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VAT and Sales Tax - Case Laws
Showing 1 to 20 of 66 Records
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2023 (3) TMI 1458
Rejection of petitioner’s application for waiver of pre-deposit under Section 63(4) of the KVAT Act - validity of the provisions of Section 63(4) of the KVAT Act - HELD THAT:- On careful consideration of these circumstances, and this Court’s opinion on modulating the requirement of pre-deposit under Section 63(4) of the KVAT Act in the light of the earlier decision of this Court, this Court is of the considered view that the petitioner, which cannot be granted complete waiver, must deposit 50% (15% of the amount in demand) of the requirement of pre- deposit under Section 63(4) of the KVAT Act with reasonable time.
The petitioner is permitted to deposit 50% (that is 15% of the amount in demand) as required under Section 63(4) of the KVAT Act and the petitioner shall be at liberty to make this deposit within six (6) weeks from the date of receipt of a certified copy of this order - Petition allowed in part.
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2023 (3) TMI 1331
Rate of tax - HSD and LDO - fresh assessment under Section 12(8) of the OST Act - such reassessment is vitiated on account of “change of opinion” or not - disallowing set off of entry tax paid on the goods which were sold to the dealers at concessional rate of tax @ 4% as per Entry 81 of schedule appended to Notification dated 31.03.2001 issued under Section 5(1) of the OST Act - set off of entry tax - whether the petitioner is entitled to set off entry tax paid against tax payable for sale of goods?
HELD THAT:- Both the First Appellate Authority and the Second Appellate Authority have come to the conclusion that the petitioner, having dealt with the item(s) mentioned in Entry No.101 and sold said item(s) against declaration in Form IV at concessional rate of tax, is not entitled to get set off of entry tax paid against the amount of tax payable for sale of goods. The Item No.101 deals with the general provision, so far as HSD and LDO are concerned, and for that the dealer is liable to pay tax @ 20%. There is no dispute on that. But here is a case where the petitioner is carrying on business in HSD and LDO, which is used within the State.
There is no iota of doubt that the petitioner claims concessional rate of 4% tax on the strength of Form-IV. The transaction which was done by the petitioner with the others, being on the strength of Form-IV, set off was granted to the petitioner. The assessment order issued by the Assessing Officer under Section 12(4) is very clear to that extent, but reassessment made under Section 12(8) and confirmation thereof made by the First Appellate Authority and the Second Appellate Authority cannot be sustained in the eye of law.
The reopening of the assessment is based on the investigation report of the tax authorities themselves and is, therefore, founded on nothing but a mere change of opinion. As a consequence thereof, the order passed by the Assessing Authority under Section 12(8) for reassessment has no justification in view of law laid down by the apex Court in Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT] followed by Nava Bharat Ferro Alloys v. State of Orissa, [2010 (3) TMI 1009 - ORISSA HIGH COURT]. Therefore, the formation of opinion in the reassessment under Section 12(8) of the OST Act cannot have any justification and while forming such opinion, as it appears from the records, no opportunity of hearing to the petitioner was given in compliance of the principles of natural justice.
It is also not in dispute that the petitioner-company has paid entry tax on procurement of HSD and LDO into the State of Orissa but has not sold any finished goods rather sold the same goods as procured. On perusal of the assessment order under Section 12(4) of the OST Act, it is made clear that the Assessing Authority has taken note of the fact that HSD and LDO, which have been utilized by different companies by furnishing the Form-IV, the same has been taken note of and assessment thereon has been made by the Assessing Authority - obviously the petitioner is liable to pay tax @ 20% as per Entry-101, ibid. In such eventuality, the petitioner is liable to discharge its liability by availing set off of entry tax paid. The issue of set off being taken into consideration while finalizing assessment under Section 12(4) of the OST Act, on account of “change of opinion” the reassessment under Section 12(8), ibid. is not legally tenable.
HSD is one of the covered goods under Note-1(b) and, thereby, the petitioner is statutorily entitled to claim set off of entry tax against sales tax payable on sale of HSD. As the State Government has not imposed any restriction/limitation on the claim of set off of entry tax on the covered items, the reassessment made by the Assessing Authority under Section 12(8) and confirmation made thereof by the First Appellate Authority and also the Tribunal denying the benefit of set off cannot be sustained in the eye of law. The benefit statutorily permissible, vide notification dated 31.03.2001 issued by the Government, cannot be denied/disallowed without considering such notification in proper perspective.
The reassessment order under Section 12(8) of the OST Act dated 27.01.2007 under Annexure-3 passed by the Assessing Officer disallowing the set off of entry tax to the petitioner, which comes under the purview of the notification dated 31.03.2001, cannot be sustained in the eye of law - Revision allowed.
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2023 (3) TMI 1330
Validity of assessment order - scope of rectification or reassessment and the powers under Section 10-B of the Act - non-entitlement to the amounts deposited towards development charges as the same were charged from the buyer - Tribunal specifically recorded that the material which led to the passing of order in the year 2015 were not available with the Assessing Authority when the assessment was done for the first time in the year 2012.
HELD THAT:- In view of the law as laid down in the case of M/s. A.K. Corporation [[1993 (11) TMI 226 - ALLAHABAD HIGH COURT]], it is well settled that the assessment after Section 10-B of the Act proceedings has to be confined to the material on record that were available when the first assessment order was passed, any subsequent material cannot be the basis for reassessment in view of the law laid down - The order of the Tribunal is in consonance with the law, as such the revision filed by the State is liable to be dismissed.
Revision dismissed.
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2023 (3) TMI 1270
Entitlement for interest on the amount due as there is no specific provision under the VAT Act for payment of interest on refund - HELD THAT:- Admittedly, the assessment order was quashed upholding the order of this Court - the respondent was obliged to refund the amount so collected to the petitioner immediately after dismissal of SLP. Even though, there is no provisions of payment of interest on refund of amount so collected under the VAT Act, but, looking to the fact that the SLP was dismissed on 17.04.2017, the petitioner would be eligible for interest@6% per annum w.e.f. 17.04.2017 till the date of refund.
In the circumstances, petition is allowed - Respondents are directed to refund the amount so collected and withheld since 2016 alongwith interest @6% per annum w.e.f. 17.04.2017 till the actual date of payment.
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2023 (3) TMI 1269
Reopening of assessment under Section 12(8) of the O.S.T. Act, 1947 - rate of tax - turnover relating to payments received towards supply of goods - taxable at 4% or 13%? - works contract or transaction of sale - HELD THAT:- The law regarding contract for supply, erection and thereafter installation of machinery was entertained as contract work and no independent sale had ever been made since the principles of law have already been decided in number of cases also and the petitioner is deriving the principles from the case of COMMISSIONER OF SALES TAX, MAHARASHTRA STATE, BOMBAY VERSUS BRIMCO PLASTIC MACHINERY PRIVATE LIMITED [1995 (2) TMI 379 - BOMBAY HIGH COURT] had categorically stated that the works contract executed along with supply installation etc. will be taxed as works contract exigible to Orissa Sales Tax @ 4%.
In the case of STATE OF ORISSA VERSUS UGRATARA BHOJANALAYA [1992 (7) TMI 300 - ORISSA HIGH COURT], it has been held that if the assessing authority initiates proceeding under Section 12(8) of the O.S.T. Act in respect of assessment which has merged with the appellate order, it would be without jurisdiction. Since the assessment for the subject-year framed under Section 12(4) has already attained finality at the second appellate level, there was no scope to initiate proceeding under Section 12(8) of the O.S.T. Act.
The reopening of the case basing on the A.G. audit report has further negated the issues, as held in the case of COMMISSIONER OF INCOME-TAX VERSUS LUCAS TVS. LTD. [2000 (12) TMI 102 - SC ORDER] by the apex Court that if the Assessing Officer accepts the audit report, it would be vulnerable and report of the audit party cannot make the basis to issue notice for reassessment under Section 148 of the of the I.T. Act, which is pari materia to Section 12(8) of the O.S.T. Act, 1947, since the common issues were involved on erection and installation of machinery, which constituted works contract but not for sale.
Once the Full Bench of the Odisha Sales Tax Tribunal held that the petitioner being a contractor executed works which were indivisible contract and came to a conclusion that works executed by the dealer during the period were entertained as works contract and made exigible to tax @ 4%, a different view should not have been taken on the basis of the audit report submitted before the Assessing Officer and notice should not have been issued under Section 12(8) of the O.S.T. Act, 1947 for reassessment and the order of reassessment, which has been passed by him by holding that contract is divisible and, therefore, the petitioner is liable to pay higher tax @ 13%, which has been confirmed in First Appeal and Second Appeal, should not have been passed. The reason being, once the Full Bench as well as Coordinate Bench of the Tribunal has come to a definite conclusion that it should be treated as works contract and exgible to tax @ 4%, instead of 13%, thereby, the questions formulated in this revision petition are answered in favour of the petitioner and against the Revenue.
The revision petition is allowed.
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2023 (3) TMI 1268
Club and Association Services - applicability of doctrine of mutuality - supply of goods/services/amenities/luxuries by the club to its members - supply effected by one person to another for consideration or not - HELD THAT:- In Lotus Club [2018 (10) TMI 452 - KERLA HIGH COURT], the Division Bench essentially followed an earlier division bench judgment of this Court in Trivandrum Club v. Sales Tax Officer (Luxury Tax) [2013 (1) TMI 606 - KERALA HIGH COURT] that unambiguously held that under the KTL Act, the charging section recognised the club as the person liable to luxury tax. The Division Bench therefore recognised the club as the person on whom the incidence of tax fell. Since the later division bench in Lotus Club did not find any cause for doubting the propositions laid down in Trivandrum Club and dismissed the appeal preferred by Lotus Club by following the decision in Trivandrum Club, we cannot read the observations of the Division Bench in Lotus Club as having laid down the proposition that the incidence of tax under the KTL Act is on the person enjoying the luxury and not on the ‘proprietor’ who provides the luxury.
Similarly, the observation of the division bench of this court in M/s Madhavaraja Club [2013 (2) TMI 614 - KERALA HIGH COURT] that the doctrine of mutuality is relevant only for the purposes of the Income Tax Act and is not apposite in the context of the KTL Act cannot be seen as laying down the correct law in the light of the subsequent judgment of the Supreme Court in Calcutta Club Ltd [2019 (10) TMI 160 - SUPREME COURT] where the doctrine of mutuality was held applicable in the context of legislations regulating the levy of indirect taxes such as VAT and Service Tax - the principle recognised in Calcutta Club Ltd, that the absence of two distinct persons to a transaction viz. a supplier/provider of goods/ services/ amenities/ luxuries and a recipient thereof, makes the transaction a supply to oneself, which cannot be taxed under the statute, applies equally to the KTL Act which contemplates the levy of tax whenever a luxury is provided by one specified person to another.
Matters remanded to the assessing authority for de novo assessment taking note of the observations in this judgment as also the applicability of the mutuality principle to the assessment of members' clubs under the KVAT Act, as declared by the Supreme Court in Calcutta Club Ltd. - petition allowed by way of remand.
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2023 (3) TMI 1267
Seeking grant of stay on deposit of 20% of the existing tax demand - non-maintenance of books of account properly - pattern of suppression was established - HELD THAT:- The Tribunal has considered the relevant facts and has also exercised discretion in accordance with the law. On perusing the orders impugned before it, it has granted a conditional stay, which is found to be reasonable and legal.
There are no merit in the original petition, which will stand dismissed. However, as a measure of indulgence, we extend the time granted by the Tribunal for complying with the conditions imposed up to 17.04.2023. If the petitioner complies with the order of the Tribunal before 17.4.2023, it will be treated as compliance with the order of the Tribunal for the grant of stay of the recovery. The petitioner may also move the Tribunal for an expeditious hearing of the appeal.
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2023 (3) TMI 1266
Condonation of delay of 2569 days in filing the appeal - reasons put forth in the application for condonation of delay before the Tribunal was that the Lawyer handling the case had suffered from serious illness and ultimately died on 6th August, 2012 - Sufficient cause for delay, present or not - HELD THAT:- The Court is of the view that what was expressed in the context of the Land Acquisition proceedings cannot ipso facto be extrapolated to proceedings like the present one which arise under the Sales Tax legislation. Here, the Assessee is fully aware of the requirement of having to file returns and proceedings within time. After all, the Petitioner is a dealer registered under the Orissa Sales Tax Act and is aware of the necessity for filing returns, for challenging demands before an Appellate Authority and of the fact of the further appeal before a Second Appellate Authority like the Tribunal.
The long and short of the narration is that as far as the Petitioner/Assessee is concerned, the explanation offered for an extraordinary delay of 2569 days was not convincing at all.
Since no substantial question arises from the impugned order of the Tribunal, the present revision petition is dismissed.
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2023 (3) TMI 1206
Validity of assessment proceedings - seeking certain modifications to the turnover returned by the petitioner - HELD THAT:- There has been substantial elapse of time from the inception of the original proceedings in October, 2014 till 2020 when the present impugned orders have been passed. Hence the following directions are issued:
(i) The petitioner will remit the taxes on the turnover that was omitted to be offered along with interest for the delay within two weeks from the date of receipt of this order.
(ii) Upon condition that the amount as above is so remitted, the objections of the petitioner filed on 22.12.2014 shall be taken into account as though they constitute an application for rectification under Section 84 of the Act, and disposed within a period of four weeks thereafter.
These writ petitions stand disposed.
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2023 (3) TMI 1119
Disallowance of exemption from payment of tax under 1996-2001 industrial policy - molasses, bagasse and filter mud - disallowance on the ground that it would amount to dual benefit because the petitioner is enjoying the benefit of deferral of purchase tax on sugarcane - sale of by-products namely, molasses, bagasse and filter mud - disallowance when the petitioner's application for granting of FAVC was pending consideration before the SLCC.
HELD THAT:- The AO (Assessing Officer) has disallowed the exemption on the premise that it would amount to dual benefit to the petitioner. The State Government have also denied the benefit which has been considered in the aforementioned writ petition. Thus, the subject matter is common in the said writ petition and this revision petition. In our considered opinion, the reasons recorded while allowing the writ petition also answer the contentions urged by the assessee and the Revenue in this revision petition and this revision petition merits consideration.
The questions of law are answered in favour of the assessee and against the Revenue - Revision petition is allowed.
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2023 (3) TMI 1066
Recovery of Outstanding dues of Bank and tax dues under the VAT / sales tax act - Priority of claims - Attachment order - Right of Auction Purchaser of property - borrowers failed and neglected to clear the outstanding dues to the Petitioner Bank - Seeking directions to issue NOC to the Petitioners for effecting the transfer of the Secured Assets in its name, without any requirement of making payment of the dues of the Respondent No.3 and/or NOC of Respondent No.3.
Whether the Petitioner Bank having registered mortgage of the secured asset with Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) will have priority to make its claim over the claims/charge of the Sales Tax Department arising out of the dues under the Maharashtra Value Added Tax Act, 2002 (MVAT) against the borrower to enforce the mortgaged writ property in favour of the Petitioner and more particularly, when the Sales Tax Deparatment had not registered its claim with CERSAI?
HELD THAT:- The issue as to who will have priorty in view of Section 26E of SARFAESI Act was referred to the Full Bench of this Court in case of Jalgaon Janta Sahakari Bank Ltd. & Anr. [2022 (9) TMI 163 - BOMBAY HIGH COURT] where Full Bench considered Section 26-C of the SARFAESI Act and held that the proviso to Section 26-C also declares that a secured creditor, who has registered the security interest or other creditor who has registered the attachment order in its favour, shall have priority of claims over subsequent security interest created over the property in question, any transfer by way of sale, lease, assignment or licence of such property or attachment order subsequent to such registration.
This Court noted that since the equitable mortgage could be created without registration, the transaction between the lender and the borrower largely remained secret. There was no way anyone else could get an inkling thereof, until the provisions of CERSAI registration were enacted. This Court held that to curb such problems and other undesirable consequences, the Parliament designed Chapter IV-A in such a manner to include provisions which, on the one hand, would disable any secured creditor to exercise the right of enforcing security interest under Chapter III of the SARFAESI Act without the CERSAI registration (section 26D) and, on the other, enable the secured creditor, if it has the CERSAI registration, to claim priority over all other debts and all revenues, taxes, etc.
It is held that Section 26E, also beginning with a non-obstante clause, is unambiguous in terms of language, effect, scope and import. A ‘priority’ in payment over all other dues is accorded to a secured creditor in enforcement of the security interest, if it has a CERSAI registration, except in cases where proceedings are pending under the provisions of the Insolvency and Bankruptcy Code, 2016. This Court held that such registration would constitute public notice thereof. The Full Bench of this Court has held that the dues of the secured creditor shall have priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority in view of Section 26E of the SARFAESI Act.
This Court held that Section 26E of the SARFAESI Act is a subsequent legislation, as it was notified on 24th January, 2020. Subject to compliance of the terms of Chapter IV-A, Section 26E of the SARFAESI Act would, thus, override any provision in the MGST Act and the BST Act in case of a conflict with the SARFAESI Act. This Court held that Section 26D which also refers with a non-obstante clause, prohibits a secured creditor from exercising the rights for enforcement of security interest conferred by Chapter III, unless the secured interest created in its favour by the borrower has been registered with the CERSAI.
It has further held that not only therefore registration with the CERSAI has been made a mandatory pre-condition for invocation of the provisions contained in Chapter III of the SARFAESI Act, the provisions relating to debts that are due to any secured creditor being payable to such creditor in priority over all other debs and revenue, taxes etc. is available to be invoked only after the registration of security interest. It leads to the irresistable and inevitable conclusion that unless the security interest is registered, neither can the borrower seek enforcement invoking the provisions of Chapter III of the SARFAESI Act nor does the question of priority in payment would arise without such registration.
The auction purchaser have participated in the e-auction conducted by the Petitioner Bank who had priority over the secured asset in view of registration of the equitable mortgage under Section 26E of the Securitization Act with CERSAI - the Petitioner Bank is not liable to take cognizance of the claim of Respondent No.1 over the secured asset in view of the Petitioner bank having priority over the secured asset and thus, is not liable to pay any taxes or other liabilities out of sale proceeds of the secured asset to the Respondent No.1. The Auction Purchasers’ claim their rights from the Bank having priority over the secured asset which was not liable to pay any taxes to the Respondent No.1 Authority. The principles laid down by the Full Bench on this aspect clearly applies to the facts of the present case.
The submission of the learned special counsel for the Respondent No.1 Authority that the Petitioner cannot waive their right to forfeit the earnest money deposit and to accept the balance consideration amount subsequently, depending upon the outcome of this petition filed by the Petitioner Bank, cannot be agreed upon - there is no substance in the submission made by the learned Special Counsel for Respondent No.1. If the Petitioner Bank has waived its right to forfeit the Earnest Money Deposit which is permissible in law, Respondent No.1 Authority cannot object to right of Petitioner not to waive.
The auction purchasers had never received any actual notice of the lien or constructive notice from the Respondent No.1 Authority in respect of the said writ property and thus is not liable to pay any tax separately towards the tax dues of the dealer of Respondent No.1 Authority.
Attachment order set aside - Society to issue such NOC in favour of such auction purchasers for transfer of Secured Asset in their favour without insisting for payment of the Sales Tax dues payable by the dealer, if any, however, on compliance with all other formalities, expeditiously - petition disposed off.
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2023 (3) TMI 1065
Time Limitation - Levy of penalty - suo-moto revision initiated by the respondent no. 3 was much after expiry of the period of limitation as prescribed under Sections 33 and 74 of the TVAT Act, 2004 - HELD THAT:- The respondent no. 4 after verification of the relevant documents of the petitioner had completed the assessment by assessment order dated 24.03.2015. From the face of the record, it is apparent that the respondent no. 4 on 10.07.2020 i.e. after elapse of more than five years had issued a notice under Section 70(1) of the TVAT Act, upon the petitioner wherein the petitioner was asked to appear in person or by his authorized representative and to explain as to why the assessment shall not be cancelled or modified. As per sections 33 of 74 of the TVAT Act, 2004, the issuance of notice after elapse of five years is barred by limitation.
This court prima facie on perusal of the proceeding dated 27.10.2020, order which is impugned herein, this court expresses its concern that the revisional authority has not passed any speaking order and has not dealt with the issues allowing the discounts and to say that the amounts discounted are fictitious.
Without entering into the merit of the case, the case is remanded back to the revisional authority to decide the matter afresh by passing a speaking order. It is also open for the petitioner to raise all his objections including the issue of jurisdiction and also to place any judgment in support of his contentions before the revisional authority.
Petition disposed off.
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2023 (3) TMI 1028
Levy of penalty upon the appellant under Section 51 (7) (b) of the Punjab VAT Act - penalty levied on the ground that there was mens rea to evade tax in the present case as the goods meant for trade were being transported by the dealer without proper and genuine documents with an intention to evade tax - HELD THAT:- It transpires that the department had committed a mistake by not involving M/s K.S. Steel Tubes Ltd. regarding transaction of goods from its premises without invoice. At the time of detention of vehicle and goods, the driver had produced the computerized invoice, which could have been destroyed after the vehicle had left the limits of Punjab and this fact has gone unaccounted. This invoice was not held to be genuine. More so, after about one week, the documents were produced before the designated officer during inquiry, showing purchase of goods by the appellant firm from various parties and kanda parchis. No such document was produced before the competent authority when the goods were released after accepting the bank guarantee. Once the appellant was taking the responsibility of getting the goods released, it was its own duty/responsibility to immediately produce the correct invoice. In this case, proper invoice had not been produced, rather it was a computerized invoice, which was produced after a gap of almost 10/20 days. Hence, the penalty has been rightly imposed upon the appellant, as the computerized invoice could have been easily destroyed.
In the facts of the present case, the driver had produced the invoice as well as G.R. The invoice was computerized one. The fact that the goods were loaded from the premises of M/s K.S. Steel Tubes was also substantiated by the statement of Manoj Sehgal, Manager of that firm - Keeping in view the statement given by the driver and the manager (Manoj Sehgal), penalty has been rightly imposed by the competent authority, as the appellant did not produce any invoice/document immediately after the goods were seized on 26.02.2009.
This Court is of the view that the impugned order has rightly been passed by the Tribunal and no illegality, much less perversity, has been found therein. No substantial question of law arises for consideration - Appeal dismissed.
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2023 (3) TMI 1027
Service of SCN - Whether notice N-2 was properly served to the appellant as per the provisions of order V of CPC read with rule 79 of HVAT Act? - service of notice N2 is valid if served to an unknown and unnamed person, who is neither the addressee nor his regular employee and nor a person authorized by the addressee, or not? - department is right in sending subsequent notices without mentioning or referring to Notice N-2, which had already been allegedly served and without referring to the fact that none had appeared in response to the notice N2, or not?
HELD THAT:- The assessing officer vide order dated 29.03.2013 had framed assessment under Section 15(3) of HVAT Act as well as CST Act to the tune of Rs.34,23,021/- by observing that the appellant-assessee was illegally claiming exemption from HVAT and CST by showing transactions between its sale offices and itself as branch transfers though they were interstate sales and thereby demand of tax was evaded. Against this order, the appellant had filed appeal before JETC (A) on the grounds that no notice for rejection of branch transfer and converting the same into interstate sales was ever given and further that the assessing authority had erred in treating branch transfer as interstate sales. The JETC (A) had rejected the plea that notice in form N-2 was not issued to the assessee. However, with regard to the question that the transaction as made by the appellant was branch transfer or interstate sales, the matter had been remitted to the assessing authority with direction to confront all the material which he was relying upon to the appellant.
The assessment order was passed on 29.03.2013. In such circumstances, there cannot be stated to be any force in the argument as raised by the appellant that notice VAT N-2 had not been validly served upon it. The Tribunal had also taken note of the fact that the above named Sh. Rajeev Kumar had subsequently furnished an affidavit on 17.04.2018 swearing therein that his signatures on statement dated 01.06.2017 was obtained on blank papers. The Tribunal had rejected this plea and in our opinion rightly so in view of the fact that the affidavit so sworn by Sh. Rajiv Kumar was dated 17.04.2018 i.e. only on the day when the appeal by the Tribunal had been decided. The appellant being employer of the above said Sh. Rajeev Kumar can obviously be presumed to be in a dominating position to procure such affidavit. As such, we are inclined to hold that the Tribunal had rightly observed that the statement dated 01.06.2017 was actually made by Sh. Rajeev Kumar before the officers of department affirming that notice VAT N-2 was served upon the appellant through its gatekeeper. The appellant had failed to bring any such material on record to show that the service of notice VAT N-2 was not validly effected upon it.
Thus, it is held that no ground has been made out for accepting the plea of the appellant that the notice VAT N-2 was not served upon it in accordance with law and, therefore, the contention raised by the appellant that in the subsequent notices, no reference as to service of previous notice VAT N-2 had been mentioned is also of no consequence - no substantial question of law has arisen in favour of the appellant.
Appeal dismissed.
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2023 (3) TMI 1026
Revisional powers of respondent-authorities under Section 61 (2) of the Haryana Value Added Tax Act, 2003 - after passing of the assessment order, no proceedings were pending under the Haryana General Sales Tax Act, 1973 - HELD THAT:- In the present case, the assessment order for the year 2002-2003 has been passed on 19.03.2007 (Annexure A-1). As per the judgment in EXCISE AND TAXATION COMMISSIONER, HARYANA VERSUS M/S FRIGOGLASS INDIA PRIVATE LIMITED AND ANOTHER [2019 (5) TMI 1178 - PUNJAB AND HARYANA HIGH COURT], period of three years would expire in the year 2006. However, this order in itself was beyond the period of limitation. Apart from this fact, the revisional authority, while exercising its powers under the Haryana General Sales Tax Act, 1973, had issued notice for revising the assessment order. On the date of issuing this notice, the authorities under the Haryana VAT Act had no jurisdiction to revise the order, as no assessment proceedings were pending when the order of revision was passed/issued.
Once, Haryana VAT Act had come into force, the authorities could not issue the said notice, as the jurisdiction to issue such notice has not been saved in the saving clause under Section 61 (2) of the Haryana Value Added Tax Act, 2003.
Hence, by applying the ratio of the aforesaid judgment on the facts of the present case, the impugned orders are held to be without jurisdiction. Since the assessment order was passed under the Haryana General Sales Tax Act, no proceedings could be initiated after coming into force the Haryana VAT Act, as has been done in the present case - Apart from that, as per the judgment passed in M/s Frigoglass India Private Limited’s case, the proceedings for the assessment year 2002-2003 had to be completed within a period of three years. However, the assessment order itself has been passed on 19.03.2007 (Annexure A-1).
Appeal allowed.
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2023 (3) TMI 1005
Retrospective withdrawal of exemption - Constitutional Validity of Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) - vires of Sections 30 and 88 of the Tamil Nadu Value Added Tax Act, 2006 and Articles 14, 19 (1) (g), 265, 301 and 304 (a) of the Constitution of India - exemption to Waste Paper, Paper Boards and used/old bottles - refund - principles of unjust enrichment.
Whether the impugned notification(s) which imports the condition that the exemption to Waste Paper, Paper Boards and used/old bottles shall be subject to the concession that the said goods are sold on inter-state trade and tax has been paid under the Central Sales Tax Act, 1956, retrospectively is within or beyond the scope of the powers conferred on the Government in terms of Section 17 of the TNGST Act, 1959 (or) Section 30 read with Section 88 (4) of the TNVAT Act? - HELD THAT:- The question is no longer res integra. Power may be conferred to make subordinate/ delegated legislation in the shape of rules, bye-laws, notifications etc., which have retrospective operation. - Such a power may be either conferred in express words or may be inferred by necessary implication. In the absence, however, of an express or necessarily implied power to that effect, subordinate/ delegated legislation, be it a rule, a bye-law or a notification, cannot have retrospective operation.
It has been consistently held by this Court in the context of Section 17 of TNGST Act which is pari materia with Section 30 of the TNVAT Act, that while the Government is conferred with the power to grant exemption prospectively or retrospectively, the power to withdraw, annul, modify or vary a notifcation traceable to sub-Section (3) to Section 17 of the TNGST Act, cannot be exercised retrospectively.
Reliance can be placed in the case of HONEST CORPORATION VERSUS STATE OF TAMIL NADU [1997 (12) TMI 622 - MADRAS HIGH COURT] and G. PACKIRISAMY & CO. VERSUS STATE OF TAMIL NADU (AND OTHER CASES) [1994 (5) TMI 244 - MADRAS HIGH COURT] - On a reading of the above judgments it is beyond the pale of any doubt that the power of the State Government be it under Sub-section (3) to Section 17 or 30 of the TNGST Act or TNVAT Act respectively cannot modify, annul or vary a notification retrospectively. Thus the impugned notification insofar as it imports conditions which curtails or whittles the exemption for waste paper, paper board and old or used bottles is in excess of the power conferred under Sub-section (3) to Section 17 or 30 of the TNGST Act or TNVAT Act respectively.
The impugned notification travels beyond the scope of power conferred under sub-Section (3) to Section 17 (or) Section 30 of the TNGST Act and the TNVAT Act respectively and thus the impugned notification viz., Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) is ultra vires to Sections 17 of the TNGST Act, 1959 (or) Sections 30 and 88 of the TNVAT Act, 2006, insofar as it imports conditions with retrospective effect which has the effect of curtailing/ whittling down the scope of exemption granted vide notification in G.O.Ms.No.176 dated 28.12.2006.
Whether any refund consequent to a declaration that the impugned notifications are ultra vires would be subject to the doctrine of ''Unjust Enrichment''? - HELD THAT:- It was submitted that it was not a case of claim of refund, but a case where the assessment orders were made granting refund and the prayer is to direct the 1st Respondent herein to forbear from giving effect to or rely upon Notification No.II(1)/CTR/75/(81)/07 [G.O.Ms.No.198, Commercial Taxes and Registration (B2)] dated 19.12.2007, to revise or review completed proceedings granting exemption in respect of the purchases of old/ used empty bottles during the period from 1st June, 2000 to 5th September, 2006. It is submitted by the learned counsel that Doctrine of Unjust Enrichment is applicable only against a claim for refund and not to reopen closed assessment thereby resulting in recovery of any sums/amounts collected by way of or purporting to be by way of tax. We are not inclined to accede to the above prayer for we do not intend rather cannot pass orders pre-empting a quasi-judicial authority from exercising its power.
It is made clear that the above declaration on the validity of the impugned notification would not preclude the authorities to recover the sums if any collected by way or purporting to be by way of taxes if law enables/permits to do so. Needless to state that any such exercise shall be in accordance with law.
Petition disposed off.
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2023 (3) TMI 1004
Inter unit transfer of goods would constitute a sale or not - Rejection of claim of the petitioner that the transfer of goods from one unit of the petitioner company to another unit does not constitute sale - whether independent registrations are obtained by the units and whether different business are carried out by different units of the same company to conclude that two different entities are in existence?
HELD THAT:- It is found that mere independent registrations or the fact that different lines of business would not convert an inter unit transfer as constituting a ''sale''. Unless and until it is shown that there are two distinct legal entities involved in a transaction, levy of tax by treating it as a transaction of sale is wholly impermissible.
It would be relevant to refer to the following judgment of the Andhra Pradesh High Court in KCP. LIMITED VERSUS STATE OF ANDHRA PRADESH [1992 (9) TMI 330 - ANDHRA PRADESH HIGH COURT] wherein it was held that mere registration certificate obtained by different branch or unit will not by itself result in different units becoming distinct and different legal entities capable of transferring properties/goods from one entity / person to another which is a sine qua non for a transaction to be treated as a sale attracting the charging provision.
It is thus evident that unless and until there are two distinct entities, the question of sale may not arise. However, the Tribunal has not even addressed this issue and has misdirected itself in looking at the factum of independent registrations and independent lines of business to conclude that the alleged inter unit transfer would constitute sale.
It is deemed appropriate to remand the matter back to the Tribunal for examining the question on the strength of the documents whether both Hi-Tech Carbon Unit and Cement Unit are different units of Indian Rayon and Industries Limited. If the answer is in the affirmative, then the question of levy of tax cannot be sustained.
Writ petition disposed off.
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2023 (3) TMI 943
Process amounting to manufacture or not - mixture of the base paint with different colours, results in a new product or not - Revenue contended that the sale of paints which had undergone mixing (through a computerised process with the aid of a DTS machine) amounted to ‘manufacture’, thereby resulting in a new product, which was a fresh incidence of taxation - HELD THAT:- In Mahalaxmi Stores [2002 (11) TMI 112 - SUPREME COURT], this court relied on previous decisions such as Commissioner of Sales Tax Vs. Pio Food Packers [1980 (5) TMI 30 - SUPREME COURT], and Chowgule and Company(P) Limited Vs. Union of India [1980 (11) TMI 61 - SUPREME COURT] to state that the manufacturing process can vary, and that the process of producing every type of variation, or finishing of goods, would not amount to ‘manufacture’ as contained in the statute unless it resulted in the emergence of a new commercial commodity.
In Sonhbadra [2006 (8) TMI 304 - SUPREME COURT], this court while deciding the facts of the case before it cited a large number of decisions rendered in the context of what was meant by ‘manufacture.’ This court specifically noticed in Union of India V. Delhi Cloth and General Mills [1962 (10) TMI 1 - SUPREME COURT] that ‘manufacture’ meant bringing into existence a ‘new’ substance and did not mean merely to bring about some change in the substance. In Mahalaxmi Stores, it was held that processing or variation/finishing of goods would not per se amount to manufacture unless it resulted in the emergence of a new commercial commodity.
In the present case, the findings based on the expert’s evidence are that the base paint was mixed with colouring as an additive. Both of these had suffered tax. The resultant article i.e., the paint of a different shade, did not result in a new commercial product. In common parlance, the new product was nothing else but ‘paint’, and not a different article.
The High Court did not fall into error - Appeal dismissed.
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2023 (3) TMI 942
Reopening of assessment - order of assessment itself was not issued by the Authorities - HELD THAT:- The dispute raised in the present Writ Petition is squarely covered by the decision of the Division Bench of this High Court rendered in the case of State of Chhattisgarh & Ors. v. M/s Tata Teleservices Limited [2022 (12) TMI 264 - CHHATTISGARH HIGH COURT]. These Writ Appeals by the State were preferred against the Order passed by the Single Bench in Writ Petition (T) No.79/2017 on 20.3.2018. In the said Writ Petition, the Writ Court in identical set of facts had held the order of reopening of assessment to be bad when the order of assessment itself was not issued by the Authorities. The said Order of the Single Bench was subjected to challenge by the State before the Division Bench in the aforesaid Writ Appeals. The Division Bench rejected the bunch of Appeals of the State, affirming the Order passed by the Single Bench.
Similar matter which came up for consideration before the Division Bench in TAXC No.74/2022 in the matter of "M/s. Iron Junction Rajbandha Maidan, Raipur Vs. Commissioner of Commercial Tax" [2022 (9) TMI 1407 - CHHATTISGARH HIGH COURT] where keeping in view the decision rendered in the case of “M/s. Tata Teleservices Limited” [2022 (12) TMI 264 - CHHATTISGARH HIGH COURT], the Division Bench had disposed of the said Tax Case also in terms of the Order passed in “M/s. Tata Teleservices Limited”. It has been emphatically held that unless there is a specific order of assessment under Section 21(1) of the Chhattisgarh Value Added Tax Act, there cannot be reopening of an assessment made under Section 21(2) of the said Act.
In the light of the aforesaid judicial pronouncements by the Division Bench of this High Court, the present Writ Petition, being squarely covered by the same, deserves to be and is accordingly allowed.
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2023 (3) TMI 941
Claim of exemption even after the expiry of exemption period as per the scheme - Revival of viable sick industrial units - It is the case of the petitioner company that it had suffered because of serious breakdown of law and order and was not able to submit the financial returns - HELD THAT:- It appears that in the order dated 28.01.2013 by which the writ petition was disposed of, it was recorded that the petition was filed in the year 2001 seeking a direction to revive the petitioner sick unit pursuant to a minutes of meeting dated 14.06.2000 and also to quash the order dated 22.11.2001 passed by the Board of Industries and Financial Reconstruction (BIFR). The stand of the State that the petitioner was not entitled to any relief and that the benefit had already been availing by the petitioner was recorded. It appears that a concession was made by the petitioner that a final reasoned order may be passed by the Government and on such concession, the order was passed by directing that a final decision be taken within a period of three months.
The present demand appears to be for exemption of Sales Tax beyond the period of the policy which cannot be claimed as a matter of right. This Court also finds force in the contention of the learned Standing Counsel, Industries & Commerce Department that there has been huge diversion of money of the petitioner company to other companies. A perusal of the minutes of meeting held in the chamber of the Additional Secretary, Industries & Commerce dated 14.06.2000 would show that huge amounts were diverted and the same was confirmed by the Managing Director of the petitioner.
This Court is of the opinion that the relief claimed is based on speculation and assumption and it does not appear that there is any indefeasible right of the petitioner for such relief. This Court in exercise of its jurisdiction under Article 226 of the Constitution of India does not act as a Court of Appeal and its functions are only confined to the decision making process. In the impugned order dated 20.09.2013, reasons are reflected which according to this Court are cogent and acceptable. This Court is of the further opinion that the factors which have been considered, namely, availing of the benefits of five different heads are relevant and germane to the issue at hand - Though a case has been tried to be projected of hardships to operate and run the Industry, including infrastructural and law and order problem, the petitioner company choose to set up the Industry in that location knowing fully well about the situation. It is however required to be noted that while the petitioner has highlighted the difficulties, the easy availability of raw materials for the cement Industry namely, Limestone has not been focused.
Appeal dismissed.
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