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Showing 101 to 120 of 27753 Records

2025 (3) TMI 673

Reopening of assessment beyond a period of three years from the date of the judgment or order - applicability of time limitation - suppression of facts - HELD THAT:- It is apparent from the narration of facts recorded in the foregoing paragraphs that the writ petitioner approached this Court without making any mention or reference of the suo-moto revisional proceedings by raising a plea of time bar under Section 36 (1) of the TVAT Act, 2004 for reopening of assessment vide notice dated 18th October, 2024. This Court being persuaded by the legal plea also passed an interim order staying further proceedings pursuant to the impugned show-cause notice. The petitioner did not even care to challenge the order of the revisional authority dated 27th October, 2022 though it was specifically mentioned in the impugned notice dated 18th October, 2024. Therefore, petitioner has not come with clean hands before this Court. The writ petition is, therefore, fit to be dismissed only on the basis of the principles suppressio veri; suggestio falsi. The proceedings under writ jurisdiction of such nature cannot be entertained at the behest of a party who has indulged in suppression of fact.

Reliance is placed on the opinion of the Apex Court in K Jayaram and Others Vs. Bangalore Development Authority and Ors., [2021 (12) TMI 1439 - SUPREME COURT], paragraphs 10, 11, 13 & 14 which are quoted hereunder. The Hon’ble Supreme Court has categorically held that the petitioner approaching the writ court must come with clean hands and put forward all facts before the court without concealing or suppressing anything while invoking the extraordinary, equitable and discretionary remedy of the High Court under Article 226 of the Constitution.

Conclusion - A petitioner seeking relief under Article 226 must disclose all material facts and come with clean hands. Suppression of material facts is a ground for dismissal of a writ petition. The writ petition is dismissed on the ground of suppressio veri; suggestio falsi, as the petitioner had not disclosed the revisional proceedings and the order directing reassessment.

The writ petition is accordingly dismissed.
2025 (3) TMI 562

Rejection of his rectification application - Karnataka Appellate Tribunal raised an issue, which had not been raised by the lower authorities and also not argued at the time of final hearing by both the sides - exemption of turnover under section 5 (3) of the CST Act - amendments to section 5 of the CST Act effective from 13-5-2005 - HELD THAT:- Section 5 is intended to promote export business of the country and therefore grants certain concessions & exemptions in respect of sale of goods that are exported or intended to be exported. Sub-section (3) grants exemption from tax in respect of last sale of goods provided that some tangible evidentiary material as prescribed in law is produced to prove the intended onward transaction of export.

Sub-section (3) of Sec.5 of the Act r/w Rule 12 (10) (a) of the subject rules, which is much pressed into service by both the sides has been construed by the Coordinate Bench in A.R. ASSOCIATES [2001 (1) TMI 948 - KARNATAKA HIGH COURT] wherein it was held that 'Undoubtedly, the law does make an exception in those of the instances where very valid and cogent reasons are set out for the default or for those cases where the aggrieved party is able to demonstrate that but for the absence of appearance, the chances of success were almost certain and that it would really be a miscarriage of justice if the party is not afforded a second opportunity. None of those principles apply to the present case and consequently, we are of the view that no second opportunity can be afforded to the present appellants.'

Learned AGA is more than justified in contending that sub-section (3) of Sec. 5 is a qualified provision to sub-section (1) and that in addition to what it requires, the Assessee has to comply with other requirement prescribed under Rule 12 (10) (a) coupled with Form-H.

Conclusion - The denial of tax exemption upheld due to non-compliance with statutory requirements and evidentiary standards.

Petition dismissed.
2025 (3) TMI 561

Wrongful denial of Input tax credit - Grant of deduction of Input Tax Credit at the rate admissible in law although what was claimed in the Returns filed by him, was less than that - HELD THAT:- Ordinarily, the claim for Input Tax Credit has to be made in the Return or Revised Return only. A claim otherwise is an exception and bona fide of the same has to be demonstrated - However, when underclaim is made in the Return/Revised Return due to bona fide mistake of adopting inapplicable rates of tax only, it is permissible to seek rectification by making a representation provided that the foundational fact matrix is already available in the Return/Revised Return - Further, no rectification whatsoever can be sought for, once the assessment/reassessment proceedings are concluded or that the limitation period otherwise has expired.

Whether a claim for ITC can be rectified under Section 39 of the 2003 Act even if it is disadvantageous to the State Exchequer? - HELD THAT:- If the Assessee during the course of reassessment proceedings makes a claim for Input Tax Credit, the same cannot be disallowed only on the ground that the claim of the Assessee is disadvantageous to the State Exchequer - If the reassessed tax is more than what is payable, then the same has to be recovered from the Assessee along with admissible interest/penalty; as a corollary of this, what is paid is more than what is payable on reassessment, then the claim for Input Tax Credit has to be favoured if that is made before the conclusion of reassessment proceedings.

Conclusion - Claims for ITC rectification must be made before reassessment proceedings conclude or the limitation period expires.

Petition dismissed.
2025 (3) TMI 560

Challenge to attachment order - attachment of flat for non payment of tax dues - Section 34 of the Maharashtra Value Added Tax Act, 2002 - HELD THAT:- Section 34 (1) (v) of the said Act empowers the Respondent No. 1 to perform duties of Tahsildar under the Code, for the purpose of effecting recovery of amount of tax and its dues as arrears of land revenue. Perusal of Form No.15 submitted by the Petitioner to the Cooperative Housing Society, affidavit by the Petitioner and her three sons including Mr. Jayesh dated 30/06/2017 and indemnity bond executed by the Petitioner dated 01/07/2017 shows that it is clearly stated in all these three documents, that the Petitioner is claiming to be a nominee after the death of late Madhusudan and the Petitioner is one of his legal heirs and there are three other legal heirs i.e. her sons. It is settled law that mere nomination in favour of one of the legal heirs does not make that nominee the exclusive owner holding full title to the property and the nominee holds it in trust of all the legal heirs as per applicable succession rules. As per the averments in petition itself (paragraph no. 3.3) late Madhusudan has passed away ‘intestate’. Therefore, the laws of succession would squarely apply.

The affidavit in reply filed by the Respondent State is not countered by filing any rejoinder. From the said affidavit, it is clear that the arrears under the said Act are in respect of period FY 2008-09 and FY 2012-13. If this period is considered along with dates of earlier notices issued, it is evident that the alleged transfer in favour of the Petitioner by her sons is subsequent in point of time, being effected in June 2017 and therefore, undivided share of Mr. Jayesh in the title therein is hit by Section 38 of the said Act. Whether the said transfer was with ‘an intent to defraud revenue’ is a disputed question of fact, that will have to be considered in accordance with law, including enquiry under Section 38 of the said Act.

The affidavit in reply filed by the Respondent State is not countered by filing any rejoinder. From the said affidavit, it is clear that the arrears under the said Act are in respect of period FY 2008-09 and FY 2012-13. If this period is considered along with dates of earlier notices issued, it is evident that the alleged transfer in favour of the Petitioner by her sons is subsequent in point of time, being effected in June 2017 and therefore, undivided share of Mr. Jayesh in the title therein is hit by Section 38 of the said Act.

Conclusion - It is settled law that mere nomination in favour of one of the legal heirs does not make that nominee the exclusive owner holding full title to the property and the nominee holds it in trust of all the legal heirs as per applicable succession rules.

Petition dismissed.
2025 (3) TMI 493

Attachment of personal properties of directors of a company under the Gujarat Value Added Tax Act, 2003 - lifting of corporate veil - HELD THAT:- This Court finds that this very issue came up for consideration before the Division Bench of this Court in the case of MR Choksi [2004 (6) TMI 642 - GUJARAT HIGH COURT] where it has been held 'As regards the faint plea of lifting the corporate veil, as per the settled legal position, the corporate veil is not to be lifted lightly. It is only when there is strong factual foundation for lifting the corporate veil that the question of examining the applicability of the principle of lifting such veil would be required to be examined. In neither of the two petitions raising the controversy, the authorities have passed any specific order fastening the liability on the Directors personally, much less any factual foundation has been laid to invoke the doctrine of lifting the corporate veil. Hence it is not necessary to dilate on the said principle any further.'

The present issue is no longer res integra and this Court has repeatedly and emphatically held that the personal properties of a Director cannot be attached to secure the dues of the Company. Besides, there is no factual foundation whatsoever, for this Court to lift the corporate veil and permit the respondents to go after the Directors of the Company, whose dues the respondents seek to secure by way of the attachment in question.

The impugned attachment orders dated 19.01.2013, 17.02.2014 as well as attachment order dated 01.05.2015 are hereby quashed and set aside - Petition allowed.
2025 (3) TMI 427

Confirmation of best of judgment assessment made on the writ petitioner by the assessing authority - dismissal of application filed by the writ petitioner primarily on the ground that the order passed by the Fast Track Revisional Authority, impugned before it, is a well reasoned order and does not appear to have infringed any provision of law and any said principle of law - HELD THAT:- Since the matter involves verification of the documents, which the petitioner asserts to have produced along with its reply to the verification report, we are of the view that one more opportunity can be granted to the writ petitioner to go before the 4th respondent, which authority presently has jurisdiction viz., West Bengal Commercial Taxes Appellate and Revisional Board so that a factual verification can be done.

In any event, as the matter requires verification of the documents, which are stated to be in possession of the writ petitioner, therefore, it will be justified in remanding the matter back to the 4th respondent for a fresh consideration of all issues, which were raised by the writ petitioner in the grounds of revision initially filed before the Revisional Board, which stood transferred to the Fast Track Revisional Authority as well as the issues, which were canvassed in the rebuttal/reply to the verification report dated September 17, 2019.

Conclusion - The Court emphasized the need for factual verification of the documents claimed to have been submitted by the petitioner. The petitioner expressed readiness to produce the documents before the Court.

Petition allowed by way of remand.
2025 (3) TMI 426

Sales under concessional rate of tax against declaration in Form ‘C’ i.e. exemption from tax in sale in transit and regarding Camp sales - whether the appellant is entitled to further time to produce the declaration forms in Form 'C' under the Central Sales Tax Act, 1956, to support their claim for a concessional rate of tax? - HELD THAT:- Though perusal of the record shows that the appellant was granted a number of opportunities to produce declaration Form ‘C’ but it was not able to produce the same before the Assessing Authority, still in the interest of justice and as per the statement of the learned counsel for the appellant, since the appellant is in possession of declaration Form ‘C’, one last opportunity is granted to the appellant to produce the declaration in Form ‘C’ before the Assessing Authority.

The case is remanded to the Assessing Authority to consider and verify the declaration Form ‘C’ produced by the appellant and after considering the same, pass a fresh order - one last opportunity is granted to the appellant to produce the declaration Form ‘C’ before the Assessing Authority within a period of two weeks from the date of passing of this order and the Assessing Authority is directed to consider and verify the same and pass a fresh order.

Conclusion - The appellant should be granted one final opportunity to produce the Form 'C' declarations before the Assessing Authority within two weeks.

Appeal disposed off.
2025 (3) TMI 425

Cancellation of penalty imposed u/s 47 (6) of the KVAT Act - documents accompanied has no connection with the gold detained and said documents are not valid documents because of variation of quantity, non declaration of the said delivery chalan before the assessing authority and non mentioning the date of transport - HELD THAT:- The appellate tribunal took note of the factual position obtaining with regard to the seizure of the gold ornaments from the employee of the respondent/assessee. As is apparent from a reading of the proceedings of the intelligence officer, the jewellery that was seized was found in the possession of one Sumesh who was standing at the hallmarking centre where he had been entrusted to take the gold ornaments by the respondent/assessee. It was not in dispute that the jewellery in his possession was being taken for the sole purpose of hallmarking and thereafter returning to the store of the respondent/assessee. The revenue also did not have a case that the goods were meant for sale and that therefore there was a possible evasion of tax.

It is also significant that the respondent/assessee was paying tax on compounded basis, based on the tax paid in the immediately preceding assessment year. In the absence of any material to suggest that the gold ornaments that were seized from the employee of the assessee were meant for sale either within the State or inter-state, and finding that the assessee was paying tax on compounded basis in which event any suppression of turnover in the present year would have no bearing on his tax liability for the said year, the appellate tribunal was of the view that there was no justification for the imposition of any penalty based on the turn over computed of alleged suppressed sales. The tribunal accordingly confirmed the penalty only to an extent of Rs.10,000/- as mandated under Section 67 (1) (j) of the Kerala Value Added Tax Act.

Conclusion - No evidence of tax evasion or suppression of turnover that would impact the assessee's tax liability for the year. Therefore, the appellate tribunal's decision to confirm a reduced penalty of Rs. 10,000 under Section 67 (1) (j) of the Kerala Value Added Tax Act was upheld.

The O.T. Revision dismissed.
2025 (3) TMI 424

Validity/correctness of order granting permission/sanction for re-assessment - Commissioner is entitled to grant such permission for reassessment without affording opportunity of hearing to the Assessee or not - violation of principles of natural justice - HELD THAT:- It is to be noted that vide order dated 08.07.2014 in CWP-12839- 2014 [2015 (3) TMI 479 - PUNJAB & HARYANA HIGH COURT] and other connected writ petitions, vires of Section 29 (7) of PV Act were upheld, approval given by Commissioner and notices issued by concerned authority for amending assessment order were held to be in order and without any fault.

Reference was thereafter made to Rule 49 of Punjab VAT Rules in regard to amendment of assessment and procedure to be followed therein. In respect to question of grant of opportunity of hearing at the stage of grant of approval, while referring to judgment of Hon’ble the Supreme Court in Assistant Commissioner Assessment-II, Bangalore and others versus Velliappa Textiles Limited and another [2003 (9) TMI 3 - SUPREME COURT], it was held that grant of sanction is a purely administrative act with no opportunity of hearing required to be provided to the affected person before it.

The learned Tribunal has correctly proceeded to dismiss the appeals filed by present appellant - appeal dismissed.
2025 (3) TMI 375

Method of Valuation of goods - cell phone sold along with a charger - only one Maximum Retail Price (MRP) stated on the packaging - HELD THAT:- It was held in the case of STATE OF PUNJAB & OTHERS VERSUS NOKIA INDIA PVT. LTD. [2014 (12) TMI 836 - SUPREME COURT] that 'Assessing Authority, Appellate Authority and the Tribunal rightly held that the mobile/cell phone charger is an accessory to cell phone and is not a part of the cell phone.'

There are no reason to interfere with the impugned order - SLP dismissed.
2025 (3) TMI 186

Challenge to appellate order by which assessment order was confirmed - whether the petitioner was right in his contention that the output tax demand for the period during which the eligibility certificate was not renewed or rejected, namely, 4.3.2015 to 31.3.2015 could be adjusted with the forwarded accumulated input tax credit? - HELD THAT:- The learned tribunal had rightly took into consideration the provisions of the West Bengal Value Added Tax Act and found that the rejection of the renewal of the eligibility certificate will render the petitioner/dealer ineligibility for output tax for discharging the liability the dealer will have to pay the taxes.

However, the claim of the petitioner/dealer to adjust the carry forward input tax which was carried forward to the subsequent quarter is not feasible as there is no such provision under the Act.

Conclusion - The learned tribunal was perfectly right in holding that the output liability for the rejected period, namely, from 4.3.2015 to 31.3.2015 was to be paid by the writ petitioner within 30 days of such rejection in terms of Rule 180 of the said Rules and having not done so, the authorities were justified in demanding the same by passing the impugned order.

The petitioner has not made out any case for interference with the order passed by the learned tribunal - Petition dismissed.
2025 (3) TMI 116

Entitlement to the benefit of prospective effect as contemplated under Section 56 (2) of the MVAT Act - Appellant Trust is a deemed dealer under section 2 (8) of MVAT Act 2002 liable for registration and payment of tax under MVAT Act or not - whether it is not necessary for levy of Sales Tax, that the Appellant must carry on ‘business’ in the capacity of the dealer? - sale of movable or immovable property, to be ascertained by the field officers at the appropriate stage.

Whther the appellant is a 'deemed dealer' as contemplated under the explanation to section 2 (8) of the MVAT Act? - HELD THAT:- The Appellant became the full and absolute owner of the loans and the stressed assets [by virtue of the Transfer Deed dated 30th September 2004] and the only person legally entitled to recover those loans or any part thereof. To ensure that the Appellant could in fact avail of quick remedies of recovery under the provisions of the RDDB Act, 1993, as well as the SARFAESI Act, 2002, the Government, in exercise of powers conferred by sub-clause (ii) of clause (h) of Section 2 of the RDDB Act, 1993 specified/notified the Appellant to be a financial institution for the purposes of the said clause. On perusing the clauses of the Trust Deed as well as the Transfer Deed, it is clear that the objects of the Appellant Trust were for recovering debts of defaulting borrowers by disposing of the stressed assets inter alia under the provisions of the SARFAESI Act, 2002.

The deemed dealer provision under the MVAT Act becomes operational when the categories thereunder sell any goods, whether by auction or otherwise. The Explanation which introduces the deeming provision further stipulates that the deemed dealer provision would operate notwithstanding anything contained in Section 2 (4) [the definition of the word “business”] or any other provisions of the MVAT Act - The Explanation in clear terms provides that the enumerated entities would be deemed to be a “dealer” when they sell any goods, by auction or otherwise. Thus, the definition itself specifies that the sale of goods, whether by auction or otherwise would render the person/body/entities enlisted in the clauses to the Explanation to be a dealer.

Whether the Appellant would fall within any of the ten clauses as set out in the Explanation to Section 2 (8) of the MVAT Act? - HELD THAT:- Clause (x) of the Explanation clearly stipulates that any corporation, company, body or authority owned or constituted by or subject to the administrative control of the Central Government, any State Government or any local authority, would be deemed to be a dealer for the purposes of the MVAT Act. It can hardly be disputed that the Appellant is a body constituted by the Central Government. This is abundantly clear from the Trust Deed which in fact constitutes and sets up the Appellant as a Trust and the settlor of this Trust is the Central Government. The Appellant therefore is clearly a body constituted by the Central Government. Once this is the case, we find that the Appellant is certainly a deemed dealer for the purposes of the MVAT Act.

Denial of benefit of prospective effect to the DDQ order (u/s 56(2) of the MVAT Act) - HELD THAT:- Under Section 56 (1), if any question arises regarding, inter alia, a person being a dealer, or whether such person is required to be registered as a dealer, or any particular thing done to any goods amounts to or results in the manufacture of goods, or any transaction is a sale or purchase etc., and such a question/s is posed to the Commissioner, the Commissioner shall determine such question/s in terms of Section 56 (1) of the MVAT Act. Section 56 (2) gives the power and discretion to the Commissioner to direct that the determination made by him under sub-section (1) shall not affect the liability under the MVAT Act in respect of any sale or purchase effected prior to the determination - the Commissioner has the power and discretion to put a quietus to transactions entered into prior to his DDQ Order. It is, of course, needless to clarify that this discretion has to be exercised on sound judicial principles and cannot be on the ipse dixit of the Commissioner.

Whether the Petitioner had made out a case for getting the benefit of prospective effect to the DDQ Order? - HELD THAT:- There is a force in the argument of Ms. Badheka that by virtue of Article 285 of the Constitution of India the Appellant was of the bona fide opinion that it being set up and constituted by the Central Government, and all the proceeds that it recovers from sale of stressed assets are to go to the Central Government, coupled with the fact that if for any reason the stressed assets are not sold during the tenure of the Trust, the same would vest in the Central Government, it was not liable to collect any tax on the sale of securities of the stressed assets - the Appellant ought to have been extended the benefit of prospective effect to the DDQ Order.

Conclusion - The Appellant is a deemed dealer under the MVAT Act and liable for sales tax on the sale of movable properties. However, the Appellant is granted prospective effect to the DDQ Order, exempting it from liability for past transactions.

Appeal disposed off.
2025 (3) TMI 61

Entitlement to concessional rate of tax - inter-state sale - Rejection of application filed by the writ petitioner on the ground that the tribunal cannot issue the direction sought for - HELD THAT:- It is required to be seen as to what remedy the petitioner is entitled to. Form-C declaration have been held to be documents when produce by the dealer, they will be entitled to benefit of the concessional rate of tax or reduced rate of tax. There are several decisions which have been pointed out and even if there is a defect in Form-C declaration issued in respect of an inter-State sale the same can be rectified and if there is a delay in issuance of Form-C declaration by the assessing officer of the purchasing dealer and if the Form-C declaration is issued belatedly, such declaration can be produced before the jurisdictional assessing officer of the selling dealer and the assessment for the relevant period can be revised.

In the instant case, the factual position is much better as the respondent/department does not dispute the fact that the transaction done by the writ petitioner with the 7th respondent is a case of inter- State sale. There may be cases where the purchasing dealer might have faced action by the department including that of cancellation of registration and there are decisions which have held that if the registration of the selling dealer is valid during the period when the inter-State sale took place, then the selling dealer would be entitled to the concessional rate of tax.

More or less an identical issue was decided by the Division Bench of this court in the case of Commissioner of Commercial Taxes and Another v. Tata Steel Limited and Others [2022 (11) TMI 1274 - CALCUTTA HIGH COURT] - It is informed the said decision though the appeal was filed against the said order before the Hon’ble Supreme Court, subsequently, the State Government accepted the decision and the concessional rate of tax was extended to the assessee therein, namely, Tata Steel Limited. Though this writ petition arises out of a challenge to an order passed by the learned tribunal yet this court is not denude of jurisdiction to do substantial justice in the instant matter in exercise of its powers under Article 226 of the Constitution of India, particularly when facts are not in dispute, that the transaction between the writ petitioner and the 7th respondent is a case of inter-State sale.

Conclusion - The petitioner was entitled to the concessional tax rate of 2% for the inter-State sale based on the admitted facts and the 6th respondent's acknowledgment.

The writ petition is disposed of by directing the 6th respondent to address a letter to the writ petitioner to the effect that the subject sale transaction is admittedly an inter-State sale, and Form-C declaration is not being able to be issued as the 7th respondent has not filed any application for issuance of Form-C declaration.
2025 (2) TMI 1050

Refund of excess tax deposited during appellate proceedings - infringement of Articles 14, 19(1)(g), and Article 265 of the Constitution of India or not - HELD THAT:- The respondents cannot retain the amounts deposited by the petitioner pursuant to condition imposed by the appellate authority for stay of the assessment order and contend that there is no necessity to refund the same. If the actual tax assessed from the petitioner is much less than the amount which the petitioner had deposited at the time of filing the appeal and seeking stay, retention of the balance after the assessing officer, post remand, reduced the demand drastically, would undoubtedly amount to unjust enrichment on the part of the respondents and would be violative of Article 14 and Article 265 of the Constitution of India.

The respondents are directed to refund the amounts deposited by the petitioner after adjusting the same towards the tax finally assessed post remand by the assessing authority for the Assessment Year 2013-14 and Assessment Year 2014-15 with interest at the rate of 9% per annum from 09.01.2021 till the date of actual payment. The respondents shall also pay cost of Rs. 2,00,000/- to the petitioner for unjustly retaining the said amount for the last four years. The cost as well as the refund shall both be paid to the petitioner within six weeks from the date of receipt of a copy of this order.

Petition allowed.
2025 (2) TMI 1014

Works contract - Exemption to subcontractors in terms of Entry 59-A of the 1st schedule to the AP VAT Act - HELD THAT:- Entry 59A exempts all goods sold within the SEZ area by an operator, developer, a co-developer or contractor or by any of the above. The term contractor has now been interpreted to include sub-contractors, by virtue of the Judgment of the erstwhile High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in M/s. Larsen and Toubro and Others vs. State of Andhra Pradesh [2006 (10) TMI 377 - ANDHRA PRADESH HIGH COURT].

However, Section 7A, which was introduced subsequently, on 24.09.2008, states that exemption of tax on sale of goods within the Special Economic Zone will be available on sale of any goods to persons who have been authorized to establish unit in the SEZ or authorized to develop operate and maintain a SEZ. The further condition is that only such sales of goods made for the purposes, set out in Section 7A would be eligible for such exemption.

In the present case, entry 59A states that all goods sold by the persons mentioned in entry 59A, would be eligible for exemption. Section 7A also provides for such exemption. However, the said exemption is subjection to certain conditions - When there is a possibility of conflict between two provisions of law, the rule of harmonious construction would have to be applied to see if both provisions of law can operate simultaneously. Applying this principle, there are no reason as to why both provisions cannot operate at the same time. At best, Section 7A is a more restrictive provision of law whereas item 59A is a more expansive exemption. It may also be noted Entry 59A was not deleted from the Act, when Section 7A was introduced, and came to be deleted much later. This is also a factor, which has to be taken into account while trying to harmonize both the provisions of law.

Conclusion - There are no reason to hold that there is a conflict between Section 7A of AP VAT Act and Entry 59A of the 1st Schedule to the AP VAT Act. In the absence of a conflict, the non-obstante clause does not come into operation and consequently the petitioner was entitled to the benefit of Entry 59-A of the 1st schedule which exempts all the sales made by the petitioner, in the course of execution of the works contract, for M/s. Abhijeet Projects Limited.

All the impugned orders are set aside and the Writ Petitions are allowed.
2025 (2) TMI 943

Challenge to search and seizure proceedings conducted in the appellants’ Firm by the Taxation Authorities, in exercise of powers conferred under Sections 74 (3) and 74(4) of the Assam Value Added Tax Act, 2003 - main contention raised by the appellants before the Writ Court was that the respondent authorities had conducted the aforesaid search and seizure proceedings without following the due process of law - HELD THAT:- The learned Single Judge, while taking into consideration the provisions of the Code of Criminal Procedure, 1973 in Sections 46, 47, 51 and 100, has come to the conclusion that while conducting the search and seizure proceedings, the respondent authorities ought to have followed the procedure laid down under Sections 47 and 100 of the Code of Criminal Procedure, because detail procedure for search and seizure has not been provided in the Assam Value Added Tax Act, 2003. At the same time, the learned Single Judge has not interfered with the search and seizure proceedings effected way back on 03.09.2014, while observing that since much time had already elapsed after conducting the search and seizure proceedings, it may not be necessary to make any further observation except to hold that if any cause of action still survives, the appellants will be at liberty to approach the appropriate forum. It is to be noticed that while passing the impugned order on 05.11.2019, no one appeared on behalf of the appellants before the learned Single Judge.

Since in the order dated 05.11.2019 passed in WP(C) No. 6363/2014 and WP(C) No. 6364/2014 and orders dated 25.01.2021 passed in I.A. (Civil) No. 956/2020 and I.A. (Civil) No. 1262/2020 the learned Single Judge has kept it open for the appellants to challenge the validity of the assessment order and the notice of demand issued during the pendency of the writ petitions, or after disposal of the writ petitions, no further order is required to be passed in these writ appeals.

Appeal dismissed.
2025 (2) TMI 942

Valuation - Invocation of revisional jurisdiction of this court u/s. 8F of the Karnataka Entertainment Tax Act, 1958 - inclusion of service tax component in the ‘amount received or receivable’ while levying entertainment tax, in terms of Sec. 4G of the Act

Whether the service tax collected by the Petitioner from the subscribers under the provisions of the Finance Act, 1994 against the DTH broadcasting services shall from part of consideration for the levy of Entertainment Tax under Section 4G of the 1958 Act? - HELD THAT:- The entertainment tax is levied and collected ‘on the amounts received or receivable’ by a Multi System Operator or Direct To Home service provider [DTH]. These amounts are nothing but the consideration which the customers would pay towards providing television signals under the DTH scheme. The transaction would obviously include both entertainment and service. Since both are discernible independent of each other, they are taxable separately; the entertainment is taxed under the provisions of 1958 Act whereas, the service is taxed under the provisions of Finance Act, 1994. The text, content & intent of section 4G leaves no manner of doubt that for the purpose of levy of entertainment tax, the ‘amount received or receivable’ cannot include service tax component. Had the legislature intended inclusion, the text of this provision would have been a bit different. Therefore, the first question of law is answered in the negative and in favour of the Assessee.

The above view gains support from the decision of Apex Court in M/s Anand Swarup Mahesh Kumar vs. Commissioner Of Sales Tax [1980 (9) TMI 238 - SUPREME COURT] wherein, Assessee therein had argued that the market fee payable under the UP Krishi Utpadan Mandi Adhiniyam, 1964 being a sum which could be collected from the purchaser under the provisions of the said statute by the commission agent for being remitted to the market committee, could not be considered as forming part of the consideration payable by the purchaser of the goods to the commission agent and therefore, it could not be included in the ‘turnover of purchases’ for the purpose of levy of tax under section 3-D of the UP Sales Tax Act, 1948.

Whether in the absence of definition of ‘invoice’ in the 1958 Act, the bills/statement of accounts containing the itemized details/segregation of the basic value of DTH broadcasting services, service tax, license fee etc. will be considered as ‘invoice’? - HELD THAT:- Abundant evidentiary material is produced even in the paper book of the petition. The Assessee had placed before the authorities the Statement of Account showing itemized billing and separate collection of service tax amount which aspect has been discussed by a Coordinate Bench of this Court in Assessee’s earlier STRP No. 436/2017 disposed off on 10.12.2021 [2022 (1) TMI 443 - KARNATAKA HIGH COURT]. True it is that the word ‘invoice’ is not defined in the 1958 Act nor in the Mysore General Clauses Act, 1899. However, Black’s law dictionary, 5th edition, gives the meaning of this word. “A written account or itemized statement of merchandise shipped or sent to a purchaser, consignee, factor, etc., with the quantity, value or prices and charges annexed. Document showing details of a sale or purchase transaction…The new International Webster’s comprehensive dictionary, 2004 edition, defines ‘invoice’ to mean a list sent to a purchaser, etc., containing the items and charges of merchandise.” Both the authorities at their level and the Tribunal in its domain would have treated this aspect of the matter in a satisfactory way. This having not happened, it is required to upset the finding in this regard so that even this aspect of the matter would be considered afresh.

Conclusion - i) The 'amount received or receivable' for entertainment tax does not include the service tax component. ii) The absence of a statutory provision authorizing the passing on of tax to consumers affects the consideration for tax levy.

The impugned order of the Tribunal is set at naught; matter is remitted to the domain of the Tribunal for consideration afresh in the light of the observations hereinabove made and in accordance with law - Petition allowed by way of remand.
2025 (2) TMI 892

Constitutional validity of Section 3C of the Kerala Local Authorities Entertainments Tax Act, 1961 - Section 5 of the Kerala High Court Act, 1958 - levy of cess on cinema tickets to fund the Kerala Cultural Activists' Welfare Fund - HELD THAT:- The Cess levied under Section 3C of the Act of 1961 and collected is for the Kerala Cultural Activists' Welfare Fund, established under the Act of 2010. This Cess shall not exceed Rs. 3/- per cinema admission where the ticket price is more than Rs. 25/-. The local authority has to collect the Cess along with the tax on cinema admission and, after deducting the collection charges at a rate specified by the Government, has to transfer the proceeds to the Kerala Cultural Activists' Welfare Fund Board. The Cess is levied on the cinema viewers and not on the theatre owners. The impugned provision seeks to levy a cess on the ticket purchased by cinema viewers for the purpose of entertainment, and, therefore, it is clearly relatable to entertainment under Entry 62 of List II, VII Schedule to the Constitution of India.

In the case of M/s. Vijayalakshmi Rice Mill [2006 (8) TMI 307 - SUPREME COURT], the Hon'ble Supreme Court, had an occasion to consider the term "Cess". In this case, a cess under the Andhra Pradesh Rural Development Act, 1986, which was in addition to the purchase of sales tax, was the subject matter of challenge. The contention was that the enactment does not fall in any of the entries in List II or List III of Schedule VII to the Constitution of India. The Supreme Court considered the question of whether the said impost was a fee or a tax. In that context, the Supreme Court elaborated on the term "Cess" and held that ordinarily, Cess is also a tax but is a special kind of tax.

The Cess can also mean a tax levied for a special purpose or as an increment to the existing tax and, in given circumstances, a fee. In the case at hand, entertainment tax is already levied under the Act of 1961 and the Cess under Section 3C is an additional levy. Thus, the contention of the learned Senior Advocate for the Appellants that under Entry 62 of List II of Schedule VII to the Constitution of India, only tax can be levied, and Cess cannot be levied is without merit. The Cess is another term for the tax that is levied, which is a special kind of tax. The levy of impugned Cess is traceable to Entry 62 of List II, VII Schedule to the Constitution of India.

If the levy of the impugned Cess on entertainment improves the quality of entertainment, then a broad correlation will be established. We find a correlation between the Cess on entertainment levied on the cinema viewers as a fee and the utilisation of the Fund for the welfare of cultural activists. That is because the levy on cinema viewers contributes to the welfare of cultural artists in the State and the overall development of cultural and artistic ethos. When cultural activities relatable to art are supported and valued, it fosters a culture that appreciates art. This then creates a positive cycle of creativity and appreciation. When society encourages and supports artists, the overall artistic ethos strengthens, leading to quality artistic output - the impugned Cess can be traced to the legislative power of the State Government to Entries 62 and 66 of List II, Schedule VII to the Constitution of India, and the levy of this Cess is relatable to the benefits received by the cinema viewers on whom the Cess is levied.

Challenge to levy of impugned Cess on the grounds of violation of Articles 14 and 19 of the Constitution of India - HELD THAT:- The Cess impugned is to be collected by the local authority. The proceeds of the Cess have to be remitted by the local authority to the account of the Kerala Cultural Activists' Welfare Fund Board. There is no role for the theatre owners, and the levy does not fall on them. No data has been provided to demonstrate how this levy amount per ticket has affected the functioning of the theatre owners' business. This argument is not supported by adequate pleadings and cannot be accepted.

Conclusion - i) The constitutionality of Section 3C upheld, affirming the State's legislative competence under Entry 62 of List II. ii) The cess was a valid tax on entertainment, serving a specific purpose of funding the welfare of cultural activists.

There is no merit in the challenge. There is no error in the view taken by the learned Single Judge - Appeal dismissed.
2025 (2) TMI 884

Challenge to assessment order - authorization given to the Deputy Commissioner, Guntakal was not available in a valid format - HELD THAT:- In the present case, the turnover of Rs. 4.54 crores, being the turnover relating to sale of alcohol and the turnover relating to sale of food has been taxed. The sale of alcohol, in the State of A.P., under the A.P. VAT Act, was to be taxed under Schedule VI ‘at the point of first sale in the State’. This sale would be the sale between M/s. Andhra Pradesh Beverages Corporation Limited and the petitioner. The subsequent sale of liquor by the petitioner to his customers would not be exigible to tax.

Explanation-II to the definition of ‘taxable turnover’ stipulates that the sale prices relating to second and subsequent sale of goods, enumerated in Schedule VI, shall not form part of ‘taxable turnover’. This would mean that the entire turnover of Rs. 4.54 crores, which is on account of sale of alcohol would have to be excluded from the taxable turnover of the petitioner. This would leave a turnover of Rs. 1,02,20,407/-, which is the turnover relating to sale of food. As the turnover in question, is less than Rs. 1.5 crores per year, the same would be taxable only under Section 4 (9) (d).

Conclusion - The sale of alcohol was taxed at the point of first sale and subsequent sales were not taxable. Therefore, the turnover from alcohol sales should be excluded from the taxable turnover, leaving only the turnover from food sales, which was below the threshold for the higher tax rate.

The matter remanded back to the assessing authority to pass fresh assessment orders by excluding the turnover of Rs. 4.54 crores arising out of sale of liquor from the turnover on which tax is levied - petition partly allowed by way of remand.
2025 (2) TMI 883

Scope of Revision Petition - Set Top Boxes (STBs) are goods within the meaning of section 2(15) of the Karnataka Value Added Tax Act, 2003 or not - consideration for transfer of right to use STB - mutual exclusiveness of service tax and VAT - retrospectivity of Government notification dated 15.03.2021.

Scope of Revisional Jurisdiction - HELD THAT:- Revision is more a matter of power of the Revising Authority than the right of revisionist. Several Statutes provide for suo moto Revision whereas suo moto Appeals are almost unknown - The scope of Appeal or Revision depends upon the text of the provision of a statute which creates the right of Appeal, or vests revisional power. It has been a long settled position of law that normally scope of Appeal is wider than that of Revision. Ordinarily, first appeal is both on law and facts unless the statute otherwise says.

Thumbnail description of Section 65 - HELD THAT:- In terms of order on Revision, Assessment Orders have to be modified and any excess payment has to be refunded to and any deficit is to be made good by the Assessee, says Sub-section (9). Sub-section (10) (a) provides for review of the order made on Revision on the basis of facts that were not there when the Revision was decided. Sub-section (10) (b) empowers the government to make rules prescribing limitation period for Review and the manner in which Review should be preferred. Sub-section is on par with section 152 of Code of Civil Procedure, 1908 and it provides for rectification of mistakes in the order made in Revision. This would include order made in review as well. Rectification can be sought for at any time within five years; before effecting rectification, stakeholders need to be heard. Sub-section (12) provides for discretionary levy of cost while making orders on Revision.

Question of law within the meaning of section 65 - HELD THAT:- It is well settled that a question may be treated as of law even if in Salmondian sense, it is not: when a finding of fact is recorded without evidence or contrary to evidence or founded on inadmissible evidence, ordinarily they are treated as questions of law. It may also arise when, on the basis of evidentiary material on record, no reasonable person in the armchair of the authority would have entered a finding, that has a bearing on the outcome of the proceeding. These are only illustrative.

It is the specific case of Assessees that a finding in the form of answers in the affirmative has been recorded to the above questions without or contrary to evidentiary material; this has been done in disregard of decisions of Apex Court and High Courts. Therefore, it is opined that the preliminary objection as to maintainability of the Revision Petitions is not sustainable.

Whether a set top box is goods u/s 2(15) of the Act - HELD THAT:- A Set Top Box is an appliance between cable outlet and a subscriber’s receiver, cannot be disputed. Regulation 2(z) of the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 defines “Set Top Box” means a device, which is connected to, or is part of a television and which allows a subscriber to receive in unencrypted and descrambled form subscribed channels through an addressable system - It is not out of place to refer to a Central Government Office Memorandam dated 13.08.2014 which says that STBs fall within the definition of goods for the purpose of Central Sales Tax Act, 1956 and therefore, Form-C facility to be extended to them.

STB is capable of exclusive use by the subscribers or not - HELD THAT:- Regulation 17 obligates every Multi Service Operator like the Assessees herein to provide to the subscribers STBs conforming to standard, set by the Bureau of Indian Standards, with a minimum warranty of one year, unless the subscriber himself has bought one on his own. There is a statutory obligation to repair the STBs within 24 hours of the complaint that too, free of cost. It is admitted before us by both the sides that the STBs are installed in the premises of subscriber only, albeit license to visit the same for service/repair is accorded under the subject agreements. In deciding the question, what are the goods involved in a sale transaction of the kind and with what intent the parties have entered into it, would assume importance. The seller and purchaser, the words being used in their widest amplitude have to be ad idem as to the subject matter of the arrangement. To this to be added, the intent of law also. In finding answers to questions of the kind, the approach of the court should be of a reasonable person of average intelligence.

There being nothing to substantiate pervasive control of the Assessee over the STBs, merely because they have license to gain entry to the premises of the subscriber for periodic inspection/repair.

Consideration for transfer of right to use STB - HELD THAT:- The simple question is whether the transfer of right to use STBs is for consideration or it is free. The Authorities and the Tribunal have held that the consideration for right to use STB is Rs. 2,000/-. That estimate is made inter alia on the basis of a clause in the Inter-connect Agreement that obtained between the Assessees and their local cable operators. A clause in the agreement prescribes Rs. 2,000/- payable by the local operator if STB is damaged or it is not used for the purpose for which it is installed - The authorities having accumulated expertise in the matter have formed a considered opinion that a sum of Rs.2,000/- is the consideration for transferring the right to use the STBs. A Court exercising a limited revisional jurisdiction cannot run a race of opinions with the authorities and Tribunals which have recorded concurrent findings.

Service tax and VAT are mutually exclusive or not - HELD THAT:- There can be levy of more than one tax on a subject matter, if incidence of each of the taxes is different from the other and such taxes may be imposed under different statutes. A tax on the sale of goods is envisaged under Entry 54 of List II (Sales Tax) of Schedule 7 of the Constitution and the taxable event is transfer of goods including fictional sale envisaged under Article 366 (29A). In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994 - In the case at hand, sales tax is levied under the State Enactment. There the State is not levying tax on service aspect of the transaction, since that exclusively belongs to the domain of the Parliament, which has enacted Finance Act, 1994.

Retrospectivity of Government notification dated 15.03.2021 - HELD THAT:- Sub-section (2) of Sec. 174 has to be read with sub- section (3) of Sec. 164. Added, sub-section (4) of Sec. 174 in a way enacts Sec. 6 of the Mysore General Clauses Act, 1899. In view of this, it cannot be assumed that the tax regime during the transition period between repeal of 2003 Act and enactment of 2017 Act, was ever intended to be left as a vacuum creating a limited/partial tax heaven, in the mere absence of a notification under sub-section (2) of Sec. 174. If legislature intended to make operation of sub- section (1) of Sec. 174 dependent upon a notification to be issued under sub-section (2), the language of the provision would have been much different. An argument to the contrary would offend the tax jurisprudence evolved over centuries, in civilized jurisdictions. Therefore, the vehement submission made on behalf of the Assessees that the notification of 2021 could not have been issued with retrospective effect, pales into insignificance.

Conclusion - i) STBs are goods within the meaning of section 2(15) of the Act, capable of exclusive use by subscribers, and that the right to use them is transferred for valuable consideration. ii) Service tax and VAT are not mutually exclusive. iii) The notification dated 15.03.2021 could have retrospective effect.

Petition dismissed.