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VAT and Sales Tax - Case Laws
Showing 41 to 60 of 66 Records
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2023 (3) TMI 532
Seeking grant of anticipatory bail - any offence committed by the Director or not - for non-payment of tax, can the directors be made liable? - HELD THAT:- Going through the FIR as also the papers of investigation and the documents annexed with the application, without entering into the discussion in detail about invoking provisions of “the Act, 2003” or the Penal Code, suffice it to say that its invocation in such set of facts, as stated, that too, against the Directors in absence of any specific provisions under “the Act, 2003” and there is no provisions under the IPC, when coaccused is already considered by this Court and while admitting the present application detail reasons are assigned, on those reasons also, it is deemed fit to grant an order in the nature of anticipatory bail, which was continued since 17.02.2022.
The present application is allowed by directing that in the event of applicant herein being arrested pursuant to FIR registered as C.R.No.I-11200011210293 of 2021 with Valsad Rural Police Station, Valsad, on his executing a personal bond of Rs.10,000/- with one surety of like amount on the conditions imposed - application allowed.
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2023 (3) TMI 493
Legality of the penalty orders and assessment orders - penalty imposed on the petitioner based on the data contained in the slips that were recovered from the premises of the petitioner - HELD THAT:- These are cases where the assessment for the years 2009-10 and 2010- 11 were mechanically completed based solely on the findings contained in the penalty orders passed by the Intelligence Officer for the years 2008-09, 2009-10 and 2010-11. The penalty orders were passed by placing reliance on the data contained in certain slips recovered from the business premises of the petitioner during a shop inspection that was carried out on 4.9.2010. It is not in dispute that those slips were recovered from one Balachandran, who was present in the premises of the petitioner on the date of inspection.
As rightly found by the First Appellate Authority, the fact that Sri. K.I. Sreenivasan and Sri.K.V. Abdul Rasheed were deposing against their own interests by admitting that the data in the slips pertained to their business, ought to have weighed with the Department to initiate an enquiry against the said persons to ascertain whether they had suppressed any turnover for the purposes of taxation. They could have done this simultaneously with a protective assessment against the petitioner assessee. The fact that they did not do so ought to have operated against them in an adjudication of the petitioner's case. On the contrary, the Intelligence Officer as also the Tribunal appears to have discarded this valuable evidence and mechanically presumed that the data contained in the slips recovered from the premises of the petitioner pertained to the business of the petitioner. Since there are no justification in the Intelligence Officer as also the Tribunal having discarded the evidence tendered by Sri. Balachandran, Sri. K.I. Sreenivasan and Sri. K.V. Abdul Rasheed, we cannot uphold the reasoning of the Tribunal, in the orders impugned before us, as correct or rational.
Further, as the assessment orders for the assessment years 2009-10 and 2010-11 were based on the penalty orders for the said years, and the said penalty orders in this judgment are set aside, the impugned order of the Tribunal, to the extent it restores the assessment orders for the said years, is also set aside.
Revision allowed.
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2023 (3) TMI 492
Valuation - place of removal - charges incurred for loading, unloading, stacking, and transportation formed part of the taxable turnover or not - charges shown separately would make any difference or not - Jurisdiction of authority for clarification under Section 94 of the Kerala Value Added Tax Act, 2003 - HELD THAT:- Annexure A, the purchase order specified the price details fixed, including taxes, excise duty, other levies, freight, insurance, loading, and unloading at the site. It also contained a clause that insists that all the materials that are ordered will have to be fully insured from the time of despatch from the manufacturer to the destination station, including one month's storage, thereafter at the cost of the contractor.
The clauses in Annexures 1 and 2 clearly show that the transfer of title to the goods would take place only on delivery of goods at the customer's place and the customer's obligation to effect payment would arise only after the delivery is effected. Also the provisions of Chapter 3 of the Sale of Goods Act, in particular, section 22 that applies where the contract of sale of specific goods in a deliverable state, including the conditions to do such acts with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done.
The law applicable has again been re-iterated in INDIA METERS LIMITED VERSUS STATE OF TAMIL NADU [2010 (9) TMI 878 - SUPREME COURT] where it was held that when the transfer of the property or the goods is to be at the place of the buyer to which the seller is under an obligation to transport the goods, the expenditure incurred by the seller on freight in order to carry the goods from his place of manufacture to the place at which he is required under the contract to deliver, would thus become part of the amount for which the goods are sold by the seller to the buyer and would fall within the scope of "turnover".
The discussions would lead to the irresistible conclusion that Annexure – C order of clarification calls for no interference, and the OT appeal is without merit, and the same is, accordingly, dismissed.
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2023 (3) TMI 291
Detention of goods - Under valuation - M.R.P. can be deciding factor at this stage to under value the goods by the respondents or not - action on the part of the respondents is violative of the Article 14 and 16 of the constitution of India?
HELD THAT:- The petition deserves to be allowed. Though on a perusal of contents of the impugned notice, a copy of which has been kept on record, it is revealed that the same had been issued on the grounds that the documents appeared to be suspicious and needed verification; that the goods needed physical verification and appeared to be undervalued; that VAT number was not mentioned/wrongly mentioned on the documents and that the required information had not been generated at any Information Collection Centre (ICC) in the State of Punjab but on perusal of the written statement, it is crystal clear that except the allegation that the maximum retail price (MRP) printed on the boxes containing fire works was more than the price mentioned in the invoices from which it appeared that the goods were undervalued, no other objection had been taken by the respondents to justify detention of the vehicle as well as the seizure of the goods. It is well settled proposition of law that undervaluation of seized goods in transit cannot be a ground to confiscate the goods and the vehicle. There cannot be any mechanical detention of a consignment in transit on the basis that the goods being transported are undervalued.
Reliance can be placed upon K.P. Sugandh Ltd. v. State of Chhattisgarh [2020 (3) TMI 890 - CHHATTISGARH HIGH COURT] wherein the detention of vehicle and seizure of goods merely on the ground that there was undervaluation was not held to be sustainable by holding that it was for the department to initiate appropriate separate proceedings with regard to the alleged undervaluation and that itself could not furnish a ground for detention of vehicle.
Thus, it is held that the detention of the truck and seizure of the goods carried therein, by respondent No.2 was illegal. The goods and the truck have, however, already been ordered to be provisionally released in pursuance of order passed by this Court on 07.08.2006. They are ordered to be released - petition allowed.
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2023 (3) TMI 275
Jurisdiction - suo motu revisional power of the Additional Commissioner of Sales Tax - Was the exercise of the suo motu revisional power by the Additional Commissioner of Sales Tax (Revenue) by way of the impugned order dated 10th May, 2016 under Section 18(1) of the Odisha Entry Tax Act, 1999 (OET Act) without jurisdiction inasmuch as an appeal filed against the Assessment Order sought to be revised, was already pending at the instance of the Assessee? - barred by time limitation or not.
HELD THAT:- It is a settled legal position that the suo motu revisional proceeding has to be concluded not beyond five years from the original order of assessment.
This Court has interpreted a similar provision contained in Section 23(1) of the Odisha Sales Tax Act, 1947 read with Rule 80 of the Odisha Sales Tax Rules, 1947 in the cases of M/S. SAGARMAL AGARWALLA VERSUS COMMISSIONER OF SALES TAX, ORISSA, CUTTACK AND 2 OTHERS [2018 (1) TMI 868 - ORISSA HIGH COURT] and vide Order dated 10th July, 2019 passed in the case of P.P. RICE MILLS VERSUS SPECIAL ADDITIONAL COMMISSIONER OF SALES TAX = [2019 (7) TMI 1969 - ORISSA HIGH COURT] - In P.P. Rice Mills, this Court held that On reading of the Rule in a joint manner would make it clear that for revising an order within a period of three years after providing opportunity to the assessee and calling for the records, the revision order itself has to be passed within a period of three years.
The impugned order dated 10th May, 2016 of the Additional Commissioner is hereby set aside - the questions framed by this Court are answered in favour of the Appellant-Dealer and against the Department - appeal allowed.
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2023 (3) TMI 274
Challenge to SCN before completion of enquiry - Proposal to levy tax under TNVAT Act - doctrine of mutuality - supply of liquor to the members of club - amounts to a transaction of sale of goods from one person to another attracting taxation under the TNVAT Act, or not - HELD THAT:- The consistent legal position has been reiterated by the Hon’ble Supreme Court of India in Union of India -vs- Kunisetty Satyanarayana [2006 (11) TMI 543 - SUPREME COURT] that a charge memo or show cause notice cannot be challenged before the completion of enquiry and the proceedings cannot be interdicted till it reaches its logical conclusion.
Having due regard to the aforesaid legal position, as there is nothing which precludes the Petitioner from raising the contentions in this Writ Petition in the reply to be submitted to the Respondents, who are bound to deal with the same before coming to any ultimate conclusion, there is no necessity for the Court to interfere at this pre-mature stage of the matter.
It shall be incumbent upon the Petitioner to submit its explanation to the show cause notice, which is impugned in the Writ Petition, if not done already, to the concerned authority by 31.03.2023 - Petition disposed off.
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2023 (3) TMI 273
Classification of goods - rate of tax - Choloromint Herbasol - Happydent White - Chatar Patar - liable to tax at 12.5%, as per Schedule ‘F’ of PVAT Act, 2005 or @ 4% tax under the residue entry? - HELD THAT:- In the present case, the issue that the goods in question namely ‘‘Choloromint Herbasol’’ and ‘Happydent’ are medicines have been examined and has attained finality as per the judgments by the Uttrakhand High Court, Allahabad High Court which has been affirmed by the Hon’ble Supreme Court by dismissing the SLP against the judgment passed by Allahabad High Court.
Reference can now be made to the observations made by the Uttarakhand High Court in the case of Commissioner Trade Tax Vs. Perfetti Van Mell [[2008 (7) TMI 870 - UTTARAKHAND HIGH COURT]] with respect to the appellant-Company itself, the Uttarakhand High Court has observed that the items ‘Choloromint with Herbasol’ and ‘Happydent White’ are manufactured by the assessee under the drug licence issued to it by the Directorate of Ayurvedic Medicines of State of Haryana. Even if, for the purpose of utility, ‘Choloromint with Herbasol’ as mouth freshners and that of ‘Happydent White’ (baking soda with mint flavor) to keep the teeth clean, these items will not be confectionary items, specially when these items are manufactured under a valid drug licence. The Uttrakhand High Court held the above-said two items, ‘Choloromint with Herbasol’ and ‘Happydent White’ being manufactured under a valid drug licence are ayurvedic medicines and trade tax payable on said items @ 4% as per clause (b) of the Sub-Section (2) of Section 4 of Uttranchal Value Added Tax, 2005.
In the present case, the Revenue-respondent has not led any evidence or produced any material to discharge the onus on it. Once the goods have been manufactured by the assessee under the Drugs Licence issued by the Directorate of Ayurvedic Medicines then the ayurvedic medicines would fall under Entry 31 of Schedule B attached with the Punjab Value Added Tax Act (PVAT), 2005 and is liable to be taxed @4% as per consistent view taken by the Uttarakhand High Court.
The question posed for consideration in this appeal is answered against the respondent-Revenue and in favour of the assessee-appellant - Appeal allowed.
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2023 (3) TMI 229
Classification of goods - rate of tax - sale of Wheat Bran (Chokad) - Taxable @ 4% treating the same as industrial input coming under SI No.74 of Part-II of Schedule-B particularly when Wheat Bran (Chokad) is generally exempted under Entry 3 of Schedule-A? - HELD THAT:- The fact remains that an entry in a taxation statute admits only of strict interpretation. If the legislative intent was that there should be some conditionality attached to granting exemption from VAT on the sale of ‘Chokad’, then it should have been expressly stated as has been done in Column 3 in regard to Entries 24 and 38. That there being no such conditionality as far as Entry 3 is concerned, the only conclusion that can be drawn is that sales of ‘Chokad’ irrespective of the purpose for which such ‘Chokad’ has been purchased by the buyer, would be exempt from VAT.
It is not even the Department’s case that any notification has been issued by the State Government stating that ‘Chokad’ is an Industrial input for the purposes of Entry 74 of Schedule ‘B’. Without noticing this requirement in Entry 74, both the STO as well as the JCST fell into error in drawing an ‘inference’ that ‘Chokad’ sold to NALCO must ‘naturally’ have been used as an industrial input. This cannot be a matter of surmise or conjecture. If Entry 74 of Schedule ‘B’ had to be made applicable in order that the sale of ‘Chokad’ to NALCO is amenable to tax at 4%, then it was necessary for the Department to show that there was a notification issued by the State Government identifying ‘Chokad’ as an ‘industrial input’. In the absence of such notification, no inference could have been drawn that ‘Chokad’ sold to NALCO was in fact an ‘Industrial input’.
The Court is, therefore, satisfied that the STO, the JCST and the Tribunal erred in treating the sale of ‘Chokad’ by the Petitioner to NALCO as an ‘industrial input’ attracting VAT at 4%.
The question framed is answered in the negative, i.e., in favour of the Petitioner-dealer and against the Department.
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2023 (3) TMI 228
Violation of principles of natural justice - denial of opportunity to cross-examine the third party whose papers constitutes the basis of assessment - HELD THAT:- In the present case the computer records which reflect the name of a dealer which is identical to that of the Petitioner. However, in view of the plea of the Petitioner that he did not indulge in those purchases, the Petitioner ought to have been given the chance of cross-examining the alleged sellers in order to defend itself effectively in the assessment proceedings. The justification put forth by the STO that such an exercise would result in ‘squandering away of the time’ or that would to prolong the proceedings, appears not to be justified since the STO could have made the entire exercise of summoning those selling dealers and allowing an opportunity to the Petitioner to cross-examine them, time bound.
This is not practical or realistically feasible considering the long lapse of time. At the same time there has clearly been denial of an effective opportunity to the Petitioner-dealer by refusing it the right to cross-examine the selling dealers.
While in similar cases it might have been possible for the Court to remand the matter to the STO to complete the above exercise, in the present case, considering that more than two decades have elapsed since those transactions, an opportunity being provided at this stage to the Petitioner to cross-examine the selling dealers might not even be practical. There was no requirement of the selling dealers to preserve any records or to produce such records even if summoned. The entire exercise would certainly at this stage be a pointless one.
The Court is unable to sustain the impugned order of the Tribunal and the corresponding orders of the JCST and STO - the revision petition is disposed off.
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2023 (3) TMI 227
Demand of additional demand - tax disputes relating to the period before amendment in Section 33 of the HVAT Act - right of appeal - vested right or not - HELD THAT:- Learned counsel for the State has referred to a Division Bench judgment of this Court in KHAZAN CHAND NATHI RAM VERSUS STATE OF HARYANA AND OTHERS (AND OTHER CASES) [2004 (3) TMI 720 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that the right of appeal is a vested right and it will exist on the date of commencement of lis - The lis can be said to commence under the Haryana General Sales Tax Act (HGST) on the date when return is filed or is required to be filed. Therefore the provisions of Section 39(5) of the HGST Act would continue to govern the right of appeal vested in the petitioners which is saved in terms of Section 4 of the Punjab General Clauses Act (As applicable to State of Haryana).
A perusal of the judgment of Khazan Chand Nathi Ram's case further shows that this Court had examined Section 61(2) of the Haryana Vat Act 2003 and concluded that Section 61(2) of the Haryana Vat Act does not give any retrospective effect to the provisions of the aforesaid Act either expressly or by necessary implication. Section 61(2) of the HVAT Act contemplates transfer of pending proceedings pertaining to application, appeal, revision or other proceedings to the authorities constituted under the HVAT Act and it is to be disposed of by the authorities so constituted.
Appeal dismissed.
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2023 (3) TMI 226
Interpretation of statute - non-obstante clause - Levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax, 2006 - exemption granted on the basis of the turnover of a dealer - conditional exemption or not - HELD THAT:- The non-obstante clause contained in Section 12 of the TNVAT Act, is limited in its operation only with reference to definition of Input Tax Credit under Section 2(24) of the TNVAT Act. Apparently, there was an need to provide for a non-obstante clause with reference to Sub-section (24) to Section 2 of the TNVAT Act, inasmuch as “input tax” was defined to mean tax paid by a registered dealer to another registered dealer on the purchase of goods. However in the case of purchase tax under Section 12 of the TNVAT Act, the taxes are not paid by the purchasing dealer to the selling dealer instead the levy/ charge is on the purchasing dealer and he is required to discharge the obligation/liability. But for the non-obstante clause in sub-section (2) to Section 12 of the TNVAT Act the taxes paid under section 12 of TNVAT Act may not qualify as Input Tax Credit within the meaning of Section 2(24) of the TNVAT Act.
As a matter of fact, there are provisions under the TNVAT Act which provides for a non-obstante clause which are much wider in its scope and operation. It may also be relevant to note that there are instances/provisions under the TNVAT Act where the legislature intended to give an over-riding effect over more than one provision, it had been expressly provided for as would be evident if one gleans through the TNVAT Act.
Statue to be Constructed to make it Effective and Workable - HELD THAT:- A statute or any enacting provision therein must be so construed as to make it effective and operative. If one construes the non-obstante clause in sub-section (2) to Section 12 as extending to Section 19 which governs the conditions for claiming input tax credit, it would result in taxes paid under Section 12 of the TNVAT Act, being automatically available as credit thereby neutralizing the charge and thus the provisions meaningless. The above construction thus ought to be avoided.
Avoiding additional or substitution of words/Judicial Legislation - HELD THAT:- The attempt by the revenue to extend the operation of the nonobstante clause in Section 12 (2) of the TNVAT Act, would result in rewriting sub-section (2) to Section 12 which reads as “notwithstanding anything contained in sub-clause (2) to Section 2” as “notwithstanding anything contained in sub-clause (2) to Section 2 and 19” - Such construction ought to be avoided for the Court cannot aid the legislature, it cannot add or amend the provision. It is contrary to all rules of construction to read words into an Act. Similarly it is wrong and dangerous to proceed by substituting some other words for words of the statute. The court cannot re-frame the legislation for the reason that it has no power to legislate.
Different words different meaning - HELD THAT:- This Court had found that the legislature has employed the non-obstante clause differently through the Act, while in some provisions the non-obstante clause is very wide, in some cases it is limited to a particular provision or provisions. The non-obstante clause under sub-section (2) to Section 12 of the TNVAT Act, is limited in its operation to section 2 (24) of the TNVAT Act. If the intention of legislature of employing the non-obstante clause in sub-clause (2) to Section 12 of the Act, was to override Section 19 of TNVAT Act it would have provided for it expressly in sub-section (2) to Section 12, as done in various other provisions of the Act. It is settled rule of construction that if in relation to the same subject-matter different words are used in the same statute, there is a presumption that they are not used in the same sense.
The exemption under Entry 68 Part B to the Schedule IV is conditional and the said goods on being despatched to places outside the State would attract the levy of purchase tax under Section 12 of the TNVAT Act. Thus the challenge to the levy of purchase tax is liable to be rejected. Input tax credit of the purchase tax would be subject to Section 19 of the TNVAT Act - the impugned orders insofar as it imposes penalty are liable to be set-aside.
Petition disposed off.
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2023 (3) TMI 225
Finalisation of assessment and creation of extra demand - extension of the period of limitation - main grievance of the appellant is that the initial assessment order dated 19.11.2015 which he received on 21.01.2016 was void ab initio as the assessment framed was barred by time - HELD THAT:- The assessment order was passed on 19.11.2015 and as per the amendment made in Section 29(4) of the Punjab Vat Act, an assessment order under sub- section (2) or sub-section (3) can be passed by the Commissioner within a period of six years after the date when the annual statement was filed or due to be filed whichever is later. Even the amended sub-section(2) or sub-section (3), also extended time for passing the assessment order for the assessment year 2006-07 till 20.11.2014. In the present case, the assessment year is 2008-09 and the assessment order was passed on 19.11.2015. The period of six years would come to an end in the year 2016.
Since the period of limitation got extended from three years to five years and the assessment order with respect to assessment year 2001-02 was made on 10.07.2006 which was held to be within the limitation as provided by amended Section 11-CC. Therefore, the appeal filed by the State of Punjab was dismissed, however, it was held that the assessee was liable to pay only the principal amount of sales tax and no interest of penalty was to be paid by him.
Thus, the amendment in Section 29(4) of Punjab VAT Act was made by notification No. 49-Leg./2013 (Punjab Act No. 38 of 2013) dated 15.11.2013. Even the proviso of Section 29(4) had extended the period of limitation for the assessment year 2006-07 till 20.11.2014. In the present case, since the assessment year is 2008-09, the period of limitation of 6 years had not expired when the proceedings were pending before the Commissioner when he passed order dated 28.04.2016. The Tribunal, vide order dated 26.11.2021 had rightly partly allowed the appeal of the assessee by setting aside the order of the Designated Officer imposing interest u/s 32(3) amounting to Rs.15624220/- and the imposition of penalty u/s 53 to the tune of Rs.20832293/- and the tax calculated had to be paid by the assessee.
Appeal dismissed.
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2023 (3) TMI 168
Application for rectification of the assessment orders rejected - challenged to impugned orders on the ground of violation of principles of natural justice as the reply sent, has not been considered by the respondent in the impugned orders - seeking grant of opportunity of being heard (audi alterem partem) - HELD THAT:- While dealing with a similar issue, this Court in the case of TVL SRI RAGAVA MEDICAL AND GENERAL STORES, REP. BY ITS PROPRIETOR MR. ARIVAZHAGAN VERSUS THE DEPUTY SALES TAX OFFICER, THIRUKOILUR ASSESSMENT CIRCLE, THIRUKOILUR., THE COMMISSIONER OF COMMERCIAL TAXES EZHILAGHAM, CHEPAUK, CHENNAI [2023 (1) TMI 1102 - MADRAS HIGH COURT], after extracting section 84 of the Act, 2006 which deals with the rectification application held that as per the provisions of Section 84 of the Act, only in cases of enhancement of Assessment or Penalty, the respondents will have to afford an opportunity of hearing to the petitioner. Since the respondents have confirmed the Assessment made in the year 2016 for the Assessment Year 2013-14 in the impugned order, the question of granting an opportunity of hearing to the petitioner will not arise.
In the case on hand in the impugned orders passed under section 84 of the Tamil Nadu Value Added Tax Act, 2006, there is no enhancement of assessment or penalty and therefore, there is no necessity for the respondent to adhere to the principles of natural justice as claimed by the petitioner in these writ petitions.
Petition dismissed.
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2023 (3) TMI 167
Club or Association Service - Principles of mutuality - sale taking place between the member and the club or not - HELD THAT:- Since the issue raised in the present Revision Cases is squarely covered by the law laid down by the Hon’ble Supreme Court in Calcutta Club Limited [[2019 (10) TMI 160 - SUPREME COURT]], wherein it was held that "the doctrine of Mutuality continues to be applicable to incorporated and unincorporated member’s clubs even after the 46th Constitutional Amendment and sub-clause (f) of Article 366(29-A) to the Constitution of India has no application to member’s clubs", which binds this Court under Article 141 of the Constitution of India and also since it is not shown any subsequent deviation from the above position, the question of law raised in the present Revision Cases in favour of the petitioners-assessee.
Tax Revision Cases are allowed.
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2023 (3) TMI 124
Doctrine of promissory estoppel - Prayer for a writ of mandamus (To compel a court or judicial tribunal to exercise its jurisdiction when it has refused to exercise it), commanding the respondents to allow remission of sales tax - HELD THAT:- In the case on hand the petitioners have failed to prove that there exists a legal right which is to be enforced against the State and that the State has failed to perform its legal or statutory duty. No mandamus can, therefore, be issued commanding the State to exercise the power of relaxation in a manner so as to fulfill the desire of the unit to avail remission of sales tax - This Court has already observed that the petitioners have failed to demonstrate that the investment of Rs. 23 crores made by the unit was pursuant to any promise made by the government to allow remission of sales tax on such investment. Therefore, the question of reversing the promise by the State does not arise in the case on hand. Under such circumstances, the necessity to assign reasons for not allowing the remission as argued by the learned Senior Counsel for the petitioner does not arise as it is not a case of claiming exemption from liability.
This Court is of the considered view that the State action in the case on hand cannot be said to be arbitrary. The learned Tribunal rightly observed that no right accrued in favour of the petitioners to claim remission of tax. The Tribunal was also right in observing that the unit was granted benefit as a special case. This Court accordingly holds that the impugned order passed by the learned Tribunal do not suffer from any infirmity. Therefore, no interference with the said order is called for.
The issue that fell for consideration in K.M. Refineries [[2019 (9) TMI 522 - BOMBAY HIGH COURT]] was whether the Commissioner of Sales Tax had the power to curtail the validity period for enjoyment of incentives and other benefits under the relevant Incentive Scheme and also whether such reduction could have been made in the name of the policy of GST. On such facts it was held that no authority was given to the Commissioner to modify, enlarge or curtail the validity period and also that the benefits under the Incentive Scheme cannot be curtailed in the name of the new GST policy - In the case on hand it cannot be said that the validity period for enjoyment of the Incentive Scheme has been curtailed or that the unit was deprived from enjoying the benefits of remission of tax for the investments made on Fixed Capital Assets within 31.03.2004. Thus, the reported decision in K.M. Refineries, being distinguishable on facts, do not have any manner of application to the case on hand.
In Brahmputra Metallics [[2020 (12) TMI 1241 - SUPREME COURT]], the curtailment of the validity period as promised by the State was in issue. It was found on facts that though the State made a representation in the relevant Industrial Policy that a rebate/ deduction in electricity duty would be offered for a specified period, the units were deprived from enjoying such benefit for such specified period due to unexplained delay in issuance of notification as contemplated under the scheme. On such factual background, the Hon’ble Supreme Court held that the State action is arbitrary and violative of Article 14 - In the case on hand, this Court has already observed that State action is not arbitrary and therefore, the said reported decision is not applicable.
This Court, holds that the writ petition is devoid of any merit and the same is liable to be dismissed - Petition dismissed.
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2023 (3) TMI 123
Recovery of dues - Attachment of Bank Account of petitioner - attachment on the ground that a Statutory Appellate Authority has quashed the assessment order and remanded the matter for fresh consideration - non-application of mind - violation of principles of natural justice - HELD THAT:- Admittedly, in respect of the assessment year 2016-17, the assessment order was in entirety quashed and remanded back to the first respondent for fresh consideration, on merits and in accordance with law and in respect of the assessment year 2015-16, some of the operative portion of the assessment order was quashed and without giving any notice to the petitioner, prior to the attachment and the dues of the recovery notice, the first respondent has attached the back account, lying in the bank account of the petitioner and maintained with the fourth respondent Bank, which in the considered view of this Court, is arbitrary and has been passed by total non application of mind.
Insofar as the second submission made by the learned counsel for the petitioner with regard to the refund of the money, lying in the petitioner's bank account, maintained with the fourth respondent Bank, is concerned, the petitioner will have to give a representation for the same to the respondents - No prejudice would be caused to the respondents if the said representation is directed to be considered by the first respondent, on merits and in accordance with law within a time frame to be fixed by this Court.
The impugned recovery notice as well as the consequential bank attachment in Form U in respect of the bank account of the petitioner, maintained with the fourth respondent are hereby quashed - Petition allowed.
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2023 (3) TMI 122
Validity of assessment orders - no personal hearing was afforded to the petitioner prior to the passing of the respective impugned assessment orders - impugned assessment orders are dated 29.10.2019, the petitioner has received the same only on 30.01.2023 - violation of principles of natural justice - HELD THAT:- The date of dispatch of the impugned assessment orders by the respondent is disclosed as 27.01.2023, though the assessment order is dated 29.10.2019. Therefore, the statement of the petitioner that they had received the assessment orders all dated 29.10.2019 only on 30.01.2023 has to be believed - Further as seen from the impugned assessment orders, no personal hearing was afforded to the petitioner.
Learned Government Advocate appearing for the respondents has produced the written instructions received by the learned Special Government Pleader (Taxes) from the Assistant Commissioner, (ST), Anna Salai Assessment Circle, Chennai - 6 dated 15.02.2023, wherein they have stated that they are prepared to re-do the assessment. The said instructions received by the learned Special Government Pleader (Taxes) from the respondents is recorded.
The matters have to be remanded back to the first respondent for fresh consideration on merits and in accordance with law - the impugned assessment orders are quashed - petition allowed by way of remand.
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2023 (3) TMI 121
Recovery of dues - Attachment of property (secured asset) - absolute owner of the property - legal and valid title or not? (as once purchased under the public auction) - HELD THAT:- It is a settled position of law that the debts due to any secured creditor shall be paid in priority over all other debits and all revenues, taxes, cesses and other rates payable to the Central Government or state Government or local authority.
Reference made to the case of KALUPUR COMMERCIAL CO-OPERATIVE BANK LTD. VERSUS STATE OF GUJARAT [2019 (9) TMI 1018 - GUJARAT HIGH COURT] where it was held that We have no hesitation in coming to the conclusion that the first priority over the secured assets shall be of the Bank and not of the State Government by virtue of Section 48 of the VAT Act, 2003.
In the instant case, it is an undisputed fact that respondent No.2 – Bank of Baroda is a secured creditor. Therefore, the Bank has valid first charge over the property in question by way of mortgage and has first right to sell the same in view of priority under Section 31B of the RDDBI Act, so also Section 26E of the SARFAESI Act and recovered its dues from it. The petitioner is a bona fide purchaser, purchased the property in question from the public e-auction held by the Recovery Officer and paid full and total sale consideration and the Recovery Officer has issued sale certificate in favour of the petitioner. The debts due to Bank – a secured creditor shall be paid in priority over other debts/taxes payable to the State Government. The petitioner has no concern with the dues of the State Authorities - now it is well settled legal position that the mortgagor bank has priority to recover the dues against any charges of the State Government or Central Government, more particularly the mortgage is created prior to the registration of such charge by the Authority.
Thus, it is held that the RDDBI Act is meant for enforcement of security interest which is created in favour of the secured creditor – financial institution, and provides specific mechanism / provision for the financial assets and security interest.
Petition allowed.
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2023 (3) TMI 120
Validity of reassessment order - demand of pre-deposit - non-availment of any opportunity of hearing because of the Pandemic due to COVID-19 virus - Whether The Gujarat Value Added Tax Tribunal is justified in demanding pre-deposit without assigning any reasons or by overlooking the prima facie case of the appellant?
HELD THAT:- This Court in case of KAVYA MARKETING VERSUS STATE OF GUJARAT [2022 (4) TMI 1202 - GUJARAT HIGH COURT] has also needed to deal with the order where the Tribunal had directed to pre-deposit and hearing of the matter was prolonged on the aspect of pre-deposit. It had chosen not to address the prima facie case of the writ applicant at the stage when the directions had been issued for pre-deposit. This Court had frowned upon such approach on the part of the Tribunal by holding that This Court has time and again in identical cases has held that Tribunal is obliged to consider a prima facie case, which the appellant may be in position to highlight. It a strong prima facie case is made out, then in such circumstances, there should not be any difficulty in entertaining the appeal even without insisting for payment of tax penalty or even smaller amount.
In the instant case, as can be noticed from the chronology of events, the original reassessment order which was passed after the provisional attachment order and the audit assessment was placed upon the provisional assessment order and also considering the very material which was taken into consideration during the audit assessment - It is not the final reassessment order and the amount quantified is necessary to be looked into. It is essentially the chronology of events, coupled with the fact that there is complete absence of the any opportunity at the time of reassessment which shall need to be regarded.
The matter is remanded back to the original authority for passing reassessment order on quashing and setting aside that order - the reference of carried forward input tax credit of Rs.5,86,000/- to the credit of the appellant shall continue to act as as pre-deposit - petition allowed.
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2023 (3) TMI 61
Under-pricing of goods/colourful transactions - Determination of sale price of Iron Ore sold by the petitioner on the basis of average I.B.M. rate in exercise of the powers under Section 35 (7) read with Section 40 (1) of the JVAT Act - HELD THAT:- After going through the proviso to Section 35 (7) of the Act it appears that the statute specifically postulates that prescribed authority shall record his reason before initiating the proceedings and no order shall be passed under this sub section without giving the dealer an opportunity to be heard. Section 40(1) provides for Assessment in cases where turnover has escaped assessment on account of reasons indicated under Clause (a) to (e). In cases of concealment or failure to disclose willfully etc. the penal provisions under proviso to 40(1) provide imposition of three times the amount of additional tax assessed - the proviso to Section 35 (7) of the JVAT Act firstly stipulates that the reasons must be recorded by the prescribed authority for initiating the proceeding and secondly, the principles of natural justice should be followed.
Though in the instant case the second ingredient of the proviso has been fulfilled; however, there is no document to suggest that the assessing officer has recorded his reason before initiating the proceeding - it is noteworthy that even after remand by the appellate authority in the revised assessment order the assessing officer has not correctly applied its mind to the requirement of law under Section 35(7) of the Act and rather observed that it is not a case where the assessee has sold the goods at a price higher than what is shown by him.
In the case of GIRDHARI LAL NANNELAL VERSUS SALES TAX COMMISSIONER, MP [1976 (3) TMI 51 - SUPREME COURT], the Apex Court, held that for the purpose of levy of Sales Tax it would be necessary not only to show that the source of money has not been explained but also to show existence of some material that such acquisition of money has resulted from transactions liable to Sales Tax and not from other sources.
The Assessing Officer has come to the finding that it is a case of ‘underpricing’. The finding with respect to “underpricing” of the goods sold by the petitioner recorded by the assessing officer is not tenable in the eye of law. Further, assessing officer in its revised order has stated that “underpricing” of the petitioner has been occasioned due to connivance of the seller and the purchaser, but no details of such enquiry has been mentioned in the revised order. The lower court records do not show that any such enquiry was conducted by the learned assessing officer to conclude underpricing done by the petitioner before proceeding to impose tax and penalty under Section 40(1) based on the IBM rates - In the absence of tangible materials to support such a finding, it is difficult to assume that a purchaser of petitioner would purchase minerals at a lesser price under an invoice in order to evade payment of tax especially when the said purchaser is entitled to avail ITC under the JVAT Act, 2005. It is only after recording of reasons for initiation of proceedings under Section 35(7) the exercise for determination of value of goods at the time of sale and assessment of tax on such price is to be done by giving the dealer an opportunity of being heard.
Though several contentions have been raised by the parties on the merits of the matter regarding the levy of tax and penalty but since the matter is being remanded for the assessing officer on the point of recording of satisfaction under Section 35 (7) of the JVAT Act before initiation of the proceedings, it is refrained from making any observation on the merits of the case regarding the levy of tax and penalty upon the petitioner under Section 35 (7) r/w Section 40 (1) of the JVAT Act.
The judgment relied upon by the learned Advocate General i.e. VEENA THEATRE, PATNA VERSUS THE STATE OF BIHAR [1970 (4) TMI 169 - SUPREME COURT] relate to cases of best judgment assessment after the rejection of Books of Account of the Assessee - Since in the present case the requirement of law for initiation of the proceedings have not been fulfilled, these decisions are not of assistance to the present cases.
Petition disposed off.
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