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VAT / Sales Tax - Case Laws
Showing 441 to 460 of 545 Records
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2023 (2) TMI 1231
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - whether attracts tax at the same rate as applicable to "mobile phone" only and it cannot be taxed at higher rate separately? - HELD THAT:- This Court has considered the above question in STRP No.8/2022 & connected matters [2023 (2) TMI 1228 - KARNATAKA HIGH COURT] and answered the question in favour of the assessee and against the Revenue holding that definition contained in the Notification issued under the KVAT Act includes the ‘Charger’ which is sold along with the mobile phone in one set and accordingly taxable at 5%.
Revision dismissed.
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2023 (2) TMI 1228
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - taxable at the same rate as applicable to mobile phone only or taxed at higher rate as unscheduled goods under Section 4(1) (b) (iii) of the Act? - HELD THAT:- The issue involved in Nokia India Case [2014 (12) TMI 836 - SUPREME COURT] was whether mobile charger should be excluded from the entry of concessional rate of tax which applies to cellphones under the Entry 60(6)(g) of Schedule B of the Punjab VAT Act where it was held that the battery charger cannot be held to be a composite part of the cellphone but is an independent product which can be sold separately without selling the cellphone. The High Court failed to appreciate the aforesaid fact and wrongly held that the battery charger is part of the cellphone.
It is relevant to note that the decision in Nokia India Case is based on Entry 60(6)(g) of the Schedule B of the Punjab VAT Act. In the said Entry only cellular phone is defined and accessories are not included. The Hon'ble Supreme Court of India has upheld Revenue's contention in that case because Entry 60(6)(g) of Schedule B of the Punjab VAT Act does not mention accessories for the purpose of taxing the items/product at 4%.
Entry 53 of Schedule III of the KVAT Act read with the Notification No. FD 43 CSL 07(02) dated April 4, 2007 issued by the State Government - HELD THAT:- In Entry No. 60(6)(g) of the Punjab VAT Act, the expression used is 'cellular telephone' whereas in the Notification issued under KVAT Act, the words used are 'and parts thereof'. Further, the parts falling under Heading 8843, 8825, 8527 or 8528 have been specifically excluded. It is relevant to notice that, battery charger which falls under Entry 8504 40 30 under the CET Act and CT Act, has not been excluded. This makes it clear that charger is a composite part in the package. Thus, the intention of the Revenue is unambiguous that the Notification was applicable for telephone sets and parts thereof which includes charger. Therefore, the Entries in Punjab VAT Act and the KVAT Act are different and the Entry under the Punjab VAT Act is limited only to cellular telephones in contradistinction to the Notification under KVAT Act - 'telephone sets' can be considered as 'goods put up in sets for retail sale' under Rule 3(b) of the GRI.
A bare perusal of the Section 4 (charging section) of KVAT Act and Rule 3 (computation provision) of KVAT Rules would clearly indicate that there is no prescribed mechanism provided for determining the value of individual goods in a composite transaction. Thus, in the absence of a valuation mechanism, tax cannot be levied differently on each of the component by separating a single composite package - the definition contained in the Notification issued under the KVAT Act includes the charger which is sold along with the mobile phone in one set and accordingly taxable at 5%.
These revision petitions are dismissed.
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2023 (2) TMI 1214
Interpretation of SRO 1727/1993 which is an exemption notification issued by the State of Kerala - entitlement to exemption.
The Revenue contends that the exemption limit by five years in point of time was to commence from the date of approval by the Central Government, to the approval to the project - The assessees had on the other hand contended that the exemption would commence from the date of commencement of production.
HELD THAT:- It is evident from the overall reading of the document issued by the Department of Industrial Development, Central Government on 16-12-1993 to the assessee that it was a mere permission conditioned upon fulfilment of certain specified requirements. Therefore, it was described as a letter of intent. The actual approval in clear terms enabling the benefit of exemption was issued on 27-10-1994, when “Green Card” was issued by the Central Government. Therefore, this Court is of the opinion that the term “approval” in the present case was issued in the letter dated 27-10-1994.
In these circumstances, this Court is of the opinion that the term “approval” has to relate to unambiguous approval by the Central Government which in the present case was given on 27-10-1994 - Therefore, the assessee could have availed exemption after 27-10-1994.
The assessee’s contention that the date of commencement should be the date when the exemption also becomes determinable cannot be accepted. Another reason why such a contention is unfeasible is that it injects subjectivity with regard to assessment of proceedings itself. In a given case, the unit-holder may be vigilant and set up his or its unit early whereas in another case, the concerned unit-holder may be laid back or drags its feet resulting in the unit not commencing production. In the latter case, though it might have secured approval, the delay in the commencement of production should not be rewarded with an exemption.
The court holds that date of approval in this case was 27-10-1994 and that would be the reckonable date for grant of exemption under the Notification SRO 1727/1993.
Appeal allowed in part.
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2023 (2) TMI 1156
Request for Interim order - HELD THAT:- There is no scope of passing any interim order in the matter and the issue involved in this writ petition requires affidavit from the respondent for final adjudication - List this matter for final hearing in the monthly list of May, 2023.
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2023 (2) TMI 1090
Classification of goods - rate of tax - mobile phone chargers sold along with mobile phone in a composite pack - whether liable to tax at the same rate as applicable to "mobile phone" only and it cannot be taxed at higher rate as unscheduled goods under Section 4(1) (b) (iii) of the Act? - Applicability of Entry 53 of Schedule III of the KVAT Act read with the Notification No. FD 43 CSL 07(02) dated April 4, 2007 issued by the State Government.
HELD THAT:- The issue involved in Nokia India Case [2014 (12) TMI 836 - SUPREME COURT] was whether mobile charger should be excluded from the entry of concessional rate of tax which applies to cellphones under the Entry 60(6)(g) of Schedule B of the Punjab VAT Act - the Apex Court had held that the battery charger cannot be held to be a composite part of the cellphone but is an independent product which can be sold separately without selling the cellphone. The High Court failed to appreciate the aforesaid fact and wrongly held that the battery charger is part of the cellphone.
It is relevant to note that the decision in Nokia India Case is based on Entry 60(6)(g) of the Schedule B of the Punjab VAT Act. In the said Entry only cellular phone is defined and accessories are not included. The Hon’ble Supreme Court of India has upheld Revenue’s contention in that case because Entry 60(6)(g) of Schedule B of the Punjab VAT Act does not mention accessories for the purpose of taxing the items/product at 4%.
Applicability of Entry 53 of Schedule III of the KVAT Act read with the Notification No. FD 43 CSL 07(02) dated April 4, 2007 issued by the State Government - HELD THAT:- In Entry No. 60(6)(g) of the Punjab VAT Act, the expression used is ‘cellular telephone’ whereas in the Notification issued under KVAT Act, the words used are ‘and parts thereof’. Further, the parts falling under Heading 8843, 8825, 8527 or 8528 have been specifically excluded. It is relevant to notice that, battery charger which falls under Entry 8504 40 30 under the CET Act and CT Act, has not been excluded. This makes it clear that charger is a composite part in the package. Thus, the intention of the Revenue is unambiguous that the Notification was applicable for telephone sets and parts thereof which includes charger.
Thus, the Entries in Punjab VAT Act and the KVAT Act are different and the Entry under the Punjab VAT Act is limited only to cellular telephones in contradistinction to the Notification under KVAT Act.
A bare perusal of the Section 4 (charging section) of KVAT Act and Rule 3 (computation provision) of KVAT Rules would clearly indicate that there is no prescribed mechanism provided for determining the value of individual goods in a composite transaction. Thus, in the absence of a valuation mechanism, tax cannot be levied differently on each of the component by separating a single composite package - the definition contained in the Notification issued under the KVAT Act includes the charger which is sold along with the mobile phone in one set and accordingly taxable at 5%.
These revision petitions are dismissed.
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2023 (2) TMI 1040
Correctness of remanding the case - Entitlement to claim benefit of customs duty - denial on the ground that there were no records to show re-export of repaired units between 2005 and 2007 - HELD THAT:- No doubt the impugned order is a remand order but the matter is remitted to the file of the Assessing Officer for passing fresh re-assessment order under Section 39(2) of the KVAT Act. KAT has noticed assessee’s contention in para 6.1 of the impugned order. The assessee has pleaded before the KAT that the KVAT authority was relying solely on the show cause notice issued by the DRI Authority in a different set of proceedings under different legislation - Unless an authority vested with a power to impose tax and the KVAT authorities in this case, have had sufficient material based on its own investigation, proposition and confirmation of such proposed tax would be untenable in law. It is not in dispute that reliance has been placed on the show cause notice issued by the DRI authorities and the said ground has been noticed by the KAT. In our view, the KAT was required to return a finding on the said ground.
It is assessee’s specific case that the UPS machines exported abroad were imported without any consideration for the purpose of repair and refurbishing. According to the assessee, after repair, machines have been exported. Therefore, there needs to be an appropriate adjudication not only with regard to the factual matrix, but also on the questions of law. In the circumstances, KAT was duty bound to return its findings on the main ground urged on behalf of the petitioner.
Matter is remitted to the file of the KAT to re-examine the principal contention urged by the assessee and to pass fresh orders in accordance with law - Revision petition allowed.
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2023 (2) TMI 987
Validity of assessment order - case of petitioner is that despite seeking three weeks time to send a detailed reply by its communication dated 10.05.2022, the respondent has not considered the said request and has also not considered the 'C' and 'F' Declaration Forms submitted by the petitioner in the impugned assessment orders - violation of principles of natural justice - HELD THAT:- This Court having noticed from the communication dated 20.01.2023 that the said acknowledgment has been duly acknowledged by the Deputy State Tax Officer - 2, Annur Circle, Coimbatore by name P.Vasagi, is of the considered view that the said communication was duly received by the respondent. However, to avoid any doubt, the petitioner will have to re-submit 'C' and 'F' Declaration Forms once again with the respondent.
This Court is in agreement with the view taken by the learned Single Judge of this Court in M/s.Arvind Remedies Ltd., Vs. The Assistant Commissioner (CT), Vepery Assessment Circle, Chennai - 600 006 [2016 (11) TMI 260 - MADRAS HIGH COURT]. However, the petitioner will have to re-submit the 'C' and 'F' Declaration Forms with the respondent once again, within a time frame to be fixed by this Court and appear for personal hearing on the fixed date.
In so far as the impugned assessment orders are concerned, since there is no violation of principles of natural justice till the date of the assessment orders, this Court is not interfering with the impugned assessment orders. However, in view of the fact that the petitioner has submitted the 'C' and 'F' Declaration Forms with the respondent on 20.01.2023, after passing of the impugned assessment orders, the petitioner is directed to file a fresh application under Section 84 of the TNVAT Act, 2006, seeking for rectification of the impugned assessment orders, enclosing the 'C' and 'F' Declaration Forms and all other required documents, within a period of one week from the date of receipt of a copy of this order.
Petition disposed off.
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2023 (2) TMI 937
Classification of mosquito repellant ‘Good Knight’ - to be classified as ‘insecticide’ under Entry 30 of Part II of Schedule B to the OVAT Act attracting 4% tax or would fall in the residual entry of ‘all other goods’ under Part III of Schedule B to the OVAT Act in which case it would be amenable to tax @ 12.5%? - HELD THAT:- The ACST and the Tribunal have concurrently held that the product in question is in fact an insecticide within the meaning of that expression in Entry 30 of Part II of Schedule B and, therefore, amendable to tax @ 4% thereby rejecting the plea of the Department that it should be classified as ‘all other goods’ in terms of Part III of Schedule B of the OVAT Act, amenable to tax at 12.5%.
The literature accompanying the product, which has been enclosed with the present revision petition, reveals that one of the principal ingredients of the product is ‘Transfluthrin 0.88% w/w Liquid Vaporiser’. It is explained in the said literature that Transfluthrin 0.88% w/w Liquid “is an effective insecticide recommended for the control of adult mosquitoes in the household” - It is evident therefore, that the product sold by the Opposite PartyPage Dealer has been correctly categorized as an ‘insecticide’ under Entry 30 of Part II of Schedule B of the OVAT Act. The Court is, therefore, satisfied that no error has been committed either by the ACST or the Tribunal in accepting the plea of the dealer and negativing the contrary plea of the Department.
Revision petition dismissed.
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2023 (2) TMI 936
Refund claim - respondent recovered excess amount of advance tax by asking the petitioner to do so and did not frame assessment and refunded the said amount - demand of interest - intent to evade, present or not - HELD THAT:- In the instant case, it is not in dispute that in the previous years on the asking of the department, the petitioner had paid tax in advance. The department also adjusted it while framing assessment for the year 1998-99. It is not a case where the petitioner made payment of excess amount of tax under some mistake. When the excess amount of tax so deposited by him, was refunded by issuing adjustment orders, the petitioner had not received the same and had made prayer for adjustment of the same for the amount of tax for the year 1998-99 which was so adjusted by the respondent. The respondent on one hand recovered excess amount of advance tax by asking the petitioner to do so and did not frame assessment and refunded the said amount only at the time of complying with directions given by this Court in Writ Petition No.2162 of 2000 to frame assessment for the previous years.
On the other hand, it started demanding interest qua liability of subsequent years. There was no allegation against the petitioner that it had acted deliberately in defiance of any law or was guilty of any dishonest conduct or had made any attempt to evade payment of rightful tax levied under the provisions of the Act, 1973 - The well settled proposition of law is that penalty either by way of claiming interest or otherwise should not ordinarily be imposed unless the assessee either acted deliberately in defiance or disregard of its obligation. Unquestionably, an authority is competent to impose penalty in case, of a technical or intentional breach of provisions of an Act but where such breach flows from a bona fide belief, then the offender is not liable to act in the manner prescribed by the Statute.
The impugned notice as served upon the petitioner thereby raising demand of interest on the amount of Rs.72,89,684/- is not sustainable and is liable to be quashed - Petition allowed.
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2023 (2) TMI 890
Levy of penalty on applicant (Government Institution) under Section 8(D)(6) of the U.P. Trade Tax Act, 1948 - as per assessee, the authorities without recording any finding had imposed maximum amount of penalty on the revisionist who is not a dealer and is an educational institution - HELD THAT:- It is admitted to both the parties that the revisionist is an educational institution imparting education to the students. The university needs building not only for the students, but also for the teachers and other educational activities to be carried out within its campus. The budgets for carrying out such construction are provided by the State Government. The Act of 2008 is a fiscal act, intended to raise revenue for the State Government. The very purpose is met out, once the dealer to whom the payment has been made by the educational institution is subjected to assessment proceedings and tax liability is created and realized.
Initiation of penalty proceedings under Section 8(D)(6) against a Government Institution has not helped the revenue, but such exercise has led to financial loss to the Government by unnecessary expenditure on litigation which, at any cost, should be avoided.
Once, U.P. Rajkiya Nirman Nigam was assessed to tax and an assessment order was passed on 31.03.2010 and a tax liability was created towards the payment received by it from the university, the penalty proceedings initiated by the Taxing Authorities looses its sheen - Further, the revisionist had sufficiently explained in the reply furnished before the assessing authority that they were not well aware of the provisions of law which required for deduction under Section 8(D)(6). The reasons so furnished appear to be plausible, and in the absence of any malafide intention, penalty is not leviable.
Revision allowed.
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2023 (2) TMI 889
Imposition of penalty under Section 40(2) of the JVAT Act - concealment of purchases for an amount of Rs.1,55,69,332/- made by the Petitioner despite the fact that the said amount was duly reflected in its revised return - suppression of facts or not - order was passed without granting sufficient opportunity to the Petitioner - violation of principles of natural justice (audi alterem partem) - HELD THAT:- Admittedly, for the quarter ending September, 2015, the last date for filing of revised return was up-to January, 2016. However, before assessment proceeding was initiated on 09.01.2016 i.e., before the expiry of period of revising of return in dispute which would be itself evident from the penalty order dated 02.02.2016 at Annexure-1. Further, the Petitioner, for the purchases in dispute has utilized Form SUGAM-G and, thus, no occasion arose for suppression of any turnover with intent to evade payment of tax. In the entire Counter Affidavit no mens-rea has been alleged by Respondent-authorities. Thus, it appears that the contention of the petitioner that at best penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon petitioner is correct. This specific plea of Petitioner is uncontroverted by Respondent-authorities.
There is no dispute with respect to the fact that before assessment proceeding under Section 40(2) of the JVAT Act and regular assessment proceeding under Section 35 of the JVAT Act are mutually exclusive to each other. However, acceptance of GTO and revised quarterly return in the original assessment proceeding could not be totally brushed aside when the sole issue revolves around revision of return by the Petitioner-company.
Admittedly, the present dispute did not pertain to filing of incorrect return with intention to suppress or conceal purchases; rather the dispute pertains to filing of revised return belatedly. Thus, the imposition of penalty under Section 40(2) of the JVAT Act upon Petitioner is not sustainable in the eye of law and if the justification of the Respondents in this regard is accepted then the provision of Section 30 more particularly; sub-section 4 would be rendered otiose. In the given facts and circumstances and in view of specific provision enshrined u/s 30(4) (d) of the Act, it is apparent that there is no deliberate act of evasion of tax which would be warranting imposition of penalty on the petitioner given the language used in Section 40(2) containing the penal provision. In fact it cannot be said to be an act of deliberately filing incorrect returns as the revised return has been duly accepted by the Assessing Officer.
Reference in this regard may be made the judgment passed in the case of COMMISSIONER OF SALES TAX, UP. VERSUS SANJIV FABRICS AND HARI OIL & GENERAL MILLS [2010 (9) TMI 461 - SUPREME COURT] wherein the Hon’ble Apex Court has held that burden would be on the revenue to prove the existence of circumstances constituting the offence - mens rea is a condition precedent for levying penalty under Section 10(b) read with Section 10A of the Act.
Thus, this court holds that the penalty imposed by the revenue u/s 40(2) of the JVAT Act is not sustainable in the facts and circumstances of this case rather; penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon Petitioner - the amount of alleged penalty of Rs.17,35,000/- already realized from the bank accounts of Petitioner is to be refunded to the Petitioner after deducting Rs.25000/- taking resort of Section 30 (4) of the JVAT Act which prescribes maximum penalty of Rs.25000/-.
Application allowed.
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2023 (2) TMI 888
Validity of impugned Auction Notice - properties are brought for auction for non payment of tax and penalty of petitioner - non-application of mind in issuance of SCN - Rejection of the Rectification Petitions filed by the petitioner under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006 - No reasons given for rejection of application - violation of principles of natural justice.
HELD THAT:- As seen from Section 84 of the Tamil Nadu Value Added Tax Act, 2006, only in cases where there is an error apparent on the face of the record, the rectification of an assessment order can be entertained. The first respondent under the impugned order has categorically held that no case has been made out by the petitioner for rectification of the assessment orders. The proviso to Section 84 of the Tamil Nadu Value Added Tax Act, 2006 also makes it clear that only in cases where the authority decides to revise the assessment, there is a necessity for granting an opportunity of hearing to the dealer (the petitioner herein).
In the case on hand, the authority, while deciding the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, has not revised the earlier assessment orders passed by the respondents and therefore, has rightly not granted any opportunity of hearing to the petitioner. No specific request for personal hearing was also sought for by the petitioner.
Admittedly, only after a lapse of almost five years from the date of the assessment orders, the petitioner has filed the Rectification Petitions in the year 2018 even without filing a Statutory Appeal as against the assessment orders dated 28.01.2013 and 15.10.2013 pertaining to the relevant assessment years 2007-08 to 2011-12.
The first respondent has also observed that having not exercised the statutory appeal as directed by this Court in its order dated 18.06.2019 passed in W.P. No.6309 of 2017, the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, by the petitioner seeking for rectification of the assessment orders cannot be entertained under any circumstances whatsoever. This Court does not find any infirmity in the said observation after seeing the conduct of the petitioner, the details of which are observed in the earlier paragraph of this order which will reveal that only to protract the inevitable, the Rectification Petitions have been filed - Petition dismissed.
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2023 (2) TMI 887
Stay of demand - Recovery of amount lying to the credit of the petitioner's bank account maintained with the second respondent bank and the said amount was debited from the petitioner's bank account - HELD THAT:- Admittedly, a statutory appeal has been filed as against the assessment order dated 20.01.2021 passed under section 27 of the TNVAT Act by the petitioner which is under consideration by the Appellate Deputy Commissioner of Commercial Taxes and the petitioner has also paid the pre-deposit amount as required for filing the statutory appeal. The petitioner has also filed a stay petition seeking stay of the impugned assessment order. While that be so, the first respondent has recovered a sum of Rs.28,49,000/- from the amount lying in the petitioner's bank account maintained with the second respondent bank. The said amount covers the tax liability as determined by the first respondent in the assessment orders which is the subject matter of the appeal before the Statutory appellate authority.
This Court after giving due consideration to the fact that the statutory appeal has already been filed by the petitioner by making statutory pre- deposit amount and the first respondent has also recovered the sum of Rs.28,49,000/- from the petitioner's bank account lying with the second respondent after filing of the statutory appeal by the petitioner, is inclined to grant stay of any further recovery from the petitioner either from the amount lying to the credit of the second respondent bank or from any other source till the statutory appeal, pending on the file of the newly impleaded third respondent is disposed of on merits and in accordance with law.
Petition disposed off.
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2023 (2) TMI 886
Jurisdiction - Grant of refund of the excess amount of tax paid by the appellant as determined by the Assessing Authority - whether the Commissioner had jurisdiction under Rule 36 of the Haryana General Sales Tax Rules read with Section 43 of the Haryana General Sales Tax Act to reject the refund and to go into the merits of the assessment framed by the Assessing Authority?
HELD THAT:- The issue culled out hereinabove is no longer res integra. A Division Bench of this Court in RAGHBAR DASS HUKAM CHAND & CO. & JAI BHARAT GUM & CHEMICAL LTD. & SHIV SHAKTI RICE MILLS & BHARAT INDUSTRIAL ENTERPRISES LTD. VERSUS STATE OF HARYANA AND OTHERS [2009 (5) TMI 869 - PUNJAB AND HARYANA HIGH COURT] had precisely dealt with the question of law i.e. whether the higher authorities in the hierarchy of Sales Tax Department, Haryana in the garb of exercising power of granting sanction under Rule 36 of Haryana General Sales Tax Rules to the refund orders passed by the Assessing Officer, could set aside such order of assessment? View taken was that irrespective of merits of the case the refund has to follow order of the Assessing Authority and in proceedings for determining refund, only question was of quantification of refund.
The impugned order passed by the Haryana Tax Tribunal dated 01.07.2005 (Annexure A-7) cannot sustain. The appellant-company consequently would be entitled to the refund in the light of the assessment order dated 11.02.2003 (Annexure A-1) pertaining to the assessment year 1998-99.
Appeal allowed.
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2023 (2) TMI 885
Seeking rectification of assessment order - Validity of Bank Attachment notice - petitioner has sought for rectification of the assessment order dated 01.02.2022 on the ground that the registration certificate has been misused and also on the ground that they have already closed down their business - HELD THAT:- The petitioner's bank Account maintained with the second respondent Bank has been attached pursuant to the Bank Attachment Notice dated 14.10.2022, issued by the first respondent to the second respondent, which is also the subject matter of challenge in this writ petition - No prejudice would be caused to the respondents if the petitioner's Applications dated 26.10.2022 and 05.12.2022, filed under Section 84 of the Act seeking for rectification of the assessment order is considered, on merits and in accordance with law within a time frame to be fixed by this Court.
This Court directs the first respondent to pass final orders, on merits and in accordance with law on the petitioner's Applications dated 26.10.2022 and 05.12.2022 seeking for rectification of the assessment order dated 01.02.2022 within a period of eight weeks from the date of receipt of a copy of this order.
Petition disposed off.
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2023 (2) TMI 771
Levy of Sales Tax - customised Information Technology (IT) software - constitutional validity of Entry 39(14) of Schedule IV of the then Andhra Pradesh Value Added Tax Act, 2005 - whether declaration that Section 65(53)(a) read with Section 65(105)(zzzze) of the Finance Act, 1994, is ultra vires and unconstitutional? - HELD THAT:- Tata Consultancy Services provides consultancy services, including computer consultancy services. As part of their business they prepare and load on customers’ computers custom-made software (uncanned software) and also sell computer software packages off the shelf (canned software). The canned software packages are of the ownership of companies/persons who have developed those software. Appellant was a licensee with permission to sub-licence these packages to others. The canned software programs are programs like Oracle, Lotus, Master Key etc. In respect of canned software, Commercial Tax Officer, Hyderabad, had passed a provisional order of assessment under the provisions of the Andhra Pradesh General Sales Tax Act, 1957, holding that the software were goods and accordingly, sales tax was levied thereon.
The Supreme Court in TATA CONSULTANCY SERVICES VERSUS STATE OF ANDHRA PRADESH [2004 (11) TMI 11 - SUPREME COURT] has held that the test to determine whether a property is “goods” for purposes of sales tax is not whether the property is tangible or intangible or incorporeal. The test is whether the item concerned is capable of abstraction, consumption and use and whether it can be transmitted, transferred, delivered, stored, possessed etc. Admittedly, in the case of software, both canned and uncanned, all the above attributes are present.
Thus, according to the Supreme Court, the word “goods” as defined in Article 366(12) of the Constitution of India is very wide and includes all types of movable properties, whether those properties be tangible or intangible. In case of software or sale of computer software it is clearly a sale of goods. Even an intellectual property, whether it be in the form of canvas or computer discs or cassettes and marketed, would become goods - Thus, unbranded software when it is marketed/sold may be goods. However, Supreme Court did not express final opinion on this aspect as this was not the issue before it.
The question which fell for consideration of the Division Bench of the Karnataka High Court in SASKEN COMMUNICATION TECHNOLOGIES LTD. VERSUS JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) -3 BANGALORE [2011 (4) TMI 566 - KARNATAKA HIGH COURT] was whether a contract for development of a software falls within the mischief of a “works contract” and whether upon development of the software it is vested with the customer from day one in which event whether it would amount to deemed sale under Article 336(29A)(b) of the Constitution of India? - it was held by the Karnataka High Court that the contracts in question were not works contract but contract for service simplicitor. Consequently, the orders passed by the taxing authority levying sales tax were set aside.
The decision of the Supreme Court in Tata Consultancy Services clearly supports the contention of the Commercial Tax Officer that the development of software solutions carried out by the petitioner was nothing but sale of goods and therefore, exigible to sales tax under the VAT Act read with the CST Act.
There are no merit in the challenge to the impugned orders dated 12.05.2008 - petition dismissed.
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2023 (2) TMI 657
Classification of goods - Aluminium Composite Panels (ACP) - It is the contention of the Appellants that ACP is classifiable under Entry C-6 of Schedule to the MVAT Act, 2002 read with Sr. No.6 of Notification No. VAT- 1505/CR-113/Taxation-1 dated 1st June, 2005 and the sale was chargeable to 5% VAT and not 12.5 % as claimed by the State Authorities - interpretation of Heading 7606 and Heading 7610.
HELD THAT:- The learned Tribunal has failed to give any finding with respect to subject ACP in the context of the product description, its manufacture, its end use, the various principles including essential characteristics as well as the predominant use. There is no finding as to whether the subject aluminium panel is not a aluminum plate or sheet or a strip of thickness exceeding 0.2 mm nor a finding that the same is part of a structure or prepared for use in structures to come to a conclusion that it falls under Heading 7610. Nowhere the Tribunal has distinguished the opinions published by the Worlds Customs Organization.
It was necessary for the Tribunal to consider the submissions made on behalf of the Appellants as well as the Respondent Revenue and give factual findings with detailed reasoning before confirming the orders of the Commissioner and dismissing the Appeals. The Tribunal is the last fact finding authority and is expected to come to a conclusion of a product under a Heading after a detailed factual analysis of the product in question and not merely on the basis of judgments cited before it - the Tribunal ought to have independently come to a conclusion after considering and exhaustively dealing with the material furnished by the Appellants.
The matters are remanded back to the Tribunal - appeal disposed off.
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2023 (2) TMI 656
Scope of assessment - Reassessment of entire turnover or fresh assessment of escaped turnover - power of review - Exemption from sales tax - export sales - purchase of raw skins for export - revised assessment under Section 16 of the TNGST Act, 1959 for the turnover of the year 1988-1989 or not - HELD THAT:- The Division Bench in Ekambareeswarar Coffee and Tea Works case [1991 (2) TMI 359 - MADRAS HIGH COURT] has held that it would be a travesty of law to hold that the orders made under section 16(1)(a) of the Act had set aside the original orders of assessment, which were not even under consideration referred to or included in the order under section 16(1)(a) of the Act. The order of refund of tax, already paid on the basis of the original order of assessment is, therefore, erroneous and cannot be sustained.
The said observation has been made after considering the tenor of the re-assessment order passed under Section 16 of the Act. In the said case, the Division Bench has taken note of the language used in Section 16(1)(a) and 16(1)(b) as well as the various interpretations of the Courts, making it clear that Section 16(1) (a) deals with assessment of escaped turnover, whereas Section 16(1)(b) deals with re-assessment of the turnover not only escaped assessment, but also improperly assessed. In case of assessment on escaped turnover in exercise of power under Section 16(1)(a), reflection of the original order of assessment is not required even if the authority chooses to pass a composite order by including the assessment year relating to escaped turnover. If the tax liability already determined in the original assessment proceedings, it can be bodily lifted and added to the order under Section 16(1)(a) of the Act.
Admittedly, the right to challenge the disallowance of exemption has not been availed. When the appeal preferred and remedy exhausted against the original order, it will be preposterous to confer the said right in the subsequent assessment on the escaped turnover alone, only because the subsequent order passed under Section 16(1)(a) of the said Act has also incorporated the earlier assessment order, merely for the sake of completeness. Unless the entire turnover is re-assessed in exercise of power under Section 16 (1) (b) of the said Act, the subsequent Appellate Authority cannot substitute his view contrary to the assessment regarding the turnover which has reached finality. Such substitution will amount to review of the earlier order. The power which the assessing authority thus exercises under Section 16(1)(a) of the Act is neither the power of revision nor the power of review.
From the assessment order, dated 31.03.1995, it is found that it is not reassessment of entire turnover. It is assessment made in exercise of power under Section 16(1)(b) of the said Act, but only a fresh assessment regarding the escaped turnover in exercise of power under Section 16(1)(a) of the TNGST Act, 1959.
Appeal dismissed.
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2023 (2) TMI 603
Demand of pre-deposit - petitioner is aggrieved by the fact that it has a good case on merit and the orders of the Assessing Officer and the First Appellate Authority are based on assumption and presumption and lacks the factual basis - grievance on the part of the petitioner is that the VAT Tribunal decided the entire Revision Application and the Second Appeal at the pre-deposit stage of hearing - HELD THAT:- Here, as can be noticed from the order of the First Appellate Authority it has while quantifying the amount of Rs.30.75 Lakh already given the reasoning for such an amount to be paid by the petitioner. However, when it came to the Tribunal in the Second Appeal, it has directed the petitioner to deposit Rs.7.12 Crore which is the sum on higher side. The petitioner has pleaded his limitation to pay the amount and the pandemic due to Covid-19 virus is also another reason for him to show his inability to deposit the amount of pre-deposit.
Noticing the fact that the base order has been passed exparte and thereafter, the challenge had been made to the First Appellate Authority and then there is a pendency of Second Appeal before the Second Appellate Authority, the matter would require adjudication at the hands of the Appellate Forum and at the same time the requirement of deposit of predeposits in accordance with the law as quantified by the First Appellate Authority is already deposited before the Authority concerned. Without endorsing to the action of the Tribunal the amount of Rs.7.12 Crore directed to be deposited as predeposit may not be insisted upon in wake of these glaring facts, the property which is attached is valued at Rs.61 Crore and therefore also, the revenue’s interest is protected aptly.
Petition allowed.
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2023 (2) TMI 602
Attachment of property - recovery of dues - order of pre-deposit had not been complied with - HELD THAT:- Here, as can be noticed from the order of the First Appellate Authority it has while quantifying the amount of Rs. 60,64,430/- already given the reasoning for such an amount to be paid by the petitioner. However, when it came to the Tribunal in the Second Appeal, it has directed the petitioner to deposit Rs.3 Crore which is the sum on higher side. The petitioner has pleaded his limitation to pay the amount and the pandemic due to Covid-19 virus is also another reason for him to show his inability to deposit the amount of pre-deposit.
These petitions are allowed quashing and setting aside the order dated 17.01.2022 of the VAT Tribunal. As rightly held by the Tribunal the asset value of approximately Rs.61 Crore is attached by the department and the payment of Rs.60,64,430 /- at the stage of First Appellate Authority is already deposited. No further predeposit would be necessary to be imposed.
The amount of predeposit, which has already been deposited by virtue of the First Appellate Authority’s direction shall continue to be retained by the State and will be adjusted against the tax liability which shall be decided after affording opportunity to the parties in accordance with the law. The pending Second Appeal being Second Appeal No. 593 of 2021 be co-operated by the petitioner and the same shall be completed within a period of three months from the date of receipt of a copy of this order - Petition allowed.
Noticing the fact that the base order has been passed on the basis of presumption and assumption and then thereafter the challenge had been made to the First Appellate Authority and then there is a pendency of Second Appeal before the Second Appellate Authority, the matter would require adjudication at the hands of the Appellate Forum and at the same time the requirement of deposit of pre-deposits in accordance with the law as quantified by the First Appellate Authority is already deposited before the Authority concerned. Without endorsing to the action of the Tribunal the amount of Rs.3 Crore directed to be deposited as pre-deposit may not be insisted upon in wake of these glaring facts, the property which is attached is valued at Rs.61 Crore and therefore, also the revenue’s interest is protected aptly.
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