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VAT and Sales Tax - Case Laws
Showing 61 to 66 of 66 Records
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2023 (3) TMI 60
Entitlement to avail reduced CSA @ 2% on the interstate sales of yarn, against submission of ‘D’ Forms to the Government Departments, by taking recourse of Notification dated 13.07.2001 - Declaration in Form ‘C’ were submitted as specified in the Central Sales Tax) Registration & Turn Over) Rules, 1957 at the time of assessment - HELD THAT:- A perusal of the notifications shows that intention of the Legislator was to provide benefit of 2% tax on the inter-state sales to all the dealers outside State of Punjab and this included the Government dealers as well. However, at the time of issuing final notification, words “declaration in Form D” could not be mentioned. This omission in itself cannot alter the meaning of the notification as a whole, whereby it is clearly mentioned that benefit of this notification is to be given to any dealer having his place of business outside the State of Punjab. Any dealer would include private as well as Government dealer. Only declarations in Form ‘C’ and Form ‘D’ were to be provided by the private and Government dealers respectively. Guidelines for presenting Form ‘C’ and ‘D’ by the private as well as Government dealers have also been laid down separately.
This is only a procedural declaration and omission of mentioning the words Form ‘D’ cannot be made a ground to deny the benefit of this notification to the Government dealers outside the State of Punjab.
The present appeal was admitted way back in the year 2012. Learned counsel for the petitioner-State has not been able to cite any instance, where even after 2012, the State has not extended this benefit to any dealer outside State of Punjab being a Government department - Petition dismissed.
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2023 (3) TMI 59
Constitutional Validity of Section 17(5)(b) of AP VAT Act and charging Section 4(2) of AP VAT Act - ultra vires to Section 17(2)(3)(4)(7) - petitioner is to be assessed as ToT dealer only for his single transaction of purchase of goods from outside the State and for that single transaction or not - time limitation under Section 21(4) of the AP VAT Act - penalty can be imposed at 25% only on the tax due as per Section 49 of AP VAT Act or not - maintainability of writ petition.
Whether Section 17(5)(b) without reference to quantum of turnover is ultra vires to Section 17(2)(3)(4)(7) as well as charging Section 4(2) of AP VAT Act and liable to be struck down? - HELD THAT:- When Section 17 is comprehensively studied, it does not appear that 17(5)(b) has totally negated the operation of Sub Sections (2)(3)(4) and (7), rather it has limited their operation by carving out an exception. In other words, Sub Sections (2)(3)(4) and (7) are still operable so long as they do not fall within the groove of exception. Therefore, the petitioner cannot contend that Section 17(5)(b) has taken away the right conferred under Sub Sections (2)(3)(4) and (7). We find no conflict or inconsistency between sub-section (5) and other sub-sections and therefore, vires of Section 17(5) cannot be questioned.
Whether the petitioner is to be assessed as ToT dealer only for his single transaction of purchase of goods from outside the State and for that single transaction the petitioner shall be assessed to tax as a casual trader under relevant provisions of the AP VAT Act? - HELD THAT:- A tax is imposed for public purpose for raising general revenue of the State. As per Article 366(28) of the Constitution of India, the term “taxation” includes the imposition of any tax or impost, whether general or local or special and the tax shall be construed accordingly. The term “impost” means a compulsory levy. Since imposition of tax involves a compulsory levy or exaction of money by Government, the same is not permissible except by or under the authority of a statutory provision.
The petitioner shall be treated as a TOT dealer only irrespective of his involvement in a single transaction of purchase from outside the State. The said single transaction of purchase is concerned, the same is liable to be taxed under Section 6 of the CST Act, 1956 but not under the provisions of AP VAT Act, 2005 for the reason that as per Section 5 of AP VAT Act, the said Act has no application to impose tax on sale or purchase of any goods which took place outside the State. The petitioner cannot be treated as casual trader also for the reason that U/s 2(7) of AP VAT Act a casual trader is a person who carries on occasional transactions of a business nature involving buying, selling or distribution of goods in the State, whether as petitioner made a single purchase from outside the State.
Whether the assessment for the period April, 2013 to July 2014 is barred by limitation under Section 21(4) of the AP VAT Act? - HELD THAT:- According to the petitioner the impugned Assessment for the period April, 2013 to July, 2014 is barred by limitation under Section 21(4) of AP VAT Act since the assessment for the aforesaid period exceeded four years. The plea cannot be accepted, for the reason that for the aforesaid period, the petitioner has wilfully underdeclared his sales turnover and evaded payment of the tax to a tune of Rs.3,030/-. Therefore, following Section 21(5) of the AP VAT Act the 3rd respondent has rightly levied the tax. It is relevant at this juncture to mention that for the subsequent period also, for any undervaluation of sales and consequent evasion of tax, the petitioner will be liable to pay tax at 1% as a TOT dealer but not 14.5% as a VAT dealer
Whether penalty can be imposed at 25% only on the tax due as per Section 49 of AP VAT Act? - HELD THAT:- The petitioner shall be treated as TOT dealer only but not as VAT dealer. As such, he need not pay tax as a VAT dealer. Consequently, Section 49 of the Act which deals with penalty for failure to registration does not apply to the instant case. On the other hand, the petitioner for his act of undervaluing the tax as a TOT dealer, shall be liable to pay penalty as per Section 53 of AP VAT Act.
Whether the writ petition is not maintainable due to availability of alternative, efficacious remedy of appeal? - HELD THAT:- In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai [1998 (10) TMI 510 - SUPREME COURT] the Apex Court held that the alternative remedy will not operate as a bar in the contingencies namely where the writ petition has been filed for the enforcement of fundamental rights or where there has been a violation of principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In the instant case the petitioner challenged the validity of Section 17(5)(b) of AP VAT Act. As such the writ is maintainable.
The impugned Assessment Order dated 04.08.2018 penalty proceedings dated 23.11.2018 and Appellate Order dated 22.10.2020 are hereby set aside - Petition allowed.
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2023 (3) TMI 6
Classification of goods - KINLEY WATER - falls within the scope of Entry No.4 of Taxable List or within the ambit of Entry 39 of Tax-free List - dealer had collected sales tax from its customers/consumers - whether the finding of fact by the learned Odisha Sales Tax Tribunal is based on no evidence and/or erroneous appreciation of evidence and the conclusion arrived at by the Tribunal is untenable in the eye of law?
HELD THAT:- It is admitted by the Revenue that the dealer-company has added only sodium and magnesium salts to the treated water. The description of commodity as is given by the opposite party-company shows that the water is the potable water which is subject to treatment such as decantation, filtration, demineralization, re-mineralisation, reverse osmosis. These processes are as per the requirements of specification of the Bureau of Indian Standards as also the Prevention of Food Adulteration Act.
On comparison of definitions of “mineral water” and “packaged drinking water” as defined in the Prevention of Food Adulteration Rules, 1955, it is but clear that the process undertaken by the opposite party conforms to the “packaged drinking water”. Mere addition of sodium and magnesium salts may not convert “water” into “mineral water” unless other ingredients as specified in the Prevention of Food Adulteration Rules, 1955 are demonstrated to be present. The Revenue has utterly failed to bring on record that the product which is sold by the opposite party does contain other contents as enumerated in Appendix-B to the said Rules - If the Revenue could bring on record the fact that the product in question contained the ingredients specified for water to fall within the comprehension of “mineral water” as per A.32 of Appendix-B appended to the Prevention of Food Adulteration Rules, the matter would have been different. On the contrary, the opposite party-company having demonstrated that it has produced “packaged drinking water” in conformity with the specification of A.33 of Appendix-B of said Rules, it has discharged its onus.
The Hon’ble Delhi High Court in Bottled Water Processors Association Vrs. Union of India, [2010 (5) TMI 956 - DELH HIGH COURT], held that it is mandatory for packaged drinking water to be manufactured, sold or exhibited for sale only with a BIS Certification Mark. Packaged drinking water has to conform to the stipulated Indian Standards Specification as per IS 14543:2004. Rule 37 of the Prevention of Food Adulteration Rules requires the label to state that it is packaged drinking water and the label shall not contain any statement, claim, design, device, fancy name or abbreviation which is false or misleading in relation to the place of origin of the drinking water - Consequently, if packaged drinking water is sold without the usage of the BIS Mark, then the offence under Section 14 read with Section 33 of the Bureau of Indian Standards Act, 1986 stands attracted, which prescribes for the punishment.
Test commonly applied to such cases where the statute is silent in respect of definition of a particular commodity, is how the product gets identified by the class or section of people dealing with or using the product. This is a test, which is attracted whenever a statute does not contain any definition. It is a matter of common experience that the identity of an article is associated with its primary function. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between an article and the need it supplies in his life. It is the functional character of the article, which identifies it in his mind.
The competing entries, viz., Entry 39 of the Tax-free List vis-a-vis Entry 4 of Taxable List, do not confine the item to “water” simpliciter for classification. This Court is called upon to adjudicate whether packaged drinking water sold in the brand name “KINLEY WATER” falls within the sweep of expression “water but not aerated or mineral water sold in bottles or sealed containers”. The key words are “sold”, “aerated water” and “mineral water”. The word “sold” in the entry is indicative that it is the trade circle in which the commodity is traded or understood by the manufacturer, the trader and the consumer. In the trade “mineral water” and “packaged drinking water” are understood in the same sense in which Bureau of Indian Standards and the Prevention of Food Adulteration Act have specified/defined. Thus considered, the contention of the petitioner-Revenue deserves to be rejected.
Only conclusion that can be arrived at when Entry 39 of Tax-free List and Entry 4 of the Taxable List are pitted against each other is that what is taxable is sale of aerated water or mineral water. The scope of taxability cannot be expanded by giving the extended meaning to the excepted expressions for the purpose of narrowing down the exemption granted to “water” which falls within the ken of Entry 39 of Tax-free List - it is held that sale of packaged drinking water in the brand name KINLEY WATER falls within the expression “water but not aerated or mineral water sold in bottles or sealed containers” vide Entry No.39 of Tax-free List.
The issue is answered in the negative, i.e., in favour of the opposite party-assessee and against the Revenue.
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2023 (3) TMI 5
Constitutional Validity of Entry No.25 of the 6 Schedule to the Karnataka Sales Tax Act, 1957 - assessment order, reopening of assessment, barred by limitation or not - time limitation as per Section 12-A(1) of the KST Act - whether the proviso to Section 12-A(2) of the KST Act is applicable to the facts of the instant case?
HELD THAT:- The proviso to Section 12-A(2) of the KST Act is not applicable to the instant case and the impugned assessment orders are barred by limitation.
It is a matter of record that the petitioner was not one of the parties in PRO Lab’s case [[2015 (2) TMI 388 - SUPREME COURT]] and consequently, would not come under the expression ‘assessee’ contained in the proviso to Section 12-A(2).
The petitioner can also not be considered, construed or treated as ‘any person’ as contemplated in the said proviso since the same means, only a person who is intimately connected or interlinked or has a nexus to the parties in PRO Lab’s case and not to anyone else, much less, the petitioner herein, who was neither a party to PRO Lab’s case nor had any connection / link / nexus with the parties to the said case; to put it differently, in order to apply the judgment of the Apex Court in PRO Lab’s case, which would enable the respondents to initiate the impugned re-assessment proceedings, pursuant thereto, it is absolutely essential that the petitioner herein has to be ‘any person’ within the meaning of the proviso to Section 12-A(2); it follows there from that if the petitioner cannot be construed, considered or treated as ‘any person’ in terms of the said proviso, the same would be inapplicable to the petitioner and the benefit of exclusion of the period of 8 years prescribed in Section 12-A(1) would not be available to the petitioner.
In ITO, Sitapur vs. M/s.Muralidhar Bhagwan Das case [[1964 (1) TMI 5 - SUPREME COURT]], the Apex Court held that the said proviso would not save the time limit prescribed under sub-section (1) of Section 34 of the Act in respect of an escaped assessment of a year other than that which is the subject-matter of the appeal or the revision, as the case may be. It follows that the notice under Section 34(1) of the Act issued in the present case was clearly barred by limitation.
In Mysore Cements Ltd., case [[1999 (7) TMI 641 - KARNATAKA HIGH COURT]], the coordinate Bench of this Court while dealing with proviso 12- A(2) of the KST Act, under identical circumstances, held that Section 12-A(2) has extended the time-limit during which the stay was granted by any court or any other authority. It is only the time during which the stay granted is extended. But in a case where the stay is not granted and ultimately the matter is decided against the assessee requiring to make the assessment on the basis of the ultimate order or judgment given then the proviso further extends the time but, if a judgment is given in other case, then it would justify reopening of the assessment only within the time prescribed under section 12-A(1) and if it is in the case of the same assessee or person then, proviso to sub-section (2) of section 12-A thereof extends the time-limit for initiation of the assessment/reassessment of that assessee.
The impugned re-assessment orders for the years 1998-99 to 2004-05 dated 15.04.2016 and consequent demand notices dated 15.04.2016 passed by the 3rd respondent at Annexures-K, L, M, N, P, Q and R respectively - petition allowed.
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2023 (3) TMI 4
Validity of assessment order - sufficient opportunity of hearing has been provided or not - scope of the word 'reasonable opportunity of hearing' under Section 31 of the Tripura Value Added Tax Act, 2004 - respondents has contended that since a show cause notice was given, the same itself was sufficient in respect of providing of reasonable opportunity of hearing - HELD THAT:- The Assessing Officer cannot pass an order on the basis of pure suspicion and surmised without giving reasonable opportunity of hearing the case which is sought to be made out in the assessment order. In other words, though the Assessing Officer can make such inquiries, he must give an opportunity of being heard which is not an empty formality or ritual or a pretence. It is a valuable right granted to the assessees and, in fact, is an important safeguard against arbitrary assessments. It cannot be taken lightly by the authorities. The opportunity must be real and reasonable. If an assessee, who is asked to furnish certain particulars or submit explanations within a specified time, prays for further time stating his difficulties or reasons, his prayer should be considered judiciously. Sometimes, as in the present case, for assessment for a number of years are taken up together and the assessee is asked to appear and produce evidence in support of his returns. On consideration of the evidence produced by the assessee, the Assessing Officer might require some further particulars or information which might not be possible for the assessee to submit instantaneously, for various reasons.
The Assessing Authority cannot pass an order merely on the basis of pure guess and suspicion and surmises - the petitioner in this case was asked to furnish certain information for which he wanted time on the ground that assessments for four years were being taken up at a time and it was not possible during COVID period to bring the original invoices from Mumbai and thus his prayer was rejected. The petitioner was thus denied reasonable opportunity of hearing and on that score itself, the impugned order of assessment cannot be sustained as the same being made in violation of principles of natural justice.
The impugned orders of assessment dated 26.03.2021 as well as the notice of demand for the assessment years 2015-16 to 2017-18 stands set aside and the matter is remanded back to the concerned authorities to issue a fresh proceeding in accordance with law - Petition allowed by way of remand.
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2023 (3) TMI 2
Classification of goods - packaged drinking water or natural mineral water - HELD THAT:- Copies of the documents have been handed over to learned counsel for the Department who needs some time to examine them and make submissions.
List on 7th February, 2023.
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