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VAT and Sales Tax - Case Laws
Showing 121 to 140 of 27230 Records
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2024 (1) TMI 296
Classification of goods - memory cards - IT products covered under Entry No. 10 of Part A of Entry 65 of Schedule IV of the Rajasthan Value Added Tax Act, 2003 or taxed at residuary rate as per Entry 78 of Schedule V to the RVAT Act? - HELD THAT:- As per settled position of law, a specific entry would always trump a general entry and the burden would always be on the Revenue to prove that the goods in question would have to fall in residual entry as opposed to the specific entry. The Commissioner opined that since the use of memory cards is not restricted to recording sound and that since memory card can be used in a variety of devices, to increase functionality, the same cannot be said to be covered under any of the specific entries. A bare perusal of the aforesaid determination would reveal that the same is merely the opinion of the Commissioner and is not supported by any cogent reasons and or technical/expert opinion. It cannot be emphasized enough that in indirect tax matters, long standing classification cannot be disturbed merely on personal opinion/knowledge. The revenue has to discharge its burden to prove that the change in classification is warranted and necessary by adducing cogent and corroborating evidence. Mere assertion or personal opinion, even of the Commissioner, without any supporting evidence is of no use or value.
Since the revenue has not discharged its burden to show that the good in question, i.e. memory cards, which is undisputedly ‘media’ which can record ‘sound’ and other phenomena, would not be covered under the specific entry of either Entry No. 10 or Entry No. 3 of Part A to Schedule IV to the RVAT Act, the levy of additional tax and interest, merely on the basis of determination order passed by the Commissioner, cannot be sustained.
Because the Entry 10 of Part A of Schedule IV to the RVAT Act is inclusive and illustrative and not exhaustive. The items CD and DVD are merely listed as examples - Because reassessment after substantial period of time cannot be made merely on change of opinion.
Because the case is of classification and interpretation of taxing statute and not of avoidance or evasion of taxes, therefore invoking of Section 25 and 26 of the RVAT Act was not warranted. Further the judgment of RAJASTHAN FELTS MANUFACTURING COMPANY VERSUS THE STATE OF RAJASTHAN AND OTHERS [1978 (1) TMI 160 - RAJASTHAN HIGH COURT], relied upon by learned counsel for the revenue to support reassessment, was passed under the erstwhile regime of Rajasthan Sales Tax Act, 1994, that too under different facts, and therefore the same has no application in the facts and circumstances of the present case.
The question(s) of law framed hereinabove have to be answered in favour of the petitioner-assessee and against the Revenue - the STRs are allowed.
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2024 (1) TMI 242
Classification of goods - Entitlement for exemption of payment of VAT in excess of 5% thereupon - Pizza - sandwich - It was held by High Court that This Court holds that the question(s) of law framed above are answered in the favour of the petitioner-assessee and against the respondent-revenue. As a result, pizza and sandwiches are held to be cooked foods - HELD THAT:- There are no reason to interfere in the matter. The Special Leave Petition is dismissed.
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2024 (1) TMI 241
Direction to refund allegedly due alongwith interest - Petitioner filed a return for the fourth quarter and claimed a refund under the Delhi Value Added Tax Act - HELD THAT:- The petitioner tried to file Form DVAT-21, however, on account of a technical error, the same was not accepted. As per the petitioner, the refund for the tax period already paid has already been filed by the respondents and no demand appears in the portal, however, refund has not yet been processed for the said quarter.
Issue notice. Notice is accepted by learned counsel appearing for respondents, who submits that on account of an error, the same could not be processed and assures that the refund shall be processed within a period of two weeks from today. The statement is taken on record.
The petition is disposed of, directing the respondents to process the refund within a period of two weeks.
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2024 (1) TMI 240
Classification of the coconut oil sold by the appellant - to be classified under Entry No. 25 of the Third Schedule appended to DVAT Act as ‘Edible Oils and Oil cake’ or to be classified as a residuary item under Section 4(1)(e) of the DVAT Act bi-monthly publication namely ‘Amagram’? - HELD THAT:- The argument of the appellant that the product Amagram is a periodical since it is published periodically, and is a book having collection of number of leaves or sheets or paper, is not persuasive. Even though the product is published periodically, but from the bare glance, the same in the nature of a catalogue, containing list of goods that can be bought from Amway. Though it contains other information like upcoming training schedules, achievement levels of distributors, etc., however, the nature of the product being a catalogue, cannot be taken away.
Strictly speaking, even a diary is a book and the book is also a printed material. The printed material has been taxed under Entry No. 52 of the Third Schedule, however, the limited exemption has been given to the material which falls under Entry No. 5 of the First Schedule. The same has to be given a restricted interpretation.
In the case of INDUSTRIAL AND COMMERCIAL SERVICE, ALLAHABAD VERSUS COMMISSIONER OF SALES TAX, UP., LUCKNOW [1962 (12) TMI 44 - ALLAHABAD HIGH COURT], the Division Bench of the Hon’ble Allahabad High Court had answered the issue whether “books” used in Section 4 of the UP Sales Tax Act would include the diaries sold by the appellant therein. In terms of Section 4 of the UP Sales Tax Act, the sale of books was exempted from taxation. The appellant therein was selling the diaries, which were claimed to be books as they were bound like a book. There were few pages in the diary containing general information on various matters and the Shlokas from Bhagavad Gita were referred. The Hon’ble High Court noted that ‘book’ has got several meanings and in a wider sense, means a writing in the collection of sheets of paper, blank, written or printed, strung or bound together and the diary would come within this meaning. However, it held that the diary would not come within the restricted meaning because primarily it is meant to be written and not to be read. It held that the books referred to in Section 4 are not to be interpreted in a wider sense but in a restricted or popular sense, which is the one that can be read for education, knowledge, enlightenment or recreation, the book that one would find in a literary or a book seller shop.
In the present case also, the appellant is contending that ‘Amagram’ is a periodical since the same is published periodically and would fall within Entry 5 of the First Schedule. On first blush, the contention might appear to be merited, however, when the Entry is read as a whole, which is accompanied with journals, including maps, charts and globes, the intention of Legislature does not appear to exempt periodicals as circulated by the appellant.
In the case of MINERVA PRINTING WORKS VERSUS STATE OF BIHAR [1973 (6) TMI 51 - PUNJAB HIGH COURT], the Hon’ble Patna High Court had considered whether the sale of blank registers, exercise books, letter pads was exempted under the Bihar Sales Tax Act in the category of books and periodicals. It was held that the word ‘book’ is used along with the word ‘periodical’ and are meant for reading purposes and derive lessons from and gather information. Therefore, in a wider sense, blank registers, exercise books, etc. might fall within the category of books, the restricted meaning has to be given by looking at the entry in its entirety and gathering the intensity of the Legislature.
In the present case also, the product sought to be classified as periodicals by the appellant, is essentially in the nature of catalogue containing information in relation to the products being offered for sale. No doubt, certain other information and news in relation to events, being organized, is also mentioned for the purpose of the consumption of its dealers. The same, however, cannot be held to be a periodical as referred in Entry No. 5 of the First Schedule. Moreover, it is not disputed that ‘Amagram’ is in the nature of a ‘catalogue’, which has specifically been included in Entry No. 52 of the Third Schedule by Circular No. 2 dated 26.04.2005 - It is settled law that a person claiming exemption has to establish that the product squarely falls within the category of exempted goods. It is also settled that while interpreting the exemption notification / statute, a consideration in favour of the Revenue has to be given and in case of ambiguity, the same has to be interpreted against the assessee.
The question of law as to whether the periodical ‘Amagram’ is to be classified as catalogue liable for tax under Entry 52 of Third Schedule of the DVAT Act, is answered in favour of the Revenue.
Coconut Oil - HELD THAT:- In view of the admitted fact that the coconut oil is sold by the appellant in small packs; is displayed in the category of hair care; the manner in which it is to applied on hair; and the purpose for which it is purchased by the consumer leaves no manner of doubt that the coconut oil sold by the appellant is wrongly sought to be classified under Entry 25 of the Third Schedule of the DVAT Act - the question of law as to whether the coconut oil is wrongly classified under Entry No. 25 of the Third Schedule of the DVAT Act is answered in favour of the Revenue as well.
Appeal disposed off.
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2024 (1) TMI 177
Inter state sale or intra state sale - Validity of directions beyond the scope of the questions framed and referred - goods of special importance under Section 14 of the CST Act - deletion of penalty despite of the fact that the assessee has created documents to convert the local sale into interstate transaction with the intention to evade/avoid tax.
Whether the sale of goods involved in the present case were inter-state sales or intra-state sales?
HELD THAT:- In the considered opinion of this Court, the RTB, after careful consideration of the entire record, had rightly concluded the contract to be a composite and indivisible EPC works contract on turnkey basis. The observation by the RTB, are in content and form, flawless and thus this Court has no hesitation in affirming the view taken by RTB in this regard.
The contract was a composite and indivisible EPC works contract. In the simplest of terms, RVUNL was to receive the final thermal power project which was to be erected by the assessee for which the assessee was to receive a fixed consideration. It is not a case where there was sale of individual goods to the RVUNL. Though the goods were specially designed to be used in the power project, the point of transfer of such goods is what is relevant for determining whether the title to the goods transferred to RVUNL during movement of goods from one state to another. The assessee contends that the title to the goods transferred to the assessee outside the State of Rajasthan, upon issuance of MDCC or other like documents - In the case in hand, the pre-dispatch inspection and issuance of MDCC, in view of terms of contract, did not serve the purpose of transfer of goods. This unequivocally establishes that there was no transfer of title of goods after their inspection and/or issuance of MDCC or any like document.
The intent of the parties is quite clear. The clauses of ‘Final Handing Over’, ‘Project Schedule’, ‘Liquidated Damages’, ‘Warranty’, ‘Insurance’, ‘Completion of Contract’, the project import certificate letter dated 06.07.2009, etc. clearly reveal that under the present works contract, the complete unit/power project would be transferred by assessee to RVUNL. Further, as per SOG Act, the goods are said to be transferred only when they are put into deliverable state by the contractor as per the terms and conditions of contract. The transfer in the case was of entire thermal power project. The title to the goods involved in the execution of works contract also, accordingly, only transferred to RVUNL upon completion of contract and upon final handing over of the project as the goods had been subjected to some process to be accommodated in the power project - In the present case, the goods claimed to be sold by the assessee to be part of inter-state sales were not sold to the RVUNL as goods, but utilized in erection of the thermal power project. Since the erection of thermal power project in the state of Rajasthan can only be termed as an intra-state transaction, the property in goods used in such erection, whether as goods or as some other form, would constitute an intra-state sale and accordingly be subject to RVAT.
The assessee has relied on several judgments, however none of those judgment deals with EPC works contract where there is a transfer of entire project. The judgment of COMMISSIONER, DELHI VALUE ADDED TAX VERSUS M/S. ABB LTD. [2016 (4) TMI 534 - SUPREME COURT], being on different facts, has rightly been distinguished by the RTB with sufficient reasons and it is not deemed necessary to reproduce those reasons here again.
The questions of law framed are answered in favour of the Revenue and against the assessee.
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2024 (1) TMI 176
Maintainability of petition - availability of statutory alternative remedy - Validity of assessment order - levy of penalty - specific stand of the respondents is that the order is passed in consonance with the principles of natural justice of following statutory provisions by serving the notices to which the dealer did not respond - HELD THAT:- It is evident from Rule 64 of the Andhra Pradesh Value Added Tax Rules, 2005, that a notice required or authorized under the Act or the Rules to be served shall be considered as sufficiently served, if it is sent by registered post to such place of residence, office or business or to the person’s usual or last known address in the State. Clause (c) of Rule 64 (1) provides for sending the notice through E-mail. In view of Rule 64, and Para 5 of the counter affidavit which shows sending of the notices by Post or/and E-mail, it shall be considered in law that the dealer was sufficiently served. Anything to the contrary has not been brought on record - under sub- section (1), “shall be considered as sufficiently served” is not dependent upon the certificate of service under sub-section (2).
Besides, the averments of Para 5 of the counter affidavit having not been controverted on oath, the question of proof by certificate of service in evidence, does not arise in the present case - there are no force in the submission of the learned counsel for the petitioner that the orders impugned have been passed in violation of the principles of natural justice for the argument of no service of the notices before passing the impugned orders.
The petitioner has the statutory alternative remedy. Without prejudice to that right, but subject to the due process of law and the law of limitation, the petitioner is at liberty to avail statutory remedy, on such grounds as may be open, other than the one dealt with in this judgment, if so advised, this writ petition is dismissed.
Petition dismissed.
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2024 (1) TMI 175
Maintainability of petition - availability of alternative remedy - whether the petitioner has not disclosed the sales to the 3rd respondent in its books of account - Violation of principles of natural justice - HELD THAT:- The particulars of the report were already mentioned in the show cause notice and the petitioner did not challenge the same. More so, the contents of the report are not new to the petitioner as those contents relate to the sales effected by the petitioner to the 3rd respondent for a specific period. Therefore, the contents of the report cannot be said to contain altogether unknown facts without which the petitioner cannot give an effective reply. Therefore, the petitioner’s plea cannot be accepted.
Availability of efficacious alternative remedy of appeal against the impugned Assessment Order - HELD THAT:- On this ground also the writ petition is not maintainable.
The writ petition is dismissed.
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2024 (1) TMI 132
Grant of Regular Bail - commiting fraud with the intention of not paying the tax with the support of proper planning by showing the false inter state sales for on bogus documents and causing the loss to tax department by claiming refund - HELD THAT:- The object of the bail is to secure the presence of the accused at the trial only. It is also observed that the object of bail is neither punitive nor preventive and deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. Hon’ble the Supreme Court has observed in catena of judgments that when a person is punished by denial of bail in respect of any matter upon which he has not been convicted, it would be contrary to the concept of personal liberty enshrined in the Constitution except in cases where there is reason to believe that he may influence the witnesses.
In GURBAKSH SINGH SIBBIA VERSUS STATE OF PUNJAB [1980 (4) TMI 295 - SUPREME COURT], Hon’ble the Supreme Court has observed as under:- “Judges have to decide cases as they come before them, mindful of the need to keep passions and prejudices out of their decisions. The Court has also observed that in which case bail should be granted and in which case it should be refused is a matter of discretion.
Admittedly, the petitioner is a senior citizen and is in custody since 22.08.2023. The challan has already been presented against the petitioner and his co-accused.
The present petition is allowed and the petitioner is ordered to be released on bail subject to his furnishing bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate, concerned.
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2024 (1) TMI 131
Levy of penalty u/s 27 (3) of the Tamil Nadu Value Added Tax Act, 2006 - assessment order was already passed before, without imposing penalty - HELD THAT:- A mere reading of the judgment in The Deputy Commissioner (C.T.), Coimbatore Vs. V.S.R.Ramaswami Chettiar and Bros [1975 (8) TMI 114 - MADRAS HIGH COURT] would make it clear that no penalty proceedings can be initiated independently in terms of provisions of Section 16 (2) of the Tamil Nadu General Sales Tax Act, 1959 - In the present case on hand, the penalty proceedings were initiated under Section 27 (3) of the TNVAT Act and the provisions of Section 27 (3) of the TNVAT Act and Section 16(2) of the TNGST Act are similar.
A reading of the provisions of Section 27 (3) of the TNVAT Act and Section 16(2) of the TNGST Act would make it very clear that unless there is a definite finding as to the wilful non-disclosure of taxable turnover, the assessing officer will have no jurisdiction to impose the penalty. Therefore, this Court is of the considered view that once the Assessment Order is passed, without imposing penalty, subsequently the 1st Respondent cannot change his view and initiate the fresh penalty proceedings.
This Court is inclined to quash the impugned proceedings of the 1st Respondent dated 15.03.2023 - the impugned orders passed by the 1st Respondent are quashed - Petition allowed.
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2024 (1) TMI 78
Compounding scheme - it is submitted that the assessment order in Exhibit P-2 treating the petitioner’s return under the compounding scheme is unsustainable - HELD THAT:- The assessee has been filing his return under the compounding provision and it is not the first time that he has filed the returns under the compounding provision for the financial year 2020-21. This Court therefore, cannot believe the petitioner was not aware of the difference of filing of normal return and return under the compounding provision. In fact, the petitioner has remitted the tax as per the compounding scheme provided under the Act. Since the rate of tax has been reduced for certain period during which the Bar Attached Hotels were entitled for parcel sale of Indian made Foreign Liquor, the petitioner found that the his returns filed under the compounding scheme should be treated as normal return and the Assessing Authority should proceed to complete the regular return.
There are no illegality in the impugned orders - petition dismissed.
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2024 (1) TMI 34
Validity of intimation dated 30.04.2021 issued for the assessment years 2011-12, 2012-13 and 2013-14 - rejection of the petitioner’s application under Section 84 of TNVAT Act primarily on the ground that it is not a speaking order - violation of principles of natural justice - HELD THAT:- The impugned order does suffer from the vice of being a non-speaking order inasmuch as it only contains the conclusion viz., that the request for rectification being rejected without assigning any reasons. When a request is made for rectification of an order, it is not for the authority concerned to refuse to exercise this power without giving any reason or without adverting to the representation made by the aggrieved person. When the circumstances exist for the exercise of this power, it is mandatory to have recourse to it in public interest and to avoid injustice in taxation.
Keeping in view, the nature of the power to rectify errors apparent on the face of the record, it appears to me that it is incumbent on the Assessing Authority while dealing with the rectification petition to pass order assigning reason, in other words, pass speaking order. It is now well recognised as one of the norms of natural justice that reasons be recorded and conveyed in an order quasi-judicial in nature - What the assessing authority is expected by the rules of fundamental fairplay is not a mere empty formality but what the assessing authority is duty bound to do is to give reasoned finding so that an aggrieved party may be able to canvass the correctness of the same.
The impugned orders are non-speaking and thus liable to be set-aside. The respondent is directed to pass a speaking order within a period of 8 weeks from the date of receipt of a copy of this order after providing the petitioner a reasonable opportunity of hearing - Petition allowed.
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2023 (12) TMI 1286
Seeking grant of regular bail - input tax credit claimed on bogus billings during the assessment period of 2011-2012 - fraudulently obtaining refund by using false and fabricated documents - HELD THAT:- It transpires that the petitioner is behind the bars since 29.05.2023 and has been granted bail by learned Sessions Judge, Sirsa vide order dated 27.10.2023 (Annexure P-4) in one of the FIR’s i.e. FIR No. 650 dated 24.10.2020 and this Court granted regular bail to the petitioner in FIR No. 657 dated 24.10.2020 (Annexure P-3) vide order dated 09.10.2023 passed in CRM-M-49998-2023. The Investigating Agency has already completed the investigation and filed the final report under Section 173 of Cr.P.C. on 25.09.2023 and the trial has not made any progress as none of the 30 prosecution witnesses, as cited by the prosecution, has been examined so far.
In view of the ratio of law laid down by Hon’ble Supreme Court in Prabhakar Tiwari Vs. State of UP and Anr. [2020 (1) TMI 1528 - SUPREME COURT] and Maulana Mohd. Amir Rashadi Vs. State of U.P. and Others [2012 (1) TMI 407 - SUPREME COURT], it has been held that pendency of any other criminal case against the accused cannot be the sole ground to deny him the concession of bail.
The petitioner -Gopi Chand Chaudhary is ordered to released on regular bail in this case only, if not required in any other case, subject to his furnishing requisite bail bonds/surety bonds to the satisfaction of the concerned trial Court/Chief Judicial Magistrate/Duty Magistrate - petition allowed.
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2023 (12) TMI 1205
Seeking release on regular bail - claiming bogus refund on account of input tax credit - use of false and fabricated documents - HELD THAT:- A Co-ordinate Bench of this Court in Ashwani Kumar Vs. State of Punjab [2023 (6) TMI 188 - PUNJAB AND HARYANA HIGH COURT] examined the provisions of Sections 57 & 58 of the Punjab Value Added Tax Act, 2005, providing for penalty for failure to issue invoices and use of false invoices and observed that allegations of the FIR are squarely covered under the provisions of Sections 57 & 58 of the 2005 Act. It was further observed that the 2005 Act is a complete Code in itself and there is no provision provided in the 2005 Act for registration of the FIR. It was further observed that the 2005 Act only provided for imposition of penalty in case there is any contravention of its provisions and since the 2005 Act is a special law, principle of generalia specialibus non derogant would apply, meaning thereby it would operate in exclusion to the general law i.e., the IPC.
However, this Court notices that in the absence of factual matrix in Ashwani Kumar’s case, it is not possible to comment as to whether in those cases also, there were allegations regarding bogus refund of input tax credit based on false and fabricated documents. In these circumstances, it will be a debatable issue as to whether the provisions of IPC shall be applicable to the present case or not.
No explanation is given in the FIR about the delay of more than 5 years so as to write a letter to the Superintendent of Police, Sirsa on 11.12.2019 to take action against the culprits and then another approximately one year for getting the FIR registered on 24.10.2020.
Thus, no purpose shall be served by keeping the petitioners detained, particularly when no apprehension has been expressed by ld. State counsel that if released on bail, petitioners may abscond from justice - petition allowed.
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2023 (12) TMI 1204
Addition of Truck, Tripper, Dumper, JCB, Crane, Dozer, etc. to the registration certificate - Rule 13 of the Act, 1957 read with Section 8(3)(b) of the Act, 1956 - HELD THAT:- A registration certificate was issued to the petitioner according to Rule 5(1) of CST (R&T) Act, 1957 on 09.02.2011. It is not in dispute that the petitioner is indulged in the construction of roads etc. and in that process, he had plied various types of equipment, machinery including Trucks, Trippers, Dumpers, JCBs, Cranes, Dozers, Mixers etc. whereas, in the registration certificate, these articles were not included earlier, therefore, he moved an application to include these commodities which was declined by the Commercial Tax Officer, Durg and only Soil (Murum) was allowed to be included in the certificate as the same is the raw material used for construction of the road - Section 8(3)(b) of the Act, 1956 says that a dealer would be entitled to get a rebate in the tax for goods of the class or classes specified in the certificate of registration according to rules made by the Central Government to be used by him in manufacture or processing of goods for sale or mining or in general or distribution of electricity.
The Hon’ble Supreme Court in J.K. Cotton [1964 (10) TMI 2 - SUPREME COURT] while dealing with Section 8(3)(b) of Act 1956 and Rule 13 of the Act, 1957 has clearly held that the intention must be to use the goods as raw materials, as processing materials, as machinery, as plant, as equipment, as tools, as spare parts, as stores, as accessories, as lubricants, as fuels etc. and the restricted interpretation is not warranted. The Hon’ble Supreme Court further held in no uncertain terms that articles used in the process of manufacture would be liable for concessional tax, even though such articles may not be incorporated in the manufactured end-product.
The High Court of Patna in the matter of M/s Larson & Toubro [1994 (12) TMI 313 - PATNA HIGH COURT] and the High Court of Calcutta in the matter of Nagarjuna Constructions [2014 (3) TMI 1043 - CALCUTTA HIGH COURT] while dealing with similar issues included machinery, plant, equipment, tools, spare parts, stores, accessories, fuels, lubricants etc. in the registration certificate according to the provisions of Section 8(3)(b) of Act, 1956 and Rule 13 of Act, 1957.
Thus, the authorities have committed an error of law in rejecting the application moved by the petitioner to include the articles mentioned in the application - the order passed by Deputy Commissioner, Commercial Tax, Durg is hereby set aside and the application moved by the petitioner under Section 8(3)(b) of the Act, 1956 is hereby allowed.
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2023 (12) TMI 997
Constitutional validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002 - validity of the provisions of requirement of pre-deposit as introduced by sub-section (6A), (6B) and (6C) to Section 26 of the 2002 Act, as incorporated by Maharashtra Act 31 of 2017 w.e.f. 15th April 2017 - HELD THAT:- In the case of THE STATE OF TELANGANA & ORS. VERSUS M/S TIRUMALA CONSTRUCTIONS [2023 (10) TMI 1208 - SUPREME COURT] it was held that The amendments in question, made to the Telangana VAT Act, and the Gujarat VAT Act, after 01.07.2017 were correctly held void, for want of legislative competence, by the two High Courts (Telangana and Gujarat High Court). The judgment of the Bombay High Court Court is, for the above reasons, held to be in error; it is set aside; the amendment to the Maharashtra Act, to the extent it required pre-deposit is held void.
Considering the finality now having reached in regard to the issue of pre-deposit being put to rest by the decision of the Supreme Court in The State of Telangana & Ors. Vs. Tirumala Constructions, it is opined that the request of the Petitioners to approach the Appellate Authority/Tribunal needs to be accepted.
The Petitioners shall approach the Appellate Authority/Tribunal by filing their respective appeals along with applications praying for condonation of delay and also waiver of pre-deposit within a period of four weeks from today. If such appeal alongwith application are filed as permitted such proceedings be considered by the Appellate Authority/Tribunal in accordance with law and appropriate orders be passed on the application as also on the appeals - petition disposed off.
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2023 (12) TMI 898
Validity of Circular No.VII-12-1-2016-Rev-Sec-CCT-17265/CT dated 16.11.2016 under Annexure-8 issued by Commissioner of Commercial Taxes, Government of Odisha, Cuttack - circular was within authority or not - challenge to audit visit report in Form VAT-303, notice in Form VAT-306 for assessment under Section 42 of the Odisha Value Added Tax Act, 2004, order of assessment in Form VAT-312 which is the result of aforesaid circular dated 16.11.2016 issued by the Commissioner of Commercial Taxes, Government of Odisha, Cuttack - HELD THAT:- The assessment order has been passed on 29.06.2017 under Section 42 of the OVAT Act, 2004 for the periods from 01.04.2014 to 30.09.2015 which was based on Audit Visit Report restricting tax periods prior to aforesaid amendment. Though aforesaid circular has been quashed by this Court, the assessing authority while passing the final order of assessment has taken into account the Audit Visit Report submitted restricting the period till 30.09.2015 by issue of intimation vide Annexure-2. Thus, in the fact situation, it appears, the circular dated 16.11.2016 had no impact on the assessment order dated 29.06.2017 passed under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015.
This Court finds no infirmity in amending the impugned notice dated 26.09.2016 vide Annexure-1 wherein the authority rectified the notice limiting the tax periods for tax audit from 01.04.2014 to 30.09.2015 instead of 01.04.2014 to 31.03.2016.
In consequence thereof such tax audit being conducted and the assessing authority having passed assessment order under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015, this Court is not inclined to entertain this writ petition. However, if the Petitioner is so advised, may avail the remedy available under the OVAT Act.
The writ petition stands disposed of.
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2023 (12) TMI 838
Scope of contract - contract of services or a contract of supply and/or sale of software - requirement to follow decision of the Hon'ble Karnataka Sales Tax Tribunal in the case of M/s. IBM India Pvt. Ltd. vs. State of Karnataka and the judgment of the Hon'ble Karnataka High Court in the case of Saskan Communication Technologies Limited vs. Joint Commissioner of Commercial Taxes [2011 (4) TMI 566 - KARNATAKA HIGH COURT] - failure to take into account the Affidavit dated 18.12.2014 as relevant evidence of conduct of the parties to the Agreement dated 1.1.2006 and to determine the nature of the services and the work performed thereunder - for removing or fixing of bug/error within the basic software, which is in the nature of repair of the basic software, amounts to development/enhancement/customization of the existing software or not.
HELD THAT:- It is clause 4 of the agreement that has been totally misunderstood and misread by both the Commissioner as well as the Tribunal. The lower authorities have purported to hold that the said clause shows that there is a transfer of software that has come into existence. On the contrary the aforesaid clause appears to be, when the contract is read as a whole, a standard clause inserted into such contracts for repair and service and is a clause, it appears, to have been inserted by way of abundant precaution to overcome a situation where the service provider would misuse the QAD software or claim ownership over the same.
In fact, this clause shows that appellant had neither any ownership of the original software nor ownership of anything that came into existence whilst resolving customer issues. The said clause, on the contrary, shows that from the very inception everything belongs to QAD and the moment anything comes into existence by virtue of any work done by appellant's employees the same is deemed to have always been owned by QAD and appellant is not deemed to be the author of anything done. In fact, appellant was not even entitled to utilize any such work or material or product that may have come into existence and there could have been no question of any sale, as nothing belongs to appellant. When nothing belongs to appellant it is not possible to come to the conclusion that there was a transfer of goods or a sale as held by the lower authorities.
Assuming that any software has been developed or there is some change in the source code, no new or saleable software comes into existence. Appellant's employees had merely worked on the old software remotely as the same is located on QAD USA's server situated in the USA. The alteration in such software is to meet the requirements of the QAD India's customer, which at all times belonged to the QAD India. There is no sale to QAD India, and no sale was involved in the contract. In fact, the terms of the contract makes it clear that the contract was one for rendering service. In fact, even before rendering any service, appellant had given up their right to any development to the software. The consideration involved is not for the sale of any software but for the services rendered by appellant's employees. All IT property rests with QAD India.
Mastek Limited case relied upon by the Tribunal is not applicable to the facts and circumstances of the case. In the case of Mastek Limited, Mastek was required to use its professional intelligence to solution the requirements of HDFC for its Home Loan Applications; evolve a software programme to meet the requirement of the HDFC and encode a programme on its medium. HDFC’s source codes were shared, unlike in appellant’s case, to do the required alteration and modification to develop a programme which will meet functional requirement of HDFC. The software programme so developed was owned by Mastek and was then subsequently sold to HDFC through a medium. Hence there was clearly a sale in this case.
Even the judgments in the matter of Direction Software Solutions V/s. Income Tax Officer [2008 (4) TMI 332 - ITAT BOMBAY-E] and ISBC Consultancy Services Ltd. V/s. Deputy Commissioner of Income Tax [2002 (8) TMI 840 - ITAT MUMBAI] relied upon by the Tribunal are not applicable to the facts and circumstances of the case. The reliance by the Tribunal on these two decisions is totally misplaced. These were cases where the assessee(s) contended that they had developed software and were entitled to a deduction in terms of Section 10A of the Income Tax Act, 1961 which defined “computer software” to mean inter alia any customised electronic data or any product or service of any similar nature which is transmitted or exported from India to any place outside India by any means.
It has been clarified by appellant that other activities captured side agreement development of Just in Time Sequencing Product or development of any other OAD product was never undertaken by appellant. The Karnataka Appellate Tribunal in IBM India Private Limited, Bangalore when discussing levy of VAT by activity performed by ERP Implementation Specialists noted that the codes which such Professionals insert in that software are not proprietary codes, having a marketability of their own which the concerned customer can possess or transfer or sell. In other words, there is no marketable commodity in existence to be sold and unless such commodity, whether tangible or intangible, exists there cannot be a sale or a works contract. This aspect was summarily dismissed by the Tribunal and the proprietary nature of the ERP software was not duly considered - The case at hand is also similar to the one dealt by the Hon'ble High Court of Karnataka in the case of Sasken Communication Technologies Ltd. The Tribunal distinguished this judgment on the ground that in this particular case, the ownership vested with the customer from the very inception. A true and proper reading of Clause 4 of appellant’s agreement with QAD India, it would be absolutely clear that from the very inception all property is owned by QAD India and vests with QAD India. No doubt that at the end of the day, the software, which is developed is embedded on the material object that exclusively belong to QAD. In the entire contract there is nothing to indicate that appellant after developing any software has to embed the same on a material object and then deliver the same to the customer so as to affect title to the project which is developed. The title in any case, always lived and vested with QAD.
The pith and substance of the contract or true nature of the transaction shows that the contract is a contract for service simplicitor and is not a works contract or composite contract consisting of 2 contracts - one for service and one for sale, but is an indivisible contract for service only. On examination of the contract as a whole, it becomes obvious that the contract is essentially an agreement to render service. The theory of works contract or the concept of aspect theory is not attracted.
The questions of law as framed by this Court on 8th December 2015 are answered in favour of appellant. The agreement dated 1st January 2006 between appellant and QAD is a contract of service and would not be a contract for sale as defined under Section 2(24) of the MVAT Act.
Appeal disposed off.
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2023 (12) TMI 778
Levy of penalty u/s 60(4) of Bihar Value Added Tax Act, 2005 - presence of mens rea or not - invoice number not tallied - human/clerical error - detention of a truck carrying goods at the integrated checkpost, Dhobi, Gaya - HELD THAT:- In the present case, there was a mistake in the invoice number as indicated in the declaration form which was accompanying the transport. A reasonable ground of attempt to carry out multiple transport arise, since if there was no checking at the check-post then there could have been a further transport made under the same invoice, thus, enabling an inter-State sale of the goods transported by the subject invoice and SUVIDHA Form, which could go unnoticed by the Department. Section 60(4) enables a seizure of goods along with the carrier if the authority suspects the transport to be in contravention of the provisions of Section 60(2). Section 60(4) (b) makes Section 56 applicable mutatis mutandis. Penalty is imposable under Section 56(4) (b) if the person in charge of the goods fails to satisfy the officer regarding the proper accounting of goods. The ingredients of Section 60(4) (b) read with Section 56(4) (b) are available in the instant case.
There are absolutely no reason to interfere with the penalty imposed - petition dismissed.
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2023 (12) TMI 743
Application for condonation of delay dismissed - provisions of Section 12-B of the J&K GST Act, 1962 ignored, which provide that the provisions of Sections 5 & 12 of the Limitation Act, Samvat 1995 shall apply to the appeals, revisions, filed under this Act before Appellate, Reviewing Authorities or the Tribunals - HELD THAT:- A conjoint reading of Section 12(D) along with first proviso shows that the maximum time within which reference could be filed by the dealer or the Commissioner should not exceed 90 days (including the grace period of 30 days) from the date of communication of appellate order.
Admittedly, the order passed by the appellate authority is 22.02.2022 and indisputably the same was communicated to the Commissioner on 29.02.2022 as per the own admission of petitioners in the writ petition. Therefore, 29.02.2022 is the date which is to be taken for consideration for the purposes of calculation of period of limitation for filing reference. The Commissioner, therefore, was required to file reference within 60 days, i.e., on or before 29.04.2022 or before 29.05.2022 (including the extended/grace period of 30 days subject to sufficient cause). However, no such reference was filed within 90 days; as such it has become barred by Section 12(d) of the J&K GST Act. Thus, the order passed by the appellate authority has attained finality because in view of the provisions of Section 12(d) of the J&K GST Act, which is a special Act, has excluded the applicability of Section 5 of the Limitation Act.
The order of learned Tribunal upheld - petition dismissed.
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2023 (12) TMI 742
Refund of excess tax alongwith interest - Power to re-quantification or re-adjudication after the sanction of refund - it is contended that in spite of refunding the excess amount in terms of the order dated 22.09.2022, the refund Officer had issued the said impugned notice beyond his jurisdiction - HELD THAT:- It appears that the refund order was passed on 22.09.2022 whereby the 1st respondent had determined the excess tax amount available with them to an extent of a sum of Rs.2,06,22,234/-. Pursuant to the said refund order, the petitioner had filed a refund application before the 1st respondent. At this juncture, the respondent had once again issued a notice to the petitioner and called for the particulars, as if, he is going to revise his own order.
As far as the 1st respondent is concerned, he has already assessed the excess tax amount and passed the refund order dated 22.09.2022. Having passed the same, the 1st respondent cannot issue the impugned notice dated 24.01.2023 without any provision of the law much less in terms of the Section 42(5) of the Act, and thereby the petitioner is entitled for the refund - there is no doubt that the first respondent had issued the said notice beyond the scope of his jurisdiction, since in the course of processing of the refund application, the 1st respondent is not empowered to re-adjudicate or re-quantify while passing the refund order.
This Court is inclined to direct the 1st and the 2nd respondent to refund the excess tax amount lying with the department to an extent of a sum of Rs.2,06,22,234/- along with interest as per the refund order in CST No.50806/2013-14 dated 22.09.2022. The said exercise is directed to be completed on or before 05.12.2023.
Post this matter on 08.12.2023 under the caption 'for reporting compliance'.
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