Levy of tax - freight charged separately from the buyer would fall part of the sale price or not - activity of transportation is an activity of service or not - freight charges collected separately as the carrier of the goods - Appellate Authority can exercise the power under Section 47 of the VAT Act, while taking Suo Moto Revision of the Appellate order under Section 3A of the VAT Act while passing the impugned order or not - HELD THAT:- Few substantial questions of law No.1, 2 & 3 were answered by Orissa High Court in the case of M/s Utkal Moulders [2021 (4) TMI 84 - ORISSA HIGH COURT ], where it was held that the freight shown in the sale bill separately is part of the sale price. It is held that the Petitioner is entitled to claim deduction of the freight charges from the taxable sales turnover.
Other substantial questions of law are squarely covered and answered in the decision of Goldie Glass Industries [ 2017 (8) TMI 1451 - MADHYA PRADESH HIGH COURT] where it was held that Section 3A was inserted in the Statute to provide for appointment of Appellate Authority by the State Government not below the rank of Deputy Commissioner of Commercial Tax. It is further clear from Sections 46 and 47 that from the order of Dy. Commissioner of Commercial Tax (Appeal), no further appeal or revision lies. In other words, the order passed by the Dy. Commissioner of Commercial Tax (Appeal) is final and is not amenable to suo-motu revisional powers conferred by Section 47 of the Act.
All the five substantial questions of law are answered in favour of the petitioner/assessee - petition disposed off.
Condonation of delay of 322 days in filing and 149 days in re-filing the Special Leave Petition - HELD THAT:- The delay is also exorbitant. Hence, the Special Leave Petition is dismissed both on the ground of delay as well as on merits.
Seeking restoration of the statutory appeal before the appellate authority - application for restoration was dismissed on the ground that he had not raised any valid ground for seeking restoration of the appeal - unsuccessful in availing the benefit under the Amnesty scheme - HELD THAT:- The appellate authority as well as the High Court ought to have permitted the appellant herein to seek restoration of his appeal before the appellate authority so that the same could have been heard on merits.
After all, the appellate authority was seized of the appeal which was in the nature of a statutory appeal and if the appellant was unsuccessful therein he had further remedies in law. In view of the application filed by the appellant being rejected, neither the appeal has been restored nor has he been heard on merits and further remedies have also been foreclosed. On that short ground alone, the orders of the High Court as well as the appellate authority on the application filed by the appellant herein are set aside. The appeal before the KVATA No.174/2019 which was pending before the Joint Commissioner of Appeals is restored on the file of the said authority.
Demand on pre-deposit even though it is accepted that no sales were made by the Appellant - demand of pre-deposit even though it is not in dispute that the fraudulent refund was pocketed by the consultant Mr. Sunil Shah through fraudulent bank account - demand of huge pre-deposit even though it was specifically pointed out that the business of the appellant is closed and it is facing financial crisis - HELD THAT:- The matter is remanded back to the first appellate authority so as to decide the appeal filed by the appellant within a period of four weeks from the date of fulfilling of the aforesaid conditions.
Benefit of Vera Samadhan Yojana-2019 - Short payment of tax - after filing of the return, it was noticed that there was an error in tax computation - HELD THAT:- Considering the material on record it is not in dispute that the petitioner has paid the entire amount of the outstanding dues as per the corrected intimation and assessment order prior to the date prescribed under the Vera Samadhan Yojna-2019 i.e. 31.08.2021. The petitioner has also deposited Rs. 1,31,643/- on 5th March, 2021 after the assessment order was passed on 31.12.2020. Thus, the petitioner has deposited the entire amount as per the assessment order.
The petitioner is entitled to the benefit of the Vera Samadhan Yojana- 2019 and merely because the respondent No. 3 has changed the figure of payment to be made by the petitioner in the intimation as the figure shown in the in the intimation was erroneous, cannot come in way of the petitioner in the facts of the case to deny the benefit of the Vera Samadhan Yojna-2019 Scheme which is a benevolent scheme for the assessees floated by the State of Gujarat so as to see that the principal amount of tax is recovered on waiver of interest and penalty, if any, so as to reduce the future litigation.
The impugned communication dated 20.07.2022 is hereby quashed and set aside - Petition allowed.
Disallowance of ITC - various inputs purchased locally and interstate and used by the petitioner in the manufacture of PVC pipes - Case of petitioner is that the input tax credit was availed only in respect of the raw materials purchased locally and the said raw materials were entirely consumed in the manufacture of that quantity of PVC pipes that were sold within the State - HELD THAT:- As rightly pointed out by the learned Government Pleader, the consistent finding of the First Appellate Authority and the Tribunal is that no records/accounts were produced by the petitioner before them to substantiate the contention that no input tax credit was availed on the tax paid on raw materials/inputs purchased from outside the State and further that the said inputs were used exclusively for the manufacture of that quantity of PVC pipes which were eventually stock transferred outside the State.
In the absence of a clear bifurcation in the accounts between the two streams of supply of PVC pipes, namely, (1) through stock transfer outside the State and (2) through sale within the State, the authorities below cannot be faulted for having disallowed input tax credit proportionate to the quantity of PVC pipes that were stock transferred to outside the State.
The O.T.Revisions are therefore disposed by answering the questions of law raised in favour of the revenue and against the assessee.
Imposition of freight charges at the rate of one per cent. of the purchased value on overall turnover on the basis of the market value - Non-examination of individual vouchers - mala fide or intention of evading taxes or not - levy of penalty - HELD THAT:- The court finds that this indeed is an audit assessment under section 9C of the OET Act and at the relevant point in time, the decision of this court in Chandrakanta Jayantilal [2022 (7) TMI 607 - ORISSA HIGH COURT] was not available and, therefore, perhaps the issue was not raised by the assessee. That does not however mean that it cannot be raised a subsequent stage since it is a jurisdictional issue.
Since the Tribunal also had no occasion to examine the issue, the court considers it appropriate to direct that the matter be restored to the file of the Tribunal for a fresh decision - impugned order set aside.
Validity of assessment order - Constitutional Validity of Section 26(6A)(a) of the Maharashtra Value Added Tax Act, 2002 as ultra vires the Central Sales Tax, 1956 and the Central Sales Tax Rules (Registration and Turnover Rules) of 1957 as well as the Constitution of lndia - C-forms and F-forms not taken into consideration - HELD THAT:- There are substance in the contentions as urged by Mr. Patkar. It is a clear case of the petitioner that all the details in regard to C-Forms and F-Forms were placed for consideration of the assessing officer which ought to have been taken into consideration by the assessing officer in passing the impugned order.
It is a clear case of the petitioner that all the details in regard to C-Forms and F-Forms were placed for consideration of the assessing officer which ought to have been taken into consideration by the assessing officer in passing the impugned order - the assessment order provides no reasoning whatsoever in this regard. The assessment order neither refers to all such materials as placed on record by the petitioner nor there is a discussion as to why such material ought to be discarded in arriving at the final assessment. The only consequence from such order which is bereft of particulars and any discussion in that regard, would be that the order would be required to be held to be passed in patent non application of mind and materials on record.
The impugned order cannot be sustained, it would be required to be quashed and set aside with a directions to the Assessing Officer to hear the petitioner and after considering all the materials on record, pass a fresh order in accordance with law - Petition allowed.
Violation of principles of natural justice - respondent had passed impugned order without calling the petitioner for hearing - HELD THAT:- It is evident that the order has been passed in a tearing hurry, although the petitioner has requested for hearing after 18.05.2023.
The petitioner appears to have made out a prima facie case on merits. That apart, on merits also, it appears that the petitioner has a good case, as the petitioner has assessed the respective bill of entries, which were at the Special Economic Zone (SEZ), wherein, the goods were stored after their initial import - The only difficulty has arisen on account of non-filing of the details by the customs in respect of the four of the bills of entries out of six.
The impugned order set aside and the case remitted back to the respondent to pass a speaking order within a period of six weeks from the date of receipt of a copy of this order - petition disposed off.
Interest and penalty for delayed payment of tax - tribunal set aside the penalty - HELD THAT:- Given the said statutory provisions and powers conferred upon the Tribunal, it was within the powers of the Tribunal to look into the reasons which prevented the assessee in timely payment of tax and the delay also was too short a period so as to infer that the delay was with any mala fide intention.
Another fact which needs consideration is the fact that penalty imposed is invoking the provisions under Section 15(4) of the A.P.G.S.T. Act. The proviso to the said Section clearly indicates that before passing of an order of penalty, the authority concerned is required to issue a notice to the assessee seeking his explanation as to the cause which led to the delayed payment of tax. The very insertion of the aforesaid Section 15(4) pre-supposes that upon a notice being issued before penalty orders are passed, if the assessee was able to provide plausible and justifiable reasons which led to the delayed payment of tax it would be then within the discretion of the authority to decide whether penalty at all is to be levied.
The petitioners failed to make out any case warranting interference of this Bench with the order passed by the Sales Tax Appellate Tribunal - the question of law framed by the Court, while admitting the revisions, deserves to be decided in the negative.
Validity of assessment order - Levy of Trade Tax - association of persons - HELD THAT:- While making the assessment assessing authority was of the view that the business is being run by three brothers namely Pradeep Kumar, Kamlesh Kumar and Vimlesh Kumar and, therefore, treating them to be association of persons the said assessment order has been passed. The assessment has been made against the firm namely Pradeep Khad Bhandar which has challenged the assessing orders as well as both the appellate orders.
Against the said order of assessment an appeal was filed which was allowed by the Joint Commissioner (Appeal) - Ist, Lucknow thereby holding that all the three persons were part of the association of persons and directions were issued to the assessing authority to pass a fresh assessment order considering them to be an association of persons and issue them individual notices before finalizing the said assessment.
It is noticed that there is no dispute in the present case with regard to the assessment order but the grievance pertains only that the said Association of Persons has been described as S/Sh Pradeep Khad Bhandar and, accordingly, the liability to pay the tax for Association of Persons would fall directly on the revisionist. It is stated that the other two partners are also liable to pay the Trade Tax as per the assessment order.
In the present case it is noticed that the said Association of Person is being run by the three brothers while the firm is being run by only one brother, i.e., revisionist has been made liable to pay the amount of Trade Tax and, accordingly, even if the revisionist pays the tax as assessed, he can always recover it from other members of the Association of Person as the liability is joint and several but merely on this score the validity of the impugned orders cannot be doubted - this Court does not find any infirmity with the assessing order or with order passed by the Commercial Tax Tribunal and it is left open to the petitioner to recover the outstanding amount of the tax from the other members of the Association of Person in accordance with law.
Rejection of appeal - non-deposit of 15% of the pre-deposit - HELD THAT:- Considering the facts and circumstances of this case and in the interest of justice the impugned orders of the first appellate authority, revisional authority and the Tribunal are set aside and the matter is remanded back to the first appellate authority concerned to consider and dispose of the appeal on merit and in accordance with law subject to compliance of any other formalities, if any, which is required to be observed.
It is expected that the appellate authority shall consider and dispose of the appeal expeditiously - Application disposed off.
Classification of goods - Interpretation of statute - kattha and cutch - forest produce or mot - Whether for the purpose of Road Tax, both can be treated as one product or different products? - HELD THAT:- When the State Government in its letter dt. 20.07.2001 had itself taken a decision that both are different products and both cannot be taxed at same rate because their price in the market varies from Rs. 250-400/- per kg for ‘Kattha’ and Rs. 5-25/- per kg for ‘Cutch’, the said view of the Government was binding on the Excise and Taxation Commissioner because the said letter dt. 20.07.2001 was addressed by the Government to the Excise and Taxation Commissioner, Himachal Pradesh only.
It is not open to Excise and Taxation Commissioner to take a different stand as he is supposed to have done in the alleged letter dt. 20.01.2003, as stated by the Assistant Excise and Taxation Commissioner, Himachal Pradesh in his letter dt. 30.01.2003 - In fact, the request of the petitioner for supply of the proceedings dt. 20.01.2003 of the Excise and Taxation Commissioner under the Right to Information Act, 2005, has been returned on 18.07.2017 saying that said letter is not even available in the office of Deputy Excise and Taxation Commissioner, H.P.
The order passed by the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 cannot be sustained because he had simply refused to grant the refund on the view that the Excise and Taxation Commissioner, H.P. had rejected the refund on 20.01.2003. But there is no such letter made available to petitioner under the Right to Information Act, 2005 - the order dt. 28.9.2011 of the Deputy Excise and Taxation Commissioner-cum-Appellate Authority, Palampur, on 28.09.2011 set aside.
The petitioner is entitled for refund of Rs. 40,48,125/- illegally collected by the respondents as Road Tax on ‘Cutch’ during the period 13.11.2000 to 28.12.2001 - Petition disposed off.
Taxability - Deemed sale or not - receipts towards royalty and the transfer of the right to use intangible property - HELD THAT:- A reading of the judgment in Quick Heal Technologies [2022 (8) TMI 283 - SUPREME COURT] clearly shows that the issue is not whether there is a transfer of property in goods but if there is a transfer of the right to use the property in goods. The first Appellate Authority and the Tribunal essentially held that there is no exclusive transfer of the goods and that the decision of the Division Bench in Malabar Gold regarding the trademark would come to the rescue of the assessee.
The judgment in Malabar Gold [2013 (7) TMI 101 - KERALA HIGH COURT] has not become final as it is challenged before the Supreme Court. That apart, it cannot be held that it is a requirement of law that there should be a transfer of the entire right to the exclusion of the transferor for there to be a transfer of the right to use. The transfer of the right to use goods is distinct and separate from the transfer of goods.
Thus, it has to be held that in a contract for the transfer of the right to use the goods, the taxable event is the execution of the contract for delivery of the goods, and if that has taken place, it was immaterial whether the transfer was exclusively or to the exclusion of all others. In the instant case, the transferee obtained a legal right to use the goods for the period during which he had such legal rights, which had to be to the exclusion of the transferor - the Tribunal has clearly gone wrong in law while dismissing the appeals preferred by the State. The order of the Tribunal impugned before us is set aside.
Case remitted back to the assessing officer to consider the question afresh and pass a speaking order dealing with the contentions of the assessee. The questions of law are answered in favour of the State and against the assessee - revision disposed off.
Seeking adjustment of 25% of the tax confirmed by the second respondent towards pre-deposit - HELD THAT:- The Writ Petition has to fail as no amounts remains for being adjusted towards pre-deposit in the Input Tax Credit of the petitioner.
The Writ Petition fails. However, liberty is given to the petitioner to pay 25% of tax as is contemplated under Section 51 of the TNVAT Act within a period of thirty days from the date of receipt of a copy of this order.
Penalty order - illegal detention of goods - demand of security deposit under Section 47(2) of the KVAT Act - HELD THAT:- From a perusal of clause (h) of Sub-section (1) of Section 67, it would be evident that if the vehicle had been asked to be stopped, but it has not stopped, it would constitute an offence for which twice the amount tax is to be levied as a penalty under Sub-section (2) of Section 67. The Explanation to Sub-section (2) of Section 67 provides the burden of proving that any person is not liable to the penalty under Sub-section (1) shall be on such person.
This Court does not find any ground to interfere with the order insofar as it relates to the imposition of penalty under Subsection (2) of Section 67; however, concerning the demand for a security deposit of Rs. 1,38,352/-, thus no security could have been directed to be deposited by the petitioner inasmuch as the goods were not detained which were required to be released after seizure and therefore, the impugned order directing the petitioner to deposit a security deposit of Rs. 1,38,352/- is set aside. The petitioner has not deposited the penalty amount of Rs. 1,38,352/-; the Department is entitled to recover the said amount along with the applicable interest as arrears.
Violation of principles of natural justice - entitlement to exemptions as per SRO 246 of 1998 dated 20.08.1998 - invocation of suo moto powers of revision under Section 12 of the GST Act, 1962 - HELD THAT:- The court being satisfied that the impugned order has been passed by the respondent in violation of the principle of natural justice, the petitioner having not been heard the petition is required to be allowed on that score alone.
The petitioner has challenged the order of the respondent No. 2, impugned in the present petition, on various other grounds, which also relate to the competency of the said respondent to invoke the revisional powers under the GST Act and the period within which it could be exercised qua the proceedings which came to be initiated against the petitioner - the Court is of the view that as these grounds are required to be decided qua the other facts that have emerged in the proceedings it is in the fitness of things that the petitioner should take all these pleas which he has taken in the present petition and also urged before the court to take the same before the respondent No. 2 who had passed the impugned order.
Validity of assessment order - inspection was contrary to authorization under Section 67(1) of the CGST Act, 2017 or not - HELD THAT:- The petitioner having failed to respond to the notice cannot challenge the impugned order either before the Appellate Commissioner after limitation or before this Court long after the limitation. Before the Appellate Authority the appeal would be time barred and before this Court, the writ petition is liable to be dismissed on account of latches.
The Hon'ble Supreme Court recently in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited [2020 (5) TMI 149 - SUPREME COURT] has held that High Courts cannot entertain writ petition against assessment orders beyond the period of statutory period - As per the decision of the Hon'ble Supreme Court in Glaxo Smith Kline Consumer Health Care Limited case [2020 (5) TMI 149 - SUPREME COURT], a writ petition beyond the statutory period of limitation is liable to be dismissed.
There are no hesitation in taking the view that what this Court cannot do in exercise of its plenary powers under Article 142 of the Constitution, it is unfathomable as to how the High Court can take a different approach - The principle underlying the rejection of such argument by this Court would apply on all fours to the exercise of power by the High Court under Article 226 of the Constitution.
There is no case made out for interfering with the Impugned Assessment Order - petition dismissed.
Quantum of Levy of penalty - Liability of revision petitioner to pay the due tax with penalty - motor spare parts which had been given away by the revision petitioner - HELD THAT:- In view of the legislative change that has taken place by reducing the volume of the penalty and keeping in consideration of the peculiar facts and circumstances of this case, the penalty reduced from 200% to 100%, but this will not create any precedent for any other case, in as much as, no principle laid down to be applied generally.
The revision petitioner is directed to pay the tax and the penalty within a period of two months from today - the revision petition stands disposed of.
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