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VAT / Sales Tax - Case Laws
Showing 121 to 140 of 27753 Records
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2025 (2) TMI 797
Doctrine of promissery estoppel - Rejection of the respective eligibility certificates applied under the relevant provisions of the Industrial Policy of 2008 - rejection of eligibility certificates without due and proper appreciation of the facts and materials available before the respondent-Department of Industries - industrial unit was “non-functioning” or not - validity of assessments made by the Department of Finance and Taxation, during the pendency of eligibility certificate applications.
Whether the rejection of eligibility certificates by the Department of Industries and Commerce under the Industrial Policy of Assam, 2008, on the grounds of being "non-functioning," was justified? - HELD THAT:- The period of validity of the Industrial Policy of 2008 was for a period of five years with effect from 01.10.2008 till 30.09.2013. The eligibility criteria as per the said Policy was all new units as well as existing units which go in for substantial expansion and which had commenced commercial production within the period of validity will be eligible for the incentives from the date of commencement of commercial production for the period applicable for each incentive. In the said Industrial Policy of 2008, various fiscal incentives such as interest subsidy on term loan, power subsidy, subsidy of quality certification/technical knowhow and subsidy on drawal of power line were given.
The respondents were permitted to place before the Court the materials on the basis of which the General Manager, DICC submitted its report of ‘non-functioning’ unit. The Court considered it apposite to permit the respondent authorities to place such materials to show the relevant date(s) when the physical inspection was made and the said unit was found to be non-functioning. On the other hand, the Sales Tax Department completed the assessments and raised the demand on the petitioner and other similarly situated petitioners. The assessment order clearly reveals that the assessment and the consequential demand was made after due examination of the books of accounts. The assessment of tax was made on the turnover of the unit/industry. Consequently, there appears to be a contrary stand reflected by the two departments of the Government namely, the Industries and the Finance Department. It is trite to mention here that in the State Level Committee constituted to examine and issue eligibility certificates, representatives of both the industries as well as the Finance and Taxation Department are members and which fact is not disputed by the respondents. Under such circumstances, it cannot be understood as to how a unit which was found to be non-functioning by the industries department could have reflected the turnover of goods manufacture and on the basis of which the assessments were carried out and demands were raised by the Finance and Taxation Department.
In Duroply Industries Limited Vs. The Union of India & 5 Ors [2023 (11) TMI 1353 - GAUHATI HIGH COURT], the Co-ordinate Bench of this Court held that the Petitioner’s unit was duly functioning at the time when the claims for Transport Subsidy were made, and the said unit has to be closed down subsequently due to the financial crisis and shortage of raw material and thereby the State Level Committee ought not to have rejected the claims of the Petitioner on the ground that with effect from January, 2018 the Petitioner unit was not functioning.
In Sukhamoy Paul Vs. State of Tripura & Ors. [2021 (5) TMI 1077 - TRIPURA HIGH COURT] while dealing with a similar situation with regard to the Transport Subsidy Scheme, the Tripura High Court held that the eligibility period for claiming subsidy may be 5 years, the scheme nowhere provides that only if a new industrial unit continues such manufacturing activity for a period of 5 years that it can claim the transport subsidy. Therefore, even if, as pointed out by the respondents, the petitioner at some later point of time after commencing its production got engaged into the same activity as a job worker, this would not amount to breach of any of the eligibility conditions of the scheme.
The aforesaid two judgments of this Hon’ble Court and that of Tripura High Court are squarely applicable in the present case.
Whether the doctrine of promissory estoppel applies to prevent the government from denying benefits promised under the Industrial Policy of Assam, 2008, after the petitioners had altered their position based on those promises? - HELD THAT:- Under the doctrine of promissory estoppels where the Government has made a promise and the prose relying on the promise has altered it’s position to its detriment the Government is not exempt from it’s liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex-parte appraisement of the circumstances in which the obligation has arisen - The Apex Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. [1978 (12) TMI 45 - SUPREME COURT] observed that that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made — contractual, administrative or statutory.
The Doctrine of Promissory Estoppel has been repeatedly applied by the Apex Court in statutory notifications. In Pournami Oil Mills v. State of Kerala [2020 (12) TMI 1241 - SUPREME COURT] the Government of Kerala by an order dated 11-4-1979 invited small-scale units to set up their industries in the State of Kerala and with a view to boost industrialization, exemption from sales tax and purchase tax was extended as a concession for a period of five years, which was to run from the date of commencement of production. By a subsequent notification dated 29-9-1980, published in the gazette on 21-10-1980, the State of Kerala withdrew the exemption relating to the purchase tax and confined the exemption from sales tax to the limit specified in the proviso of the said notification.
After elaborate discussions of the law on Promissory Estoppel as laid down by the Apex Court, it is seen that the State authorities as well as its limbs covered under the sweep of Article 12 of the Constitution of India being treated as ‘State’ within the meaning of the said article, can be made subject to the equitable doctrine of promissory estoppel in cases where because of their representation the party claiming estoppel has changed its position and if such an estoppel does not fall under any statutory prohibition, absence of power and authority of the promisor and/or is otherwise not opposed to public interest, and also when equity in favour of the promisee does not outweigh equity in favour of the promisor entitling the latter to legally get out of the promise.
Whether the assessments made by the Department of Finance and Taxation, during the pendency of eligibility certificate applications, were valid? - HELD THAT?- The assessment orders itself reflects that the books of accounts etc were examined and pursuant to which the assessment orders and the consequential demands were raised. Therefore, in the facts of the present case, besides the other departments which had the occasion to examine the papers submitted for establishment of the industry as well as assessment order and the consequential demands raised by the Finance Department, the fact remains that there is no mala fide alleged against the industry or unit by the respondent authorities. There is also no allegation that undue advantage has been sought to be taken by the industries in respect of Industrial Policy concerned. Under such circumstances, the department of Finance as well as the Industries Department, being representatives of different department but a part of the same Government and a constituent members of the State Level Committee,- the State Level Committee being the mouth piece of the Government in so far as the Industrial Policy is concerned they must speak in one voice by taking into various views and evaluations undertaken by each of the constituent members.
The sole ground for assailing the assessment orders in these writ petitions is that the Finance Department ought not to have proceeded with the assessments in question as the relevant applications for grant of eligibility certificates in respect of the industries or units were pending before the appropriate authority under the relevant Industrial Policy. As a consequence thereof, the benefit of exemptions by the petitioners could not be availed off as the returns could not be filed on the online mode supported by the eligibility certificate as is required under the procedure. These returns were filed in the physical mode with due representations that the claims for eligibility are under consideration and the department is required to await the grant of eligibility certificate by the Industries Department.
Conclusion - i) The rejection of eligibility certificates on the grounds of being 'non-functioning' is contrary to the objectives of the Industrial Policy and the evidence of operational status as indicated by tax assessments. ii) The assessments conducted by the Finance Department without awaiting the outcome of eligibility applications are procedurally flawed and must be reconsidered. iii) The doctrine of promissory estoppel applies, binding the government to its promises under the Industrial Policy, as the petitioners relied on these promises to their detriment. iv) The Court directed the State Level Committee to reconsider the eligibility applications and issue certificates, ensuring that the petitioners receive the benefits they are entitled to under the Industrial Policy. v) The Court ordered that once eligibility certificates are granted, the petitioners should receive tax exemptions and any necessary refunds or adjustments.
Petition disposed off.
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2025 (2) TMI 739
Refund of excess amount realized by Respondents in terms of Settlement Scheme of 2022 - Dismissal of Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022 - rejection of exemption from payment of additional tax and surcharge - HELD THAT:- A perusal of Settlement Scheme would reveal that under Settlement Scheme, term ‘admitted tax’ is defined to mean an amount of tax admitted as being payable as per the return filed by an assessee, and, the term ‘disputed amount’ means the amount of tax, interest or penalty which determined as payable by an assessee pursuant to an order of assessment/re-assessment/scrutiny or any other order and which is not admitted, and, for such demand, a litigation has been filed by an assessee - under the Scheme, amount of ‘admitted tax’ clearly represents an amount which is admitted by assessee, whereas ‘disputed amount’ means amount of tax, interest or penalty which is in dispute pursuant to a litigation filed by an assessee.
The Scheme clearly provides that assessee is liable to pay 40% of the amount of tax in dispute provided the same has not been declared/considered in any order/assessment/re-assessment. In the present case, it is not in dispute that the petitioner admitted an amount of Rs. 33,79,374/- being the admitted amount of tax payable by it as per its return. However, pursuant to an adjudication order, an amount of Rs. 6,27,82,418/- was determined against the petitioner - balance between disputed tax and admitted tax was the amount in dispute i.e. in the present case Rs. 5,94,03,043/-. Under the Scheme, Petitioner was only liable to deposit 40% of the disputed amount and there was 60% waiver, but while computing the tax liability, Settlement Officer first deducted the amount of pre-deposit from the amount in dispute and, thereafter, extended the benefit of waiver under the scheme which is clearly travelling beyond the contours of the scheme itself.
Admittedly, Settlement Scheme is a beneficial scheme and Hon’ble Supreme Court in its judgment rendered in the case of Government of Kerala and Another v. Mother Superior Adoration Convent [2021 (3) TMI 93 - SUPREME COURT], has held that even in tax statutes, exemption provisions should be liberally considered in accordance with the object sought to be achieved. In a beneficial legislation, literal formalistic interpretation should be eschewed to give full effect to the provisions of the beneficial legislation.
The impugned order passed by the appellate authority is set aside and, further, order of settlement to the extent, amount of pre-deposit of 49,00,000/- has been directed to be adjusted from the amount in dispute before extending the benefit of settlement is set aside.
Conclusion - i) The calculation of tax liability under the Settlement Scheme must not deduct pre-deposits from the disputed amount before applying the waiver. ii) The petitioner is entitled to a refund of the excess amount paid due to the misapplication of the Scheme. iii) The petitioner is entitled to interest on the refunded amount at 6% per annum from the date of deposit until the refund is made.
Petition disposed off.
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2025 (2) TMI 738
Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022 (Amnesty Scheme) - Computation method of settlement amount - amount of pre-deposit was first adjusted against the disputed amount and upon remaining balance, waiver of 60% and 50% of tax respectively was extended to petitioner - HELD THAT:- A perusal of Settlement Scheme would reveal that under Settlement Scheme, term ‘admitted tax’ is defined to mean an amount of tax admitted as being payable as per return filed by an assessee, and, the term ‘disputed amount’ means the amount of tax, interest or penalty which is determined as payable by an assessee pursuant to an order of assessment/re-assessment/scrutiny or any other order and which is not admitted, and, for such demand, a litigation has been filed by an assessee - Thus, under the Scheme, amount of ‘admitted tax’ clearly represents an amount which is admitted by assessee, whereas ‘disputed amount’ means amount of tax, interest or penalty which is in dispute pursuant to a litigation filed by an assessee.
The difference between disputed tax and admitted tax was the amount in dispute and under the scheme, petitioner was entitled for waiver of 60% and 50% respectively, but while computing the tax liability, Settlement Officer first deducted the amount of pre- deposit from the amount in dispute and, thereafter, extended the benefit of waiver under the scheme which is clearly travelling beyond the contours of the scheme itself.
The petitioner is right in contending that due to incorrect application of Settlement Scheme, petitioner is denied its actual benefit which resulted into a loss of Rs. 1,32,03,446/- (Rs. 1,33,42,802-1,39,356). However, before the appellate authority, petitioner filed its revised computation taking into consideration the component of declaration form and claimed as per revised computation an amount of Rs. 1,18,02,056/- as refund. Hence, we are of the opinion that petitioner cannot take a different stand than what it has taken in the appellate proceedings and it can only be entitled for refund as per the revised computation submitted before the appellate authority of an amount.
Settlement Scheme is a beneficial scheme and Hon’ble Supreme Court in its judgment rendered in the case of Government of Kerala and Another v. Mother Superior Adoration Convent [2021 (3) TMI 93 - SUPREME COURT], has held that even in tax statutes, exemption provisions should be liberally considered in accordance with the object sought to be achieved. In a beneficial legislation, literal formalistic interpretation should be eschewed to give full effect to the provisions of the beneficial legislation.
Conclusion - Under the Amnesty Scheme, the waiver should be applied to the full disputed amount before deducting any pre-deposit. This ensures that taxpayers who have made partial payments are not disadvantaged compared to those who have not paid. The petitioner is entitled to a refund of Rs. 1,18,02,056/- with interest at 6% per annum from the date of deposit until the refund is made.
Petition allowed.
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2025 (2) TMI 675
Interpretation of statute - New conditions for allowing ITC - Whether Rule 21(8) of the Punjab Value Added Tax Rules, 2005 (Punjab VAT Rules) could have been introduced during the period between 25.01.2014 to 01.04.2014 when there was no enabling provision in the parent statute i.e. the Punjab Value Added Tax Act, 2005 (Punjab VAT Act)? - HELD THAT:- Punjab VAT Act was amended the second time by the Punjab Value Added Tax (Second Amendment) Act, 2013 (Punjab Act No. 38 of 2013). Though as per Section 1(2) of the Second Amendment Act, the same was to come into force at once, the proviso thereto mentioned that amendment of sub-section (1) of Section 13 shall come into force on and with effect from the first day of April, 2014 i.e. from 01.04.2014. Section 5 of the Second Amendment Act deals with amendment to Section 13 of the Punjab VAT Act.
A taxable person who had stock in trade as on 25.01.2014 or as on 01.02.2014 had already paid the tax while making the purchase of such goods. In this case, the purchase was made by paying higher rate of tax on iron and steel goods to be used as input for the purpose of manufacture etc. of taxable goods. The taxable person who is otherwise entitled to avail input tax credit on the goods already purchased and lying in stock would suffer serious prejudice and loss if his entitlement to input tax credit are reduced by virtue of lowering of the rate of tax on such goods on a subsequent date. High Court has noted that the enabling provision in the statute came into effect on and from 01.04.2014 and, therefore, Rule 21(8) of the Punjab VAT Rules which permits application of the reduced rate of tax cannot be given effect to transactions which already stood concluded prior thereto. It could only be applied to transactions on and from 01.04.2014.
In Eicher Motors Limited Vs. Union of India [1999 (1) TMI 34 - SUPREME COURT], a three- Judge Bench of this Court examined the challenge to the validity and application of the scheme as modified by way of introduction to Rule 57(F) of the Central Excise Rules, 1944 under which credit which was lying unutilised as on 16.03.1995 with the manufacturers stood lapsed in the manner set out therein. While examining the above issue, this Court held that if on the inputs, the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are sold subsequently. Thus, a right accrued to the assessee on the date when he paid the tax on the raw material or the input would continue until the facility available thereto gets worked out or until those goods existed. The impugned rule cannot be applied to the goods manufactured prior to the date it came into force i.e. 16.03.1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods.
The respondent had earned input tax credit on purchase of iron and steel goods which it kept as its stock in trade to be used as inputs or raw materials in the manufacture etc. of taxable goods. State lowered the rate of tax with effect from 01.02.2014 on those goods. The related amendments in the rules i.e. Rule 21(8) of the Punjab VAT Rules were notified on 25.01.2014 to come into effect from 01.02.2014. There was however no corresponding provision in the parent statute i.e. Punjab VAT Act which permitted availing of input tax credit at the lower rate of tax on the existing stock in trade though the purchase of such input was already made at a higher rate of tax thereby reducing the quantum of credit. The enabling provision in the statute i.e. first proviso to Section 13(1) of the Punjab VAT Act came into force with effect from 01.04.2014.
Under sub-section (9) of section 13, a person is under a mandate to reverse input tax credit availed by him on goods which could not be used for the purposes specified in subsection (1) of Section 13 of the Punjab VAT Act or which remained in stock at the time of closure of business. If the interpretation sought to be given to Rule 21(8) of the Punjab VAT Rules by the State is accepted, the natural corollary would be that reversal of input tax credit would be at the lower rate of tax on the goods in question when those goods could not be used for the purposes specified in Section 13(1) or which remained as part of the stock in trade at the time of closure of business. Such an interpretation besides being fallacious, would also lead to revenue loss for the State exchequer.
Conclusion - The interpretation given by the High Court to the applicability of Rule 21(8) of the Punjab VAT Rules read with the amended first proviso to sub-section (1) of Section 13 of the Punjab VAT Act is legally sound and warrants no interference.
There are no merit in the appeal which is accordingly dismissed.
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2025 (2) TMI 618
Deletion of amount of tax levied by the assessing authority - rejection of account of books have been confirmed - illegal shifting the burden on the department - it was held by High Court that 'Once the dealer has failed to prove its purchases from registered dealer, the levy of entry tax treating the same to be purchases from outside the local area and levying of entry tax on the HDEP bags is also justified.'
HELD THAT:- Attention drawn to the rejoinder affidavit incorporating certain documents in order to comply with his obligations to prove that the disputed quantity of wheat received by the petitioner is non-taxable under the provisions of Uttar Pradesh Value Added Tax Act, 2008.
Learned counsel for the respondent seeks time to verify those documents and to revert - Hence, list the matter(s) on 19.03.2025.
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2025 (2) TMI 617
Demand of surcharge, despite the absence of an assessment and recovery mechanism - demand of purchase tax, without establishing that the Petitioner has violated the condition precedent, namely, that the goods purchased have been used for purposes other than for use in manufacture or for resale - HELD THAT:- Though ordinarily it is agreed that recovery of taxes ought not to be stayed, and which is stipulated in Section 21 (7), it is found that there is an inherent inconsistency in the argument canvassed on behalf of the State. If the State contends that surcharge is different from tax, then, the statutory bar as referred to in Section 21 (7) cannot apply because the Section clearly stipulates that what should not be stayed is only the recovery of tax. On the other hand, if one were to treat surcharge as tax, then, at least prima facie, the Petitioner would be entitled to the benefits set out in Rule 15 (2) (b) and would make the recovery itself vulnerable to challenge.
The Petitioner has certainly made out a case to have the recovery proceedings stayed pending the disposal of the Reference Applications filed by it before the MSTT. This is said because the Petitioner-HPCL is a Public Sector Undertaking and it is not as if the Petitioner would be unable to pay the tax, if finally decided, either by the Tribunal or by this Court. In these circumstances, it is opined that even the balance of convenience lies in favour of the Petitioner.
Conclusion - The MSTT is directed to decide the Reference Applications filed by the Petitioner expeditiously and stay the recovery proceedings until a decision is reached.
Petition disposed off.
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2025 (2) TMI 475
Revision of assessments of the assessee-respondent made for the assessment years 2002-2003 to 2004-2005 - refund the exempted portion of the tax as per the provision of Package Scheme of Incentives 1993 on the sale of goods effected in the course of inter-State trade or commerce - HELD THAT:- The State Government though continues to have the power in public interest to grant exemption/partial exemption of tax on inter- State sale, trade or commerce but the same is subject to fulfilment of the requirements laid down under Sub-Section (4) of Section 8 of the CST Act which means that henceforth the exemption so granted would be admissible only if Form ‘C’ and ‘D’ are supplied by the dealer in context with the aforesaid interstate sale, trade and commerce.
The absolute power initially conferred under Section 8(5) upon the State Government to grant exemption/partial exemption of tax in connection with inter-State sale, trade or commerce with the amendment was circumscribed and restricted to the fulfilment of the requirement of Section 8(4) of the CST Act which prescribes for the submission of Form ‘C’ and ‘D’ only w.e.f. 11.05.2002. However, such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was permitted much prior to the amendment.
In the instant case, the assessee-respondent was granted tax benefits under the PSI 1993 issued in exercise of power under Section 8(5) of the CST Act as per the eligibility and entitlement certificates dated 20.02.1998 and 24.03.1998 respectively and that said benefit was available to the assessee-respondent up to the period of 2012 or to the extent of Rs.273.54 crore, whichever was earlier. The said benefit granted to the assessee-respondent was not with any restriction, much less the condition of submission of Form ‘C’ and ‘D’. Thus, on the basis of such exemption granted by the petitioner vide Eligibility Certificate dated 20.02.1998 and Entitlement Certificate dated 24.03.1998, a substantive right had accrued to the respondent to claim the said benefit up to the year 2012 or to the extent of Rs.273.54 crore - in view of the amendment of Section 8(5) by the Finance Act, 2002, the State Government ceases to have power to grant exemption in respect of sale of goods covered under Section 8(2) but that is not the issue herein. The precise issue in the present case is whether the aforesaid amendment would take away the right which had accrued to the assessee-respondent under the Eligibility/Entitlement certificates wherein absolute exemptions were granted without any condition of submission of Form ‘C’ and ‘D’.
In the case at hand, the assessee-respondent was held eligible for absolute exemption under the PSI 1993 issued in exercise of power under Section 8(5) of the CST Act as per Eligibility certificate dated 20.02.1998 and Entitlement certificate dated 24.03.1998 granting exemption to it from payment of tax under the BST Act and CST Act to the extent of Rs. 273.54 crore or up till 2012, whichever is earlier. The said exemption granted to the assessee-respondent was much prior to the enforcement of the Finance Act, 2002 with effect from 11.05.2002. Therefore, by virtue of the unamended Section 8(5) and the Notification issued thereunder as well as under the aforesaid Eligibility and Entitlement certificates, a substantive right of exemption from payment of tax had accrued to the assessee-respondent - The requirement for fulfilling the condition of Section 8(4) of the CST Act for getting the benefit of tax exemption came subsequently after the amendment of Section 8(5) with effect from 11.05.2002 and would apply prospectively to transactions in respect of which eligibility and entitlement certificates are issued subsequently.
Conclusion - The State Government was not competent to issue the impugned notices for revising the assessment of the assessee-respondent and to demand the exempted tax only for the reason that the assessee-respondent has not submitted Form ‘C’ and ‘D’ in support of inter-State sale, trade & commerce. The requirement of submission of Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002 i.e., after the Finance Act of 2002.
The appeal lacks merit and hence dismissed.
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2025 (2) TMI 474
Dismissal of second appeal - Denial of entire input tax credit and special rebate claimed - absence of any separate account, for raw materials traceable to products transferred outside the state, maintained by the assessee - HELD THAT:- It is found that inasmuch as the Tribunal has merely accepted the findings of the First Appellate Authority on facts that were not disputed by the State in the appeals before the Tribunal, there is no substantial question of law that arises for consideration in these OT. Revision petitions. The subjective satisfaction arrived at by the First Appellate Authority, based on records and data produced before him, would suffice to hold that the revenue has not made out a case warranting interference with the impugned order of the Tribunal.
Conclusion - The revenue did not establish a case warranting interference with the Tribunal's order, leading to the dismissal of the OT.
These OT. Revisions are dismissed.
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2025 (2) TMI 473
Addition of sale turnover by relying on the income disclosed under the head 'Income from Other Sources'/ 'Other Income’ in the trading profit and loss account for the relevant assessment year - estimating the sales turnover for the purpose of assessment under the Kerala Value Added Tax Act - estimating the sales turnover from the income disclosed under the head 'Income from Other Source' in the trading profit and loss account, without any independent finding - estimating the sale turnover by adopting the turnover at 8% as gross profit as the benchmark without any comparable data - benefit of the sub clause (3) of Section 25AA of the KVAT Act - HELD THAT:- Section 25 (1) of the Kerala Value Added Tax Act, 2003 prescribes the power of the assessing authority to complete the assessment on best judgment basis, if it is found that any income has escaped the assessment. It is now trite law that even when an intelligence officer initiates proceedings for penalty under Section 67 of the KVAT Act and finalises a report, the said report cannot form the basis of reopening of the assessment. The above principle equally applies to the proceedings initiated under Section 25. The assessing officer is bound to conduct an independent enquiry as regards the materials available, which according to him requires reopening of the assessment or completing the assessment on a best judgment basis.
The assessing officer proceeded clearly on an assumption, which is impermissible under the scheme of the Act. The infirmity which had crept into the assessment order was not considered in proper perspective by the first appellate authority as well as by the appellate tribunal.
Conclusion - None of the authorities have considered the case in hand in its true perspective and applied the law correctly. Thus, the order of assessment as confirmed by the first appellate authority and the tribunal cannot be sustained.
The O.T. Revision is allowed by setting aside the order of assessment dated 17.10.2017 as confirmed by the first appellate authority as well as by the tribunal and answering the questions of law in favour of the assessee and against the Revenue.
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2025 (2) TMI 472
Disallowance of input tax credit claimed by the Respondent on purchases effected from dealers who had failed to discharge their tax liability on such sales - disallowance of input tax credit claimed by the Respondent, despite the fact that the Respondent had utterly failed to discharge his burden of proving the correctness and genuineness of such claim - levy of penalty under Section 70(2)(a) of the KVAT Act - HELD THAT:- The Revenue officials have power to investigate and for that, they can summon any person as witness or otherwise cannot be gainfully disputed. The Assessment Officer having undertaken the investigation has formed an opinion as to there being a clandestine case of Bill Trading with the connivance. Once such an opinion is available in the very Assessment Order, it was open to the Assessee to dispel/dilute the same by producing evidentiary material. In fact, he had undertaken in writing to bring the representative of dealers to depose in his favour - No explanation is offered why he did not avail that facility. To this needs to be added one militant fact that the selling dealers enumerated in the Reassessment Order have not deposited the tax component claimed to have been paid by the Respondent Assessee on its purchase of goods.
The goods in question were copper/GI strips, sheets, patties, plates & wires. How such heavy things could have been transported in two-wheelers & three wheelers, remains to be a mystery wrapped in enigma. The reasoning of the Tribunal that in only one instance of transports, Kinetic Honda two-wheeler was used and other vehicles were autos/trucks, does not make much sense. If a dealer does not offer explanation as to why he militantly lied even in respect of one single vehicle, that would cast shadow on the truthfulness of his other statements. We hasten to add that we are not invoking the maxim falses in uno, falses omnibus i.e., proof of falsity in one thing raises a strong presumption of falsity in everything - There is force in the submission of learned AGA that the version of officials of the Tax Department, founded on evidentiary material as to the unscrupulous transactions cannot be lightly interfered for askance. Therefore, the Tribunal is not justified in upsetting the findings recorded by the Assessing Authority. Even the First Appellate Authority committed an error in upsetting the levy of penalty inasmuch as, there was absolutely no material warranting the same.
Penalty - HELD THAT:- The Tribunal was swayed away by the documents such as purchase –sale invoices, statement of accounts, purchase & sale register extract coupled with copies of cheques, it missed a very two important factors i.e., the requirement of proof of movement of goods, especially when the Revenue had pleaded that the tax component had not reached the Public Exchequer. Lastly, it needs to be stated that there are no basis on which the First Appellate Authority could quash the Penalty Order u/s.70 (2) of the Act.
Conclusion - i) The burden of proof lies with the dealer claiming input tax credit and that mere production of invoices or payment by cheques is not sufficient to discharge this burden. ii) The Tribunal is not justified in upsetting the findings recorded by the Assessing Authority. Even the First Appellate Authority committed an error in upsetting the levy of penalty inasmuch as, there was absolutely no material warranting the same.
The impugned order of the Tribunal is set at naught in its entirety - appeal of revenue allowed.
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2025 (2) TMI 471
Challenge to Assessment Order revised by the Additional Commissioner of Commercial Taxes - HELD THAT:- It is not inclined to grant interference in the matter inasmuch as the question as to revisability of Assessment Order of the kind is no longer res integra. In KIRLOSKAR POWER SUPPLY CO. LTD. VERSUS STATE OF KARNATAKA [2006 (6) TMI 490 - KARNATAKA HIGH COURT], it is observed 'Jurisdiction is clearly defined under section 15 of the Act. In the case on hand, it is seen that the Additional Commissioner has rightly invoked his power under section 15 of the Act for the purpose of revising the order passed by the Joint Commissioner. However, while passing the final order he has chosen to set aside the subsequent assessment order passed by the assessing authority. This could not have been done by him in terms of section 15 of the Act.'
It is difficult to countenance the contention of learned AGA that the expression ‘any proceedings’ employed in Section 15 would include the order of the Commercial Tax officer and therefore, the impugned order is sustainable.
Appeal allowed.
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2025 (2) TMI 313
Refusal of the assessing authorities to receive ‘H’ Forms that were sought to be produce after the assessment proceedings had been completed - time limit for receipt of ‘H’ Forms - HELD THAT:- Rule 12 (7) states that ‘C’ forms or ‘F’ forms would have to be filed, before the prescribed authority, within three months after the end of the period to which the declaration or the certificate relates. However, the proviso to Rule 12 (7) states that the prescribed authority could permit processing or filing of such declaration or certificate beyond the time set out in Rule 12 (7), if sufficient cause is made out as to why the forms could not be filed within time.
Under Rule 12 (10) the declaration in Form ‘H’ can be furnished to the prescribed authority only up to the time of assessment by the first assessing authority. There is no proviso to this provision, akin to Rule 12 (7) of the Rules. This would mean that the time frame set out under Rule 12 (10) is absolute and there is no leeway for grant of any further time by the authority - a closer look at Rule 12 (10) (b) shows that the said view may not be correct. Rule 12 (10) (b) states that if any rules are made by the respective State Governments, relating to the filing of Form ‘H’, then the rules as they applied to the declaration in Form ‘C’, prescribed under the CST (R&T) Rules, would mutatis mutandia apply to filing of a certificate in Form ‘H’.
Thus, filing of Form ‘H’ would not be mutatis mutandia with the filing of Form ’C’ and ‘F’.
Conclusion - In the absence of specific state rules, 'H' Forms cannot be accepted post-assessment.
It would only be appropriate that the matter is placed before the Hon’ble The Chief Justice for reference to a Full Bench to resolve this issue.
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2025 (2) TMI 312
Challenge to assessment order - movement of goods from the manufacturing unit of the appellant in Rajasthan to its depots in Bihar - inter-state supply of goods or inter-state stock transfers? - HELD THAT:- A perusal of the order dated 28.12.2015 passed by the Rajasthan Tax Board shows that it has reproduced the observations of the Rajasthan Tax Board in Appeal No’s. 1229-1233 decided on 24.11.2014. It is these five appeals which were assailed by M/s United Breweries Ltd. in Central Sales Tax No’s. 16/2014, 17/2014, 18/2014, 19/2014 and 20/2014 that to were allowed by this Tribunal by order dated 21.10.2024 [2024 (10) TMI 1124 - CESTAT NEW DELHI].
Conclusion - The movement of goods was a stock transfer, not an inter-state sale, and thus not subject to central sales tax.
The order dated 28.12.2015 passed by the Rajasthan Tax Board in Appeal No. 2210 of 2014 which has been assailed in this appeal deserves to be set aside and is set aside. The appeal is, accordingly, allowed.
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2025 (2) TMI 253
Challenge to orders of attachment of the bank account and the immoveable property - time limitation for issuing an assessment order under Section 21 (4) of AP VAT Act - HELD THAT:- A perusal of the impugned order would show that the entire order goes on the basis of best judgment assessment, relying upon the returns filed by the petitioner. There is nowhere any mention of suppression of facts, much less, willful suppression of facts, resulting in willful evasion of tax, which is the sine qua non, for invoking Section 21 (5) of the Act. In such circumstances, the provisions of Section 21 (5) of the Act would not be applicable and the period of limitation would be four years, as set out under Section 21 (4) of the Act.
Conclusion - As the impugned assessment order has been passed beyond the period stipulated under Section 21 (4) of the Act, it must be held that the impugned order is beyond limitation and non-est.
Both the writ petitions are allowed setting aside the impugned assessment order of the Commercial Tax Officer, Addanki Circle, dated 24.08.2021 and penalty notice dated 16.09.2021.
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2025 (2) TMI 178
Assessment and refund of taxes under the Assam Value Added Tax Act, 2003 (AVAT Act) and the Central Sales Tax Act, 1956 - non-compliance to the Circular No. 15/2010 - HELD THAT:- This Court had duly perused the Circular No. 15/2010 dated 23.08.2010. The said Circular is in respect to carrying out VAT Audit Assessment and do not prescribe any instructions or directions in so far as the Revisional Authority is concerned. Under such circumstances, the question of challenging the revisional order dated 26.02.2020 on the basis of the Circular No.15/2020 is totally misconceived.
This Court had perused the impugned orders dated 26.02.2020. It is seen that the Revisional Authority while deciding the said revision applications filed by the petitioner firm had made necessary enquiries as is apparent from a perusal of the contents of the revisional orders. The necessary enquiries were made on the basis of the Excise Documents, Certificates from officers of receiving States of Arunachal Pradesh and Nagaland, proof of the existence of the purchasing dealers, the facts of sales and facts of goods reaching other States proved by excise documents - There is nothing on record to show that the impugned orders dated 26.02.2020 are result of fraud or is on account of collusion. This Court has also duly taken note of the impugned orders dated 26.02.2020 and there is nothing to show that the impugned orders suffers from any perversity. Under such circumstances, the question of issuance of a writ in the nature of certiorari to set aside the impugned orders dated 26.02.2020 do not arise.
This Court therefore finds no merits in the instant batch of writ petitions so filed by the Assistant Commissioner of Taxes, Tinsukia challenging the impugned orders dated 26.02.2020 passed in respect to the Act of 2003 and Central Sales Tax Act, 1956 for which the same stands dismissed.
Conclusion - i) The pre-deposits for revision admission are not duty payments and must be refunded upon successful revision. ii) The tax authorities are directed to issue fresh assessment orders within six weeks and process refunds within four weeks thereafter. iii) The petitioner firm was entitled to a refund of pre-deposits with interest at 9% per annum from 08.05.2021.
Petition dismissed.
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2025 (2) TMI 138
Requirement to supply declaration in Form-F - transfer of promotional products such as Physician’s Samples as well as ‘Brand Reminders’ free of cost to depots or branches of the appellant located in other States or for supply of promotional products free of cost to the medical representatives of the appellant posted in other States, sales in the course of inter-State trade had not taken place - applicability of provisions of section 6A of the CST Act - HELD THAT:- Under article 246(1) of the Constitution, Parliament has the exclusive power to make laws with any of the matters enumerated in List 1 of the Seventh Schedule. Entry 92A of List 1 of the Seventh Schedule deals with taxes on the sale or purchase of goods, where such sale or purchase takes place in the course of inter-State trade or commerce. This entry was inserted by Constitution (Sixth Amendment) Act, 1956. The Central Sales Tax Act, 1956 was, accordingly, enacted.
Section 6 of the CST Act is contained in Chapter III and deals with “inter-State sales tax”. Sub-section (1) of section 6, in particular, deals with “liability to tax on inter-State sales”. It provides that subject to the provisions contained in the Act, every dealer shall be liable to pay tax on all sales effected by him in the course of inter-State trade or commerce during any year.
The contention of the appellant is that the transfer of promotional products are not capable of being sold and, in fact, have not been sold and, therefore, such a transfer would not amount to “sale” as defined in section 2 of the CST Act. Elaborating this submission, learned counsel pointed out that the taxable event for levy of central sales tax under the charging provisions of section 6 of the CST Act is that a “sale” has been effected by a dealer in the course of inter-State trade and as the jurisdictional condition constituting a “sale” is not fulfilled, central sales tax cannot be demanded from the appellant - In view of amendment made in sub-section (1) of section 6A of the CST Act w.e.f. 11.05.2002, the filing of Form-F no longer remains optional.
Section 6A provides for the only manner in which a dealer can substantiate that transfer of goods was otherwise than by way of sale and that is by furnishing a declaration in Form-F. It is not a case of the appellant that movement of goods had not taken place from the State of Maharashtra to other States. The contention is that the movement of goods was not by reason of sale in the course of inter-State trade or commerce. It was, therefore, imperative for the appellant, in terms of section 6A of the CST Act, to have furnished the declaration in Form-F.
The Bombay High Court in Johnson Matthey Chemicals India Pvt. Ltd. vs. The State of Maharashtra through the Government Pleader, High Court, Mumbai and others [2016 (2) TMI 543 - BOMBAY HIGH COURT] examined the amended provisions of section 6A of the CST Act and held that for discharging the burden the dealer would have to produce and furnish to the assessing authority a declaration in Form-F and if the dealer fails to furnish the declaration, then the movement of goods shall be deemed for all purposes of the CST Act to have occasioned as a result of sale.
In Ashok Leyland [2004 (1) TMI 365 - SUPREME COURT], the Supreme Court also examined the provisions of the amended section 6A of the CST Act and held that whereas prior to the amendment in sub-section (1) of section 6A, a dealer had an option of filing a declaration in Form-F but after the amendment w.e.f. 11.05.2002 a dealer does not have any option and if the dealer fails to file such a declaration, the transaction would be deemed to be an inter-State sale. The Supreme Court emphasised on the use of the expression “deemed” and held that if this is interpreted differently, an incongruity would ensue.
Thus, if a dealer intends to take up a case that transfer of goods was otherwise then by way of sale, he has to submit a declaration in Form-F, otherwise the deeming fiction contained in sub-section (1) of section 6A will come into play and the movement of goods shall be deemed for all purposes of the CST Act to have been occasioned by reason of sale in the course of inter-State trade or commerce.
Conclusion - The appellant must produce Form-F declarations for transfers to depots or branches in other states. For transfers to medical representatives, where obtaining Form-F is impractical, the assessing authority is to consider the specific circumstances and make a determination based on the merits of each case.
There is no infirmity in the order passed by the State Tribunal that may call for any interference in these appeals. The appeals are, accordingly, dismissed.
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2025 (2) TMI 99
Vires of the West Bengal Tax on Entry of Goods into Local Areas Act, 2012 as it stood prior to its amendment - constitutional validity of the original Act and the amendments.
What is the effect of the ratio of Jindal Stainless Ltd. [2016 (11) TMI 545 - SUPREME COURT (LB)] on the impugned judgment and order of the learned Single Judge dated June 24, 2013? - HELD THAT:- Although, Jindal Stainless Ltd has held that, all judgements that follow Atiabari [1960 (9) TMI 94 - SUPREME COURT], Automobile Transport [1962 (4) TMI 91 - SUPREME COURT] and Jindal Steel Ltd [2016 (11) TMI 545 - SUPREME COURT (LB)] stands overruled, nonetheless, the appeals directed against the impugned judgement and order of the learned Single Judge remained pending without a formal order of disposal of the same. The appeals therefore are required to be formally disposed of an Appeal Court. A finding has to returned as to whether, the impugned judgement and order of the learned Single Judge following the overruled decisions of the Supreme Court rendered in Atiabari, Automobile Transport and Jindal Steel Ltd, in deciding the constitutional validity of the Entry Tax Act, 2012 should be sustained or not.
A finding is returned that, learned Single Judge, in the impugned judgement and order dated June 24, 2013 proceeded on the basis of the ratio laid down in Atiabari, Automobile Transport and Jindal Steel Ltd to decide on the constitutional validity of the Entry Tax Act, 2012. Consequently, the impugned judgement and order dated June 24, 2013 cannot survive, subsequent to the pronouncement of Jindal Stainless Ltd. - the impugned judgement and order dated June 24, 2013 passed by the learned Single Judge is set aside.
Are the impugned orders of the learned Tribunal correct? - HELD THAT:- Interim order passed by the Appeal Court on July 31, 2013 had permitted the assessment under the Entry Tax Act, 2012 to be continued. It had also restrained refund of the tax already collected. Appeal Court did not vacate the stay granted by the learned Single Judge in the impugned judgement and order. Appeal Court had regulated the implementation of the Entry Tax Act, 2012 in the manner noted in its order dated July 31, 2013. Therefore, it cannot be said that, the Appeal Court had decided on the vires of the Entry Tax Act, 2012 finally on either side of the divide. In fact, Appeal Court had made the interim arrangements as done by the interim order dated July 31, 2013 on the basis that the Entry Tax Act, 2012 subsists. It had therefore allowed the assessment under the Entry Tax Act, 2012 to continue with no refund being made.
Shree Chamundi Mopeds Ltd. [1992 (4) TMI 183 - SUPREME COURT] has considered the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 and held that, when the High Court passes an interim order staying the operation of the order of the Appellate Authority exercising powers under the provisions of the Act of 1985, the same does not revive the appeal which had been dismissed as no such proceedings was pending before the Appellate Authority.
There are no position to arrive at a finding that, the Entry Tax Act, 2012 came to be declared ultra vires on the expiry of 6 weeks from the date of the impugned judgement and order of the learned Single Judge being June 24, 2013 and consequently stood obliterated. Consequently, it cannot be held that, the amendments sought to be introduced by the West Bengal Finance Act, 2017 to the Entry Tax Act, 2012 are invalid simply on the basis that, the Entry Tax Act, 2012 stood obliterated on the expiry of 6 weeks from the date of the impugned judgement and order.
In the facts and circumstances of the present case, the amending act does not take away any benefit which has accrued to any assessees by the amendments introduced retrospectively. At least now materials have been placed before us to suggest so.
Was the Entry Tax Act, 2012 in force at the time of its amendment on March 6, 2017 in view of the impugned judgment and order dated June 24, 2013 of the learned Single Judge? - HELD THAT:- Entry Tax Act, 2012 was in force at the time of its amendment on March 6, 2017.
Are the amendments introduced to the Entry Tax Act of 2012 by the West Bengal Finance Act, 2017 valid? - HELD THAT:- The amendments introduced to the Entry Tax Act, 2012 by the West Bengal Finance Act, 2017 are valid.
Are the amendments introduced by the West Bengal Finance Act, 2017 to the Entry Tax Act, 2012 discriminatory? - HELD THAT:- The amendments introduced by the West Bengal Finance Act, 2017 to the Entry Tax Act, 2012 are not discriminatory.
Conclusion - i) The Entry Tax Act, 2012 was valid at the time of its amendment, and the amendments introduced by the West Bengal Finance Act, 2017 were lawful and non-discriminatory. ii) The taxes are not inherently unconstitutional unless proven discriminatory. iii) The decision in Jindal Stainless Ltd. was pivotal in shaping the Court's conclusions, particularly regarding the overruling of earlier precedents.
The writ petitions are disposed of by setting aside the impugned order of the Tribunal.
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2025 (2) TMI 98
Challenge to Impugned Assessment Orders - no period of limitation prescribed - challenge to the Impugned Assessment Orders are primarily on the ground that confirmation of demand for the respective Assessment Years viz., 2003-2004 and 2004-2005 are long after the period covered by the Impugned Assessment Orders - HELD THAT:- The Entry Tax Act, 2001 is not a self contained enactment. It is dependent on the provisions of the Tamil Nadu General Sales Tax (TNGST) Act, 1959 and later under the provisions of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 after the Tamil Nadu General Sales Tax (TNGST) Act, 1959 was repealed and stood substituted with the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 - Assessment under the provisions of the Entry Tax Act, 2001 and under the provision of the Tamil Nadu General Sales Tax (TNGST) Act, 1959 have to be made coterminously as the basic documents required for assessment are one and the same. These documents have to be maintained for a period of five years though separate returns have been filed under these enactments.
A reading of Rule 4(1) of the Entry Tax Rules, 2001, also makes it clear that, after the close of the year, for which the returns referred to in Sub- Rule (1) of Rule 3 of the Entry Tax Rules, 2001 have been filed or where an importer has discontinued the business the course of the year, the Assessing Authority has to finally assess the tax payable in a single order on the basis of the return for the year to which the return relates - Such assessment has to be completed after scrutiny of the accounts and making such enquiry as may be considered necessary to complete and finalize the assessment on the basis of a single order. Thus, the scheme of the Entry Tax Act is to finalize the assessment as expeditiously as possible although no time limit is prescribed.
Since no time limit has been prescribed for completing the assessment under Rule 3(4), Rule 4(3) of the Entry Tax Rules, 2001, assessment has to be completed within a reasonable period of time and thereafter assessment for escaped turnover under Section 16 of the Tamil Nadu General Sales Tax (TNGST) Act, 1959 within a period of 5 years.
Conclusion - i) There was no justification in passing the Impugned Assessment Orders belated in the year 2021 in respect of the Assessment Year 2003-2004 and the Assessment Year 2004-2005. It has to be assumed that the Department has accepted the returns filed by the petitioner for the respective Assessment Years and the assessment was completed under Rule 4(1) of the Entry Tax Rules, 2001. ii) The powers could have been invoked within 5 years after deemed assessment under Rule 4(1) of the Entry Tax Rules, 2001 and after the date of filing of returns.
Petition allowed.
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2025 (2) TMI 3
Rejection of application filed by the petitioner to rectify the Assessment Orders that were earlier passed on 17.12.2019 for the Assessment Years 2016-2017 and 2017-2018 - writ petition was earlier dismissed for default due to non prosecution - HELD THAT:- It is noticed that even as per the respondent, the correct method for determination of the classification would be either before the Appellate Commissioner or before the Advance Ruling Authority. Prima facie, it appears that the issue stands now covered in favour of the petitioner as the Appellate Commissioner has accepted the contentions of the petitioner that product manufactured and dealt by the petitioner was indeed animal supplement and was exempted in terms of Item No.5, Commodity Code No.705 of IV Schedule appended to TNVAT Act, 2006 in terms of the above mentioned orders of the Appellate Deputy Commissioner.
The impugned orders are set aside and the cases are remitted back to the respondent to pass a fresh order on merits and in accordance with the aforesaid order of the Deputy Appellate Commissioner (ST FAC). Needless to state, the Department is entitled to take up the issue before the Appellate Forum as has been done against the order of the Appellate Deputy Commissioner dated 17.03.2023.
Petition allowed by way of remand.
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2025 (2) TMI 2
Revision of assessment - escaped turnover - specific case of the petitioner is that the petitioner was deemed to have been assessed in terms of Section 22(2) of TNVAT Act, 2006 on 31.10.2014 - HELD THAT:- A reading of the impugned order indicates that barring discussion on the limitation and a conclusion that there was a escaped turnover there is no clear discussion as to how the proposal contained in the revised notice dated 04.12.2020 was sustained. It is however made clear that equitable principles of estoppal will not apply on tax and equity are strangers like chalk and cheese. Therefore, merely the first revised notice dated 28.11.2017 proposed a sum of Rs. 3,15,489/- ipso facto would not mean the respondent was precluded for issuing a revised notice dated 04.12.2020 proposing to revised escaped turnover of Rs. 17,12,472/-. The order has to clearly discuss the same. Therefore, to balance the interest of the parties, Court is inclined to set aside the impugned order and the remits the case back to re-do the adjudication on merits within a period of three months from the date of receipt of a copy of this order.
Conclusion - The impugned order was deficient in addressing the merits and thus set it aside, remitting the case for re-adjudication on the merits within three months.
Petition disposed off.
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