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VAT and Sales Tax - Case Laws
Showing 401 to 420 of 27295 Records
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2023 (7) TMI 942 - SC ORDER
Levy of tax - chemicals used as consumables in the process of job work of dyeing of fabric - tax is levied irrespective of the fact whether property in goods had been transferred or not - HELD THAT:- Matters remanded to the Assessing Officer to consider the case of the assessees as well as of the Appellants herein and to pass fresh orders in terms of the directions issued by the High Court in M/S A.P. PROCESSORS, PLOT NO. 103, SECTOR-24, FARIDABAD THROUGH ITS PARTNER SH. ARVIND JAIN VERSUS STATE OF HARYANA THROUGH PRINCIPAL SECRETARY TO GOVERNMENT OF HARYANA, EXCISE AND TAXATION DEPARTMENT, CIVIL SECRETARIAT, CHANDIGARH [2018 (5) TMI 1797 - PUNJAB AND HARYANA HIGH COURT] where it was held that In the present case, it would be essential to determine the value of consumables transferred in the goods on which tax is leviable. While determining the actual loss of chemicals, dyes and colours where the fabric or textile undergoes various processes depends upon factual aspect which can be considered only by the Assessing Officer where parties can produce evidence in respect of their respective claims/contentions.
There are no reason to interfere with the impugned orders - appeal dismissed.
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2023 (7) TMI 941 - DELHI HIGH COURT
Requirement of adjusting the pending dues from the amount of refund due to a tax payer - date when the amount of refund is payable for the purposes of Section 42 of the DVAT Act - HELD THAT:- The language of Section 38(2) of the DVAT Act indicates the scheme of application of an amount refundable to a person towards the outstanding dues. It requires the Commissioner to apply the excess amount due to a taxpayer towards recovery of any other amount due under the DVAT Act or under the CST Act. Clearly, if there is a crystalized demand, which is due and payable by any taxpayer, the Commissioner is required to first apply the amount refundable for satisfaction of that liability. If any amount remains after the discharge of such dues, the same is required to be refunded within the stipulated period - It is apparent that the use of the words “any other amount due” in Section 38(2) of the DVAT Act refers to the amount due and outstanding at the material time, which is other than that covered under the assessment or quantification resulting in the claim for the refund either made separately or as reflected in the return furnished by the taxpayer.
The taxpayer’s remedies and claim in respect of any amount correctly applied in terms of Section 38(2) of the DVAT Act – that is against other amounts due outside the rubric of the return furnished or its claim for the refund – would follow a different trajectory.
If the refund claimed by the taxpayer in his return is not paid on account of the assessment and reassessment framed under Sections 32 or 33 of the DVAT Act for the same tax period and the petitioner is successful in upsetting the same either pursuant to the objections filed under Section 74 of the DVAT Act, or in an appeal filed before the Appellate Authority under Section 76 of the DVAT Act, the self-assessment (return furnished) would stand confirmed and the assessee’s claim would be required to be processed. This is so because, if the petitioner prevails in its objections under Section 74 of the DVAT Act, or appeals under Section 76 of the DVAT Act, that would amount to vindicating its stand that the assessments framed are erroneous and the refund claimed under the return should have rightly been paid within the time as stipulated under Section 38(3)(a) of the DVAT Act. Even in cases where the assessments are reviewed under Section 74B of the DVAT Act and as a consequence, the refund as reflected in the return is required to be made, the refund would be traceable to the return furnished by the taxpayer.
The doctrine of Harmonious Construction requires that provisions of a statute not be read in isolation but in conformity with the scheme of the statute so as to avoid any conflict with the other provisions. This interpretation of Sub-rule (2) and Subrule (4) of Rule 34 of the DVAT Rules is consistent with the said doctrine.
Entitlement to Interest on delayed refunds - relevant time for calculation of interest - Interest on the refund is required to be reckoned with reference to the date of filing its revised return, or not - HELD THAT:- In terms of Section 42(1) of the DVAT Act, a person is entitled to interest from the date that the refund was due to be paid or the date when the amount was over paid by the person, whichever is later - In the present case, undisputedly, the date on which the refund was due was later. According to the Revenue, the return furnished by a taxpayer, would stand superseded by the subsequent assessments under Sections 32 or 33 of the DVAT Act and, if no refund is due in terms of such assessments, the refund would be payable only after the taxpayer has succeeded in its challenge for setting aside or modifying the assessments framed under Sections 32 and 33 of the DVAT Act.
It is contended that if the taxpayer secures the orders for setting aside or modifying the said assessments, the refund would be payable as a consequence of such orders - This aforesaid contention is unmerited. Once the taxpayer has succeeded in upsetting the assessments framed under Sections 32 or 33 of the DVAT Act, which results in vindicating its claim for refund either in part or as a whole, as claimed by furnishing a return, interest under Section 42(1)(a) of the DVAT Act would be payable from such date as the refund was due to be paid to the taxpayer. The expression, “the date that refund was due to be paid” must be construed as the date when such a refund ought to have been paid to the taxpayer. If the taxpayer succeeds in vindicating its stand that its claim for the refund was correct and that the subsequent assessments framed by the concerned authorities for the same tax period were erroneous or unjustified; it would follow that the taxpayer should have been refunded the amount claimed and that interest would be payable from the said date.
In the present case, the petitioner had filed its revised return for the fourth quarter of the Financial Year 2013-14 on 31.03.2015. However, prior to that (on 15.05.2014 and 07.06.2014) default assessments under Section 32 and 33 of the DVAT Act were framed for various tax periods falling within the Financial Year 2012-13. The said default assessments were framed on 15.05.2014 and 07.06.2014. The petitioner had not filed any objections to the said assessments at the material time. In terms of Section 35 of the DVAT Act, the demands that were assessed in respect of the tax periods in the Financial Year 2012-13 were payable and outstanding. However, the refund due to the petitioner was not applied towards the dues pertaining to the amounts due against demands raised in respect of the tax periods in the Financial Year 2012-13, at the material time. Thus, the same were required to be disbursed.
Insofar as the demands for assessments for the Financial Year 2013-14 are concerned, the assessments under Sections 32 and 33 of the DVAT Act were framed subsequent to the last date of processing the petitioner’s claim for refund and the refund could not have been withheld at the material time.
There is no dispute that the petitioner’s refund was required to be paid within a period of two months from the date of filing the revised return. The respondent had clearly failed to act in accordance with Section 38 of the DVAT Act as it had not processed the petitioner’s claim within the stipulated period of two months - withholding of the amount due to the petitioner was in breach of Section 38 of the DVAT Act. Thus, interest would be payable to the petitioner on the said amount from 01.06.2015, as claimed.
Whilst the Department has processed the petitioner’s claim for the refund of ₹44,14,979/-. The Department has withheld a sum of ₹10,43,918/- [₹6,50,434/- as tax and interest and ₹3,93,484/- on account of penalty] for the tax period covered under the Financial Year 2013- 14. The demand for the same was raised on 04.09.2018. However, the said amount is not recoverable as the petitioner had filed its objections against the said demands on 02.11.2018. It is impermissible to withhold refund towards demands which are not recoverable - it is considered apposite to direct the concerned authority to refund the remaining withheld amount of amount ₹10,43,918/- along with interest with effect from 01.06.2015 and recompute the interest for the amount of ₹44,14,979/- as refunded in terms of the order dated 01.02.2023 and refund the interest due after adjusting the amount of ₹7,983/- already disbursed.
Petition allowed.
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2023 (7) TMI 940 - MADRAS HIGH COURT
Violation of Natural Justice - no personal hearing afforded to the Petitioner before passing the impugned assessment order - Validity of G.O.Ms.No.47/27.03.2012 with effect from 01.04.2012 - amendment made to Entries 1 and 2 of Second Schedule to the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- The Petitioner was not granted any opportunity to put forth their submission on merits. It was submitted that under similar circumstances, this Court was pleased to direct the Assessing Officer to revoke the assessment after granting an opportunity to the Petitioner to put forth their submission on merits.
The impugned assessment order, dated 03.06.2022 passed by the Respondent are hereby quashed and the matters are remanded back to the Respondent for fresh consideration - Petition allowed by way of remand.
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2023 (7) TMI 879 - HIMACHAL PRADESH HIGH COURT
Invocation of revisional jurisdiction of this Court under Section 48(1) of the VAT Act, 2005 - mistake or error apparent in the order sought to be rectified or not - rate of tax on charger - HELD THAT:- The clear mandate of law, thus, is that this Court can exercise revisional jurisdiction under Section 48 of the Act only against the orders passed by Tax Tribunal either under Section 45(2) or Section 46(3) of the VAT Act. Such jurisdiction can be exercised if the person aggrieved applies to this Court within 90 days of the communication of the order and also if the involvement of any question of law arising out of erroneous decision of law or failure to decide a question of law is found to exist.
The impugned order passed by the Tax Tribunal in Rectification Application filed by the petitioners under Section 47 of the VAT Act is not open to challenge by the petitioners before this Court under Section 48 of the VAT Act. Petitioners can also not be allowed to assail the order dated 19.06.2017, passed by the Tax Tribunal being clearly beyond the period of limitation, as prescribed under Section 48 of the Act.
The order passed by the learned Tribunal on 19.6.2017 is neither erroneous nor does it amount to non decision of question of law. Since, no question of law has arisen for consideration before this Court, the petition fails and is dismissed.
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2023 (7) TMI 711 - DELHI HIGH COURT
Default assessment of tax framed by the Assessing Authority - rejection of refund claim in respect of input tax credit (ITC) - rejection on the ground that the appellant had failed to establish the genuineness of the ITC on the basis of any documentary evidence - HELD THAT:- It is apparent from the orders passed by the Assessing Authority, the learned OHA, and the learned Tribunal that the assessee’s challenge to the default assessment was rejected as the appellant had failed to produce any material to establish payment of ITC. This is clearly a question of fact and therefore not amenable to review in these proceedings. It is also material to mention that there is no dispute that the appellant had not produced relevant material before the Assessing Authority or the learned OHA or the learned Tribunal.
Learned counsel for the appellant submits that the appellant was not required to produce any such material as the ITC could be verified from the returns and the forms filed online including the returns filed by the dealers from whom the appellant had purchased goods - the said contention is unsubstantial.
The Assessing Authority is duly empowered to call for the records and to verify the ITC as claimed. The onus to establish the genuineness of the ITC rests with the assessee.
It would not be open for the appellant now to raise any new challenge to the order passed by the Assessing Authority including on the ground that it had not been signed. This question does not arise from the impugned order passed by the Tribunal. The appellant has all along proceeded on the basis that the said order was passed by the Assessing Authority and had assailed the same on merits, which was considered by the OHA and by the learned Tribunal - It is well-settled that in case mala fides are alleged, the same has to be specifically pleaded with full particulars. The scope of the appeal, in the present case, is limited to examining the substantial questions of law that arise in the matter.
There are no grounds to entertain the present appeal - appeal dismissed.
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2023 (7) TMI 630 - ORISSA HIGH COURT
Classification of goods - 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel - whether ATS falls within the scope of Entry Serial No. 29 of Part-II of Schedule-B so as to attract levy of value added tax @4% [prior to 01.04.2012] and @5% [with effect from 01.04.2012] or subject to tax @13.5% as per entry in Part-III of Schedule-B appended to the Odisha Value Added Tax Act, 2004?
HELD THAT:- Considering the instant case etched on various tests and well-accepted tenets, ATS answers that it is accessory to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The document like expert opinion supported by Affidavit furnished by the petitioner remained undisputed by the opponent-State of Odisha. This Court is of the firm view that the contention of the petitioner deserves seal of approval.
In the present case, the authorities below never examined the pertinent issue as to the identity of the commodity— ATS with reference to Entry 29 of Part-II of Schedule-B. The Assessing Authority mechanically discarded the explanation rendered by the petitioner and shifted the onus on the dealer.
For ascertaining the true nature of ATS, the petitioner has brought on record the expert opinion and this Court on visiting web portal of manufacturers of such commodities found that in trade parlance ATS is treated as accessories to ‘Centrifugal, Monoblock and Submersible pumps and pump sets’. The explanation of the petitioner being in consonance with the well-settled tests and guidelines propounded by the Courts, the suggestion of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Service Tax Organisation for sending the matter back to the Assessing Authority for fresh adjudication by giving scope for enquiry/investigation is rejected. What is emanating from the Order-in-Second Appeal of the learned Sales Tax Tribunal is that no enquiry as to identity of commodity vis-à-vis entry in Serial No. 29 of Part-II of Schedule-B was conducted by neither the Sales Tax Officer (Audit) nor the Assessing Authority. Legal position is well-established in HINDUSTAN FERODO LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1996 (12) TMI 49 - SUPREME COURT] ratio of which is this, that the onus of establishing that a product falls within a particular item is on the Revenue.
This Court does not find force in the argument of Sri Sunil Mishra, learned Standing Counsel for the Commercial Tax & Goods and Services Tax Organisation, more so when the Revenue has not chosen to file any objection to the Expert Opinion supported by Affidavit sworn to by Managing Partner of the petitioner-firm. This Court, hence, feels it expedient to show indulgence in the Order-in-Second Appeal of the learned Odisha Sales Tax Tribunal in exercise of power of revision under Section 80 of the OVAT Act.
By reversing the conclusion arrived at by the Appellate Authority, the learned Odisha Sales Tax Tribunal essentially held that the commodity in question, i.e., ATS, falls within the scope of entry in Part-III of Schedule-B. Before holding the commodity to fall in residuary entry, the learned Tribunal as also the Assessing Authority failed to bear in mind the enunciation in the matters of BHARAT FORGE & PRESS INDUSTRIES (P) LTD. VERSUS COLLECTOR OF C. EX. [1990 (1) TMI 70 - SUPREME COURT]; INDIAN METALS & FERRO ALLOYS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1990 (11) TMI 143 - SUPREME COURT]; SPEEDWAY RUBBER CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [2002 (5) TMI 51 - SUPREME COURT]; CC. (GENERAL), NEW DELHI VERSUS GUJARAT PERSTORP ELECTRONICS LTD. [2005 (8) TMI 657 - SUPREME COURT]; COMMISSIONER OF C. EX., MEERUT VERSUS MAHARSHI AYURVEDA CORPN. LTD. [2005 (12) TMI 93 - SUPREME COURT], conspectus of which leads to show that only such goods as cannot be brought under the various specific entries in the tariff should be attempted to be brought under the residuary entry. In other words, unless the Department can establish that the goods in question can by no conceivable process of reasoning be brought under any of the tariff items, resort cannot be had to the residuary item.
This Court has no hesitation to hold that the commodities, i.e., 150 HP Fully Automatic ATS (Auto-Transformer Starter) Control Panel, Motor Starter Panel Board and other Control Panel is comprehended in the term “accessories” as per entry in Serial No. 29 of Part-II of Schedule-B appended to the OVAT Act, which attracts rate of tax @ 4% for the tax periods prior to 01.04.2012 and @5% for the tax periods commencing from 01.04.2012 pertaining to the periods of assessment - the question of law as framed by this Court which fell for consideration is answered in the negative, i.e., in favour of the petitioner-assessee and against the Revenue.
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2023 (7) TMI 629 - UTTARAKHAND HIGH COURT
Valuation - Inclusion of Mandi Fees/ Mandi Shulk into the Sale Price for calculation of VAT - Mandi Fees charged by the Mandi could be treated as a part of sale price under Section 2(42) of the Uttarakhand Value Added Tax Act or not - Section 17(iii)(b) of the Adhiniyam - HELD THAT:- There can be no doubt that the Supreme Court in M/s Anand Swarup Mahesh Kumar [1980 (9) TMI 238 - SUPREME COURT] drew a distinction between the levy of tax/ duty, which the dealer/ seller can statutorily pass on to the purchaser, and the levy of tax/ duty, which the dealer or seller is not statutorily entitled to pass on to the purchaser (though he may pass it on to the purchaser), and concluded that the levy of tax which can statutorily be passed on to the purchaser, cannot form part of the ‘purchase price’, within the definition of that expression found in Section 2(gg) of the U.P. Sales Tax Act. However, that is not the issue before us. The real issue is whether, the Mandi Shulk, which the dealer is entitled to statutorily recover from the purchaser, falls within the definition of expression ‘sale price’ contained in Section 2(42) of the Uttarakhand VAT Act, or not.
The expression ‘sale price’ defined in Section 2(42) of the Uttarakhand VAT Act is a very widely defined expression, which means the amount of valuable consideration received or receivable by a dealer for sale of any goods, and shall include any sum charged for anything done by the dealer in respect of goods at the time or before the deliver thereof, excise duty, special excise duty or ‘any other duty or tax’. The expression ‘any other duty or tax’, is clearly broad enough to include the Mandi Shulk, which is nothing but a duty which the dealer is statutorily entitled to recover from the purchaser. Merely because it is statutorily recoverable by the dealer from the purchaser, it does not cease to be ‘any other duty’ within the meaning of ‘sale price’ defined in Section 2(42) of the Uttarakhand VAT Act.
Thus, Mandi Shulk levied under Section 17(iii)(b) of the Adhiniyam would fall within the definition of the expression ‘sale price’, as defined in Section 2(42) of the Uttarakhand VAT Act, and would be treated as a part of sale price of the goods.
The decision of the learned Single Judge of this Court in M/s Ashok Kumar [2010 (9) TMI 1290 - UTTARAKHAND HIGH COURT], lays down the correct position in law. The learned Single Judge, while deciding M/s Ashok Kumar [2010 (9) TMI 1290 - UTTARAKHAND HIGH COURT] has appreciated the difference in the definitions of ‘purchase price’ and ‘sale price’ as defined in the U.P. Sales Tax Act, 1948 and the Uttarakhand VAT Act respectively.
There are no reason to interfere with the impugned judgment dated 30.10.2021, rendered by the Commercial Tax Tribunal, Uttarakhand, Haldwani Bench - revision dismissed.
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2023 (7) TMI 535 - BOMBAY HIGH COURT
Recovery of sales tax dues - encumbered property or not - liability of auction purchasers - liability of petitioners nos. 1 and 2 who are auction purchasers in a securitization auction held by petitioner no. 3, to discharge the sales tax dues, for the recovery of which, the property as purchased by them, was attached by the Sales Tax Department prior to the auction.
Whether the Sales Tax Department is correct in asserting that it has a charge on the property in question as purchased by petitioner Nos. 1 and 2 from petitioner No. 3? - HELD THAT:- Section 37 of the MVAT Act clearly provides that for the liability under the MVAT Act, to be the first charge, is itself, subject to any provision regarding creation of first charge in any Central Act for the time being in force. This pre-supposes that when under a Central enactment there is a provision creating first charge, then in such case, the Sales Tax Department for the purpose of Section 37 shall not have the first charge - Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967 provides for the manner of attachment of immovable property which provides that the order shall take effect as against purchasers for value in good faith and against all other transferees from the defaulter from the date the said order is made as provided in sub-rule (3).
On a perusal of the order of attachment of the said property dated 11 August, 2017, it is seen that the attachment is made in pursuance of the demand notice issued under Section 178 read with Section 267 of the Maharashtra Land Revenue Code, 1966 read with Section 34 of the MVAT Act and referring to Rule 11 of the Maharashtra Realisation of Land Revenue Rules, 1967.
The attachment is for recovery of an amount of Rs. 10,31,38,003/- being the sales tax dues payable by the dealers/borrowers – M/s. Taurus Autodeal Pvt. Ltd.. The attachment notice was never challenged by the said dealers and its directors. For such reason in the hands of petitioner no. 3, the property stood as a property as attached by the Sales tax department, however, subject to the first charge of petitioner no. 3 to realise its dues as a secured creditor - The grievance of petitioner no. 3 in the said writ petition was to the effect that the Deputy Commissioner was legally not correct to assert that petitioner no. 3 did not have the first charge on the property, while claiming unpaid sales tax dues of the dealer, in asserting that there was a charge on the said property.
It is crystal clear that there is nothing in the sale certificate to indicate that petitioner Nos. 1 and 2 have purchased the said property from petitioner No. 3 free from encumbrances, which is a specific requirement of “Appendix V” as extracted above. In fact, it is definite from what has been observed by us above that petitioner No. 3 had taken all the precautions to secure its own interest, to recover the amounts payable by the borrowers, by sale / auction of the said property, hence, certainly petitioner Nos. 1 and 2 have not purchased the said property free from any charge or encumbrance of the Sales tax department.
Thus, it is more than clear that at all material times, that is with effect from 11 August, 2017, there was a charge and/or an encumbrance on the property of the Sales Tax Department and further petitioner nos. 1 and 2 had purchased the property along with such charge/ encumbrance. The word ‘encumbrance’ would mean a burden or charge upon property or a claim or lien upon an estate or on the land. It also means a burden of legal liability on property. When there is an encumbrance on a land, it constitutes burden on the title which diminishes the value of the land.
It may be observed that once the question arises as to whether there is a charge on a property and in the present case a charge which has arisen by operation of law, Section 100 of the Transfer of Property Act, 1882 would become relevant in the context of the legal status of such property - Applying Section 100 of the TP Act to the facts of the present case, legal consequences emanate, firstly that by operation of the provisions of Section 37 of the MVAT Act there was undoubtedly a charge on the said property, when the property stood in the hands of petitioner No. 3 being the secured creditor. The charge of petitioner no. 3 as the secured creditor was the first charge and not that of the Sales Tax Department, as held by the Division Bench, interpreting Section 37 of the MVAT Act, in the order dated 10 January 2020 passed on the writ petition filed by respondent no. 3.
The Full Bench considering the provisions of Rule 8 of the Security Interest (Enforcement) Rules, 2002 read with the provisions of Section 13(4) of the SARFAESI Act and the decision of the Supreme Court in AI CHAMPDANY INDUSTRIES LIMITED VERSUS THE OFFICIAL LIQUIDATOR & ANR. [2009 (2) TMI 921 - SUPREME COURT], held that in terms of the provisions of the SARFAESI Act read with 2011 Rules, the secured creditor is expected to know the encumbrances. It was observed that once a statutory mechanism noting the encumbrances in respect of the immovable property being put up for sale by auction not being available before 24 January 2020, the authorized officers were found to play it safe by inserting the “as is where is, whatever there is basis” clause in the sale advertisement. The Court observed that once such clause is inserted in the advertisement and the prospective purchaser, upon bidding in the auction emerges as the highest bidder, normally such purchaser cannot insist upon issuance of sale certificate without clearing the liability of meeting other dues in relation to such property, and this is because he participates in the auction and bids, with his eyes open, that the sale would be on “as is where is, whatever there is basis”, and that the prospective purchaser cannot wriggle out of the consequences and claim that the other dues are not payable by him, if he cannot disprove constructive notice of the charge created on the property put up for auction sale.
Analyzing the provisions of the SARFAESI Act as also the MVAT Act, the Full Bench has held that the attachment orders issued post 24 January 2020 if not filed with the Central Registry, any department of the Government to whom a person owes money on account of unpaid tax has to wait till the secured creditor by sale of the immovable property being the secured asset mops up its secured dues. Insofar as the attachment orders which were issued prior to coming into force the 2011 Rules as amended, the Court observed that insofar as recovery as initiated under the MLRC is concerned, not only the provisions contained therein but also the provisions contained in the 1967 Rules were required to be complied with, and the proclamation has to be made in the required form and must be as specified in the 1967 Rules.
Thus, this is a clear case in which the Sales Tax Department had a charge on the said property as purchased by petitioner Nos. 1 and 2, in view of attachment order dated 11 August 2017, which has remained to be valid and subsisting. Further the position in law is also clear that after the recognition of the first charge of petitioner No. 3 as a secured creditor, the charge of the Sales Tax Department to recover the sales tax dues would be valid and subsisting, which would empower the Sales Tax Department to enforce the same.
Petition dismissed.
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2023 (7) TMI 472 - GUJARAT HIGH COURT
Amnesty Scheme - Substantial amount paid prior to announcement of the amnesty scheme and even prior to assessment order passed by the Assessing Officer (change to Vera Samadhan Yojana - 2019) - HELD THAT:- It would emerge from the record that at the time of spot inspection and assessment at the place of the petitioner, the petitioner deposited an amount of Rs. 48,75,000/- on 01.07.2015 towards the amount of tax, however while passing assessment order, the concerned Assessing Officer had not taken into consideration the said amount and thereby held that the petitioner is liable to pay total amount of Rs. 77,77,575/- (including tax of Rs. 38,03,216/- + penalty and interest). Thus prima facie from the record, it is clear that the concerned Assessing Officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner. The petitioner, therefore, filed first appeal before the appellate authority.
In the memo of appeal, the petitioner has specifically taken contention in Paragraph No. 9 that while passing an order of assessment on 29.06.2015, the concerned officer has not taken into consideration the amount of tax of Rs. 48,75,000/- paid by the petitioner and, therefore, he has wrongly calculated the amount of interest and penalty, which is not permissible - It is further reflected from the record that separate application for stay was also filed by the petitioner before the appellate authority and the appellate authority has considered the amount of Rs. 48,75,000/- paid by way of tax by the petitioner to the concerned respondent authority and, therefore, the appellant authority has granted stay on 25.05.2017 in favour of the petitioner against the recovery.
It is also pertinent to note that against the aforesaid order passed by this Court, the State preferred SLP in STATE OF GUJARAT AND ANR. VERSUS SAFAL DEVELOPERS AND ANR. [2016 (10) TMI 1383 - SC ORDER] before the Hon’ble Supreme Court and the Hon’ble Supreme Court has dismissed the SLP preferred by the State and thereby the Hon’ble Supreme Court has not interfered with the order passed by this Court in the aforesaid case.
The respondents have committed an error while rejecting the application submitted by the petitioner under the amnesty scheme as the petitioner had already paid an amount of Rs. 48,75,000/- even prior to the order of assessment was passed by the concerned Assessing Officer and prior to announcement of the scheme - the petitioner is entitled to get the benefit of the scheme and remission of penalty and interest.
The impugned communication dated 11.05.2022 at Annexure-A as well as the attachment order dated 20.06.2022 at Annexure-K are hereby quashed and set aside. The respondent no. 3 herein is hereby directed to grant benefit of the amnesty scheme to the petitioner - Petition allowed.
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2023 (7) TMI 422 - MADRAS HIGH COURT
Stay of demand / Waiver of pre-deposit - Revision of assessment order - Direction to petitioner to pay further 25% of the disputed tax in addition to the amount already paid by the petitioner at the time of filing the appeal - HELD THAT:- At the time of filing the appeal itself, the petitioner has paid 25% of the disputed tax. By way of this impugned order, the first respondent insisted the petitioner to pay further 25% of the disputed tax. The appeal was filed in the year 2019 and it is yet to be disposed for want of written submission from the third respondent.
The impugned order of the first respondent is set aside, with a direction to the first respondent to dispose of the appeal within a period of six weeks from the date of receipt of a copy of this order - Petition allowed.
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2023 (7) TMI 385 - KARNATAKA HIGH COURT
Taxability - Maize Flakes, Malted Barley, Malt conversion and Malt extract are taxable under KTEG Act or not - imposition of interest and penalty for the period prior to the decision in United Breweries [2015 (9) TMI 1516 - KARNATAKA HIGH COURT] - HELD THAT:- Admittedly, the decision in United Breweries is rendered on September 14, 2015. Hence, Maize Flakes, Malted Barley, Malt conversion and Malt extract became taxable pursuant to the decision in United Breweries. Assessee was paying tax on hops pallets prior to the said decision.
In Jayce Trading Corporation [2021 (3) TMI 956 - KARNATAKA HIGH COURT], the assessee therein had paid taxes for period between 03.03.2010 and 31.03.2011 prior to the date on which the Commissioner had clarified the issue on 07.07.2014. In the case on hand, the basis to impose tax is the decision in United Breweries which has been rendered on 15.09.2015. Therefore, imposition of tax prior to the decision in United Breweries is not sustainable. For the same reason, interest and penalty are also not sustainable.
The aspect of ‘fit for consumption’ has been considered by this Court in United Breweries. Therefore, this contention is untenable and accordingly, rejected.
Revision petition allowed.
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2023 (7) TMI 295 - PUNJAB AND HARYANA HIGH COURT
Levy of penalty under Section 9 (2A) of the CST Act read with Section 37 (6) of HGST Act, 1973 - Evasion of tax - Inter-State Sales shown as branch transfers - HELD THAT:- In the present case, a consignment of motor cycles destined to Ghaziabad and Secunderabad Depots were checked at STCB, Faridabad and a penalty was imposed under Section 9 (2A) of the CST Act read with Section 37 (6) of HGST Act, 1973. The verification regarding stock transfer to Ghaziabad and Secunderabad Depots from Faridabad was also made. The assessee admitted the certain branch transfer in the original return as inter state sales. The dealer filed revised returns for first and second quarter showing an enhanced turnover of interstate sales and paid additional tax - the lack of bona fides on the part of appellant’s part as he did not file the revised returns under Section 25 (4) of the 1973 Act and waited till the filing of fourth return. The appellant had deliberately filed incorrect return and omitted to pay the amount of tax due and thus contravened Section 25 (2) and 3 of 1973 Act. The penalty has rightly been imposed by the Assessing Officer.
The assesse filed his revised return when his vehicle was confiscated. The mens rea and deliberate attempt to conceal and suppress the taxable turnover by fabricating or maintaining false returns with a motive to evade the payment of tax due are the essential ingredient of Section 48 of HGST Act. No material was brought on record by the assessee to prove any deliberateness. The Assessing Officer had enough ground to impose penalty under Section 48 of the Act.
No substantial question of law arises for consideration in the present appeal and the same stands dismissed.
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2023 (7) TMI 191 - SUPREME COURT
Scope of clarification issued by the Revenue Department - To be retrospective or prospective - Applicability of Exemption Entry No. 8 on maize starch - overriding effect of Taxation Entry No. 61 - recovery of taxes retrospectively is a mere change of opinion or not - HELD THAT:- The Exemption Notification was erroneously held by the High Court not to have statutory backing. Recital thereof shows the source of power. Exercise of power was in terms of Section 17 of the Act, which appears to be the repository of the State Government’s power to exempt payment of tax. However, nothing really turns on it in view of the several Amendment Acts by which the Schedules were amended from time to time - Indeed, the Act was amended further with effect from 27th March, 2002 by Act No.18 of 2002, i.e., the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 2002, but the same being a post-millennium event is admittedly beyond the period under consideration, i.e., 1998-99; hence, we need not be too concerned with the latter amendment.
It would appear from the conspectus of the statutory provisions as delineated above that there were two entries in the field at or about the period of the relevant assessment year, i.e., “sago and starch of any kind” in Schedule I, referred by us as Taxation Entry No.61, and “products of millets (rice, flour, brokens and brans of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize)” in Schedule III which we are referring to as Exemption Entry No.8.
Law is well settled that if in any statutory rule or statutory notification two expressions are used - one in general words and the other in special terms - under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail - it is thus emerged that Taxation Entry No.61 is relatable to ‘starch’ of any kind whereas Exemption Entry No.8 relates to products of ‘millet’.
The clarification vide Circular dated 8th October, 1998 was issued in exercise of power conferred by the statute (i.e., Section 28-A of the Act). Whenever a clarification pursuant to an application made by a registered dealer as to the applicable rate of tax is issued under sub-section (1), or the Commissioner on his own clarifies any point concerning the rate of tax under the Act, or the procedure relating to assessment and collection of tax as provided for under the Act is issued under sub-section (2), the object is to make the rate of tax explicit what is otherwise implicit - What the clarification provided by the Commissioner does is to clear the meaning of the two entries which was already implicit but had given rise to a confusion. A clarification of this nature, therefore, is bound to be retrospective.
The impugned judgment is upheld albeit for reasons not assigned by the High Court. Finding no merit in the appeals, the same is dismissed.
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2023 (7) TMI 104 - CALCUTTA HIGH COURT
Reversal of input tax credit against the supply - purchase of materials from a dealer whose registration has been cancelled - basis of the cancellation of registration of the selling dealer, not provided to appellant - violation of principles of natural justice - HELD THAT:- Admittedly, the details of such cancellation has not been furnished to the appellant. In any event, the appellant having availed the input tax credit against the inward supply cannot be directed to reverse the input tax credit by way of an email communication without mentioning as to what was the basis of the cancellation of registration of the selling dealer.
There are no need to travel far to examine the correctness of the direction issued by the respondent department to the appellant, without furnishing any details to the appellant, the respondent could not have directed reversal of the input tax credit, which was availed by the appellant and it is informed that the appellant was compelled to pay the amount and without prejudice to their rights have paid the amount - the procedure adopted by the authority for directing reversal of the input tax credit and thereafter compelling the appellants to pay the amount is not sustainable in the eye of law but will be in violation of the principles of natural justice.
Communication sent by the authority by an email dated 20th December, 2022 is set aside with a direction to the authority to remit the amount of input tax credit which was reversed by the appellant on effecting payment without prejudice to their right by transmitting the same amount in the appellants’ electronic credit ledger - Petition allowed.
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2023 (7) TMI 41 - SUPREME COURT
Calling to pay the deferred sales tax immediately - validity of G.O.Ms. No. 503 Revenue (CT-II) Department dated 08.05.2009, whereby Rule 67 of the A.P. VAT Rules, 2005 came to be amended - contrary to the industrial policy of the State Government in G.0.Ms. No. 108 dated 20.05.1996 or not - HELD THAT:- Under Section 69 read with Rule 67, all those industrial units, who availed the option of tax holiday / exemption prior to 2005, came to be converted to the unit availing tax deferment, however, with condition that the balance period of tax holiday / exemption available as on 31.03.2005 to such units shall be doubled for the purpose of tax deferment. Meaning thereby, an industrial unit having two years balance period available as tax holiday / exemption as on 31.03.2005, the same shall be converted to the unit availing tax deferment for four years, i.e., double the balance period. However, the illustration to Rule 67 provided contrary to Rule 67 and it provided for 14 years deferment.
As per the settled position of law, an illustration cannot govern the Rule but it is the Rule which shall govern and the illustration is always for clarification and it is to explain what is provided under the Rule. But the illustration cannot be contrary to the main statute namely, Rule and/or Act. Therefore, thereafter when the illustration came to be amended subsequently, vide G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009, to bring it in line with the statutory provision – Rule 67, it cannot be said that the same is illegal and/or contrary to the parent act and/or contrary to the original industrial scheme - In fact, the State Government has taken care of the interest of the industrial units by providing double the balance period while converting the industrial units, who earlier availed the tax holiday as the units having tax deferment. Therefore, it cannot be said that the State was not aware of the interest of the industrial units under the VAT regime.
The High Court has rightly dismissed the writ petitions upholding the subsequent G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 and amendment to Rule 67 of the Rules, 2005 - The impugned judgments and orders passed by the High Court upholding the validity of the amendment to Rule 67 of the Rules, 2005 vide G.O.Ms. No.503 Revenue (CT-II) Department dated 08.05.2009 is/are hereby confirmed.
Appeal allowed in part.
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2023 (7) TMI 40 - SC ORDER
Attachment of immovable property - existence of any material to establish that there was valid publication of proclamation of attachment of the property or not - HELD THAT:- There is a clear distinction between the service of notice/warrant of attachment on the defaulter - assessee, and publication of proclamation of attachment in the manner and mode prescribed by law, as elucidated in DESH BANDHU GUPTA VERSUS. N.L. ANAND & RAJINDER SINGH [1993 (9) TMI 350 - SUPREME COURT] and M/S. MAHAKAL AUTOMOBILES & ANR VERSUS KISHAN SWAROOP SHARMA [2008 (4) TMI 710 - SUPREME COURT]. Mere passing of an order of attachment and service on the defaulter - assessee is not sufficient for constructive notice to the general public, unless proclamation of attachment is publicized in the manner prescribed by law.
It is, no doubt correct that the appellants had handed over a copy of the Attachment Warrant to the office of Sub-Registrar of Assurances, albeit it is also a fact that the register recording the attachments was misplaced in April 2004. Further, the sale deeds in favour of respondent nos. 1 and 2, namely, Amit Ahuja and Shalini Ahuja were registered by the Sub-Registrar of Assurances on 26.04.2006.
It is a need to update and revise Rule 54 to Order XXI of the CPC, as the prescribed modes of publication for proclamation of attachment are outdated. A dedicated and specific website and publication in the electronic and social media, apparently appears to be a better method to inform and alert the general public. This would be easier, less prone to challenge and more transparent and open for the public to verify and check.
It will not be appropriate and proper for this Court to interfere with the impugned judgment passed by the High Court - appeal dismissed.
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2023 (7) TMI 39 - KARNATAKA HIGH COURT
Forfeiture of the refund permitted to the petitioner - third respondent has erred in his jurisdiction in upholding the fourth respondent’s rectification order dated 12.07.2019 under Section 69 of the KVAT Act or not - HELD THAT:- In the present case, the petitioner, when not obliged to deduct any tax at Source from M/s. Ocean Interior Limited [its Contractor] as contemplated under Section 9-A of the KVAT Act, has deducted certain amount as tax and deposited the same along with interest because of its own reading of this provision. Subsequently, when the petitioner has made a request for VAT Form-156, its representatives are informed that it was not obliged under the provisions of Section 9-A of the KVAT Act to deduct the amount. The petitioner has repaid the amount to M/s. Ocean Interior Limited. Neither this fact, nor the further assertion that the contractor has filed full returns disclosing this transaction and offering tax is contested.
This Court must opine that, given the scheme under Section 47 of the KVAT Act and the circumstances in which the petitioner has deduced TDS and deposited the same notwithstanding the provisions of Section 9(A) of the KVAT Act, there could not have been a forfeiture. The petitioner has repaid the amount deducted as TDS to its contractor on being informed that it could not have deducted any amount as TDS and the contractor has also offered such amount as tax - In the present case, without any detailing, the fourth respondent has only opined that refund is not in accordance with the proceedings dated 11.07.2019. The fourth respondent, unless could explicate in the impugned order dated 12.07.2019 how the proceedings dated 11.07.2019 related to deductions made notwithstanding the provisions of Section 9-A of the KVAT Act, could not have been relied upon the same to conclude that there was a mistake apparent from the record in permitting the refund.
This Court is of the considered view that the respondents must refund a sum of Rs. 80,75,720/- in terms of Form- 185 dated 11.02.2019 (Annexure-M) within a reasonable time without interest, but if there is any delay, then must be liable to pay interest for the delayed period - Petition allowed.
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2023 (6) TMI 1237 - BOMBAY HIGH COURT
Rejection of rectification of assessment order - admission of Appeal without any pre-deposit - case of petitioner is that impugned orders are passed without giving opportunity of hearing insofar as, disallowance of input tax credit qua all the parties is concerned - violation of principles of natural justice - HELD THAT:- The Petitioner has approached this Court under Article 226 of the Constitution of India, in order to bypass the mandatory provision under the MVAT Act, 2002 which required pre-deposit of 10% of the tax for entertaining the appeal. In the facts of the present case, this approach of the Petitioner cannot be accepted moreso because against order rejecting the rectification, it had filed an appeal because according to the Petitioner against such rejection of rectification order no pre-deposit is required to be made. [This clearly shows that the present petition is filed to bypass the mandatory pre-deposit provision in entertaining the appeal].
The issue raised in the assessment order interalia qua circular trading requires factual determination which this Court cannot go into in exercise of its jurisdiction under Article 226 of the Constitution of India. It is also important to observe that by various show cause notices, the Petitioner was called upon to file all the evidences in support of its return of income and furthermore order sheet annexed to the Petition records that the Petitioner’s accountant refused to sign the proceedings sheet in relation to the circular transaction query raised by Respondent No. 2. Therefore, prima facie, the contention of the Petitioner that opportunity of hearing was not given may not be correct.
The decision of the Supreme Court in the case of State of Tripura Vs. Manoranjan Chakraborty & Ors. [2000 (11) TMI 1079 - SUPREME COURT] relied upon by the Petitioner does not assist the case of the present Petitioner in the facts of the present case. The decision of the Supreme Court was in connection where there is a high ended assessment and gross injustice done. Therefore, the decision of the Supreme Court is not applicable to the facts of the present case.
The issue raised in the present petition qua opportunity of hearing would require examination of the factual matrix in the complexion of the proceedings as they stand, which can be effectively adjudicated more appropriately by the Appellate Authority - the Petitioner relegated to avail the alternative remedy of an appeal - petition disposed off.
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2023 (6) TMI 1236 - BOMBAY HIGH COURT
Calling for the records pertaining to the Petitioner’s case and after going into the validity and legality thereof to quash and set aside the impugned Order - direction to Respondents themselves, their officers and subordinates to withdraw and/or cancel the impugned Order dated 11.12.2018 passed by the Respondent No. 2; and to refrain from taking any steps or proceedings in pursuance of and/or in furtherance of and/or in implementation of impugned Order dated 11.12.2018 passed by the Respondent No. 2 - benefits of the exemption granted vide Notification No. DNH/CST/4-1/99/4 dated 31.12.1999 and Notification No. ADM/LAW/CSR/2/84 dated 04.01.1984 without the production of C Forms.
HELD THAT:- The petitioner has drawn our attention to the judgment and order dated 30 August, 2012 passed by a co-ordinate bench of this PRISM CEMENT LTD & AKSHAY RAHEJA VERSUS STATE OF MAHARASHTRA, FINANCE DEPARTMENT & OTHS. MUMBAI [2013 (7) TMI 668 - BOMBAY HIGH COURT] to the order passed on Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors.) dated 03 September, 2012, as also to another order of even date in case of Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors. to contend that the issue as arising in the present petitions is squarely covered by the decision in Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors. as also in cases of Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. and Universal Comfort Products Pvt. Ltd. & Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa & Ors.
The orders passed by the Division Bench in Voltas Ltd. and Anr. Vs. Commissioner of Sales Tax, Dadra & Nagar Haveli, Silvassa and Ors. by which the Division Bench disposed of the said case following the decision in case of Prism Cement Ltd. & Anr. Vs. State of Maharashtra and Ors held that the petitioners have challenged the validity of the Circulars at Exhibits S, U, V & W to the petition. Counsel for the parties state that this Court in the case of Prism Cements Ltd. V/s. State of Maharashtra & Ors. has quashed similar circulars issued by the Commissioner of Sales Tax, State of Maharashtra.
Petition allowed.
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2023 (6) TMI 1235 - GUJARAT HIGH COURT
Sale of High Speed Diesel (for short ‘HSD’) to various private industries of three States viz. Gujarat, Maharastra and Madhya Pradesh at concessional rates of sales tax without complying with the mandatory requisite permission from the Ministry of Petroleum & Natural Gas - diversion thereof has caused huge revenue loss to the Government and wrongful gain to the concerned - whether C.B.I. had any case to even lodge a prosecution?
HELD THAT:- Admittedly CVC too had not found any case against the accused to grant sanction.
The compilation and circulation by OCC on 08.07.1991, of the Guidelines for Release of Petroleum Products and Lubricants to Direct Consumers have not been denied, which suggests that the same was in force and all oil companies were following the guidelines since 1991. The charge-sheet has been filed for period between 1997-2000. The guidelines of OCC dated 08.07.1991 had not found any change. Mr. Shastri had referred in his Fax message of no change in the guidelines for allocation of HSD to processors. According to him, HSD allocation to the processors is approved by the MoP&NG based on the certification and recommendation of the TEC of the Oil Companies. The guidelines referred and relied upon does not reflect any certification and recommendation of the TEC to the oil companies, and, when a clarification was sought by P. Sudarsnam by a letter dated 23.08.1999, Mr. Shastri states before the C.B.I. that there was no change in the allocation policy and requested P.Sudarsnam of IOC not to make HSD supplies to the processors without the Ministry’s allocation / Linkage, and, since clarification was sought by the E.D., IOC from OCC, reply was sent by OCC, which stated by Mr. Shastri, according to the existing guidelines available, the directions were to be followed by the oil companies necessarily, and according to him the clarification was in accordance with the existing guidelines of the Ministry, and, in the present case, to his clarification on behalf of OCC, Ministry did not issue any such amendment, which implies, concurrence of the MoP&NG on the particular issue, upon which the Oil Companies were required to act accordingly.
It is required to be noted that TEC was dissolved with effect from 01.04.2002; the non-requirement of the TEC had been noted in the letter dated 27.03.2002.
The C.B.I. while filing the F.I.R. has failed to take a clarification from the authorized person of the Ministry as to why the Circular dated 02.01.1981 was only addressed to IOCL for the utilization of HSD from Koyali Refinery and not for any other oil companies. While the guidelines of the OCC does not refer to the requirement of TEC recommendation for uplifting HSD from any other oil companies. All the letters/circulars referred earlier hereinabove with the communication starting from 1988-1996 require TEC evaluation only for supplying LSHF-HSD/High Flash-HSD, LDO and Crude Sludge to processors for the manufacture of petroleum specialities - All the companies were clear on the fact that in the year 1991, the MoP&NG had issued the instruction vide letter/circular dated 2/6.1.1981 for instituting a procedure for utilization of HSD from Koyali Refinery and not from any other refineries, and the Ministry had addressed by Circular dated 17.03.1988 to all the oil companies regarding the constitution of TEC on supply of feed-stock for the production of petroleum specialities, by making a reference to the Ministry’s letter dated 02.01.1981, for reconstitution of the TEC; it was clarified that it would initially look into the supply of LSHF-HSD, LDO and Crude Sludge for the manufacture of petroleum specialities. There was no reference with regard to the supply of regular HSD.
There was no reason for the C.B.I. to file charge-sheet against any of the accused. None of the communications of the Ministry, except of 02.01.1981, for the utilization of HSD from Koyali Refinery, required any TEC recommendation for lifting of HSD from any other companies. The C.B.I. failed to take into account that the Ministry had never called for any clarification from any other company during the period between 1997 – 2000 in connection with the alleged facts noted in the F.I.R., the officers, who were working in the company, would go by the understanding of the Circulars.
The learned Special Judge observed that as per the record, four oil companies are of Gujarat, Maharashtra and Madhya Pradesh and there is no evidence to show that the officers of the oil companies had gathered, or met sales tax officers or staff or purchasers with an intention to commit the alleged offence - For the offence under the P.C. Act, the learned Special Judge found that there is no prima facie evidence to show that the applicants had accepted any gratification from any person as a motive or reward, and the applicants accused had followed all the instructions issued by the MoP & NG and acted in discharge of the duties; no sanction has been brought on record by the C.B.I., while sanction has been refused against the officers of the oil companies and against refusal C.B.I. had written to Central Vigilance Committee, but the said committee to confirm the order of non-issuance of sanction against the officers of the oil companies and therefore, no summons were issued against those accused persons.
The Petroleum Rules, 2002 came into force on 13.03.2002. A technical body being Oil Industry Safety Directorates Standards (OISD) had been formed for assisting the safety council constituted under the MoP&NG. The rules deals with restrictions of delivery and dispatch of petroleum in all classes A, B and C, the requirement of the licence for the import of petroleum, and the dispute with regard to the HSD would have to be resolved by the Board, which is governed by the Petroleum and Natural Gas Regulatory Board Act, 2006. The legal provision of the Petroleum Act and rules thereunder become relevant in this case, since chargesheet came to be filed on 25.03.2009.
This Court finds that the Special Judge has not committed any error in discharging the accused. No sanction has been granted for prosecuting the officers of the oil companies. The assessment made by the Special Judge discharging the accused is consistent with the record - the orders passed by the learned Special Judge discharging the accused – respondents herein are just and correct, the findings are in accordance to the documents on record, the accused are rightly discharged, as there are no sufficient grounds for proceedings against them.
All the present revision applications fail merits and are dismissed as rejected.
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