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VAT / Sales Tax - Case Laws
Showing 221 to 240 of 545 Records
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2023 (8) TMI 7
Classification of goods - toughened glass manufactured and sold by the appellant - to be classified as “glass and glassware” or as an unclassified item subjected to lower tax? - HELD THAT:- The nature and description of articles in Item No. 39 of the Tariff Notification, emphases the kind of goods which are covered and at the same indicate the class of goods which are not covered. In the opinion of this Court, the article manufactured by the appellant-assessee clearly falls within the description of Item No. 39.
In TRUTUF SAFETY GLASS INDUSTRIES VERSUS COMMISSIONER OF SALES TAX, UP [2007 (8) TMI 21 - SUPREME COURT] this Court had observed pertinently in relation to the same legislation held that The High Court proceeded on the basis that while interpreting the words ’glass and glass wares’ in the entry, it should be interpreted as it is understood by the persons dealing in them. It held that the articles manufactured by the assessee cannot be described as glass or glass wares. The view of the High Court would have been correct had the expression "in all forms" not succeeded the expression "glass and glass wares".
The judgment of the High Court, therefore, does not call for interference. The appeals are dismissed.
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2023 (8) TMI 6
Lien on property on account of sales tax dues - dues of a secured debtor rank above the dues of the State Government or not - Seeking initiation of contempt action against the respondents for having committed a breach of the order passed by a Co-ordinate Bench of this Court - HELD THAT:- In so far as the petitioners’ case that a letter dated 16 March 2021 issued by the respondent to petitioner No. 3 would amount to breach of the order dated 10 January 2020 passed by the Division Bench, is totally untenable. This for the reason that such a communication did not in any manner obstruct the sale of the property by the petitioners to realise its dues by exercising its first charge as per the orders dated 10 January 2020 passed by the Division Bench. Secondly, the petitioners in alleging breach have totally overlooked that petitioner No. 3 taking the benefit of the order dated 10 January 2020 had already proceeded to issue an auction proclamation on 11 February 2021 under which petitioner Nos. 1 and 2 had submitted their bids which came to be considered by petitioner No. 3. Petitioner Nos.1 and 2 were declared to be successful bidders by issuance of a communication by petitioner No. 3 titled as “Successful Bid Confirmation Letter”. Thereafter, on 5 March 2020 petitioner Nos. 1 and 2 had made part payment/consideration in purchasing the auctioned property, from petitioner No. 3. All this has happened prior to the respondent issuing letter dated 16 March 2021. Thus, to infer any intentional disobedience to defeat an order dated 10 January 2020, is unacceptable.
It may be observed that once the Court recognizes the first charge of petitioner No. 3 and in pursuance thereto actions were taken by petitioner No. 3 to auction the mortgaged property, it cannot be said that the issuance of the letter / Notice dated 16 March 2021 and 9 April 2021 respectively by the respondents alleged to be issued in breach of the orders, would even remotely amount to any intentional disobedience of the orders passed by this Court.
The Court considering the position in law has held that apart from recognizing the first charge of petitioner No. 3, the charge of the Sales Tax Department on the mortgage property had continued to operate even on transfer of the said property in the hands of petitioner Nos. 1 and 2 as auction purchasers, as it was on the very terms and conditions of “as is where is basis”, “as is what is basis” and “whatever is there is basis”, the petitioner Nos. 1 and 2 had purchased the property.
The present contempt petition appears to be not bonafide and is dismissed.
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2023 (8) TMI 5
Maintainability of petitioner's original appeal - time limitation - appeal was in prescribed format or not - HELD THAT:- The petitioner had instituted the appeal against the common assessment order (CST and VAT) dated 27.04.2017 and 12.07.2017. This was admittedly within the prescribed period of limitation. However, because of the confusion due to the filing of the consolidated appeal, the VAT appeal may not have been in the prescribed format. Therefore, the VAT appeal in the prescribed format was placed on record on 15.04.2019 for the convenience of the appellate authority. Such placement does not amount to originally instituting the appeal. Therefore, the approach of the first appellate authority was rather hyper-technical. The appeal should have been following the law rather than nonsuiting the petitioner based on such technicality.
A valuable right of appeal on merits should not have been denied for such hyper-technical considerations. When technical and substantive concerns are pitted against one another, the latter must prevail over the former. The Administrative Tribunal also failed to appreciate the matter from this perspective, and therefore, these orders warrant interference.
The impugned order set aside - petitioner's appeal restored - appeal disposed off.
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2023 (7) TMI 1234
Goods - Levy of Service Tax or Sales tax - activity of developing and supply of customised software to its clients - Levy of penalty - wilful suppression of facts or not - HELD THAT:- Even a customised software will satisfy the definition of 'goods' for, it is evident that it has the attributes having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of being transmitted, transferred, delivered, stored and possessed. Once the said attributes are seen satisfied in the software in question, then whether the software is treated as customised or non-customised, it would nevertheless be categorised as 'goods' for the purposes of levy of tax - The said view of the Supreme Court has since been followed in later decisions including a recent decision of the Supreme Court in COMMISSIONER OF SERVICE TAX DELHI VERSUS QUICK HEAL TECHNOLOGIES LIMITED [2022 (8) TMI 283 - SUPREME COURT].
Merely because the software developed by the respondent/assessee in the instant case was customised for a particular user and was not sold to other users, the charges collected from the customer cannot escape the levy of sales tax under the KGST Act. This is more so because the mere fact that it was customised for a particular user did not lead to the software ceasing to be goods for the purposes of levy of sales tax.
Issue in favour of the assessee and against the Revenue.
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2023 (7) TMI 1233
Validity of Best Judgement Assessment - fixation of rate of Gross Profit - 70% or 80% of cost of goods sold (COGS) - invocation of provisions under Section 41(1) of the Kerala General Sales Tax Act, 1963 - HELD THAT:- In the instant case, the Appellate Tribunal found that the assessee was given the opportunity, both at the time of issuance of notice for the production of the books of accounts as well as at the time of issuance of proposal notice, to produce the books of accounts. However, the assessee did not avail of those opportunities. The Appellate Tribunal noticed that no audited statements in Form 50A and 50B were produced before the first appellate authority and no such audited statements were produced before the Tribunal as well. After considering the rival contentions, the Appellate Tribunal, by the order dated 03.11.2022, dismissed the appeals filed by the assessee.
In the instant case, in Annexure-A assessment orders for the year 2017-18 and 2018-19, the assessing authority fixed gross profit at the rate of 80%, to complete the assessment for those years on the basis of ‘best judgment assessment’. In Annexure-C orders for the year 2017-18 and 2018-19, the first appellate authority modified Annexure-A assessment orders by adopting a gross profit of 70% of the cost of the goods sold for those assessment years, considering the fact that the assessee is conducting business at a distance of 8 kilometres from the town. It is an admitted fact that, for the years 2015-16 and 2016-17, the assessing authority adopted a gross profit of 65% of the cost of the goods sold, while completing the assessment of the assessee for those years on the basis of ‘best judgment assessment’, in the assessment orders dated 11.03.2020 and 16.03.2020.
In best judgment assessment there is always a certain degree of guesswork and it is the assessee himself who is to blame, as he did not submit proper accounts. In the facts and circumstances of the case on hand, it cannot be said that the estimation of gross profit by the assessing authority at 70% of the cost of the goods sold for those assessment years is not bona fide or without a rational basis.
There are no reason to interfere with the orders of the authorities below, which are impugned in these S.T. Revisions - Revision dismissed.
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2023 (7) TMI 1170
Principles of natural justice - No personal hearing was afforded to the Petitioner before passing the impugned assessment order - Amendment made to Entries 1 and 2 of Second Schedule to the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The Petitioner was not granted any opportunity to put forth their submission on merits. It was submitted that under similar circumstances, this Court was pleased to direct the Assessing Officer to revoke the assessment after granting an opportunity to the Petitioner to put forth their submission on merits.
The impugned assessment order, dated 12.09.2022 passed by the Respondent are hereby quashed and the matters are remanded back to the Respondent for fresh consideration. The Respondent shall pass final orders in accordance with law after granting reasonable opportunity of personal hearing to the Petitioner - Petition disposed off.
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2023 (7) TMI 1060
Revision of remand assessment order - vires of Section 174 (2) (3) of Haryana Goods and Services Tax Act, 2017 - effective and alternative remedy of filing reply not effected - opportunity to file appeal against the order passed by the revisional authority before the appropriate forum not provided - HELD THAT:- It is very much explicit that the High Court can entertain a writ petition even though the alternative remedy has not been availed if there is pure question of law and the matter can be decided without going into disputed questions of fact, if the proceedings initiated by the assessing authority/any other revenue authority are without jurisdiction or, if there is violation of principles of natural justice or if the writ petitioner seeks enforcement of any fundamental right. The main thrust of argument raised by the petitioner for assailing the impugned show cause notice is that it was illegal and without jurisdiction and was liable to be quashed as it was issued in violation of Section 29 (2) (e) of the HVAT Act by respondent No.2 who would require it to produce documents and books of accounts pertaining to the A.Y. 2011-12 while conducting proceedings on this notice though the petitioner was not required to maintain and preserve such documents and books of account beyond a period of eight years from close of relevant assessment year. The argument so raised by the petitioner appears to be attractive but on a careful perusal of the record, the same lacks any merit.
When the respondent No.2 in the impugned notice has not sought production of the account books for the relevant assessment year and when the respondents have rather clarified that they would not be needing production of the same at the stage of determining the impugned show cause notice, the impugned notice could not be stated to be illegal or without jurisdiction merely because it was issued after expiry of period of eight years from the closing of A.Y. 2011-12.
In the present set of circumstances, any finding by this Court at this stage is likely to be prejudicial to the interest of either of the parties to this petition. The issues raised in the show cause notice are required to be determined by the respondent No.2 at the first instance. The matter has to be determined in the light of the submissions that may be advanced by the petitioner as well as the revenue in course of such determination. The question as to whether the assessment order is liable to be revised is yet to be determined by the revisional authority. In such circumstances, the writ petition does not deserve to be allowed. Consequently, without expressing any opinion on the merit of the issues raised in the course of the arguments, this petition is dismissed but the petitioner is allowed, a further period of 30 days from today to file reply to the impugned show cause notice and to participate in the proceedings.
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2023 (7) TMI 1013
Levy falling upon the trade mark or brand name owner in the case of first sale of any product by such brand name holder or owner - Sale of Plastic moulded furniture - First point sale or not - further sale denied to fall within the mischief of Section 5(2) of the Kerala General Sales Tax Act (KGST Act) - holding brand names by two different licensing arrangements - HELD THAT:- In the present case, it is evident that both Kaveri and the assessee are authorized to use the trade mark and brand “Nilkamal” through separate arrangements. It appears that despite this fact, the present assessee is not engaged in manufacture of the goods in Kerala but is only selling them in that State. On the other hand Kaveri appears to be a manufacturer / dealer whose entire produce is sold to the assessee. In view of the categorical ruling of this Court in “Kail” there can be doubt that the sale to the assessee by Kaveri cannot be ignored by any stretch of the imagination - not in the least because Kaveri was an exempted unit at the relevant time. The fact that an exemption prevailed and enured in favour of a unit does not in any way detract from the circumstance that the levy subsists. This fundamental aspect appears to have been completely ignored by the High Court when it ruled that such sale had to be ignored altogether.
The High Court, therefore, acted clearly in error in reversing the findings of Tribunal - the impugned judgment and order is hereby set aside; the appeals are allowed.
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2023 (7) TMI 1012
Method of calculation or the method of determining the exemption limits under the scheme, extended by the State, to multiplexes, who had put up capital infrastructure - Denial of extension of New Package Scheme of Incentives for Tourism Projects - invocation of doctrine of promissory estoppel - HELD THAT:- It is evident from the terms of the Scheme and the exemption notification which gave effect to it, fixed to limits i.e. (1) a time limit and (2) quantification of the exemption. The latter could be subject to the first i.e., in the event, the amount reached the exemption limit were achieved, before the expiry of the period in question (5-10 years), no further exemption could be claimed. The state, however, omitted to provide any mechanism to determine how the exemption limits could be worked out for the purpose of notional calculation of the quantified limit. This meant that a reasonable workable method of calculation had to be applied.
The state’s contention is founded on the assumption that the amount collected during the exemption period by the multiplex owners, also included in element of tax. This assumption, in the opinion of this court is flawed because there could have been no collection which amounted to tax. Furthermore, multiplex/theatre-owners were under an obligation to file monthly returns in terms of the enactment. This would have taken care of any allegation of abuse. The state’s additional argument was that since the element of tax was notionally included in the collections – by multiplexes, -during the exempted period, a further amount equivalent to the tax collectable had to be added.
As the High Court concluded- and in the opinion of this Court correctly so, this contention was bereft of any logic and was plainly unreasonable. There is concededly, a gap in the manner how tax exemption limits can be discerned. Undoubtedly, the law is now settled that exemption notifications have to be interpreted strictly, and against assesses in case of ambiguity.
A reasonable method of calculating benefit of tax exemption, for the purpose of considering (whether the 100% limit equivalent to capital expenditure) was reached or not is to notionally determine the tax amounts payable during the relevant period, when the multiplexes enjoyed tax exemption. This is possible, having regard to the returns filed by them during the time when they sought and were granted exemption. The outer limit (100% investment) is a discernible amount, which the units would be able to furnish, with appropriate proof in their books of accounts, and valuations furnished by them. Clearly enunciating this principle and applying to the facts of this case, High Court has followed a reasonable method which cannot, in this court’s opinion, be faulted.
This court holds that there is no merit in this appeal - Appeal dismissed.
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2023 (7) TMI 942
Levy of tax - chemicals used as consumables in the process of job work of dyeing of fabric - tax is levied irrespective of the fact whether property in goods had been transferred or not - HELD THAT:- Matters remanded to the Assessing Officer to consider the case of the assessees as well as of the Appellants herein and to pass fresh orders in terms of the directions issued by the High Court in M/S A.P. PROCESSORS, PLOT NO. 103, SECTOR-24, FARIDABAD THROUGH ITS PARTNER SH. ARVIND JAIN VERSUS STATE OF HARYANA THROUGH PRINCIPAL SECRETARY TO GOVERNMENT OF HARYANA, EXCISE AND TAXATION DEPARTMENT, CIVIL SECRETARIAT, CHANDIGARH [2018 (5) TMI 1797 - PUNJAB AND HARYANA HIGH COURT] where it was held that In the present case, it would be essential to determine the value of consumables transferred in the goods on which tax is leviable. While determining the actual loss of chemicals, dyes and colours where the fabric or textile undergoes various processes depends upon factual aspect which can be considered only by the Assessing Officer where parties can produce evidence in respect of their respective claims/contentions.
There are no reason to interfere with the impugned orders - appeal dismissed.
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2023 (7) TMI 941
Requirement of adjusting the pending dues from the amount of refund due to a tax payer - date when the amount of refund is payable for the purposes of Section 42 of the DVAT Act - HELD THAT:- The language of Section 38(2) of the DVAT Act indicates the scheme of application of an amount refundable to a person towards the outstanding dues. It requires the Commissioner to apply the excess amount due to a taxpayer towards recovery of any other amount due under the DVAT Act or under the CST Act. Clearly, if there is a crystalized demand, which is due and payable by any taxpayer, the Commissioner is required to first apply the amount refundable for satisfaction of that liability. If any amount remains after the discharge of such dues, the same is required to be refunded within the stipulated period - It is apparent that the use of the words “any other amount due” in Section 38(2) of the DVAT Act refers to the amount due and outstanding at the material time, which is other than that covered under the assessment or quantification resulting in the claim for the refund either made separately or as reflected in the return furnished by the taxpayer.
The taxpayer’s remedies and claim in respect of any amount correctly applied in terms of Section 38(2) of the DVAT Act – that is against other amounts due outside the rubric of the return furnished or its claim for the refund – would follow a different trajectory.
If the refund claimed by the taxpayer in his return is not paid on account of the assessment and reassessment framed under Sections 32 or 33 of the DVAT Act for the same tax period and the petitioner is successful in upsetting the same either pursuant to the objections filed under Section 74 of the DVAT Act, or in an appeal filed before the Appellate Authority under Section 76 of the DVAT Act, the self-assessment (return furnished) would stand confirmed and the assessee’s claim would be required to be processed. This is so because, if the petitioner prevails in its objections under Section 74 of the DVAT Act, or appeals under Section 76 of the DVAT Act, that would amount to vindicating its stand that the assessments framed are erroneous and the refund claimed under the return should have rightly been paid within the time as stipulated under Section 38(3)(a) of the DVAT Act. Even in cases where the assessments are reviewed under Section 74B of the DVAT Act and as a consequence, the refund as reflected in the return is required to be made, the refund would be traceable to the return furnished by the taxpayer.
The doctrine of Harmonious Construction requires that provisions of a statute not be read in isolation but in conformity with the scheme of the statute so as to avoid any conflict with the other provisions. This interpretation of Sub-rule (2) and Subrule (4) of Rule 34 of the DVAT Rules is consistent with the said doctrine.
Entitlement to Interest on delayed refunds - relevant time for calculation of interest - Interest on the refund is required to be reckoned with reference to the date of filing its revised return, or not - HELD THAT:- In terms of Section 42(1) of the DVAT Act, a person is entitled to interest from the date that the refund was due to be paid or the date when the amount was over paid by the person, whichever is later - In the present case, undisputedly, the date on which the refund was due was later. According to the Revenue, the return furnished by a taxpayer, would stand superseded by the subsequent assessments under Sections 32 or 33 of the DVAT Act and, if no refund is due in terms of such assessments, the refund would be payable only after the taxpayer has succeeded in its challenge for setting aside or modifying the assessments framed under Sections 32 and 33 of the DVAT Act.
It is contended that if the taxpayer secures the orders for setting aside or modifying the said assessments, the refund would be payable as a consequence of such orders - This aforesaid contention is unmerited. Once the taxpayer has succeeded in upsetting the assessments framed under Sections 32 or 33 of the DVAT Act, which results in vindicating its claim for refund either in part or as a whole, as claimed by furnishing a return, interest under Section 42(1)(a) of the DVAT Act would be payable from such date as the refund was due to be paid to the taxpayer. The expression, “the date that refund was due to be paid” must be construed as the date when such a refund ought to have been paid to the taxpayer. If the taxpayer succeeds in vindicating its stand that its claim for the refund was correct and that the subsequent assessments framed by the concerned authorities for the same tax period were erroneous or unjustified; it would follow that the taxpayer should have been refunded the amount claimed and that interest would be payable from the said date.
In the present case, the petitioner had filed its revised return for the fourth quarter of the Financial Year 2013-14 on 31.03.2015. However, prior to that (on 15.05.2014 and 07.06.2014) default assessments under Section 32 and 33 of the DVAT Act were framed for various tax periods falling within the Financial Year 2012-13. The said default assessments were framed on 15.05.2014 and 07.06.2014. The petitioner had not filed any objections to the said assessments at the material time. In terms of Section 35 of the DVAT Act, the demands that were assessed in respect of the tax periods in the Financial Year 2012-13 were payable and outstanding. However, the refund due to the petitioner was not applied towards the dues pertaining to the amounts due against demands raised in respect of the tax periods in the Financial Year 2012-13, at the material time. Thus, the same were required to be disbursed.
Insofar as the demands for assessments for the Financial Year 2013-14 are concerned, the assessments under Sections 32 and 33 of the DVAT Act were framed subsequent to the last date of processing the petitioner’s claim for refund and the refund could not have been withheld at the material time.
There is no dispute that the petitioner’s refund was required to be paid within a period of two months from the date of filing the revised return. The respondent had clearly failed to act in accordance with Section 38 of the DVAT Act as it had not processed the petitioner’s claim within the stipulated period of two months - withholding of the amount due to the petitioner was in breach of Section 38 of the DVAT Act. Thus, interest would be payable to the petitioner on the said amount from 01.06.2015, as claimed.
Whilst the Department has processed the petitioner’s claim for the refund of ₹44,14,979/-. The Department has withheld a sum of ₹10,43,918/- [₹6,50,434/- as tax and interest and ₹3,93,484/- on account of penalty] for the tax period covered under the Financial Year 2013- 14. The demand for the same was raised on 04.09.2018. However, the said amount is not recoverable as the petitioner had filed its objections against the said demands on 02.11.2018. It is impermissible to withhold refund towards demands which are not recoverable - it is considered apposite to direct the concerned authority to refund the remaining withheld amount of amount ₹10,43,918/- along with interest with effect from 01.06.2015 and recompute the interest for the amount of ₹44,14,979/- as refunded in terms of the order dated 01.02.2023 and refund the interest due after adjusting the amount of ₹7,983/- already disbursed.
Petition allowed.
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2023 (7) TMI 940
Violation of Natural Justice - no personal hearing afforded to the Petitioner before passing the impugned assessment order - Validity of G.O.Ms.No.47/27.03.2012 with effect from 01.04.2012 - amendment made to Entries 1 and 2 of Second Schedule to the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The Petitioner was not granted any opportunity to put forth their submission on merits. It was submitted that under similar circumstances, this Court was pleased to direct the Assessing Officer to revoke the assessment after granting an opportunity to the Petitioner to put forth their submission on merits.
The impugned assessment order, dated 03.06.2022 passed by the Respondent are hereby quashed and the matters are remanded back to the Respondent for fresh consideration - Petition allowed by way of remand.
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2023 (7) TMI 879
Invocation of revisional jurisdiction of this Court under Section 48(1) of the VAT Act, 2005 - mistake or error apparent in the order sought to be rectified or not - rate of tax on charger - HELD THAT:- The clear mandate of law, thus, is that this Court can exercise revisional jurisdiction under Section 48 of the Act only against the orders passed by Tax Tribunal either under Section 45(2) or Section 46(3) of the VAT Act. Such jurisdiction can be exercised if the person aggrieved applies to this Court within 90 days of the communication of the order and also if the involvement of any question of law arising out of erroneous decision of law or failure to decide a question of law is found to exist.
The impugned order passed by the Tax Tribunal in Rectification Application filed by the petitioners under Section 47 of the VAT Act is not open to challenge by the petitioners before this Court under Section 48 of the VAT Act. Petitioners can also not be allowed to assail the order dated 19.06.2017, passed by the Tax Tribunal being clearly beyond the period of limitation, as prescribed under Section 48 of the Act.
The order passed by the learned Tribunal on 19.6.2017 is neither erroneous nor does it amount to non decision of question of law. Since, no question of law has arisen for consideration before this Court, the petition fails and is dismissed.
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2023 (7) TMI 711
Default assessment of tax framed by the Assessing Authority - rejection of refund claim in respect of input tax credit (ITC) - rejection on the ground that the appellant had failed to establish the genuineness of the ITC on the basis of any documentary evidence - HELD THAT:- It is apparent from the orders passed by the Assessing Authority, the learned OHA, and the learned Tribunal that the assessee’s challenge to the default assessment was rejected as the appellant had failed to produce any material to establish payment of ITC. This is clearly a question of fact and therefore not amenable to review in these proceedings. It is also material to mention that there is no dispute that the appellant had not produced relevant material before the Assessing Authority or the learned OHA or the learned Tribunal.
Learned counsel for the appellant submits that the appellant was not required to produce any such material as the ITC could be verified from the returns and the forms filed online including the returns filed by the dealers from whom the appellant had purchased goods - the said contention is unsubstantial.
The Assessing Authority is duly empowered to call for the records and to verify the ITC as claimed. The onus to establish the genuineness of the ITC rests with the assessee.
It would not be open for the appellant now to raise any new challenge to the order passed by the Assessing Authority including on the ground that it had not been signed. This question does not arise from the impugned order passed by the Tribunal. The appellant has all along proceeded on the basis that the said order was passed by the Assessing Authority and had assailed the same on merits, which was considered by the OHA and by the learned Tribunal - It is well-settled that in case mala fides are alleged, the same has to be specifically pleaded with full particulars. The scope of the appeal, in the present case, is limited to examining the substantial questions of law that arise in the matter.
There are no grounds to entertain the present appeal - appeal dismissed.
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2023 (7) TMI 630
Classification of goods - 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel - whether ATS falls within the scope of Entry Serial No. 29 of Part-II of Schedule-B so as to attract levy of value added tax @4% [prior to 01.04.2012] and @5% [with effect from 01.04.2012] or subject to tax @13.5% as per entry in Part-III of Schedule-B appended to the Odisha Value Added Tax Act, 2004?
HELD THAT:- Considering the instant case etched on various tests and well-accepted tenets, ATS answers that it is accessory to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The document like expert opinion supported by Affidavit furnished by the petitioner remained undisputed by the opponent-State of Odisha. This Court is of the firm view that the contention of the petitioner deserves seal of approval.
In the present case, the authorities below never examined the pertinent issue as to the identity of the commodity— ATS with reference to Entry 29 of Part-II of Schedule-B. The Assessing Authority mechanically discarded the explanation rendered by the petitioner and shifted the onus on the dealer.
For ascertaining the true nature of ATS, the petitioner has brought on record the expert opinion and this Court on visiting web portal of manufacturers of such commodities found that in trade parlance ATS is treated as accessories to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The explanation of the petitioner being in consonance with the well-settled tests and guidelines propounded by the Courts, the suggestion of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Service Tax Organisation for sending the matter back to the Assessing Authority for fresh adjudication by giving scope for enquiry/investigation is rejected. What is emanating from the Order-in-Second Appeal of the learned Sales Tax Tribunal is that no enquiry as to identity of commodity vis-à-vis entry in Serial No. 29 of Part-II of Schedule-B was conducted by neither the Sales Tax Officer (Audit) nor the Assessing Authority. Legal position is well-established in HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1996 (12) TMI 49 - SUPREME COURT] ratio of which is this, that the onus of establishing that a product falls within a particular item is on the Revenue.
This Court does not find force in the argument of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Services Tax Organisation, more so when the Revenue has not chosen to file any objection to the Expert Opinion supported by Affidavit sworn to by Managing Partner of the petitioner-firm. This Court, hence, feels it expedient to show indulgence in the Order-in-Second Appeal of the learned Odisha Sales Tax Tribunal in exercise of power of revision under Section 80 of the OVAT Act.
By reversing the conclusion arrived at by the Appellate Authority, the learned Odisha Sales Tax Tribunal essentially held that the commodity in question, i.e., ATS, falls within the scope of entry in Part-III of Schedule-B. Before holding the commodity to fall in residuary entry, the learned Tribunal as also the Assessing Authority failed to bear in mind the enunciation in the matters of BHARAT FORGE & PRESS INDUSTRIES (P) LTD. VERSUS COLLECTOR OF C. EX. [1990 (1) TMI 70 - SUPREME COURT]; INDIAN METALS & FERRO ALLOYS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1990 (11) TMI 143 - SUPREME COURT]; SPEEDWAY RUBBER CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [2002 (5) TMI 51 - SUPREME COURT]; CC. (GENERAL), NEW DELHI VERSUS GUJARAT PERSTORP ELECTRONICS LTD. [2005 (8) TMI 657 - SUPREME COURT]; COMMISSIONER OF C. EX., MEERUT VERSUS MAHARSHI AYURVEDA CORPN. LTD. [2005 (12) TMI 93 - SUPREME COURT], conspectus of which leads to show that only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item.
This Court has no hesitation to hold that the commodities, i.e., 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel is comprehended in the term “accessories” as per entry in Serial No. 29 of Part-II of Schedule-B appended to the OVAT Act, which attracts rate of tax @ 4% for the tax periods prior to 01.04.2012 and @5% for the tax periods commencing from 01.04.2012 pertaining to the periods of assessment - the question of law as framed by this Court which fell for consideration is answered in the negative, i.e., in favour of the petitioner-assessee and against the Revenue.
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2023 (7) TMI 629
Valuation - Inclusion of Mandi Fees/ Mandi Shulk into the Sale Price for calculation of VAT - Mandi Fees charged by the Mandi could be treated as a part of sale price under Section 2(42) of the Uttarakhand Value Added Tax Act or not - Section 17(iii)(b) of the Adhiniyam - HELD THAT:- There can be no doubt that the Supreme Court in M/s Anand Swarup Mahesh Kumar [1980 (9) TMI 238 - SUPREME COURT] drew a distinction between the levy of tax/ duty, which the dealer/ seller can statutorily pass on to the purchaser, and the levy of tax/ duty, which the dealer or seller is not statutorily entitled to pass on to the purchaser (though he may pass it on to the purchaser), and concluded that the levy of tax which can statutorily be passed on to the purchaser, cannot form part of the ‘purchase price’, within the definition of that expression found in Section 2(gg) of the U.P. Sales Tax Act. However, that is not the issue before us. The real issue is whether, the Mandi Shulk, which the dealer is entitled to statutorily recover from the purchaser, falls within the definition of expression ‘sale price’ contained in Section 2(42) of the Uttarakhand VAT Act, or not.
The expression ‘sale price’ defined in Section 2(42) of the Uttarakhand VAT Act is a very widely defined expression, which means the amount of valuable consideration received or receivable by a dealer for sale of any goods, and shall include any sum charged for anything done by the dealer in respect of goods at the time or before the deliver thereof, excise duty, special excise duty or ‘any other duty or tax’. The expression ‘any other duty or tax’, is clearly broad enough to include the Mandi Shulk, which is nothing but a duty which the dealer is statutorily entitled to recover from the purchaser. Merely because it is statutorily recoverable by the dealer from the purchaser, it does not cease to be ‘any other duty’ within the meaning of ‘sale price’ defined in Section 2(42) of the Uttarakhand VAT Act.
Thus, Mandi Shulk levied under Section 17(iii)(b) of the Adhiniyam would fall within the definition of the expression ‘sale price’, as defined in Section 2(42) of the Uttarakhand VAT Act, and would be treated as a part of sale price of the goods.
The decision of the learned Single Judge of this Court in M/s Ashok Kumar [2010 (9) TMI 1290 - UTTARAKHAND HIGH COURT], lays down the correct position in law. The learned Single Judge, while deciding M/s Ashok Kumar [2010 (9) TMI 1290 - UTTARAKHAND HIGH COURT] has appreciated the difference in the definitions of ‘purchase price’ and ‘sale price’ as defined in the U.P. Sales Tax Act, 1948 and the Uttarakhand VAT Act respectively.
There are no reason to interfere with the impugned judgment dated 30.10.2021, rendered by the Commercial Tax Tribunal, Uttarakhand, Haldwani Bench - revision dismissed.
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2023 (7) TMI 535
Recovery of sales tax dues - encumbered property or not - liability of auction purchasers - liability of petitioners nos. 1 and 2 who are auction purchasers in a securitization auction held by petitioner no. 3, to discharge the sales tax dues, for the recovery of which, the property as purchased by them, was attached by the Sales Tax Department prior to the auction.
Whether the Sales Tax Department is correct in asserting that it has a charge on the property in question as purchased by petitioner Nos. 1 and 2 from petitioner No. 3? - HELD THAT:- Section 37 of the MVAT Act clearly provides that for the liability under the MVAT Act, to be the first charge, is itself, subject to any provision regarding creation of first charge in any Central Act for the time being in force. This pre-supposes that when under a Central enactment there is a provision creating first charge, then in such case, the Sales Tax Department for the purpose of Section 37 shall not have the first charge - Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967 provides for the manner of attachment of immovable property which provides that the order shall take effect as against purchasers for value in good faith and against all other transferees from the defaulter from the date the said order is made as provided in sub-rule (3).
On a perusal of the order of attachment of the said property dated 11 August, 2017, it is seen that the attachment is made in pursuance of the demand notice issued under Section 178 read with Section 267 of the Maharashtra Land Revenue Code, 1966 read with Section 34 of the MVAT Act and referring to Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967.
The attachment is for recovery of an amount of Rs. 10,31,38,003/- being the sales tax dues payable by the dealers/borrowers – M/s. Taurus Autodeal Pvt. Ltd.. The attachment notice was never challenged by the said dealers and its directors. For such reason in the hands of petitioner no. 3, the property stood as a property as attached by the Sales tax department, however, subject to the first charge of petitioner no. 3 to realise its dues as a secured creditor - The grievance of petitioner no. 3 in the said writ petition was to the effect that the Deputy Commissioner was legally not correct to assert that petitioner no. 3 did not have the first charge on the property, while claiming unpaid sales tax dues of the dealer, in asserting that there was a charge on the said property.
It is crystal clear that there is nothing in the sale certificate to indicate that petitioner Nos. 1 and 2 have purchased the said property from petitioner No. 3 free from encumbrances, which is a specific requirement of “Appendix V” as extracted above. In fact, it is definite from what has been observed by us above that petitioner No. 3 had taken all the precautions to secure its own interest, to recover the amounts payable by the borrowers, by sale / auction of the said property, hence, certainly petitioner Nos. 1 and 2 have not purchased the said property free from any charge or encumbrance of the Sales tax department.
Thus, it is more than clear that at all material times, that is with effect from 11 August, 2017, there was a charge and/or an encumbrance on the property of the Sales Tax Department and further petitioner nos. 1 and 2 had purchased the property along with such charge/ encumbrance. The word ‘encumbrance’ would mean a burden or charge upon property or a claim or lien upon an estate or on the land. It also means a burden of legal liability on property. When there is an encumbrance on a land, it constitutes burden on the title which diminishes the value of the land.
It may be observed that once the question arises as to whether there is a charge on a property and in the present case a charge which has arisen by operation of law, Section 100 of the Transfer of Property Act, 1882 would become relevant in the context of the legal status of such property - Applying Section 100 of the TP Act to the facts of the present case, legal consequences emanate, firstly that by operation of the provisions of Section 37 of the MVAT Act there was undoubtedly a charge on the said property, when the property stood in the hands of petitioner No. 3 being the secured creditor. The charge of petitioner no. 3 as the secured creditor was the first charge and not that of the Sales Tax Department, as held by the Division Bench, interpreting Section 37 of the MVAT Act, in the order dated 10 January 2020 passed on the writ petition filed by respondent no. 3.
The Full Bench considering the provisions of Rule 8 of the Security Interest (Enforcement) Rules, 2002 read with the provisions of Section 13(4) of the SARFAESI Act and the decision of the Supreme Court in AI CHAMPDANY INDUSTRIES LIMITED VERSUS THE OFFICIAL LIQUIDATOR & ANR. [2009 (2) TMI 921 - SUPREME COURT], held that in terms of the provisions of the SARFAESI Act read with 2011 Rules, the secured creditor is expected to know the encumbrances. It was observed that once a statutory mechanism noting the encumbrances in respect of the immovable property being put up for sale by auction not being available before 24 January 2020, the authorized officers were found to play it safe by inserting the “as is where is, whatever there is basis” clause in the sale advertisement. The Court observed that once such clause is inserted in the advertisement and the prospective purchaser, upon bidding in the auction emerges as the highest bidder, normally such purchaser cannot insist upon issuance of sale certificate without clearing the liability of meeting other dues in relation to such property, and this is because he participates in the auction and bids, with his eyes open, that the sale would be on “as is where is, whatever there is basis”, and that the prospective purchaser cannot wriggle out of the consequences and claim that the other dues are not payable by him, if he cannot disprove constructive notice of the charge created on the property put up for auction sale.
Analyzing the provisions of the SARFAESI Act as also the MVAT Act, the Full Bench has held that the attachment orders issued post 24 January 2020 if not filed with the Central Registry, any department of the Government to whom a person owes money on account of unpaid tax has to wait till the secured creditor by sale of the immovable property being the secured asset mops up its secured dues. Insofar as the attachment orders which were issued prior to coming into force the 2011 Rules as amended, the Court observed that insofar as recovery as initiated under the MLRC is concerned, not only the provisions contained therein but also the provisions contained in the 1967 Rules were required to be complied with, and the proclamation has to be made in the required form and must be as specified in the 1967 Rules.
Thus, this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos. 1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No. 3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same.
Petition dismissed.
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2023 (7) TMI 472
Amnesty Scheme - Substantial amount paid prior to announcement of the amnesty scheme and even prior to assessment order passed by the Assessing Officer (change to Vera Samadhan Yojana - 2019) - HELD THAT:- It would emerge from the record that at the time of spot inspection and assessment at the place of the petitioner, the petitioner deposited an amount of Rs. 48,75,000/- on 01.07.2015 towards the amount of tax, however while passing assessment order, the concerned Assessing Officer had not taken into consideration the said amount and thereby held that the petitioner is liable to pay total amount of Rs. 77,77,575/- (including tax of Rs. 38,03,216/- + penalty and interest). Thus prima facie from the record, it is clear that the concerned Assessing Officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner. The petitioner, therefore, filed first appeal before the appellate authority.
In the memo of appeal, the petitioner has specifically taken contention in Paragraph No. 9 that while passing an order of assessment on 29.06.2015, the concerned officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner and, therefore, he has wrongly calculated the amount of interest and penalty, which is not permissible - It is further reflected from the record that separate application for stay was also filed by the petitioner before the appellate authority and the appellate authority has considered the amount of Rs. 48,75,000/- paid by way of tax by the petitioner to the concerned respondent authority and, therefore, the appellant authority has granted stay on 25.05.2017 in favour of the petitioner against the recovery.
It is also pertinent to note that against the aforesaid order passed by this Court, the State preferred SLP in STATE OF GUJARAT AND ANR. VERSUS SAFAL DEVELOPERS AND ANR. [2016 (10) TMI 1383 - SC ORDER] before the Hon’ble Supreme Court and the Hon’ble Supreme Court has dismissed the SLP preferred by the State and thereby the Hon’ble Supreme Court has not interfered with the order passed by this Court in the aforesaid case.
The respondents have committed an error while rejecting the application submitted by the petitioner under the amnesty scheme as the petitioner had already paid an amount of Rs. 48,75,000/- even prior to the order of assessment was passed by the concerned Assessing Officer and prior to announcement of the scheme - the petitioner is entitled to get the benefit of the scheme and remission of penalty and interest.
The impugned communication dated 11.05.2022 at Annexure-A as well as the attachment order dated 20.06.2022 at Annexure-K are hereby quashed and set aside. The respondent no. 3 herein is hereby directed to grant benefit of the amnesty scheme to the petitioner - Petition allowed.
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2023 (7) TMI 422
Stay of demand / Waiver of pre-deposit - Revision of assessment order - Direction to petitioner to pay further 25% of the disputed tax in addition to the amount already paid by the petitioner at the time of filing the appeal - HELD THAT:- At the time of filing the appeal itself, the petitioner has paid 25% of the disputed tax. By way of this impugned order, the first respondent insisted the petitioner to pay further 25% of the disputed tax. The appeal was filed in the year 2019 and it is yet to be disposed for want of written submission from the third respondent.
The impugned order of the first respondent is set aside, with a direction to the first respondent to dispose of the appeal within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.
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2023 (7) TMI 385
Taxability - Maize Flakes, Malted Barley, Malt conversion and Malt extract are taxable under KTEG Act or not - imposition of interest and penalty for the period prior to the decision in United Breweries [2015 (9) TMI 1516 - KARNATAKA HIGH COURT] - HELD THAT:- Admittedly, the decision in United Breweries is rendered on September 14, 2015. Hence, Maize Flakes, Malted Barley, Malt conversion and Malt extract became taxable pursuant to the decision in United Breweries. Assessee was paying tax on hops pallets prior to the said decision.
In Jayce Trading Corporation [2021 (3) TMI 956 - KARNATAKA HIGH COURT], the assessee therein had paid taxes for period between 03.03.2010 and 31.03.2011 prior to the date on which the Commissioner had clarified the issue on 07.07.2014. In the case on hand, the basis to impose tax is the decision in United Breweries which has been rendered on 15.09.2015. Therefore, imposition of tax prior to the decision in United Breweries is not sustainable. For the same reason, interest and penalty are also not sustainable.
The aspect of ‘fit for consumption’ has been considered by this Court in United Breweries. Therefore, this contention is untenable and accordingly, rejected.
Revision petition allowed.
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