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VAT and Sales Tax - Case Laws
Showing 341 to 360 of 27295 Records
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2023 (8) TMI 1130 - ALLAHABAD HIGH COURT
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 - HELD THAT:- From perusal of the provision of Section 16 of the UP VAT Act, it is evidently clear that the burden of proof lies upon the dealer/opposite party - Merely showing the purchases through invoices from the registered dealer, will not enough and sufficient to proof that the purchases have been made bona fidely.
The Apex Court in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [2023 (3) TMI 533 - SUPREME COURT], while considering the pari materia of section 70 of the Karnataka Value Added Tax Act, 2003, where the burden was upon the dealer to prove beyond doubt its claim of exemption and deduction of ITC, has held that the primary responsibility of claiming the benefit is upon the dealer to prove and establish the actual physical movement of goods, genuineness of transactions, etc.
In the case in hand, from the verification of the registration numbers of the trucks provided by the dealer, it was found that some of them are of two-wheeler, passenger vehicles, small three-wheeler and some of them could not be found. Therefore, the dealer has miserably failed to prove the actual physical movement of goods which deemed to have been purchased from ex UP dealers.
Once the dealer failed to establish the said purchases and the physical movement of the same, the claim for non-taxability cannot be accepted -
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.
Revisions are allowed with a cost of Rs. 5,000/- each, which shall be deposited with the Department within a period of one month from today.
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2023 (8) TMI 1129 - ANDHRA PRADESH HIGH COURT
Jurisdiction of AP VAT Appellate Tribunal/5th respondent to entertain the stay application pending appeal - recovery of the disputed tax - HELD THAT:- It is true, as rightly submitted by learned counsel for the petitioner, when a substantive power of deciding an appeal is vested with an Appellate Court or Tribunal, the incidental/ancillary power of passing interlocutory orders including stay order shall also be deemed to be vested with the aforesaid Appellate Authority for rendering complete justice as otherwise the appeal will become otiose and the said Appellate Institution will be redundant. This will be against the public interest.
In STATE OF ANDHRA PRADESH VERSUS HINDUSTAN SHIPYARD LIMITED AND OTHERS [1987 (6) TMI 389 - ANDHRA PRADESH HIGH COURT] the division bench of Common High Court of Andhra Pradesh was dealing with the question whether the Tribunal has the power to grant stay in appeals pertaining to the Assessment Years fallen prior to 01.07.1985 because w.e.f the said date, Section 21 of APGST Act, 1956 was amended and sub section 6 and 6(a) were introduced. Section 6(a) created an express embargo of granting stay pending disposal of the appeal filed against the order of first appellate authority or deputy commissioner suo moto or in revision.
Thus, it can be said that the incidental or ancillary power to pass interlocutory orders in the main appeal is inherent or intrinsic in its substantive power of the Appellate Court or Tribunal to decide the appeal pending before it unless such ancillary or incidental power is taken away by an express provision or by necessary implication.
Whether such stay granting power is expressly or impliedly taken away from the AP VAT Appellate Tribunal? - HELD THAT:- While under Section 33(1), a VAT Appellate Tribunal has been conferred jurisdiction to entertain an appeal against the orders specified in that sub-section, including against order passed on appeal under Section 31 as in the present case, Section 31 (6)(b) creates an express embargo on the stay granting power of VAT Appellate Tribunal pending disposal of appeal passed against different orders including the order of the first appellate authority - Therefore, in view of the clear manifestation made by the express provision, the contention of learned GP agreed upon that AP VAT Appellate Tribunal is not vested with the power or jurisdiction to entertain the stay application and pass orders in the present situation.
The petitioner’s prayer to declare the action of respondent No. 1 in issuing the notice and Garnishee notice pending the stay petition before the AP VAT Appellate Tribunal as illegal, cannot be considered on that ground - Petition disposed off.
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2023 (8) TMI 1128 - MADRAS HIGH COURT
Interest on delayed refund sanction - HELD THAT:- There is no merits in the contention of the Commercial Tax Department that the petitioner is not entitled to the interest during the pendency of the proceeding before this Court in M/S. SWATHY CHEMICALS LTD. [2021 (3) TMI 1187 - MADRAS HIGH COURT]
Merely because the order dated 20.01.1997 of the Appellate Assistant Commissioner was revised by the Joint Commissioner vide order dated 28.05.2003 which was affirmed vide order dated 05.12.2003 pursuant to the show cause notice dated 04.05.1998 would not mean that the petitioner is not entitled to interest during the aforesaid period. Merely because the Department had revised the order of the Appellate Assistant Commissioner dated 20.01.1997 in AP.No.CST 188/95 would not mean the petitioner is not entitled to interest. Once the order of the Joint Commissioner has been restored, the petitioner is entitled to interest as calculated by the petitioner which was also confirmed by the 2nd respondent in its communication dated 30.11.2021.
The respondents are directed to refund the interest amount of Rs. 6,21,919.74/- after adjusting any amount if any paid towards interest during the interregnum, within a period of two weeks from the date of receipt of a copy of this order - petition allowed.
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2023 (8) TMI 1096 - ALLAHABAD HIGH COURT
Levy of Entry Tax on purchase turnover - purchase of iron & steel from unregistered person - dispute relates to the assessment year 2013-14 - HELD THAT:- It is not in dispute that against the order of the Tribunal partly allowing the second appeal of the respondent, any revision has been has been preferred under the UP VAT Act. It is also not in dispute that while allowing the second appeal in part, the Tribunal has confirmed the levy of tax apart from purchases being made from outside the country as well as purchases made from outside the State of U.P.
It is admitted between the parties that the tax levied by the Assessing Authority has been confirmed, which goes to show that the purchases from unregistered dealer have been confirmed upto the Tribunal. Once the said finding is not assailed by the respondent, the Tribunal was not correct in holding that the respondent has not made purchase of iron & steel from unregistered dealer.
The Tribunal, by the impugned order, has tried to blow hot & cold at the same time. It may further be observed that the Tribunal, while recording the finding under the Entry Tax Act that the purchased have not been made from unregistered dealer by the respondent, has neither made any discussion, nor any material was brought on record to justify the said observation.
The impugned order passed by the Tribunal is set aside to the extent that the levy of entry tax as assessed by the Assessing Authority is confirmed - revision allowed.
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2023 (8) TMI 1095 - MADRAS HIGH COURT
Legality of Recovery Notices and Garnishee notice sent to the sixth respondent / Indian Oil Corporation Limited - Stay granted not taken note of - violation of principles of natural justice - HELD THAT:- It appears that the respondents have issued the Impugned Recovery Notice without properly taking note of the stay that was granted by the Tribunal in the appeals that are pending before it for the Assessment Year 2007-2008 to 2015-2016.
The petitioner has also paid the tax for these Assessment Years. As far as the rest of the Assessment Years for 2016-2017 & 2017-2018, which is covered partly by the Impugned Recovery Notice as mentioned above, some of the demands have been set aside and the cases have been issued back to the Assessing Officer to pass a fresh order. Therefore, there are no justification in the Impugned Recovery Notice to recover the amounts from the sixth respondent/Garnishee.
The impugned order stands quashed. The respondents are to await for the final order to be passed by the Tribunal for the assessment year 2007 to 2008 to 2015 to 2016, which is likely to be taken up for hearing on 21.07.2023 - Petition allowed.
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2023 (8) TMI 1093 - HIMACHAL PRADESH HIGH COURT
Classification of goods - Khair - falls under the definition of “Timber” as defined under section 2(II) (Explanation 3) of the HP GST Act, 1968 or not - Khair wood, which is a raw material for katha manufacturing companies/ dealers, can be classified as converted timber or not as per notification dated 07-02-1992 - entitlement to claim sale @1% of Khair wood against RM-1, as per Notification No.EXNF( 9)2/99 (ii) dated 23-07-1999 or not.
HELD THAT:- The issue as to whether Khair wood falls within the definition of timber or converted timber, has already been decided by Hon’ble Division Bench of this Court in KARTAR SINGH VERSUS STATE OF HP. AND OTHERS (AND OTHER CASES) [2008 (12) TMI 696 - HIMACHAL PRADESH HIGH COURT] following the judgment of Hon’ble High Court of Punjab & Haryana in PANWAR TIMBERS VERSUS STATE OF PUNJAB [2006 (9) TMI 508 - PUNJAB AND HARYANA HIGH COURT].
When the issue is covered by the above decisions, learned Tribunal has no authority or jurisdiction to make a Reference under Section 33(1) of the HPGST Act, 1968 to this Court in the manner as has been done.
Therefore, the reference is rejected. The matter is to be re-considered by the learned Tribunal in light of the above decisions and an appropriate order be passed in the case of assessee in question.
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2023 (8) TMI 988 - SC ORDER
Condonation of delay of 390 days in filing the Special Leave Petition - no sufficient reasons for delay - HELD THAT:- It is found that delay of 390 days in filing the Special Leave Petition, now converted into Civil Appeal, has not been explained to the satisfaction of this Court, inasmuch as there is no narration as to what happened between 18.02.2019, the date on which the impugned order was passed till 25.04.2019. Thereafter the only explanation given is that the file had got mixed up with some other files and, therefore, ultimately only on 13.01.2021, the same was noticed and steps were taken to send a letter to the Office of the Advocate General of the State of Kerala and a copy to the Special Govt. Pleader (Taxes) and thereafter, steps were taken to file the appeal on 22.07.2021.
The reason cited for the gross delay of 390 days in filing the Special Leave Petition, now converted into a Civil Appeal, does not pursuade to condone the delay. The explanation offered is not satisfactory and not sufficient in the eye of law to condone the delay - Appeal dismissed on the ground of delay.
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2023 (8) TMI 987 - DELHI HIGH COURT
Refund claim - It is the case of the petitioner that bearing in mind the provisions of Section 38(3)(a)(ii) of the DVAT Act, the refund application was liable to be granted within two months from the submission of the revised return and thus latest by 31 May 2015 - HELD THAT:- Once the objections had been duly lodged online, the mere fact that the respondents were unable to trace out the objections filed physically would not detract from the right of the petitioners to claim refund - it is further constrained to observe that the various status reports as well as the averments made in this respect relate to the objections which had been filed for FY 2014-15, those pertaining to FY 2015-2016 and the first quarter of FY 20172018. However, the claim for refund which is made in the instant writ petition, undisputedly, relates to and emanates from the return which was submitted for the quarter ending 31 March 2014. Undisputedly all objections which pertained to FY 2012-13 as well as the period for April 2013 to December 2013 had been duly considered and ultimately disposed of by the respondents themselves in terms of the order of the OHA dated 31 October 2019.
As would be evident from a bare perusal of Rule 34, a claim for refund of tax is liable to be made in Form DVAT-21 only if such a refund is not claimed in the return itself. This clearly emerges from Rule 34(1) which uses the expression “except claimed in the return”. The aforesaid position is again reiterated in sub-rule (2) and which stipulates that only such claim for refunds may be made in Form DVAT-21 which have not been claimed in any previous return. It is thus manifest that once a claim for refund stands embodied in the return itself, there is no additional obligation placed upon the assessee to file Form DVAT-21. This position, in any case, stands concluded against the respondents in light of the judgments rendered by the Court in Corsan Corviam [2023 (4) TMI 4 - DELHI HIGH COURT] and Consortium of Sudhir Power Projects [2023 (2) TMI 290 - DELHI HIGH COURT].
Once a claim for refund stands embodied in the return itself, there is no additional obligation placed upon the assessee to file Form DVAT-21. This position, in any case, stands concluded against the respondents in light of the judgments rendered by the Court in Corsan Corviam and Consortium of Sudhir Power Projects.
There thus existed no justification for the respondents adjusting the sum of Rs. 10,74,67,218/- on 03 December 2018. This since evidently the objections were yet to be disposed of by the OHA on that date - the stand as taken by the respondents cannot be sustained and it is observed that they clearly acted in flagrant violation of the mandate of Section 38 of the DVAT Act.
The impugned order dated 31 May 2022 is hereby quashed. The respondents are consequently directed to refund the amount of Rs. 6,62,74,405/- along with interest from the date it fell due - Petition allowed.
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2023 (8) TMI 986 - MADRAS HIGH COURT
Levy of luxury tax under the provisions of the Tamil Nadu Tax on Luxuries Act, 1981 - amendment Act No.24/2002 to the Tamil Nadu Tax on Luxuries Act, 1981, imposing 1% on gold, silver, platinum jewellery and other precious stones at every point of purchase - HELD THAT:- The respondent ought to have called upon the petitioner to show cause as to why the amount that was paid by the petitioner covered by the impugned order should be refunded back to the petitioner as the petitioner would have passed on the incidence of tax to its customers - If the petitioner had produced evidence that the incidence of tax was not passed on to the customers, it is not on the part of the duty of the Department/State Government to retain the tax, which was otherwise not due to it.
The impugned order set aside and case remitted back to the respondent to pass a fresh order after calling upon the petitioner to show cause as to how the tax amount, which has been paid by the petitioner pursuant to the impugned order should not be retained by the State Government on account of unjust enrichment.
The respondent shall pass appropriate orders keeping note of Paragraphs 97 and 98 of the decision of the Hon'ble Supreme Court in M/s.Godfrey Phillips India Limited case - petition allowed.
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2023 (8) TMI 935 - SC ORDER
Rejection of refund application - Assessment order set aside - HELD THAT:- By the order impugned before the High Court, the authority rejected the application for refund. The respondent filed a writ petition challenging such rejection before the High Court of Punjab and Haryana.
The Division Bench of the High Court examined the matter and having considered the order rejecting the refund came to the conclusion that there are no reasons accompanying the decision taken and following the decision in the case of SADHU OVERSEAS VERSUS STATE OF HARYANA AND ANOTHER [2007 (9) TMI 575 - PUNJAB AND HARYANA HIGH COURT] as well as RATTI WOOLLEN MILLS VERSUS STATE OF PUNJAB AND OTHERS [2007 (2) TMI 587 - PUNJAB AND HARYANA HIGH COURT], the High Court allowed the writ petition(s) and directed the refund to be made.
Further, the High Court directed that the interest shall be calculated at a statutory rate of 12 per cent for the first month of delay and at the rate of 18 per cent per annum in respect of delay caused for the subsequent months.
The interest payable confined to 12 per cent per annum for the entire period - application disposed off.
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2023 (8) TMI 934 - BOMBAY HIGH COURT
Maintainability of petition assailing the assessment - availability of alternate remedy of appeal - Validity of assessment orders - Levy and recovery of Local Body Tax (LBT) - bringing the goods, subject matter of assessment within the municipal limits for use, consumption and sale or not - vires of sub-section 152D of the MMC Act - HELD THAT:- The municipal taxation in regard to the levy and recovery of the LBT is part of a well defined statutory scheme, which is a Code by itself. The question would be whether the petitioner has made out any exceptional case so as to be made an exception from deviating the statutory scheme and discipline as may be legitimately required in entertaining the present petition. Considering the case as averred by the petitioner in the petition, it is opined that at this stage of the proceedings, the vires of sub-section 152D of the MMC Act not examined, as challenged by the petitioner - this is because what was questioned by the petitioner are primarily the assessment orders.
It would quite justified in taking such view considering the clear averments as made in the memo of petition in paragraph 5(f) when the petitioner takes a position contrary to the well settled principles of law, i.e. when the petitioner contends that the provision of not allowing filing of a statutory appeal without deposit of the disputed tax is arbitrary, harsh and irrational (when the validity of the said provision of pre-deposit has already been upheld]. Also when the petitioner clearly avers in the petition that it is difficult for the petitioner to pay the entire amount of disputed tax to maintain the appeal, and for such reason this petition is filed.
The Division Bench of this Court in case KHARGHAR CO-OP. HOUSING SOCIETIES FEDERATION LTD. AND ORS. VERSUS MUNICIPAL COMMISSIONER, PANVEL MUNICIPAL CORPORATION AND ORS. [2023 (4) TMI 1241 - BOMBAY HIGH COURT] when in the context of payment of municipal taxes the Division Bench referring to the provisions of Section 406 and considering the several decisions of the Supreme Court in Shivram Poddar Vs. Income Tax Officer, Central Circle II, Calcutta and Anr. [1963 (12) TMI 6 - SUPREME COURT]; Income-Tax Officer Lucknow Vs. M/s S.B. Singar Singh & Sons & Anr. [1976 (8) TMI 5 - SUPREME COURT]; Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. & Ors. [1984 (11) TMI 63 - SUPREME COURT]; M/s. Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-cum-Assessing Authority & Ors. [2023 (2) TMI 64 - SUPREME COURT] has held that the petition under Article 226 of the Constitution assailing the assessment and demand order ought not to be entertained and the proper remedy would be to challenge the assessment order by taking recourse to the statutory remedy of an appeal - Such decision is squarely applicable in the facts of the present case, as contention of the petitioner is similar to one considered by the Division Bench in Kharghar Co-op. Housing Societies’ case.
Petitioner has not brought the goods, subject matter of assessment within the municipal limits for use, consumption and sale and has purchased goods locally - HELD THAT:- In so far as the contention of the petitioner on merits are concerned namely that the petitioner has not brought the goods, subject matter of assessment within the municipal limits for use, consumption and sale and has purchased goods locally and therefore such goods are not liable for the levy of the LBT, is a factual contention, which can be effectively examined on the basis of the documents and which can be certainly examined in the proceedings of a statutory appeal.
The petitioner has not made out any case for interference in these petitions so as to pursuade the Court to make an exception to entertain the petitions, notwithstanding the statutory remedy of an appeal available to the petitioner as provided under the provisions of Section 406 of the MMC Act - merely for the reasons that the vires of a statutory provision namely Section 152D of the MMC Act being assailed by the petitioner, would not mean that de hors a strong foundation and a cause of action for assailing such provision being made out, the Court nonetheless would be under an obligation to examine the vires of the said provision and entertain the petitions.
The petitioner is permitted to avail the remedy of an appeal under Section 406 of the MMC Act to assail the impugned assessment orders. Let such appeal be filed within four weeks from today - If such appeals are filed, the same be adjudicated by the appellate authority on its merits without an objection as to limitation as the petitioner was bonafide pursuing the present proceedings. All contentions of the parties on the merits of the proceedings if any instituted before the appellate authority are expressly kept open.
Petition disposed off.
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2023 (8) TMI 933 - MADRAS HIGH COURT
Validity of assessment orders - demand under Section 19(2)(v) of the TNVAT Act - Invisible loss - Deficit stock - HELD THAT:- It was incumbent on the part of the assessee as also the revenue to have to applied for a modification of the aforesaid order. It however went unnoticed. The revenue was under the assumption that the amount stood confirmed as far as deficit stock issue was concerned while the petitioner has assumed the issue all the issues were answered as the impugned orders were set aside and case was remitted back. The Department also did not choose to issue further prerevision notice on deficit stock which culminated in the subsequent orders.
The issue relating to the stock deficit has not been addressed after the order was set aside by this Court on 18.09.2017 in W.P.Nos.16000 to 16004 of 2017 on account of the confusion that prevailed. Be that as it may, the issue has been alive in these proceedings, all through though the other two issue have been settled in favour of the petitioner and have been dropped. As far as deficit stock is concerned, it has be construed that the issue is still alive. Neither the Department can be deprived of the revenue if the amount was payable by the petitioner nor the petitioner deprived of a chance to defend itself.
The case is remitted back to the respondent to pass a fresh order as far as deficit stock is concerned - Petition disposed off.
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2023 (8) TMI 932 - DELHI HIGH COURT
Refund of Pre-deposit alongwith interest - Adjustment of pre-deposit with pending demand - pre-deposit made for the purposes of pursuing an appeal under the Act can be treated as duty or not? - HELD THAT:- MRF LIMITED VERSUS COMMISSIONER OF TRADE AND TAXES [2015 (5) TMI 462 - DELHI HIGH COURT] has unequivocally held that a deposit made in terms of a provision connected with the preferment of an appeal cannot be treated to be tax or duty. In fact that is the position which has been consistently held by various courts as would be evident from the discussion which follows. It thus remains undisputed that a pre-deposit cannot partake the character of a tax or duty. This since, it would clearly be connected only with the right of the assessee to pursue an appeal.
As is manifest from a clear reading of sub-section (1) of section 30, the said provision relates to a claim made by a person for refund of an amount of tax paid by him. The express language as employed in Section 30(1) itself takes the case of refund of pre-deposit out from the rigors of the procedural formalities which are contemplated therein. We further note that as in the present case, claims for refund which may arise as a consequence of an order passed by the Appellate Authority or a Court would be governed by Section 30(4) of the Act - The same position would also appear to flow from a reading of Rule 29 and which contemplates Form ST- 21 and Form ST-22 being moved by an assessee when claiming refund. Rule 29 (2) speaks of an application for refund of any tax or penalty imposed under Section 30(1) or reimbursement of tax under Section 30(8). Neither sub-section (1) nor sub-section (8) of Section 30 deal with the subject of refund of pre-deposit.
Thus, a pre-deposit would become refundable the moment an Appellate Authority comes to hold in favour of the assessee and demands come to be annulled. This principally since pre-deposit is not tax or duty and the refund of which alone is regulated by Section 30(1) of the Act - the decision of the Bombay High Court in SUVIDHE LTD. VERSUS UNION OF INDIA [1996 (2) TMI 136 - BOMBAY HIGH COURT] was assailed before the Supreme Court. While dismissing the appeal of the Union, the Supreme Court in Union of India Vs. Suvidhe Limited. [1996 (8) TMI 521 - SC ORDER] held as A deposit under Section 35-F is not a payment of duty but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed with consequential relief.
There are no justification to accord a judicial imprimatur to such an interpretation since it would go against the very grain of a pre-deposit - Whether the respondents would be entitled to adjust a pre-deposit against an outstanding demand in case the assessee were to lose in the appeal is a question which, in any case, does not arise in the present proceedings.
The respondent is hereby directed to refund a sum of Rs.50,76,485/- along with interest in terms of Section 30(4) with effect from 04 December 2017 till the date of actual payment - Petition allowed.
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2023 (8) TMI 893 - KERALA HIGH COURT
Best Judgement assessment - scope of term 'goods' - electrical energy comes within the definition of goods or not - petitioner submits that since the definition of ‘goods’ specifically excludes electricity, the contention that electrical energy is included under the 1st Schedule to the Act as exempted goods would not make any difference to the situation - HELD THAT:- It is noticed that Ext. P19 notice proceeds on the basis that the goods brought in by the petitioner on 24.3.2008 had been disposed of during the financial year 2008-’09 without disclosing the same to the Department. It is, therefore, presumed that the petitioner had brought in three different windmills and had effected sale of the same which has not been disclosed to the Department. It is on this basis that tax at the rate of 4% on the value of three windmills with cess and interest has been calculated by Ext. P20.
The petitioner has produced material to show that what was brought into the State was one windmill in a knocked down condition in three separate vehicles and also to show that the said windmill is still operational and that electrical energy is being generated and supplied to the KSEB. The further contention appears to be that electrical energy being goods included in the 1st Schedule, for which, no tax is payable, the sale of electrical energy also ought to have been disclosed by the petitioner, who is a registered dealer under the KVAT Act, in his returns as turnover which has not been done in the instant case.
The remaining question is with regard to the sale, if any, of the windmill as such. From the materials produced by the petitioner, especially Exts. P15, P22 and P24, it is clear that what has been brought into the State of Kerala was one windmill in knocked down condition in three separate vehicles as part of the same bill or invoice. The KSEB is on record stating that one windmill is still functional at Ramakkalmedu and that electrical energy is being generated and supplied to the KSEB from the same.
Thus, Ext.P20 order, which does not satisfy the ingredients of Section 25(1) of the KVAT Act is completely unsustainable. Exts. P19, P20 and P26 are, therefore, set aside - petition allowed.
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2023 (8) TMI 845 - ANDHRA PRADESH HIGH COURT
Maintainability of petition - availability of efficacious and alternative remedy of appeal - Validity of assessment order - barred by time limitation or not - principles of natural justice.
Time Limitation - HELD THAT:- Admittedly, the basis for issuing show cause notice and passing of impugned Assessment Order was the inspection dated 21.05.2013 of V&E Department and its report to the 1st respondent. In such an event, the 1st respondent owes a responsibility to furnish the copy of the said report at least after receiving the request letter dated 08.07.2015 of the petitioner, a copy of which is filed along with material papers. Thus the petitioner was deprived of a valuable opportunity to submit her objections against the said report and impugned Assessment Order - The net result is that though the Assessment Order pertaining to the tax period 2013-14 is within the period of limitation, however, the same is liable to be set aside for non-furnishing of the report of the V&E Department forwarded to the 1st respondent and also non-consideration of subsequent report issued by the V&E Department as claimed by the petitioner and not giving an opportunity of hearing to the petitioner in this regard.
In this case, the principles of natural justice were violated and further a major part of assessed period is barred by limitation and thereby, the 1st respondent had no jurisdiction to pass assessment order to that extent. In such an event, this Court can entertain writ petition.
The Assessment Order dated 11.01.2019 so far as it relates to the period 2008-09 to 2012-13 (upto November, 2012) is barred by limitation and hence set aside to that extent, however, the said order relating to the tax period 2013-14 is held to be within the period of limitation - Petition allowed in part.
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2023 (8) TMI 844 - MADRAS HIGH COURT
Determination of appellant's turnover under Section 3-B of the TNGST Act 1959 - levy of penalty under Section 16(2) of the Act - revision of assessment on the basis of third party records - assessment confirmed on the basis of information collected from the place of business of a third party that too when those information reveal only the commission received by the said third party, for the invoices allegedly raised in the name of the appellant - burden to prove - violation of principles of natural justice.
HELD THAT:- Admittedly, the assessments of the appellant have been revised based upon certain records said to have been seized by the Enforcement Wing from the Photo Marketing Service in Chennai which is said to have revealed that the assessee had purchased the goods vide six invoices from one Jindal Photo Films, New Delhi. Therefore, it is clear that the assessments have been revised based upon third party documents and not based upon any inspection conducted in the premises of the assessee. The authorities have failed to furnish a copy of the said third party document to the assessee, especially when the assessee has taken a stand that their names and registration number have been misused by some one to evade tax. No opportunity has been provided to the assessee to cross examine the said third party.
Therefore, it is clear that the entire revision of assessment has been made based on documents which have been screened from the purview of the assessee. On the other hand, the burden has been fixed upon the assessee to prove the negative that he did not have any transaction with those third party entities.
The orders of the authorities are clearly in violation of the principles of natural justice and they are liable to be set aside and accordingly, set aside - All the substantial questions of law are answered in favour of the appellant - Appeal allowed.
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2023 (8) TMI 843 - JHARKHAND HIGH COURT
Initiation of Reassessment proceedings - time barred or not - Levy of penalty u/s 10 A of the CST Act - deliberate intent or not - Mis-utilization of Form 'C' for purchase of goods at concessional rate - assessee was carrying out manufacturing activity on job work basis and the goods manufactured by it was not sold by it but was sold by Tata Motors Limited.
Whether Section 42(3) is in itself the substantive provision provided under the JVAT Act for initiation of re-assessment proceeding or it merely enumerates additional circumstances/grounds under which re-assessment proceeding can be initiated under the substantive provision of re-assessment contained under Section 40 of the JVAT Act? - HELD THAT:- The Hon’ble Supreme Court, in the case of Mafatlal Industries [1996 (12) TMI 50 - SUPREME COURT], has clearly laid down that the phrase “levy and collection” indicates that all the steps in making a man liable to pay a tax and exaction of tax from him must be in accordance with law. All steps must be taken according to statutory provisions and no one can be subjected to levy and collection of tax without authority of law. It is a settled law that completion of assessment of an assessee confers valuable right upon the said assessee and the said assessment proceeding can be subjected to re-assessment strictly in accordance with the statutory provisions contained under the Act.
Pior to insertion of Section 42(3), the Assessing Authority, could have treated audit objection as an information and could have initiated re-assessment proceeding. However, Section 42(3) provides that when information is received by way of observation/objection from the Comptroller and Auditor General of India, the Assessing Authority has to proceed to re-assess the dealer. Thus, what is dispensed with under Section 42(3) is recording of reasons to believe by the Assessing Authority for initiation of re-assessment proceeding.
Further, in the Judgment rendered by Hon’ble Apex Court, in the case of Larsen and Toubro [2017 (3) TMI 1064 - SUPREME COURT], Hon’ble Apex Court, after examining almost all earlier Judgments, although held that an audit objection would be well within the parameters of being construed as information, but at the same time, it has been held that merely because audit objection has been raised, the same would not authorize the Assessing Authority to proceed with re-assessment and the Assessing Authority has to record his satisfaction on the audit objection. In the said Judgment, Hon’ble Supreme Court noticed that the Assessing Authority was not agreeing with the audit observation, but, despite the same, proceeded to issue Notice on the ground of direction issued by Audit Party and not on its personal satisfaction and it was clearly held by Hon’ble Apex Court that same was not permissible under law; and the very initiation of re-assessment proceeding was declared as without jurisdiction.
The law is no more res integra that a quasi-judicial authority cannot abdicate its jurisdiction on the dictate of an external authority and proceed to pass order on such external dictate - In the present case, it has been argued by learned Advocate General, Section 42(3) mandates the assessing authority to initiate re-assessment proceeding on the dictate of the Audit Party which, on the face of discussions, would amount to abdication of jurisdiction of the assessing authority being a quasi-judicial body to external dictates, which would be contrary to the ratio laid down by the Judgment of Hon’ble Apex Court in the case of Indian Eastern Newspaper Society, New Dehi [1979 (8) TMI 1 - SUPREME COURT] and in the case of Larsen and Toubro.
Whether Section 42(3) is an independent provision conferring power of re-assessment or is merely as additional ground conferred under the Act upon the assessing authority for carrying out re-assessment proceedings? - HELD THAT:- Since it is already declared that Section 42(3) is to be read with Section 40(4) of JVAT Act and limitation period for carrying out re-assessment proceeding is five years, we are not deliberating further over the said issue - However, it would be apt to also refer to the Judgment rendered by Hon’ble Supreme Court in the case of State of Punjab & Ors. Vs. Bhatinda District Cooperative Milk Producers Union Ltd. [2007 (10) TMI 300 - SUPREME COURT] wherein Hon’ble Apex Court, while examining the provisions contained under the Punjab General Sales Tax Act conferring power of suo-motu revision upon the Commissioner, held that although said Section prescribed no period of limitation but the same would not mean that suo-motu power can be exercised at any time. The Hon’ble, in the said Judgment, held that if no period of limitation is prescribed, statutory authority must exercise jurisdiction within reasonable time and the reasonable period would depend upon the nature of the statute, liabilities and other relevant factors.
In the said Judgment, Hon’ble Supreme Court, while examining the scheme of Punjab General Sales Tax Act, held that revisional power should ordinarily be exercised within a period of three years and, in any event, the same should not exceed the period of five years. Said finding was given by the Hon’ble Apex Court by considering various provisions of the Punjab Act which contains provision of limitation varying from three years to five years from the end of the tax period.
Similarly, under the scheme of JVAT Act also, provisions of limitation for carrying out assessment, audit assessment, scrutiny assessment, re-assessment proceedings, etc. have been prescribed to be three years to five years. It is for the said reason also, in our opinion, while incorporating provision of Section 42(3), the Legislature, in its wisdom, had not sought to extend the period of limitation by inserting non-obstante clause.
Whether imposition of penalty under Section 10A of the CST Act against the Petitioner-assessee for alleged violation of provisions of Section 10(b) of the CST Act is sustainable in the eye of law? - HELD THAT:- The Assessing Authority failed to discharge its burden to prove the existence of circumstances constituting the said offence under Section 10(b). It may also be noted here that Show Cause Notice, pursuant to audit objection, was issued for alleged violation of Section 10(d) of the Act, but orders were passed for alleged violation of Section 10(b) of the Act. The first Revisional Authority i.e. Additional Commissioner of Commercial Taxes also held that the audit objection is not valid in view of the Judgment of East India Mfg. Company Ltd. [1981 (7) TMI 205 - SUPREME COURT], but still upheld the order of the Assessing Authority imposing penalty, which compelled the Petitioner to move before the second Revisional Authority i.e. Commercial Taxes Tribunal.
The Commercial Taxes Tribunal, interestingly, upheld levy of penalty on a completely new ground by recording, inter alia, that in the original Registration Certificate of the Petitioner, although Petitioner was entitled to purchase goods at concessional rate for re-sale, but the word ‘Wahi’/’Do’ was missing in the Registration Certificate and Petitioner was not entitled to purchase goods for manufacturing and processing of the goods for sale. This finding rendered by Commercial Taxes Tribunal is clearly travelling beyond the impugned orders and has been raised for the first time before the Tribunal.
The imposition of penalty against the Petitioner under Section 10A of the Act is not sustainable in the eye of law, and, the assesse was under the bona fide belief that its Registration Certificate entitled it to purchase goods at concessional rate for manufacturing and processing of goods for sale and the said bona fide belief of the assesse is fortified by the stand taken by the Revenue itself, wherein at no stage it was disputed that assesse was not entitled to purchase goods at concessional rate for manufacturing and processing activity. The assesse-Petitioner, therefore, cannot be said to have falsely represented knowingly and willfully with guilty mind and, thus, we are of the opinion that the order of penalty levied against the assesse is not sustainable.
Application allowed.
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2023 (8) TMI 787 - JAMMU AND KASHMIR AND LADAKH HIGH COURT
Date of commencement of production of the unit - initial date of production of the commencement of service of the petitioner’s unit has been recorded as 12.06.2012 instead of actual date of production, i.e., 28.03.2012 - Grievance projected by the writ petitioner is that the petitioner has although submitted the documentary evidence of having commenced the production of the unit on 28.03.2012, the final decision for grant of DOP (date of production) has not been taken by the Director Industries and Commerce
HELD THAT:- As on account of inaction on part of the respondents by not taking the decision timely regarding the date of production, the benefits which have been availed by the petitioner under the provision of Section 80IB of the Income Tax Act which have been duly accepted by the department at the relevant point of time by accepting the returns are being withdrawn.
The record reveals that although the petitioner continued to carry out the production of biscuits with effect from 28.03.2012 and have been filing the returns with the Income Tax Department and the assessment proceedings u/s 153(A)/143(3) of the Income Tax Act for the annual years, 2014-15, 2015-16 and 2016-17 were initiated because of the date of production shown as 12.06.2012 and the deductions claimed by the petitioner were being withdrawn.
Since the respondents have failed to take a decision for grant of date of production as on 28.03.2012 in conformity with the interim direction passed by this Court coupled with the observation of the Director Industries and Commerce, the learned senior counsel appearing on behalf of the petitioner-unit submitted that he would be satisfied at this stage in case if a direction is issued to the respondents to accord consideration to the unit of the petitioner within some reasonable time in the light of the observations of the concerned Director, i.e., respondent No. 2 and to the aforesaid preposition, the learned counsel appearing on behalf of the respondents have no objection.
The present petition is disposed of with the direction to the respondents to accord consideration to the case of the petitioner to have commenced the production of the unit on 28.03.2012 instead of 12.06.2012 by granting final DOP in conformity with the observations of the Director Industries and Commerce, which find mention in communication dated 14.06.2012 addressed to the General Manager District Centre, Jammu within a period of six weeks from the date copy of the order along with writ petition and the annexures appended thereto, are made available to the respondents.
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2023 (8) TMI 786 - JHARKHAND HIGH COURT
Maintainability of writ petition - availability of alternative remedy - Validity of Re-assessment order - statutory period of limitation prescribed under the JVAT Act not followed - Section 42(3) of the JVAT Act.
Existence of alternative remedy - HELD THAT:- It is trite law that existence of alternative remedy is not an absolute bar to the maintainability of writ petition under Article 226 of the Constitution of India. There are circumstances under which writ petition can be entertained namely; breach of fundamental right; violation of principles of natural justice; and excess of jurisdiction or a challenge to vires of a statute or delegated legislation. In the present case, writ petitioner has raised the issue of limitation which is a jurisdictional question and, thus, writ petition is maintainable.
Interpretation of statute - Whether Section 42(3) is in itself the substantive provision provided under the JVAT Act for initiation of re-assessment proceeding or it merely enumerates additional circumstances/grounds under which re-assessment proceeding can be initiated under the substantive provision of re-assessment contained under Section 40 of the JVAT Act? - HELD THAT:- The Hon’ble Supreme Court, in Mafatlal Industries [1996 (12) TMI 50 - SUPREME COURT], has clearly laid down that the phrase “levy and collection” indicates that all the steps in making a man liable to pay a tax and exaction of tax from him must be in accordance with law. All steps must be taken according to statutory provisions and no one can be subjected to levy and collection of tax without authority of law.
Completion of assessment of an Assessee confers valuable right upon the said assessee and the said assessment proceeding can be subjected to re-assessment strictly in accordance with the statutory provisions contained under the Act - under the scheme of the Act, there is provision for assessment, self-assessment, audit assessment, assessment of dealers not registered, and, specific provisions have also been incorporated for carrying out re-assessment proceedings under Section 40(1) of the JVAT Act.
Even earlier, prior to insertion of Section 42(3), the Assessing Authority, could have treated audit objection as an information and could have initiated re-assessment proceeding. However, Section 42(3) provides that when information is received by way of observation/objection from the Comptroller and Auditor General of India, the Assessing Authority has to proceed to re-assess the dealer. Thus, what is dispensed with under Section 42(3) is recording of reasons to believe by the Assessing Authority for initiation of re-assessment proceeding.
In the Judgment rendered by Hon’ble Apex Court, in the case of Larsen and Toubro [2017 (3) TMI 1064 - SUPREME COURT], Hon’ble Apex Court, after examining almost all earlier Judgments, although held that an audit objection would be well within the parameters of being construed as information, but at the same time, it was held that merely because audit objection has been raised, the same would not authorize the Assessing Authority to proceed with re-assessment and the Assessing Authority has to record his satisfaction on the audit objection. In the said Judgment, Hon’ble Supreme Court noticed that the Assessing Authority was not agreeing with the audit observation, but, despite the same, proceeded to issue Notice on the ground of direction issued by Audit Party and not on its personal satisfaction and it was clearly held by Hon’ble Apex Court that same was not permissible under law; and the very initiation of re-assessment proceeding was declared as without jurisdiction.
It is trite law that a quasi-judicial authority cannot abdicate its jurisdiction on the dictate of an external authority and proceed to pass order on such external dictate. In the present case, it has been argued by learned Advocate General that Section 42(3) mandates the assessing authority to initiate re-assessment proceeding on the dictate of the Audit Party which, on the face of discussions held above, would amount to abdication of jurisdiction of the assessing authority being a quasi-judicial body to external dictates, which would be contrary to the ratio laid down by the Judgment of Hon’ble Apex Court in the case of Indian Eastern Newspaper Society, New Delhi [1979 (8) TMI 1 - SUPREME COURT] and in the case of Larsen and Toubro.
Whether Section 42(3) is an independent provision conferring power of re-assessment or is merely as additional ground conferred under the Act upon the assessing authority for carrying out re-assessment proceedings? - HELD THAT:- What has been dispensed with in Section 42(3) is the requirement of recording ‘reasons to believe’ only. It is under the said circumstances, non-obstante clause was not inserted in Section 42(3) extending the period of limitation from the date of receipt of audit objection, and, thus, the period of limitation would be governed by Section 40(1) read with 40(4) of the JVAT Act - If the assessing authority is allowed to initiate repeated re-assessment proceeding against an Assessee merely on the dictate of Audit Party, there would be no finality of assessment and the Assessee would be having domical sword hanging over in it in perpetuity, which is not the scheme of the Act.
Since it is already declared that Section 42(3) is to be read with Section 40(4) of JVAT Act and limitation period for carrying out re-assessment proceeding is five years, we are not deliberating further over the said issue. However, it would be appropriate to also refer to the Judgment rendered by Hon’ble Supreme Court in the case of STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [2007 (10) TMI 300 - SUPREME COURT] wherein Hon’ble Supreme Court, while examining the provisions contained under the Punjab General Sales Tax Act conferring power of suo-motu revision upon the Commissioner, held that although said Section prescribed no period of limitation but the same would not mean that suo-motu power can be exercised at any time. Hon’ble Supreme Court, in the said Judgment, held that if no period of limitation is prescribed, statutory authority must exercise jurisdiction within reasonable time and the reasonable period would depend upon the nature of the statute, liabilities and other relevant factors.
Thus, under the scheme of JVAT Act also, provisions of limitation for carrying out assessment, audit assessment, scrutiny assessment, re-assessment proceedings, etc. have been prescribed to be three years to five years. It is for the said reason also, in our opinion, while incorporating provision of Section 42(3), the Legislature, in its wisdom, had not sought to extend the period of limitation by inserting non-obstante clause.
Whether suo-motu extension orders extending the period of limitation passed by Hon’ble Supreme Court would apply to original adjudication proceedings? - HELD THAT:- A bare perusal of the said Circular would reveal that CBIC, in exercise of its power under Section 168A of CGST Act, has issued the said guidelines which was deliberated in 43rd meeting of the GST Council and in the said guidelines, it was clearly noted that the orders of Hon’ble Supreme Court only apply to quasi-judicial and judicial matters relating to petitions/ applications/suits/appeals/all other proceedings and not to original adjudication proceedings. In fact, the Parliament has enacted the ‘Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and, under the said Act, provisions were incorporated extending the period of limitation specifically for passing of adjudication orders.
A careful reading of the Judgment of Hon’ble Apex Court in S. Kasi [2020 (6) TMI 727 - SUPREME COURT] would leave no iota of doubt in our mind that the purpose of extending the period of limitation was for the benefit of litigants who have to take remedy in law as per the applicable statute for a right, as the law of limitation bars the remedy but not the right. Thus, in view of the ratio of the Judgment of Hon’ble Apex Court, in the case of S. Kasi read with the amendments carried out by the Parliament and the State Legislature extending the period of limitation by amending Acts, it is opined that the benefit of suo-motu extension orders of Hon’ble Apex Court would not be available to original adjudication proceedings which is to be governed by applicable Statutes including its amendments.
The suo-motu orders extending the period of limitation passed by Hon’ble Apex Court is not applicable to original adjudication proceedings and re-assessment proceedings would be governed by provisions of JVAT Act read with the Amendment Act of 2020.
Application disposed off.
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2023 (8) TMI 652 - SC ORDER
Purchase of gold for manufacturing of jewellery and ornaments - Claim of exemption from tax under Rule 33A of the West Bengal Value Added Tax Rules, 2005 (the Rules).
It was held by the High Court that the arguments that by preventing the petitioner from carrying out job work outside the State of West Bengal would violate Article 301 and 304 of the Constitution is an argument which is stated to be outrightly rejected.
HELD THAT:- There are no reason to interfere with the judgment and order impugned in the petition - SLP dismissed.
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