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VAT / Sales Tax - Case Laws
Showing 61 to 80 of 545 Records
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2023 (11) TMI 53
Rejection of Form E - 1 and C, filed along with application for filing additional evidence - appeal dismissed without considering that the application for additional evidence was already on record and a report from assessing authority was sought by the Tribunal - violation of principles of natural justice - HELD THAT:- It is admitted that inter-State transaction has been made. In the event the forms submitted by the applicant are not accepted, the applicant will be compelled to pay higher rate of tax - In the peculiar facts & circumstances of the case, when the transaction has already been made and covered by the requisite forms, the applicant, if due to unavoidable circumstances, could not obtain the forms and had produced the same upto the state of Tribunal, even in the subsequent stage, providing the claim has already been made for the same, the form should be accepted.
This view has been taken by this Court in the case of M/s Dhan Prakash Cane Crushers Vs. Commissioner of Sales Tax [2002 (4) TMI 898 - ALLAHABAD HIGH COURT], where, this Court accepted the form, which was furnished for the first time in the revisional jurisdiction and had remanded the matter to the Tribunal to reconsider the same.
The impugned judgements & orders passed by Commercial Tax Tribunal in these revisions cannot be sustained and the same are modified to the extent that the Tribunal is directed to accept the forms submitted by the applicant and thereafter, decide the issue in accordance with law - the matter is remanded back to the Tribunal by restoring the case to its original number before the Tribunal - Revision allowed.
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2023 (11) TMI 3
Benefit of Group Insurance purchased by the State for "Registered Dealer" under VAT - Application for cancellation of registration before the death of registered dealer - Consideration of claim for insurance money being paid to the petitioner - HELD THAT:- It appears that the respondent-authorities have misdirected themselves in not looking at the application dated 18.03.2013 without considering the fact of the pre-existing registration, that stood in the name of the deceased. If the deceased held a registration certificate prior to the occurrence of his death and that registration did not stand cancelled on the date of occurrence of his death, the status of the deceased would remain to be of a registered dealer for the purpose of Group Insurance Policy.
Since the respondents have not applied their mind on this aspect of the matter, the writ petition is disposed off with the direction upon the respondent no. 3 to examine the correct facts in light of the observations made and issue appropriate reasoned communication to the petitioner within a period of one month from today.
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2023 (11) TMI 2
Maintainability of petition - Jurisdiction of Revision proceedings under Section 32 of the AP VAT Act - classification of goods - iron and steel items - HELD THAT:- In the case of POTLAPELLI RAVINDER RAO VERSUS STATE OF TELANGANA [2022 (10) TMI 1212 - ANDHRA PRADESH HIGH COURT], a Division Bench of this High Court set aside the earlier revision proceedings in R.F.No.18/2019-20 dated 12.01.2021 passed by the 1st respondent and remanded the matter back to 1st respondent with a direction to issue notice to the petitioner, in which case the petitioner shall appear with his documents if any and thereupon the 1st respondent shall hear both parties and pass an appropriate order on merits in accordance with governing law and rules expeditiously.
The impugned revisional order is set aside and matter is remitted back to the 1st respondent with a direction to afford an opportunity of hearing to the petitioner - Petition allowed.
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2023 (10) TMI 1448
Classification of proprietary food items - Kurkure and Cheetos - classifiable under Entry 131 of Schedule IV to the RVAT Act, which reads as “Sweetmeat Deshi (including Gajak & Revri), bhujiya, branded and unbranded namkeens.” or under the residual/orphan entry in Schedule V to the RVAT Act? - restricted meaning for the term “namkeen” in interpreting the scope of Entry 131 of the Schedule IV - HELD THAT:- As per settled position of law, a specific entry would always trump a general entry and the burden would always be on the Revenue to prove that the goods in question would have to fall in general entry as opposed to the specific entry.
The reliance placed by the Tax Board on Co-ordinate Bench judgment of Pepsico India Holding [2016 (12) TMI 1740 - RAJASTHAN HIGH COURT] is onerous for the simple reason that the Co-ordinate Bench had classified the goods in the more specific entry, especially after observing that the goods in question can technically be considered namkeen. Merely because the specific entry of ‘preserved food articles’ did not transition from RST Act to RVAT Act is no reason to automatically place the goods in question in the residual entry. In these circumstances, the correct approach would have been independent analysis of the relevant entries under the RVAT Act and examining whether the Revenue had discharged its onus to establish that the goods in question cannot, by any conceivable means, be included in any of the specific entries. Accordingly, the conclusion of the Tax Board, to the extent that it is based on Co-ordinate Bench judgment of Pepsico India Holding cannot be sustained.
Whether the Revenue has successfully discharged its onus to establish that the goods in question cannot be placed in any specific entry and had to be placed in the residual entry? - HELD THAT:- The Tax Board held that since the goods in questions are snacks, which do not find its place in any specific entry, the same had to be placed in residual entry. However, this conclusion of the Tax Board, in the opinion of this Court, is not supported by any cogent reason or evidence - It is noted that the Revenue neither sought any technical / expert opinion, nor brought any evidence on record to prove their point. It appears that the Tax Board merely relied on a basic Google search result wherein the goods in question were described as namkeen snacks.
Considering that the Revenue and all the authorities below have misinterpreted the Co-ordinate Bench judgment of Pepsico India Holding that Revenue has failed to discharge its onus to establish that the goods in question would fall in general/residual/orphan entry and not the specific entry; that no cogent reason has been assigned to hold the goods in questions as ‘snacks’; that the goods in question have been classified as namkeen as per the FSSAI license; that the goods in question have been held to be namkeen by Apex Court in Frito Lays India [2009 (8) TMI 98 - SUPREME COURT] and Pepsi Foods Ltd. [2002 (9) TMI 184 - CEGAT, COURT NO. IV, NEW DELHI], this Court is inclined to answer the questions of law framed herein-above in favour of the petitioner-assessee and against the respondent-revenue.
The order impugned of the Tax Board and the authorities below are quashed and set aside - all these STRs are allowed.
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2023 (10) TMI 1343
Levy of penalty - non deposit of TDS on the amount alleged to have been received by the revisionist for construction of Stadium at Narendra Dev University of Agriculture & Technology, Faizabad - HELD THAT:- This Court is of the considered view that the Tribunal has rightly imposed penalty upon the revisionist for not deducting TDS on the amounts which were paid to the U.P. Awas Evam Vikas Ltd. as they were given task of constructing Stadium. The Accountant of the revisionist in his statement before the Tribunal has admitted that payments were infact made directly to the Agency on which TDS was to be deducted and deposited with the State authorities.
Once it is admitted that payment was made by the revisionist directly to U.P. Awas Evam Vikas Nigam Ltd. then they were mandated to deduct the amount of TDS on such payments. Non deduction of TDS would be deemed to be intentional for which the penalty has rightly been imposed.
No interference is required by this Court in the order dated 14.03.2019, passed by the Tribunal - The revisions being devoid of merits are rejected.
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2023 (10) TMI 1338
Denial of grant of bail - refund obtained without any actual movement of goods during the course of interstate sale - use of forged and false documents of sale - HELD THAT:- The allegations against the petitioner are subject to trial. The trial’s progress has been slow, and it is anticipated to take a considerable amount of time. Bail serves the purpose of allowing an accused to remain free until their guilt or innocence is determined. In contrast, the petitioner has been in detention since May 29, 2023, for more than 04 months.
The petitioner’s continued preventive custody is based on an unsubstantiated suspicion that he might tamper with evidence or influence witnesses. There is no probability of tampering with evidence as it has already been seized by the investigating agency - The petitioner is stated to be a 67-year-old senior citizen having family to look after. Being a family man and having a family to look after, a fixed abode, it is unlikely that he poses any flight risk and/or will flee from trial proceedings.
Thus, no useful purpose would be served by keeping the petitioner in further preventive custody - the petitioner is ordered to be released on bail upon furnishing bail bonds and surety bonds to the satisfaction of the learned trial Court, where his case is being tried, and in case he/she is not available, before the learned Duty Judge, as the case may be - bail application allowed.
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2023 (10) TMI 1296
Rejection of application, partly, under Vera Samadhan Yojna, 2019 (Amnesty Scheme- 2019) for A.Y. 2011- 12 and A.Y. 2012-13 - issuance of C-Forms or not - HELD THAT:- In this case, the respondent verified the ‘C’ form through “TINXSYSY” website resulting into allowing the ‘C’ forms of Rs. 1,45,87,986/- (without tax) and disallowing the amount of Rs. 1,85,82,948/- (without tax). Thus, the verification by the respondents was made prior to the passing of the order dated 15.2.2020 for A.Y. 2011-2012, and for A.Y. 2012-13. Since, the order under Amnesty-2019 Scheme was to be passed latest by 15.2.2020, the authority passed an order on 15.2.2020 after verification of the ‘C’ forms which was available on record and therefore, in our opinion there is no illegality committed.
Moreover, heavy reliance placed by the petitioner on the certificate dated 17.2.2020 at Annexure ‘G” is of no consequences since the same was made available after 15.2.2020 i.e. after the cutoff date to pass the order. Therefore, accepting the request or the prayer made by the petitioner would amount to extending the benefit of the scheme beyond the due date which is not permissible under law and, therefore, we do not find any error in the order passed by the authority dated 15.2.2020.
Further, the rectification application was rightly rejected by observing that there is no error apparent on the face of the record which requires rectification.
There are no illegality in the orders dated 15.2.2020 and 29.5.2020 - petition dismissed.
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2023 (10) TMI 1212
Development of MSTT’s Website - in affidavit placed on record it is inter alia stated that as soon as the proposal for the development of website from the President, MSTT is received to the Finance Department it would expedite the process of approval at the earliest - HELD THAT:- In the present era, the courts and tribunals which cater to demands of the consumers of justice cannot be expected to function without the basic requirement of an official website to say the least. It also cannot take so long to create and make the website functional. As observed by the Supreme Court, the technology plays an essential role in securing access to court rooms and, as a result, access to justice for citizens across the country. In embracing technology, the tribunals in a progressive State like Maharashtra cannot remain primitive. Providing of a website would certainly enhance the efficiency in the working of the tribunal and make effective the access to justice.
Thus, it is of utmost necessity that the President of the MSTT on urgent basis forwards a proposal to the State Government in regard to making available video conferencing facilities in conducting Court proceedings, unless the same are already in place.
The present proceedings are adjourned at the first instance to 28th November 2023 so that the further progress on all these aspects can be informed to us by the President, MSTT as also by the State Government.
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2023 (10) TMI 1155
Maintainability of first appeals - first appeals were dismissed by the appellate authority summarily on the ground of non-compliance of the directions of pre-deposit.
It was the case of the appellants before the Tribunal that the orders dismissing the first appeals summarily were bad inasmuch as of the total tax dues under various assessment orders which came to Rs. 204 crores and odd, an amount of Rs. 119 crores were already deposited under protest which were approximately more than 20% of the tax payable and therefore the appeals could not have been dismissed summarily on the ground of failure to pre deposit.
HELD THAT:- Perusal of the order of the Tribunal indicates that it was the case of the principal appellant that the transactions in question were not bogus and the appellant cannot be liable for the other business done by the agents. Effectively, the tax dues against the appellants is Rs. 204 crores of which Rs. 119 crores has been paid under protest. The case of the appellants before the Tribunal was that the deposit so made be considered towards pre-deposit under Section 73 of the GVAT Act. Merely because the amount was paid, as ‘protest amount’, the first appellate authority could not have directed the pre-deposit without considering the payment already made by the appellant, particularly, when such amounts were paid before passing of the assessment orders.
The decision of the Hon’ble Apex Court in the case of VVF India [2021 (12) TMI 477 - SUPREME COURT] was in context of Section 26(6A) of the Maharashtra VAT Act which did not have a stipulation of the discretion in the appellate authority as is evident from the language of Section 73 of the GVAT Act.
There is no reason why the appeals on the facts of the present case need to be entertained - Appeal dismissed.
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2023 (10) TMI 1147
Review petition - Jurisdiction of Section 41(7)(b) of the KGST Act - re-visiting an issue settled by the Amnesty Order - HELD THAT:- The golden rule of interpretation means that the words of a Statute must prima facie be given their literal and natural meaning and that the language of the Section is read as it is. Applying the said interpretative tool, Sub-section (7) of Section 23B means that (a) the amount settled under Section 23B has been a subject matter of appeal or revision; (b) such appeal and revision may be continued and if the final orders of such appeal or revision results in the reduction of tax payable under this Act; (c) so the tax received more than legally payable will be refunded.
In the case of the State, if the appeal or revision is allowed, the excess amount to be collected from the dealer is collected. The sine qua non for operating the last two stages referred to above is that the amount settled has been a subject matter of appeal or revision. The protection under Section 23B(7) cannot be logically extended to appeal and revision filed ex-post to the Amnesty order. For the above view, it is sufficiently clear that the precedents on which the dealer relied are distinguishable, both in law and fact.
Thus, no ground is made out warranting interference with the judgment - review dismissed.
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2023 (10) TMI 1103
Quashing of penalty - forged document or not - necessary document not considered on the sole ground that it was produced after 08 days and presumption has been made that it was a forged document - import of badam for which the additional duty of custom is paid and this duty is also refunded.
HELD THAT:- In M/s Anand Refrigeration Co. (P) Ltd’s case [2010 (1) TMI 1116 - PUNJAB AND HARYANA HIGH COURT], the Division Bench has considered Section 14-B (7) of PGST Act, 1948 and held that the combined reading of these provisions would reveal that the appropriate authority under the Act, is under legal obligation to conduct an enquiry after serving a notice to the consignor or consignee and give him an opportunity of being heard. If after the enquiry, such officer finds that there has been an attempt to avoid or evade the tax due or likely to be due under this Act, he shall, by order, impose on the consignor or consignee of the goods, a penalty, which shall not be less than twenty per cent and not more than thirty per cent of the value of the goods and in case he finds otherwise, he shall order the release the goods and the vehicle.
In the present case, the only ground for imposing penalty was given that the document (P-8) was given by the petitioner after 08 days. However, giving the documents after 08 days would not make it a forged document. Further the invoice has been issued by a Company from U.S.A. The finding that this invoice is forged and fabricated has been given without verifying the contents of the invoice (P-8). This finding cannot be given without enquiry and there was no attempt of evading tax. Moreover, the petitioner was importing the badam for which he has paid the additional duty of custom and this duty is also refunded.
Petition allowed.
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2023 (10) TMI 1102
Validity of continuing the criminal proceedings on the same set of facts, which the Adjudicating Authorities declared that the allegations against the petitioners of having contravened the provisions of the VAT Act with an intent to evade tax cannot be sustained - Purchase of new vehicles from secret routes to avoid the barriers established by the Punjab Govt. on the basis of fake papers with an intent to evade tax - HELD THAT:- In view of the ratio of law laid down in Radheyshyam Kejriwal's case [2011 (2) TMI 154 - SUPREME COURT] this Court is of the view that the twin test prescribed for determining the effect of the orders passed by Adjudicating Authority/Tribunal on the criminal proceedings is :
(i) Whether the allegations in the adjudication proceedings as well as the proceedings for prosecution are identical? and
(ii) Whether the exoneration of the person concerned in the adjudication proceedings is on merits ?
The afore-prescribed twin test when applied to the present case, this Court finds that the case of the petitioners is fully covered by the ratio of law laid down in Radheyshyam Kejriwal's case and thus merits acceptance.
Keeping in view the fact that the Tribunal has already quashed the penalty against the Firm and has found that there was no case of tax evasion as being alleged by the Revenue, this Court finds that the FIR on the same set of allegations cannot be allowed to continue.
Petition allowed.
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2023 (10) TMI 1078
Best Judgement assessment - non-service of SCN - non-communication of the assessment orders to the Petitioner with the prescribed period.
The edifice of the case set out by the Petitioner in the three writ petition is that the Respondent No. 4 could not have exercised the power under Section 37 of the Act of 2003 without issuance of notice as mandated under Section 37(1) of the Act of 2003.
HELD THAT:- When a notice is issued under Section 36 in Form-20, the dealer or the assessee is completely at dark as to why the prescribed authority have initiated audit assessment proceedings. Under such circumstances, if any adverse steps are taken in terms with Sub-Section (5) of Section 36, the principles of natural justice has to be followed. The failure to adhere to the same by giving a reasonable opportunity of being heard at a time of exercising power under Section 36(5) which are adversarial to the interest of the dealer/assessee violates the principles of natural justice.
This Court further finds it very pertinent that Sub-Section (5) of Section 36 only empowers the Prescribed Authority to either confirm the self-assessment under Section 35 or set aside the self-assessment made under Section 35 and assess the tax amount from the dealer or assess the amount of tax due from the dealer if no assessment has been made under Section 35. Therefore, as per Section 36(5), what can be assessed by the Prescribed Authority other than confirming the self-assessment is only the amount of tax due and nothing more.
This Court had decided that the impugned assessment orders dated 21.12.2017, 21.12.2017 and 24.06.2019 are bad in law and stands vitiated for non-compliance of notice. However, this Court further finds it relevant to take note of the second submission made by the learned counsel appearing on behalf of the Petitioner wherein it was mentioned that the assessment orders both dated 21.12.2017 for the Assessment Year 2012-13 and 2013-14 respectively are also bad in law in view of the provisions of Section 39 of the Act of 2003.
Whether the non-communication of the assessment orders to the Petitioner with the prescribed period would render the Assessment Orders for the Assessment Year 2012-13 and 2013-14 fatal? - HELD THAT:- In the instant case, it would be seen that though the period as stipulated under Section 39 ended on 31.03.2018 and 31.03.2019 for the assessment years 2012-13 and 2013-14, but the notice of demands were issued in the month of July and August, 2019. There is no mention by way of affidavit or even from a perusal of the records as to why there was a delay in issuance of the said notice for more than two long years - Under such circumstances, this Court taking into account the judgment of the Supreme Court more particularly in the case of M. Ramakishtaiah and Company [1994 (2) TMI 260 - SUPREME COURT] is further of the opinion that the impugned assessment orders for the Assessment Years 2012-13 and 2013-14 cannot be presumed to have been passed on 21.12.2017 as the same could have been made after the expiry of the period prescribed. For this reason also, the assessment orders for the period 2012-13 and 2013-14 are set aside.
All the assessment orders i.e. 21.12.2017, 21.12.2017 and 24.06.2019 along with the demand notices dated 10.08.2019, 02.07.2019 and 01.07.2019 are all set aside and quashed - petition allowed.
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2023 (10) TMI 990
Exemption from payment of tax - turnover of books and periodicals printed at the printing press of the petitioner in terms of G.O. Ms. No. 625 Rev. (CT-II) dated 31.07.1996 - nature of job undertaken by the petitioner would fall within the purview of ‘works contract’ or whether it would be termed as a sales in terms of the definitions provided under the provided under the provisions of APGST Act, 1957?
HELD THAT:- Admittedly, the petitioner is a business organization which is otherwise into the business of printing of textbooks, periodicals and other materials as per the orders/demand received from the various customers. What is also undisputed is that there is a contract entered with the customers for the printing of the books and magazines as the case may be. The contract is for the quantity of the printed materials in the form of books and magazines - What is required to be understood further is that in terms of the contract itself, it is the responsibility of the petitioner to use the required paper for the purpose of printing. Neither the printed material nor the raw material paper can be separated, nor can the aforesaid two materials be sold independently at the first instance and neither can the same can be sold by the petitioner in any manner. It can be sold only by the publisher who has got the materials printed.
The fact which needs to be further looked into is that if the transaction between the printer and the publisher is treated as sale, then the publisher in turn would claim exemption on the sale value of the textbook on the ground of the same being second sale. Therefore, the contention of the learned counsel for the petitioner becomes difficult to be accepted - Yet another fact which needs to be considered is that if the contention of the learned counsel for the petitioner is to be accepted, then there shall be no distinction between the printing of textbooks, magazines and periodicals and the printing works of letter heads, bill books, account books, leaflets etc., as any printing carried on by the printer would have to be treated as sale upon which G.O. Ms. No. 625 would become applicable.
No strong case for interfering with the impugned order of the Tribunal has been made out - Tax Revision Cases being devoid of merits, deserves to be and are accordingly, rejected.
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2023 (10) TMI 953
Exemption on commencement of commercial production - Grant of incentives of exemption from State Sales Tax to existing and new Information Technology Industrial Units - Notification dt. 05.08.2002 - HELD THAT:- Since the petitioners’ units commenced commercial production on 31.03.2010 (between the dates 01.08.2006 upto 31.03.2013), they would be entitled to the incentives contained in the Notification dt. 05.08.2002.
The Supreme Court in Jugalkshore Saraf vs. Raw Cotton Company Limited [1955 (3) TMI 38 - SUPREME COURT] declared that the cardinal rule of construction of statutes is to read the statute literally, that is by giving to the words used by the legislature their ordinary, natural and grammatical meaning; if, however, such a reading leads to absurdity and the words are susceptible of another meaning, the Court may adopt the same. But if no such alternative construction is possible, the Court must adopt the ordinary rule of literal interpretation.
Had the State intended to confine the benefit granted to New Information Technology Industrial Units only upto 31.03.2013 as is contended by the respondents the language in para-4 would have been different, and it would have stated that for such units the period of incentive is only up to 31.03.2013, but that is not the case. Para-4 specifically says that total period of incentive in case of New Information Technology Industrial Units also would not exceed 6 years and 8 months - the specific language used in para-4 cannot be ignored on the basis of minutes of a meeting said to have been held between the Secretary (Information Technology) to the State Government of Himachal Pradesh and the Excise & Taxation Commissioner on 31.05.2006 or the proposal placed before the Council of Ministers, as has been done by the Tribunal.
Therefore, since the petitioners fall within the plain terms of the exemption granted in para-3 having commenced production on 31.03.2010, which is between 01.08.2006 and 31.03.2013 (as mentioned in para-3), they are entitled as per Para 4 for the incentive mentioned in the Notification dt. 05.08.2002 for a period not exceeding 6 years and 8 months, i.e. up to 30.11.2016 - this apart, Section 60 authorizes the Assessing Authority to undertake scrutiny of returns filed for any return/tax period under Section 16 (3 & 4) and to interalia check correctness of application and calculation of rates of tax etc.
The statutory procedure of scrutiny of returns filed to check correctness of application an calculation of rates of tax, penalty and interest, and issuance of notice enacted under Section 60(2) if a mistake is detected, read with Rule 44 (1) & (2), and the recommendation for audit under Rule 44(2) are mandatory requisites of procedure of scrutiny of returns under the Act and this fact had not been appreciated by the Tribunal.
The substantial questions of law are answered in favour of the assessee - the Revision Petitions are allowed.
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2023 (10) TMI 952
Contractual dispute or not - security being insisted to be furnished by the Petitioner’s members by way of a bank guarantee - requirement of filing of Form C within a span of three months - monthly compliance not required - amicable settlement of the dispute - HELD THAT:- There certainly appears to be a friction which is caused between the parties although the relation between the parties is contractual in view of the statutory mechanism, which is in operation under the Central Sales Tax Act and, more particularly, in respect of release of Form C, which are required to be furnished by the Petitioner to the IOCL, to avail the benefit of the tax paid. The Petitioners are admittedly the dealers of the petroleum products as supplied by the Respondent IOCL.
In the peculiar facts of the case, it would be appropriate that the statutory mechanism is required to be discussed between the parties and appreciated in its proper perspective so that the dispute in this regard as asserted in the present proceedings can be resolved amicably.
The present petition needs to be disposed of by directing the Respondent - Deputy General Manager, IOCL, to hear the Petitioner and after appreciating the contentions of the Petitioner on the statutory canvass as involved, take an appropriate decision by passing a reasoned order on such representation by keeping open all contentions of the parties - petition disposed off.
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2023 (10) TMI 867
Recovery of tax dues - priority of charges - Right of auction purchase of property - Auction by the Secured Creditors - Requirement to deposit an additional sum on account of the unearned premium i.e. the differential amount of Industrial Plot which existed at the time of execution of initial lease deed vis-à-vis the market value existing on the date of auction/ sale - HELD THAT:- The issue as to whether the dues of secured creditor under SARFAESI Act shall have priority over the dues of Central Excise Department has been answered by the Hon’ble Apex Court, in PUNJAB NATIONAL BANK VERSUS UNION OF INDIA & ORS. [2022 (2) TMI 1171 - SUPREME COURT] by recording a finding that secured creditor will have a first charge on secured assets and the provisions of SARFAESI Act shall have overriding effect on the provisions of Central Excise Act 1944 or on all other laws, in view of Section 35 of the SARFAESI Act.
The issue of sanctity of public auctions and the rights of an auction purchaser which had fructified on issuance of the sale certificate cannot be nullified, defeated, obstructed, frustrated, restricted nor curtailed, whittled down or extinguished in any manner has been approved by the Hon’ble Apex Court in the case of K. Kumara Gupta v. Sri Markendaya and Sri Omkareswara Swamy Temple & Ors [2022 (2) TMI 1388 - SUPREME COURT].
The Hon’ble Apex Court in Shakena & Anr versus Bank of India & Ors, [2019 (8) TMI 904 - SUPREME COURT], has been held that after incorporation of amended Section 13(8) of the SARFAESI Act, 2002 w.e.f. 1.9.2016 that the rights of an auction purchaser crystallize on issuance of sale certificate and registration of such certificate is not essential and the borrower can only redeem its mortgaged property before the date of the publication of sale notice by depositing amount and such right was not available thereafter when the rights title and interest of the auction purchaser-subsequent purchaser have matured.
Whether the petitioner-auction purchaser of the secured assets-industrial plots under SARFAESI Act could be fastened with the liability of State taxes which had accrued and were connected with and were solely attributed to the business of the original lessee? - HELD THAT:- Once the petitioner has only purchased the Industrial Plots-Immovable Properties, which had been leased out to the Original Lessee by department of industries and the petitioner has never purchased the past or ongoing business of the original lessee therefore, the petitioner-auction purchaser cannot be fastened with the liability of State taxes, which had accrued and were connected with and were solely attributable to the business of the original lessee only.
Whether Business liability (past or ongoing) of original lessee (erstwhile owner of business) could be fastened on an Auction purchaser? - HELD THAT:- While discussing the ambit of recovery of dues of the original lessee from the transferee dealer under the Karnataka Sales Tax Act, which is akin to Section 39 of the Himachal Pradesh Value Added Act, 2005, it has been held by Hon’ble Apex Court that the subsequent purchaser can be held liable if “the ownership of business is transferred to such auction purchaser and not otherwise, in view of the mandate laid down by the Hon’ble Apex Court in the case of STATE OF KARNATAKA AND ANOTHER VERSUS SHREYAS PAPERS P. LTD. AND OTHERS [2006 (1) TMI 243 - SUPREME COURT].
Enforcement of charge, dues, taxes etc if preconditions in section 26-B (4) w.e.f 24.01.2020 complied - HELD THAT:- A perusal of Section 26-B (2) provides that from the date of issuance of the notification dated 24.01.2020 the transactions pertaining to the creation, modification and satisfaction of any security interest over properties was to be registered with the Central Registry i.e. CERSAI. It is mandatory that under Section 26-B(4) that every authority or officer of the Central Government or any other State Government or local authority entrusted with the function of recovery of taxes or other Government dues against any person shall have to file an attachment order with the Central Registry - once the State authorities were negligent and had slept over their claims, interests or rights in neither registering its recoverable claim with CERSAI nor have they obtained and registered the attachment orders with CERSAI in accordance with the mandate of Section 26B of the SARFAESI Act read with Enforcement Rules 2002 then, Respondents-State Authority cannot fasten the business liability of the original lessee on the petitioner. Moreover, the respondents cannot be permitted to penalize and prejudice the petitioner for inaction of the respondents in not resorting to the remedy available under Section 26B of SARFAESI w.e.f. 24.1.2020 and therefore, the condition so inserted to the disadvantage of petitioner is arbitrary and illegal.
Legal position: Section 26-E of SARFAESI Act and section 26 of HP VAT Act - HELD THAT:- Reference to Section 26E of SARFAESI Act and Section 26 of HPVAT Act, reveals that the words ‘priority’ in Section 26E of the SARFAESI Act and “first charge” in Section 26 of the VAT Act are of utmost significance. As per the Black’s Dictionary, the word ‘priority’ in Section 26E of SARFAESI Act means ‘precedence’ or ‘going before’ meaning thereby, that the word ‘priority’ would mean right to enforce the claim in preference to others. That being so, the word ‘first charge’ in Section 26 of the HPVAT Act cannot take precedence over the word ‘priority’ in Section 26E of SARFAESI Act. Reading these provisions in the context of present case reveals that once the State Authorities have neither created a charge and have not made such charge known to the petitioner -auction purchaser nor have the respondents obtained the attachment orders under Section 26(B)(4) of the Act then, the outstanding tax liability of original lessee cannot be fastened on the petitioner.
The petitioner-auction purchaser cannot be fastened with the outstanding liability of dues and taxes, which had accrued and were connected with and were solely attributable to the business of Original Lessee. Moreover, the outstanding liability of an Original Lessee cannot be fastened on the auction purchaser when, the Bank has nowhere stipulated in sale notice that the business liability of Original Lessee was put to sale under Rule 6 of Enforcement Rules. Such liability cannot be fastened when, the auction purchaser has never purchased the business liability of original lessee - once the Bank has failed to disclose the known encumbrances of state taxes/dues of the original lessee in sale notice, despite knowledge, vide Annexure R-5 and R-6 and the Bank had acted contrary to Rule 8(7)(a) of the Security Interest Enforcement Rules which came into force w.e.f. 18.10.2018 and had also not complied with Rule 8(7)(f) of the Security Interest (Enforcement) Rules then, any such undisclosed liability cannot be fastened on an auction purchaser.
The Respondents-State Authorities cannot nullify, defeat, obstruct, restrict, frustrate, curtail, take away or extinguish the rights, title and interest acquired by the auction purchaser after issuance of the Sale Certificate in his favour and such an auction purchaser has every right to get the benefit of the auctioned-scheduled immoveable property to be entered in the revenue records as lessee in the present case (or as owner as the case may be) and for all intends and purposes and in such an eventuality, any coercive or red entry, made by the revenue authorities on such auctioned property cannot operate to the disadvantage of the auction purchaser, alike the petitioner, in the instant case.
Whether the Condition no 7 in letters dated 11.10.2022 and 13.12.2022 vide Annexure P-7 and Annexure P-9, could be imposed on the petitioner when, the outstanding business liability of the Original Lessee was not disclosed in the Sale Notice dated 10.12.2021, Annexure P-3, as mandated by Rule 8 (7) (a) of the Security Interests (Enforcement) Rules 2002 - HELD THAT:- Any adversial condition, imposed, after the date of the issuance of the sale certificate as in the impugned orders, cannot nullify, frustrate or extinguish the rights, title and interest acquired by the auction purchaser except in case of fraud or collusion of an auction purchaser, which are non-existent and not borne out from the facts of the instant case. Accordingly, the impugned order and the adversial condition so imposed against the petitioner-auction purchaser, being illegal and arbitrary is set-aside.
Whether adversial condition can be enforced against the petitioner when, Respondents-State Tax Authorities have failed to recover its outstanding encumbrances-tax liability, which was attributable to the business of the Original Lessee or its Directors in-accordance with the Himachal Pradesh Value Added Tax Act, 2005? - HELD THAT:- Notably, once the original lessee, being a Company was the dealer, who carried on its business from these industrial plots then, the original lessee was bound in law to pay the taxes relatable to his business. In case the taxes or outstanding dues of taxes were not forthcoming from original lessee then, the State authorities were under an obligation to recover such taxes from the Company and its Directors as the arrears of land revenue under Section 25 and Section 53 of the VAT Act - in the present case, once the original lessee and its Directors had failed to file returns or has failed to pay the taxes, interest and penalty in terms of Section 16 and 19 of the HPVAT Act and had contravened the provision of Section 50 of HPVAT Act then, the State authorities were under an obligation to resort to the criminal prosecution of the Original Lessee-Company and its Directors but the inaction or negligence or non-performance of functions and legal obligations by the Respondents under the Statute cannot be the ground to fasten the liability of the outstanding state taxes, which had accrued, were connected with and solely attributable to the business of the Original Lessee-Company and its Directors under the HP VAT Act on the petitioner-auction purchaser.
Once the State Tax Authorities under the HPVAT Act have neither invoked, nor resorted to statutory remedial action for recovery of taxes, interest or penalty and arrears under VAT Act which had accrued and was connected with and was solely attributable to the business of the Original Lessee-Company and its Directors then, the inaction or negligence or non-performance on the part of the State Authorities cannot be the basis for prejudicing or putting the petitioner-auction purchaser to a disadvantage or position, by fastening the business liability of others, on the petitioner-auction purchaser is impermissible.
Petition allowed.
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2023 (10) TMI 724
Input Tax Credit - Intrastate stock transfer of goods - denial of credit is contrary to amended provisions of Section 18(8)(ix) of the Jharkhand Value Added Tax Act, 2005 or not - HELD THAT:- By bare perusal of the provisions of the JVAT Act, 2005 it would transpire that said provisions are in consonance with the scheme of Value Added Tax Regime introduced in the Country. From the scheme of JVAT, 2005 it would be evident that output tax liability of a dealer was required to be determined after subtracting therein the input tax paid by the dealer.
ITC is claimed by a manufacturer on its input which is, admittedly, used for manufacture of goods, which is intended for sale. If the reasoning given by the Tribunal is accepted, then a manufacturer would get ITC on input if the goods are manufactured by it and sold by it itself. Whereas, the manufacturer would not be entitled to ITC if the goods are manufactured but not sold by manufacturer itself and stock transferred to its branch/stockyard/other units etc. up to the stage when the final product is sold - This is clearly not the intent of the Scheme of JVAT Act and the manufacturer is not required to wait for availment of ITC to a stage of ultimate sale of goods but it is entitled for ITC if the goods are merely ‘intended for sale’.
Almost identical issue came up for consideration before the Hon’ble Apex Court by interpreting almost pari materia provisions contained under Section 8(3)(b) of the Central Sales Tax Act, 1956 in the case of ASSESSING AUTHORITY-CUM-EXCISE AND TAXATION OFFICER, GURGAON AND ANOTHER VERSUS EAST INDIA COTTON MFG. CO. LTD. [1981 (7) TMI 205 - SUPREME COURT] - In the said Judgment, Hon’ble Apex Court in categorical term has held that the words ‘for sale’ following the word ‘goods’ in Section 8(3)(b) of the Central Sales Tax Act 1956 clearly indicate that the goods manufactured or processed must be goods ‘for sale’; in other words, they must be ‘intended for sale’ either by registered dealer himself or by anyone else.
Thus, Petitioner is entitled to claim full ITC on Intrastate stock transfer of goods and, consequentially, the impugned orders being the orders dated 05.12.2012, impugned Judgment and order dated 10th August, 2021 passed by Commercial Taxes Tribunal, Jharkhand and impugned Judgment and Order passed by Commercial Taxes Tribunal, Jharkhand are hereby quashed and set aside.
Application allowed.
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2023 (10) TMI 723
Concessional rate of duty - execution of works contract - purchase of cement - taxable at the rate of 4% or 16% under the provisions of Section 5-B of the Andhra Pradesh General Sales Tax Act, 1957 - legality of penalty order passed by the assessing authority and confirmed by the Appellate Deputy Commissioner under Section 7-A of the Act - assessment orders of the years 2001-02, 2002-03, 2003-04 and 2004-05.
HELD THAT:- Prior to issuance of the G.O. dated 17.07.2001, cement was one of the item which was eligible to be purchased at a concessional rate. It was in this context that the authorities at the earliest time had issued the G2 registration certificate permitting the petitioner to purchase cement at a concessional rate. However, after issuance of the G.O. dated 17.07.2001, the petitioner was not entitled for purchase of cement at a concessional rate. In spite of this, petitioner continued to purchase cement at a concessional rate against the G Forms - the petitioner, beyond 17.07.2001, could not have purchased cement at a concessional rate and petitioner continued to purchase cement against the G Forms basing on the G2 registration certificate issued much before 17.07.2001.
The proviso to G.O. dated 17.07.2001 would not be applicable to the petitioner. Therefore, the assessing officer, the appellate authority and the Sales Tax Appellate Tribunal were justified by holding that the petitioner is liable to pay tax on cement at its normal rate and not at the concessional rate - The said issue whether the petitioner is entitled for purchase of cement at a concessional rate under Section 5B in the teeth of G.O. dated 17.07.2001 stands answered in the negative against the petitioner.
Penalty order - HELD THAT:- Though the State has taken a plea that there is some misquoting or wrong quoting of the provision, nonetheless, the petitioner never had an occasion of defending himself in a penalty proceedings under Section 5-B(2). What is also required to be appreciated is that Section 7-A(2) and Section 5-B(2) are both independent penal provisions. Separate proceedings have to be drawn for each of the provisions. In the instant case, there does not seem to be any corrigendum or rectification order issued by the respondent for treating the notice under Section 7-A(2) as notice under Section 5-B(2) either before imposing of the penalty or subsequently, except for the admission on their part in the reply in Writ Petition No. 14484 of 2005.
Since the petitioner never had an occasion to defend himself under Section 5-B(2), the entire proceedings initiated against the petitioner so far as imposing penalty is concerned under Section 7-A(2) stands vitiated as the petitioner has taken a stand that the penalty to be imposed against the petitioner was not under Section 7-A(2) but under Section 5-B(2) - the orders passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, at Hyderabad confirming the order of penalty by the Appellate Dy. Commissioner and the Assessing Authority is improper and unjustified and therefore, the same deserves to be and are accordingly set aside.
Tax revision disposed off.
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2023 (10) TMI 722
Non-grant of exemption to the petitioner by the respondent - cement and steel used by the petitioner are supplied by the establishment for which they were carrying out the contract - taking the goods from another site - Neither sale nor transfer of property - HELD THAT:- There is a consistent and concurrent finding of fact by the two forums below. First, the Deputy Commissioner (CT) in the course of deciding the revision and secondly by the Tribunal while deciding the Tax Appeal. Moreover, during the course of hearing of the instant Tax Revision Case also the petitioner was not in a position to bring before this Court any cogent material to dispute or disprove the concurrent finding, except for the oral submissions made so far as the petitioner receiving the cement and steel would amount to second sale or prove the contention that the product received by the petitioner had already suffered tax at the hands of the contractee.
The Tax Revision Case thus being devoid of merits, deserves to be and is accordingly dismissed.
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