, provisions of Section 3-F is attracted. Hence, no interference is required in the order passed by the Tribunal.
The revisions fail and are hereby dismissed.
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2023 (1) TMI 540
Suo motu revision of assessment orders passed by the Sales Tax Officer and Assistant Sales Tax Officer - delegation of authority to the Assistant Commissioner of Sales Tax - HELD THAT:- The suppression of purchases has been established by due examination of the material on record and consideration of evidence produced by the petitioner during the course of proceedings. The Revenue Authorities were justified, therefore, in varying with the percentage of profit as stated to have been added by the petitioner for many years due to special circumstance that is obtained during the Assessment Years in question. This Court is not, therefore, inclined to interfere with the impugned Orders which have been passed on facts.
Each assessment year is a separate and self-contained unit of assessment and the accounts of each year must be judged with reference to material pertaining to that assessment year. Merely because the accounts of the preceding year were rejected was no ground for rejecting the accounts for the assessment year in question. A resort to best judgment assessment can only be made if the account books produced were incomplete or otherwise unreliable and there is material to show that the assessee has suppressed such sales.
In the instant case, certain material was seized on search being conducted by the Vigilance and such seized material was found to be relatable to the years in question. Said material was used during the course of assessment with confrontation. The fact-situation in the impugned Assessment Years being not identical to the earlier years, the contention of the petitioner that the percentage of profit as added to the purchase turnover to arrive at taxable turnover is liable to be repelled.
Admittedly, in the present case, no additional material was adduced by the petitioner to show that the finding of the Assistant Commissioner of Sales Tax in suo motu proceedings as affirmed by the Commissioner of Sales Tax, Odisha in Appeals was perverse. This Court finds that sales tax revision itself is not entertainable against orders passed by the Commissioner of Sales Tax in exercise of power under Section 23(4)(c)(ii) of the OST Act - no ground has been made out by the petitioner-assessee in the instant revision petitions to invoke jurisdiction under Section 24 of the OST Act.
The sales tax revisions are dismissed.
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2023 (1) TMI 504
Penalty under Section 54(1)(14) of U.P.V.A.T. Act, 2008 - change in the quantum of penalty by rectification proceedings - revisionist submitted that the Assessing Authority has erred in law in passing the rectification order dated 26.12.2012 under Section 31 of the Act of 2008 after the order of the first Appellate Authority, as the order of the Assessing Authority merged in the order of the first Appellate Authority - HELD THAT:- It is clear that the goods were intercepted by the mobile squad on 17.5.2010 while it was in transit. Form 38, which was being used for carrying the goods, only mentioned about two bills being Bill No.260 and 194 and not Bill No.195. The Taxing Authorities as well as Tribunal had categorically recorded findings that there was an intention to evade tax by the assessee as the third bill was deliberately not mentioned in From 38 and column was left blank - the first Appellate Authority had reduced the quantum of penalty imposed by the Assessing Authority and only penalty have been imposed on the goods which has been transported through the Bill No.195 and has not been entered in From - 38.
The argument of learned counsel for the revisionist to the extent that order passed by the Assessing Authority under Section 48(5) of the Act of 2008 merged after the order passed by first Appellate Authority and no rectification order could have been passed under Section 31 has no legs to stand as the rectification proceedings are initiated for error apparent on the face of the order and the Assessing Authority has rightly proceeded to pass order and rectified its order. The nature of the penalty proceedings cannot be changed by rectification order under Section 31 of the Act and the penalty proceedings was rightly carried out against the assessee-revisionist as description of goods and Bill No.195 was not entered in Form -38 while the goods were in transit.
There are no case for interference is made out - The revision being devoid of merit is hereby dismissed.
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2023 (1) TMI 446
Rejection of books of accounts of assessee - enhancement of turnover - higher consumption of electricity during the period 01.01.2008 to 31.03.2008 - HELD THAT:- This question has been directly and indirectly under consideration of this Court as well as Hon’ble Apex Court for a long time. The Division Bench of this Court in MAHABIR PRASAD JAGDISH PRASAD, VARANASI VERSUS COMMISSIONER OF SALES TAX, UP. [1970 (7) TMI 71 - ALLAHABAD HIGH COURT]was of the view that high consumption of electricity may be a circumstance justifying action under Section 21 of U.P. Sales Tax Act, 1948, but, the Court was of the view that high consumption of electricity by itself is no material for rejecting the books of accounts of the Assessee. The judgment of Mahabir Prasad Jagdish Prasad was followed by another Division Bench in MAHASHAKTI OIL MILL VERSUS COMMISSIONER, SALES TAX, UP., LUCKNOW [1972 (1) TMI 91 - ALLAHABAD HIGH COURT]wherein the proceedings were under Section 21 of Act of 1948 and the Court was of the view that if no material was brought by the taxing authorities on record, there was no justification for rejecting the books of accounts.
The said judgment was subsequently followed in M/S SUNITA ISPAT PVT. LTD. VERSUS THE COMMISSIONER, COMMERCIAL TAX [2016 (11) TMI 131 - ALLAHABAD HIGH COURT]and the Court found that excessive electricity consumption cannot be a ground for rejection of books of accounts.
In the case in hand, there is no denial of the fact that for nine months starting from 01.04.2007 to 31.12.2007, the total electricity consumption was 8,55,375 and total grinding of wheat, which was done, was 96760.05 quintals, while for the remaining period i.e. 01.01.2008 to 31.03.2008, only 8791.14 quintals of wheat was grinded consuming 1,83,625 units of electricity, which comes to 20.887 units of electricity per quintal compared to the earlier period, where the consumption was 8.840 units per quintal. The difference between consumption of electricity for the period 01.4.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 is about 2.5 times high, for which justification given by the Assessee to the extent of electricity being consumed by the officials at their residential premises for running Air Conditioners, fans and light, cannot be accepted, as the period for which explanation has been given is the winter time when there is no use of Air Conditioners and the domestic consumption cannot be believed on such a higher side.
Thus, it is apparent that the Assessing Authority had rightly rejected the books of accounts on the basis of high consumption of electricity after dealing with each aspect of the case and recording a categorical finding as to the production of flour made from the wheat during the relevant period of assessment year in question. The earlier Division Bench and coordinate Bench of this Court had only held that rejection of books of accounts cannot be done on the basis of high consumption when there was no material on record. However, in the present case, the Assessing Authority has demonstrated how the electricity was consumed by the Assessee during the period 01.04.2007 to 31.12.2007 and 01.01.2008 to 31.03.2008 when the production did not increase but only the consumption was high.
There are no ground for interference is made out in the order of Tribunal. Both the revisions lack merits and are hereby dismissed.
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2023 (1) TMI 385
Seeking exemption under Section 4-A (5) of the U.P. Trade Tax Act - manufacture of Spun Line Crown Cork in the year 1986, used as one of the packing materials of the glass bottles - manufacture of double Lip Dry Blend Crown under the program of diversification - It was submitted that under the term “modernization” only those units fall, which by the modern technical produce the same goods and the scheme of “modernization” do not apply on the units which produce different goods.
Whether for the goods, manufactured by use of modern technologies can be said to be “diversification”, and manufacturing of the goods of a nature different from the goods manufactured earlier entitle the appellant to claim the exemption from trade tax as provided under Section 4-A (5) of the U.P. Trade Tax Act?
HELD THAT:- It is clear that in case of “diversification” the goods manufactured by diversification shall be different from the goods manufactured before such diversification [Section 4-A(2)(c)] - In the case of “expansion or modernization”, the exemption shall be available, if there is an additional production as a result of such modernization or expansion. In the present case, we are concerned with the case of “diversification”. Therefore, the goods manufactured after diversification must be different goods from the goods manufactured before such diversification. As per the settled position of law, in case of an exemption notification/exemption provision, the same is required to be construed literally and the person claiming the exemption must satisfy all the conditions of exemption provision.
In the present case, the appellant was manufacturing / producing “Spun Line Crown Cork” used for sealing the glass bottles. With the use of modern technologies, now the appellant is manufacturing “Double Lip Dry Blend Crowns”, which is also used for sealing the glass bottles. The earlier product being manufactured by the appellant was used for sealing glass bottles and subsequently the additional product produced with the use of modern technology is also being used for the same purpose namely, “sealing glass bottles”. Therefore, the same cannot be said to be manufacturing of goods different from being manufactured before such diversification. With the passage of time, due to advancement in technology, if there is a replacement of the old machinery with the new machinery for improvement in quality and quantity of a product, at the most, it can be said to be expansion and/or modernization, but it cannot be said to be “diversification”, which is “manufacturing of goods different from the goods manufactured before such diversification” - the Statute and more particularly, the exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning. Giving the literal meaning to the exemption provision namely, Section 4-A, it cannot be said that the appellant is entitled to the exemption as claimed.
When the provisions of the Act unequivocally provides that the “diversification” can be considered only in a case where “goods of different nature” are produced, and only then the exemption shall be available. The goods manufactured on “diversification” must be a “different”, “distinct” and a “separate” good in nature. In the present case, the goods manufactured on use of advance and/or modern technology, cannot be said to be a different commercial activity at all. The High Court has not committed any error in refusing to grant exemption to the appellant. We are in complete agreement with the view taken by the High Court.
Appeal dismissed.
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2023 (1) TMI 384
Initiation of re-assessment proceedings - escaped assessment - initiation on the ground that three Form-C issued by the purchasing dealer, which was situated in the State of Rajasthan had not entered the same in the books of accounts and the said three Form-C are not verified - HELD THAT:- On perusal of material on record and find that after the two round of remand of the matter by the first Appellate Authority, the Tribunal, after considering the material on record and calling for the records of the Assessing Authority, had found that the three Form-C, which were issued to the selling dealer, was issued by the Tax Department of State of Rajasthan and the assessment of purchasing dealer has already been done in his State. The Tribunal has further recorded a finding that the books of accounts of the assessee was already accepted and there was no ground for initiating proceedings under Section 21 of the Act for reassessment and there was no material on record to make out a case that any turn over has escaped assessment.
The findings of fact has been recorded by the Tribunal which needs no interference by this Court.
Revision dismissed.
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