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Showing 101 to 120 of 657 Records
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2003 (9) TMI 729
Issues Involved:
1. Whether asphalting of roads amounts to the construction of roads under the Karnataka Sales Tax Act, 1957.
2. Whether the penalty levied on the petitioner for non-payment of sales tax is justified.
Detailed Analysis:
Issue 1: Asphalting of Roads as Construction
The petitioner, a contractor and registered dealer under the Karnataka Sales Tax Act, 1957, was assessed to pay sales tax for asphalting roads for the assessment years 1987-88 to 1992-93. The assessing officer, followed by the Joint Commissioner of Commercial Taxes (Appeals) and the Tribunal, concluded that asphalting amounted to construction under item 6 of the Sixth Schedule of the Act.
The petitioner argued that only the construction of buildings, bridges, roads, etc., attracts sales tax, not asphalting or repair. He relied on the principle of ejusdem generis and the Allahabad High Court's decision in Anurag Enterprises v. State of U.P., which held that only civil works akin to construction are taxable.
The Government Advocate countered that asphalting and repair fall under construction, as indicated by the word "etc." in item 6 and the definition of works contract under section 2(1)(v-i) of the Act, which includes repair, improvement, or modification.
The Court emphasized the strict interpretation of taxing statutes, where ambiguity favors the taxpayer. It noted that the word "like" in item 6 is illustrative, indicating the nature of the work, and should not be extended to include asphalting or repair. The Court referenced several Supreme Court rulings, including Janapada Sabha, Chhindwara v. Central Provinces Syndicate Ltd. and Commissioner of Income-tax v. Kasturi and Sons Ltd., which stress that taxing statutes must be interpreted strictly based on the language used.
The Court concluded that asphalting or repairing roads does not equate to construction under item 6 of the Sixth Schedule. The word "like" must be given its proper meaning, and the statute's language does not support an extended interpretation to include asphalting or repair. The Court also referred to the Allahabad High Court's decision in Anurag Enterprises, which applied the principle of ejusdem generis to restrict the scope of civil works to those similar to construction.
Issue 2: Penalty for Non-Payment of Sales Tax
Given the Court's decision on the first issue, the petitioner is not liable to pay tax for asphalting roads. Consequently, the penalty for non-payment of sales tax is also unsustainable. The Court held that the imposition of the penalty is unjustified as the petitioner did not deliberately evade tax.
Conclusion:
The Court set aside the orders of the Karnataka Appellate Tribunal, the Joint Commissioner of Commercial Taxes (Appeals), and the assessing officer. The petitions were allowed, and no costs were awarded. The Additional Government Advocate was given four weeks to file a memo of appearance. Petitions allowed.
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2003 (9) TMI 728
Issues Involved:
1. Whether the quantitative discount claimed by the petitioner as a trade discount should be included in its taxable turnover for the purposes of imposing tax under the Bihar Finance Act, 1981.
Issue-wise Detailed Analysis:
1. Inclusion of Quantitative Discount in Taxable Turnover:
Factual Matrix:
The petitioner, a private limited company engaged in manufacturing and sale of medicines, challenged the assessment order and demand notice for the assessment year 2001-2002. The dispute centered on the inclusion of Rs. 2,95,88,480 as taxable turnover, which the petitioner claimed as a trade discount.
Petitioner's Argument:
The petitioner argued that the quantitative discount, given as free goods to stockists without charging any price, should not be included in the taxable turnover. This practice was consistent with previous years and other states. The petitioner cited two Supreme Court decisions to support that transactions without consideration do not constitute a sale under the Act.
Department's Stand:
The department acknowledged the provision of free goods but contended that the discount did not pass to the consumer and thus should be taxed. They argued that the petitioner issued form "IXC" for tax-paid goods, including those given as discounts, without showing tax collection on these transactions.
Legal Provisions and Interpretation:
The Bihar Finance Act, 1981, defines "sale" and "sale price" under sections 2(t) and 2(u). The law requires a transfer of property for money consideration to constitute a sale. The court cited precedents affirming that transactions without monetary consideration do not qualify as sales.
Court's Analysis:
The court noted that the free goods provided under the discount scheme did not involve any consideration, thus lacking an essential element of a sale. Consequently, these transactions could not be included in the taxable turnover. The court referenced several Supreme Court judgments that supported the exclusion of trade discounts from taxable turnover.
Trade Discount vs. Bonus Discount:
The petitioner's scheme was deemed a trade discount, not a bonus discount. The court emphasized that trade discounts, even if not explicitly mentioned in the Act, should be deducted from the sale price. The court cited the Supreme Court's rulings in Advani Oerlikon (P.) Ltd. and Motor Industries Co., which established that trade discounts are not part of the sale price and should be excluded from taxable turnover.
Supporting Precedents:
The court referred to the Madras High Court's judgment in State of Tamil Nadu v. Ultramarine and Pigments Ltd., which allowed quantitative discounts as integral to the agreement affecting the price. The court also noted the consistent practice of allowing such discounts in previous assessments and for other manufacturers.
Conclusion:
The court concluded that the department was unjustified in including the quantitative discount in the taxable turnover. The assessment order was quashed to the extent of including Rs. 2,95,88,480 in the taxable turnover and the corresponding tax/penalty.
Judgment:
The writ application was allowed, with the assessment order and demand notice quashed in part. The court ruled in favor of the petitioner, excluding the quantitative discount from the taxable turnover.
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2003 (9) TMI 727
Issues Involved:
1. Classification of paper cones and tubes as textile machinery spares or packing materials.
2. Applicable tax rate on the sale of paper cones and tubes to spinning mills.
3. Reconsideration of previous tribunal decisions and clarifications.
Issue-wise Detailed Analysis:
1. Classification of Paper Cones and Tubes:
The petitioner argued that paper cones and tubes used by textile mills for winding yarn should be classified as packing materials, eligible for a concessional tax rate of three percent under section 3(3) of the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act). The respondent contended that these items should be classified as textile machinery spares taxable at four percent under section 3(2) of the TNGST Act, as per entry 76, Part B of the First Schedule to the TNGST Act.
2. Applicable Tax Rate:
The petitioner referred to various clarifications and notifications, including a notification issued on October 7, 1988, which reduced the tax on textile machinery spares from eight percent to four percent. However, the petitioner claimed that subsequent clarifications had treated paper cones as packing materials eligible for a three percent tax rate. The respondent, relying on a clarification issued on January 10, 2002, maintained that paper cones were taxable at four percent as textile machinery spares.
3. Reconsideration of Previous Tribunal Decisions and Clarifications:
The Tribunal had previously decided in T.C. (A) No. 18 of 1996 that paper cones and tubes should be treated as textile machinery spares eligible for a concessional levy of four percent. This decision was based on the notification dated October 7, 1988. The Supreme Court dismissed the State's appeal against this decision on August 4, 1997. The petitioner argued that the Tribunal's decision required reconsideration, as the paper cones and tubes were used for winding yarn, not as components or accessories of textile machinery.
Tribunal's Findings:
1. Definition and Usage:
The Tribunal examined the dictionary definitions of "part" and "accessory" and concluded that paper cones and tubes used for winding yarn are neither components nor attachments of textile machinery. Therefore, they do not qualify as parts or accessories of textile machinery.
2. Packing Material Argument:
The Tribunal rejected the petitioner's argument that paper cones and tubes are packing materials. It reasoned that packing involves wrapping or tying items for carrying, whereas yarn is wound on paper cones for sale, not packed with them.
3. Applicable Tax Rate:
The Tribunal referred to section 3(3) of the TNGST Act, which provides a concessional tax rate of three percent for goods used in connection with manufacturing inside the State. It concluded that paper cones and tubes sold to spinning mills for winding yarn are used in connection with manufacturing and are eligible for the three percent concessional tax rate.
Conclusion:
The Tribunal set aside the impugned orders levying a four percent tax on the sale of paper cones and tubes to spinning mills and remitted the matter back to the assessing authority for reassessment. The Tribunal held that paper cones and tubes should be classified as "any goods" used in connection with manufacturing inside the State, entitling them to a three percent concessional tax rate under section 3(3) of the TNGST Act.
Final Order:
Both original petitions were disposed of, and the stay petitions were rendered moot. The Tribunal ordered that its decision be observed and executed by all concerned parties.
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2003 (9) TMI 726
Issues Involved:1. Whether forest development tax (FDT) collected by the forest department on the auction sale of timber forms part of the turnover for the purpose of levy of tax under the Kerala General Sales Tax Act, 1963. 2. Whether the petitioners are entitled to a refund of the excess sales tax collected on the element of forest development tax. Issue-wise Detailed Analysis:1. Inclusion of Forest Development Tax in Turnover:The core issue is whether the FDT paid by the petitioners at the time of purchasing timber in auctions from the forest depots of the State Government should be included in the turnover for the purpose of sales tax under the Kerala General Sales Tax Act (KGST) and Central Sales Tax Act (CST). The petitioners argued that FDT should not be included in the turnover for the levy of sales tax, relying on a government communication dated August 21, 1996, and a judgment dated January 8, 1997, which stated that it is not proper to collect sales tax on a tax already collected for the consideration paid. They also referenced the Full Bench decision in Madras Rubber Factory Limited v. State of Kerala, which was later reversed by the Supreme Court. The forest department contended that in light of the Supreme Court's decision in State of Kerala v. Madras Rubber Factory Ltd., the FDT should form part of the taxable turnover. The department argued that the FDT is an additional tax collected along with the sale price and should be included in the aggregate amount for which goods are sold. Upon examining the provisions of sections 75A and 75B of the Kerala Forest Act, the court noted that FDT is levied at 5% of the consideration paid for the forest produce disposed of by the Government by sale. The tax is collected along with the sale price but is an independent charge intended for the development of forest industries and research. The court concluded that FDT paid by the purchasers cannot be treated as part of the consideration for the sale of timber and thus does not form part of the turnover subject to sales tax under the KGST Act. The forest department acts only as an agent of the State for collecting and remitting the FDT to the Forest Development Fund. The court relied on the Supreme Court's decisions in Spencer & Co. and Anand Swarup Mahesh Kumar, which established that taxes collected by the seller on behalf of the government do not form part of the seller's turnover. The court distinguished the case from the Supreme Court's decision in Madras Rubber Factory Ltd., noting that FDT is not akin to excise duty and is an independent levy on the purchaser. Therefore, the court declared that FDT collected under section 75A of the Kerala Forest Act does not form part of the turnover for the purpose of levy of sales tax under the KGST Act. The forest department is not entitled to collect sales tax on the element of FDT. 2. Refund of Excess Sales Tax Collected:The petitioner in W.P. (C) No. 22610 of 2003 sought a refund of the excess sales tax collected on the element of FDT from 1995-96 to 1998-99, with interest, or an adjustment towards the amount due as per the final assessment of sales tax for subsequent years. The court noted that the forest department had levied FDT only on the bid amount exclusive of the sales tax due on the bid amount, which would require a recomputation of the liability to pay FDT under section 75A of the Kerala Forest Act. The question of refund would arise only after such recomputation and adjustment. The court emphasized that the petitioners might have passed on the tax liability to consumers by including the tax paid on the element of FDT in the price of timber or finished products. Ordering a refund without considering the doctrine of unjust enrichment could lead to unjust enrichment of the petitioners. The court allowed the petitioners to agitate the matter before the concerned authorities for recomputation of the liability to FDT and determination of any excess tax paid. The petitioners were entitled to relief regarding the payment of sales tax on the element of FDT, subject to recomputation. In conclusion, the court allowed the writ petitions to the extent that FDT does not form part of the turnover for the purpose of sales tax and directed recomputation of the liability to FDT for determining any excess tax paid.
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2003 (9) TMI 725
Issues:
Challenge to order of Joint Commissioner of Taxes under Assam General Sales Tax Act, 1993 and Assam Finance (Sales Tax) Act, 1956 for rejecting claim of inter-State sale.
Analysis:
The writ petitioner, a registered dealer, challenged the order rejecting their claim of inter-State sale to a sister concern based on the absence of agreement for dispatch of goods outside the State and non-submission of C form. The assessing officer raised tax demand and interest, which was upheld by the Joint Commissioner without providing reasons for the decision.
The High Court observed that for a sale to be considered inter-State, two essential elements must be present: movement of goods between states and transfer of title supported by documents. In this case, goods were moved to other states with proper documentation. The court emphasized that maintaining a stock book indicates a proper account of sales, distinguishing it from a local sale as per the Central Sales Tax Act, 1956. The absence of C forms should not solely determine the nature of the sale.
It was noted that the assessing officer and the revisional authority failed to consider crucial factors while passing the order, leading to errors in assessment. The revisional authority did not provide reasons for dismissing the petitioner's submission. Consequently, the court quashed the orders and remitted the matter back to the assessing officer for fresh disposal in accordance with the law.
In conclusion, the High Court allowed the writ petition, disposing of the matter without any costs, and directed the assessing officer to reevaluate the claim of inter-State sale based on the provisions of the Central Sales Tax Act, 1956.
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2003 (9) TMI 724
Issues:
1. Penalty proceedings under section 15-A(1)(o) of the U.P. Trade Tax Act for assessment years 1992-93 and 1993-94.
2. Imposition of penalty for technical violation of section 28-A due to the absence of form XXXI.
3. Appeal against penalty orders before the Deputy Commissioner (Appeals) and Trade Tax Tribunal.
4. Reduction of penalty amount by the Trade Tax Tribunal based on findings of fact.
5. Challenge to the confirmation of penalty through revisions.
Analysis:
The case involved penalty proceedings under section 15-A(1)(o) of the U.P. Trade Tax Act for the assessment years 1992-93 and 1993-94 arising from the absence of form XXXI during the import of goods by a company engaged in the manufacture and sale of polyester films. The company had recorded the imports in its account books and paid the necessary taxes but failed to furnish form XXXI, leading to penalty imposition by the assessing authority. Appeals were filed against the penalty orders before the Deputy Commissioner (Appeals) and subsequently before the Trade Tax Tribunal, which partially allowed the appeals by reducing the penalty amounts after finding that there was no loss of revenue to the Trade Tax Department. The company challenged the confirmation of penalty through revisions, arguing that the penalty imposition was unjustified due to the goods being duly recorded and taxes paid, citing legal precedents where penalties were quashed in similar circumstances.
The company's counsel relied on case law to support their argument that penalties should not be imposed for technical violations without intent to evade tax or cause revenue loss. They emphasized that the goods were properly recorded and supported by customs documents, and there was no intention to evade tax. The Tribunal's findings indicated no loss of revenue, leading to the conclusion that the penalty imposition was not justified. The counsel further cited judgments where penalties were cancelled in cases of technical breaches without malicious intent, reinforcing the argument against sustaining the penalty under section 15-A(1)(o). The High Court allowed the revisions, setting aside the Tribunal's order and cancelling the penalties imposed, based on the absence of intent to cause revenue loss and the proper recording of transactions, thereby concluding the case in favor of the company.
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2003 (9) TMI 723
Issues Involved:
1. Legality of the notice and order levying tax on cold rolled strips manufactured from hot rolled strips.
2. Interpretation of Section 14 and Section 15 of the Central Sales Tax Act, 1956.
3. Applicability of Section 17 of the West Bengal Sales Tax Act, 1994.
4. Relevance of precedents and judgments from the Supreme Court and High Courts.
5. Impact of administrative letters on tax liability.
Issue-wise Detailed Analysis:
1. Legality of the notice and order levying tax on cold rolled strips manufactured from hot rolled strips:
The petitioners challenged the notice dated December 13, 1999, and the order dated December 6, 1999, which levied tax on the sale of cold rolled strips manufactured from hot rolled strips. The Assistant Commissioner, Commercial Taxes, disallowed the petitioners' claim for deduction of tax on sales of cold rolled strips under Section 17(3)(a)(vi) of the West Bengal Sales Tax Act, 1994, stating that hot rolled strips were not purchased for resale and were not sold in the same form.
2. Interpretation of Section 14 and Section 15 of the Central Sales Tax Act, 1956:
The petitioners argued that both hot and cold rolled strips are included within sub-clause (vi) of clause (iv) in Section 14 of the Central Sales Tax Act, 1956, and should be treated as one commodity. They contended that the legislature intended to levy taxes on any item at not more than one stage, as per Section 15. However, the court noted that the items under Section 14 are described separately, and the transformation of one commercial commodity into another creates a separate taxable entity.
3. Applicability of Section 17 of the West Bengal Sales Tax Act, 1994:
The petitioners relied on Section 17 of the West Bengal Sales Tax Act, 1994, arguing that the amendment deleting the expression "in the same form" implies that items mentioned in the same sub-clause should be treated as one commodity. However, the court held that the omission of the phrase "in the same form" does not alter the interpretation that different commodities under the same sub-heading are treated separately for tax purposes.
4. Relevance of precedents and judgments from the Supreme Court and High Courts:
The petitioners cited various Supreme Court judgments, including State of Tamil Nadu v. Pyare Lal Malhotra, Telangana Steel Industries v. State of Andhra Pradesh, and others, to support their contention. The court, however, emphasized the precedence of the five-judge bench decision in A. Hajee Abdul Shukoor and Co. v. State of Madras, which held that raw hides and skins and dressed hides and skins constitute different commodities. This principle was reiterated in K.A.K. Anwar & Co. v. State of Tamil Nadu, establishing that different commodities listed under the same sub-heading in Section 14 do not constitute a single taxable commodity.
5. Impact of administrative letters on tax liability:
The petitioners referred to a letter dated March 31, 1999, from the State Government's Finance Department to support their claim. However, the court clarified that such administrative letters do not have any binding effect on the determination of sales tax liability.
Conclusion:
The court dismissed the writ petition, upholding the assessment order that levied tax on the sale of cold rolled strips manufactured from hot rolled strips. The court affirmed that different commodities listed under the same sub-heading in Section 14 of the Central Sales Tax Act, 1956, are to be treated separately for tax purposes, following the larger bench decision in A. Hajee Abdul Shukoor and Co. v. State of Madras. The omission of the phrase "in the same form" in Section 17 of the West Bengal Sales Tax Act, 1994, does not change this interpretation. The administrative letter cited by the petitioners was deemed non-binding on the tax authorities.
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2003 (9) TMI 722
Issues:
1. Petitioner seeks interest on delayed tax refund.
2. Petitioner challenges the constitutionality of a specific rule.
3. Discrepancy in tax payment and refund process.
Analysis:
Issue 1:
The petitioner sought interest on a delayed tax refund amounting to Rs. 17,019 deposited from June 1, 1986, to December 16, 1986. The assessment order was challenged and set aside by the Joint Excise and Taxation Commissioner on December 31, 1990. The petitioner contended that interest should be paid on the tax amount retained by the department. However, the court held that the tax demand was not illegal, and setting aside the order did not imply the tax was illegally collected, thus denying the interest claim.
Issue 2:
The petitioner challenged the constitutionality of rule 35(1)(b) of the Haryana General Sales Tax Rules, 1975, under articles 14, 19(1)(g), and 265 of the Constitution of India. The rule did not provide for interest on the amount retained by the department, unlike provisions for interest on delayed payments by the assessee. The court rejected the argument, stating that the State's refund process differs from a taxpayer's delayed payment situation, hence not violating article 14.
Issue 3:
The court emphasized the distinction between a taxpayer's delayed payment and the State's refund of excess tax. Citing legal precedents, the court highlighted that the Government, as a distinct entity, can be treated differently in matters of payment and interest rates. Referring to Supreme Court judgments, the court concluded that the rule in question was not discriminatory or violative of constitutional provisions.
In summary, the court dismissed the petition, ruling that the rule in question was not unequal, unreasonable, or violative of constitutional articles. The parties were directed to bear their own costs, and the petition was ultimately dismissed.
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2003 (9) TMI 721
Issues Involved:
1. Scope and content of section 5A(1)(c) of the Kerala General Sales Tax Act, 1963.
2. Constitutional validity of section 5A(1)(c) of the Kerala General Sales Tax Act, 1963.
3. Applicability of section 5A to voltage stabilisers purchased from tax-exempt dealers and despatched out of state.
4. Validity of invocation of section 19 of the Act.
5. Whether the levy of purchase tax under section 5A is violative of articles 14 and 301 of the Constitution of India.
Detailed Analysis:
1. Scope and Content of Section 5A(1)(c) of the Kerala General Sales Tax Act, 1963:
The primary issue was whether the turnover of voltage stabilisers purchased by the assessee from tax-exempt dealers, such as charitable institutions and S.S.I. units, and despatched out of state, is liable to tax under section 5A of the Act. The court noted that the Tribunal had consistently held that section 5A did not apply to these transactions. However, the State contended that section 5A was applicable because the items were taxable at the first sale point, but the first sellers were exempt from tax due to notifications under section 10. The court referred to the decision in Supreme Boards [1998] 111 STC 305, which upheld the applicability of section 5A in similar circumstances, concluding that section 5A was indeed applicable.
2. Constitutional Validity of Section 5A(1)(c) of the Kerala General Sales Tax Act, 1963:
The petitioner challenged the constitutional validity of section 5A(1)(c), arguing that it violated articles 14 and 301 of the Constitution by creating an invidious distinction between goods despatched out of state and those resold within the state. The court upheld the validity of section 5A, citing previous judgments, including the Supreme Court's decision in Kandaswami's case [1975] 36 STC 191, which approved the constitutionality of similar provisions. The court found no merit in the argument that section 5A was discriminatory or violated the Constitution.
3. Applicability of Section 5A to Voltage Stabilisers Purchased from Tax-Exempt Dealers and Despatched Out of State:
The court examined whether the despatch of voltage stabilisers to other states by way of stock transfer or consignment sales attracted tax under section 5A. The court noted that the division Bench in Supreme Boards' case had already addressed this issue, holding that section 5A applied to such transactions. The court found that the Tribunal's decisions exempting these transactions from tax were incorrect and set them aside, upholding the assessing authority's orders.
4. Validity of Invocation of Section 19 of the Act:
The court briefly mentioned that the validity of invoking section 19 was also questioned in one of the cases. However, since the main issue regarding the applicability of section 5A was resolved, the court did not delve deeply into this issue, implying that the decision on section 5A would cover this aspect as well.
5. Whether the Levy of Purchase Tax under Section 5A is Violative of Articles 14 and 301 of the Constitution of India:
The petitioner argued that section 5A's levy of purchase tax on goods despatched out of state was arbitrary and discriminatory, violating articles 14 and 301. The court rejected this argument, reiterating that the Supreme Court had upheld the validity of section 5A in Kandaswami's case. The court emphasized that judicial discipline required following the Supreme Court's binding decision, even if some contentions were not explicitly addressed.
Conclusion:
The court allowed the revisions filed by the State, setting aside the Tribunal's orders and upholding the assessing authority's levy of tax under section 5A on the disputed turnover. The court also dismissed the writ petition challenging the constitutional validity of section 5A, affirming that the provision was intra vires and did not violate articles 14 and 301 of the Constitution. The court issued a certificate for appeal to the Supreme Court, acknowledging that the case involved substantial questions of law of general importance.
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2003 (9) TMI 720
Issues Involved:1. Liability to tax on the turnover of tin ingots used in the execution of works contracts. 2. Estimation of sales turnover of tin ingots by adding 25% gross profit. 3. Applicable rate of tax on tin ingots used in the manufacture of tins. Issue-wise Detailed Analysis:1. Liability to Tax on the Turnover of Tin Ingots Used in the Execution of Works Contracts:The main question involved in all these cases is regarding the liability to tax on the turnover of ingots which have been used in the execution of works contract, namely, the manufacture of empty tins. The assessee contended that the tin ingots consumed in the process of manufacture of empty tins are not exigible to tax under the Act since there is no transfer of property in the sheets. The assessing authority rejected the claim and brought the purchase value of tin ingots by making an addition of 25 per cent towards gross profit to tax at the rate of 10 per cent under the Act. The Tribunal noted that the assessing authority had levied tax on the turnover of ingots used for fabricating sheets supplied by third parties for conversion and returned empty tins. The Tribunal further considered the legality of the levy of tax on the turnover of tin ingots under explanation (3A) to section 2(xxi) of the Act and observed that tin sheets are supplied by third parties. For the conversion of tin sheet into tins, tin ingots are essential ingredients and thus there is transfer of tin ingots to complete the work entrusted and the fabrication receipt is inclusive of the value of tin ingots. The Tribunal held that the levy of tax made to the turnover of tin ingots consumed for the conversion process for all the years is quite in order. The Supreme Court in Gannon Dunkerley & Co. v. State of Rajasthan observed that keeping in view the legal fiction introduced by the Forty-sixth Amendment, whereby the works contract which was entire and indivisible has been altered into a contract which is divisible into one for sale of goods and other for supply of labour and services, the value of the goods involved in the execution of a works contract on which tax is leviable must exclude the charges which appertain to the contract for supply of labour and services. In the present case, the tin ingots used for the manufacture of tins do not disappear as in the case of electricity, oil, fuel, etc., from the end-product. The tin ingots are absolutely necessary for fabricating the tin sheets into tins. The tin ingots, unlike in the case of fuel, chemical, or oil, continue to be part of the tins manufactured. Therefore, the authorities and the Tribunal were justified in levying tax on the turnover of tin ingots used by the assessee in the execution of the works contract. 2. Estimation of Sales Turnover of Tin Ingots by Adding 25% Gross Profit:The Tribunal held that the sale value fixed by the assessing authority by adding gross profit of 25 per cent is also reasonable. The Tribunal accordingly sustained the levy of tax on the turnover of tin ingots as well as the estimation of turnover of tin ingots. The Tribunal, however, did not interfere with the order of the first appellate authority with respect to other additions. The learned Government Pleader submitted that the gross profit addition at 25 per cent made to the purchase value of tin ingots is also reasonable and does not call for any interference by this Court. The Court upheld the estimation of sales turnover of ingots by adding 25 per cent gross profit to the purchase value of tin ingots as reasonable. 3. Applicable Rate of Tax on Tin Ingots Used in the Manufacture of Tins:The assessing authority had levied tax at the rate of 10 per cent which is the rate applicable to tins and metals. The Supreme Court in Gannon Dunkerley & Co.'s case held that it would be permissible for the State Legislature to tax all the goods involved in the execution of a works contract at a uniform rate which may be different from the rates applicable to individual goods because the goods which are involved in the execution of the works contract when incorporated in the works can be classified into a separate category for the purpose of imposing the tax and a uniform rate may be imposed on such goods. Under section 5(1) of the Act in the case of goods specified in the First or Second Schedule, the tax must be levied at the rates and only at the points specified against such goods in the said Schedules. So far as works contract is concerned, section 5(1)(iv) of the Act as amended by the Finance Act, 1991 provides for a separate rate of tax. Sub-clause (a) of clause (iv) says that in the case of transfer of goods involved in the execution of works contract where transfer is in the form of goods, the rate of tax is as provided for such goods in the First, Second, or Fifth Schedule. Under sub-clause (b) of clause (iv), in the case of transfer of goods involved in the execution of works contract, where the transfer is not in the form of goods but in some other form specified in the Fourth Schedule, at the rate specified against such contract in the said Schedule. In the present case, the goods which are transferred in the execution of the works contract, viz., the manufacture of tins is tin ingots only, the tin sheets being supplied by the awarder. The expression "goods involved in the execution of works contract" and the expression "in the form of goods" occurring in clauses (a) and (b) of section 5(1)(iv) relate to the same goods, viz., the goods transferred, in the instant case are "tin ingots". The expression "in the form of goods" occurring in sub-clause (a) cannot be considered as referring to the product of works contract. In that view of the matter, the present cases fall within sub-clause (b) of clause (iv) of section 5 of the Act. However, for the assessment year 1990-91 there was no distinction as provided under clauses (a) and (b) in respect of tax on transfer of goods in the execution of works contract. The rate of tax on works contract was provided in the Fourth Schedule. Thus for all the assessment years Fourth Schedule applies. In the above circumstances, while upholding the levy of tax on the turnover of tin ingots in the execution of job-works, the Court directed the assessing authority to levy tax on the said turnover at the rate applicable to contract for fabrication of metals by applying the residuary entry 22 of the Fourth Schedule to the Act. These tax revision cases are disposed of as above.
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2003 (9) TMI 719
Issues Involved:
1. Entitlement to benefit of deferment of tax.
2. Applicability of the M.P. Deferment of Tax Rules post-reorganization.
3. Interpretation of the Madhya Pradesh Reorganisation Act, 2000.
4. Impact of Adaptation of Laws Order, 2000.
5. Promissory estoppel and legitimate expectation.
6. Jurisdiction of the High Court of Madhya Pradesh.
Detailed Analysis:
1. Entitlement to Benefit of Deferment of Tax:
The petitioner claimed entitlement to the benefit of deferment of tax as per the eligibility certificate issued on November 19, 1996, under the M.P. Deferment of Tax Rules, 1986. The petitioner argued that this benefit should continue even after the reorganization of the State of Madhya Pradesh into Madhya Pradesh and Chhattisgarh.
2. Applicability of the M.P. Deferment of Tax Rules Post-Reorganization:
The core issue was whether the petitioner, whose unit is now located in Chhattisgarh, could continue to claim the benefit of the M.P. Deferment of Tax Rules in the successor State of Madhya Pradesh. The petitioner contended that the import of cement from Chhattisgarh to Madhya Pradesh should not be considered an inter-State sale but remain an intra-State sale under the provisions of the Reorganisation Act.
3. Interpretation of the Madhya Pradesh Reorganisation Act, 2000:
The court examined sections 78 and 79 of the Reorganisation Act. Section 78 provides that the provisions of Part II of the Act shall not be deemed to have effected any change in the territories to which any law in force extends or applies. Section 79 allows the appropriate government to make adaptations and modifications of the law for facilitating its application in relation to the State of Madhya Pradesh or Chhattisgarh.
4. Impact of Adaptation of Laws Order, 2000:
The Adaptation of Laws Order, 2000, issued by the State of Chhattisgarh substituted "Chhattisgarh" for "Madhya Pradesh" in the relevant laws. This adaptation meant that the M.P. Commercial Tax Act was now applicable as the Chhattisgarh Commercial Tax Act within the territory of Chhattisgarh. The court held that the benefit of deferment could not be extended to both States simultaneously as per the Reorganisation Act.
5. Promissory Estoppel and Legitimate Expectation:
The petitioner argued that the benefit conferring notifications issued by the erstwhile State of Madhya Pradesh should bind both successor States based on principles of promissory estoppel. The court, however, held that the concept of promissory estoppel could not override statutory provisions. The court also rejected the plea of legitimate expectation, stating that it could not travel beyond the law, especially fiscal law.
6. Jurisdiction of the High Court of Madhya Pradesh:
The petitioner sought relief from the High Court of Madhya Pradesh, arguing that the sales made in Madhya Pradesh should be treated as intra-State sales. The court, however, held that the transactions between Chhattisgarh and Madhya Pradesh post-reorganization should be treated as inter-State sales, and the High Court of Madhya Pradesh had no jurisdiction to entertain the petition for sales made in Chhattisgarh.
Conclusion:
The court dismissed the writ petition, holding that the petitioner could not claim the benefit of deferment of tax in the successor State of Madhya Pradesh post-reorganization. The court found no merit in the petitioner's arguments and upheld the statutory provisions and adaptations made under the Reorganisation Act, 2000. The appeals were also dismissed, with no order as to costs.
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2003 (9) TMI 718
Issues:
Challenge to sales tax assessment on works contract; Transfer of property in goods for sales tax levy; Interpretation of contractual terms; Application of 46th Amendment on sales tax; Deemed transfer of goods in works contract.
Analysis:
The petitioner, a partnership firm, challenged sales tax assessments by the Assistant Commissioner for three financial years related to a construction project. The petitioner argued that sales tax cannot be levied without transfer of property in goods, which only occurs when goods are incorporated in the construction. They contended that no subsequent transfer of property happens at project completion. The petitioner claimed to be a bailee or trustee of materials, not the owner, as agreed in the contract terms.
The State defended the sales tax levy, citing deemed sale of goods and materials used in the works contract, purchased from the Government. The agreement between the petitioner and the State outlined provisions for material supply and sales tax deductions, indicating the State's role in providing materials like cement and steel for the project.
The judgment referenced the Supreme Court decision in Builders Association of India v. Union of India, which allowed sales tax on goods in a works contract post the 46th Amendment. The court noted the State's supply of cement and steel to the petitioner, leading to deemed transfer of property in goods upon project completion, justifying the sales tax levy.
Concluding, the court dismissed all writ petitions, upholding the sales tax assessments. The judgment emphasized the application of the 46th Amendment on sales tax in works contracts and the deemed transfer of goods upon project completion, allowing for sales tax levy by the State.
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2003 (9) TMI 717
Issues Involved:
1. Legality of the suo motu revision by the Deputy Commissioner.
2. Classification of "Himtaj oil" as an "Ayurvedic drug" or "hair oil".
3. Justification of the enhancement of gross turnover by the Deputy Commissioner.
Issue-wise Detailed Analysis:
1. Legality of the Suo Motu Revision by the Deputy Commissioner:
The petitioner challenged the Deputy Commissioner's authority to initiate suo motu revision of the appellate order passed by the Assistant Commissioner. The argument was that the reasons for the revision were not properly disclosed. The respondent countered that the revision was initiated following the issuance of a notice under section 12(3) of the West Bengal Sales Tax Act, 1954, and that the Deputy Commissioner's powers in such revisions are extensive, as supported by precedent cases. The Tribunal held that the Deputy Commissioner's initiation of the suo motu revision did not suffer from any legal infirmity, noting that the notice provided sufficient details and the petitioner had the opportunity to be heard.
2. Classification of "Himtaj Oil" as an "Ayurvedic Drug" or "Hair Oil":
The petitioner argued that "Himtaj oil" should be classified as an "Ayurvedic drug" and thus taxable at 4%, relying on certifications and clinical trial reports indicating its medicinal properties. The respondent contended that the product was "hair oil" taxable at 8%, emphasizing that the classification should be based on the intention of the Legislature and common parlance theory. The Tribunal examined various notifications and definitions under the West Bengal Sales Tax Act and the Drugs and Cosmetics Act. It concluded that the petitioner failed to prove that "Himtaj oil" was an "Ayurvedic drug" as it did not meet the criteria set out in authoritative Ayurvedic texts and was commonly understood and sold as "hair oil". Therefore, "Himtaj oil" was classified as "hair oil" and taxable at 8%.
3. Justification of the Enhancement of Gross Turnover:
The Deputy Commissioner had enhanced the petitioner's gross turnover based on the presumption of suppressed sales, inferred from an excise raid and the subsequent seizure of undisclosed cash. The petitioner argued that there was no evidence linking the seized cash to unaccounted sales. The Tribunal referred to the Customs, Excise and Gold (Control) Appellate Tribunal's finding that the seized cash could not be conclusively linked to clandestine sales. It was noted that sales tax authorities also failed to find any evidence of suppressed sales during their raid. The Tribunal held that mere presumption could not substitute for concrete evidence, and thus, the enhancement of gross turnover was unjustified. Consequently, the portion of the impugned order relating to the enhancement of turnover was set aside.
Conclusion:
The Tribunal upheld the classification of "Himtaj oil" as "hair oil" taxable at 8% and dismissed the petitioner's prayer to classify it as an "Ayurvedic drug". However, the Tribunal set aside the enhancement of gross turnover due to lack of evidence of suppressed sales and directed the assessing authority to reassess the petitioner for the relevant period. No costs were awarded.
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2003 (9) TMI 716
Issues Involved:
1. Liability to pay purchase tax under section 5A of the Kerala General Sales Tax Act, 1963.
2. Whether the conversion of animals into meat constitutes a manufacturing process.
3. Applicability of tax exemptions under Notification S.R.O. No. 342 of 1963.
4. Consideration of whether the sale or purchase of goods is liable to tax under the Act.
Issue-wise Detailed Analysis:
1. Liability to pay purchase tax under section 5A of the Kerala General Sales Tax Act, 1963:
The petitioner, a State Government undertaking involved in the sale of livestock and meat, contested the liability to pay purchase tax under section 5A of the Act on the purchase turnover of cattle, sheep, and pigs. The assessing authority, relying on the Supreme Court decision in Deputy Commissioner of Sales Tax v. A.B. Ismail [1986] 62 STC 394, rejected the petitioner's claim of non-liability. The Tribunal upheld this decision, distinguishing it from other Supreme Court rulings such as Sterling Foods v. State of Karnataka [1986] 63 STC 239.
2. Whether the conversion of animals into meat constitutes a manufacturing process:
The petitioner argued that converting animals into meat by slaughtering does not involve a manufacturing process. However, the Supreme Court in A.B. Ismail's case [1986] 62 STC 394 held that the conversion of goats and sheep into meat involves consumption and manufacture, leading to the creation of a different commercial commodity. The Tribunal followed this precedent, affirming that the conversion of livestock into meat constitutes a manufacturing process, thereby attracting section 5A.
3. Applicability of tax exemptions under Notification S.R.O. No. 342 of 1963:
The petitioner claimed that meat is an exempted commodity under Notification S.R.O. No. 342 of 1963 and that the purchase of animals for conversion into meat should be treated as the purchase of meat. The Supreme Court in Chiranjit Lal Anand v. State of Assam [1985] 60 STC 89 was cited, where "meat on hoof" was considered exempt due to the specific contractual and factual circumstances. However, the Tribunal and the Supreme Court in A.B. Ismail's case distinguished these circumstances, stating that the exemption applied only to the specific facts of Chiranjit Lal Anand's case and not as a general principle.
4. Consideration of whether the sale or purchase of goods is liable to tax under the Act:
The petitioner argued that the authorities failed to consider whether the main part of section 5A was attracted, specifically whether the sale or purchase of goods was liable to tax under the Act. The decision in Kerala Premo Pipe Factory Ltd. v. State of Kerala [1984] 57 STC 84 was referenced, which held that section 5A applies only if the transaction is not liable to tax under section 5. The Tribunal, however, found no evidence that the petitioner raised this issue before the lower authorities. The Tribunal concluded that since the petitioner did not provide evidence that the sellers' turnover exceeded the non-taxable limit, section 5A was applicable.
Conclusion:
The High Court dismissed the revisions, affirming the Tribunal's decision that the petitioner is liable to pay purchase tax under section 5A. The conversion of livestock into meat constitutes a manufacturing process, and the exemptions under Notification S.R.O. No. 342 of 1963 do not apply to the petitioner's transactions. The authorities and the Tribunal adequately considered the applicability of section 5A, and the petitioner's failure to provide necessary evidence regarding the sellers' taxable status justified the tax imposition.
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2003 (9) TMI 715
Issues:
Challenge to notification under Assam Sales Tax Act, 1947 for denial of sales tax concession, rejection of prayer for authorisation certificate, legality of assessment orders, applicability of time-limit for passing assessment orders.
Analysis:
The batch of 11 writ petitions challenged clause (ii) of a notification under section 3-A of the Assam Sales Tax Act, 1947, denying sales tax concession from August 1, 1988, without an authorisation certificate. The petitioner, engaged in tea blending and packaging, claimed exemption based on an eligibility certificate issued under the Industrial Policy decision of the Government of Assam, 1986. The petition for an authorisation certificate was rejected, leading to a previous Civil Rule being dismissed. The respondent argued that assessment orders were valid as per law, despite the petitioner's claim of non-compliance with the time-limit under the Assam General Sales Tax Act, 1993, which was deemed inapplicable.
The petitioner contended that the denial of sales tax concession post-August 1, 1988, without an authorisation certificate, was unjust. The petitioner relied on the Industrial Policy guidelines and previous court decisions to support their claim for exemption. However, the court held that the denial was lawful as the petitioner lacked the required authorisation certificate, emphasizing that the government had discretion in granting such benefits. The court distinguished the case from precedents involving promissory estoppel, ruling against its application in this scenario.
Regarding the assessment orders, the petitioner argued that they were not passed within the prescribed time-limit under the repealed Assam Sales Tax Act, 1947. The respondent maintained that the orders were valid under section 17(4) of the repealed Act, supported by the provisions of the Assam General Sales Tax Act, 1993. The court upheld the legality of the assessment orders, ruling that they were not flawed in law. Consequently, the court dismissed the writ petitions, vacating any interim orders in place.
In conclusion, the court dismissed the writ petitions challenging the denial of sales tax concession, rejection of the prayer for an authorisation certificate, and the legality of assessment orders. The court found the denial justified due to the absence of the required certificate, upheld the validity of the assessment orders under the relevant laws, and rejected the petitioner's argument regarding the time-limit for passing the orders.
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2003 (9) TMI 714
Issues Involved:
1. Whether the procurement of rice by the assessee under the Karnataka Rice Procurement (Levy) Order constitutes a sale or purchase under Section 6 of the Karnataka Sales Tax Act.
2. Whether the tax under Section 6 of the Act is applicable to the foodgrains transferred by the assessee outside the State of Karnataka.
3. Whether the assessee is entitled to a deduction of tax paid on levy-paddy under the third proviso to Section 5(4) of the Act.
Issue-wise Detailed Analysis:
1. Procurement of Rice as Sale or Purchase:
The first contention by the assessee was that the procurement of rice under the Karnataka Rice Procurement (Levy) Order does not constitute a sale or purchase and thus Section 6 of the Act is not applicable. The assessee relied on the decision in Madhur Trading Co. v. State of Karnataka, arguing that the procurement is not a sale and therefore, the tax under Section 6 cannot be levied. However, the court rejected this argument, stating that the second proviso to Section 5(4) of the Act makes it clear that while the initial sale to the procurement agent is not deemed a sale, the subsequent sale by the procurement agent is taxable. The court emphasized that the principle from Madhur Trading Co. does not apply here as it dealt with a different provision (Section 5(3)(c)).
2. Applicability of Tax Under Section 6:
The second issue was whether the tax under Section 6 of the Act is applicable to the foodgrains transferred by the assessee outside Karnataka. The court clarified that Section 6 imposes a tax on the purchase of goods in circumstances where no tax is levied under Section 5, and these goods are either consumed or dispatched outside the State. The court rejected the assessee's argument that since the miller is not liable to tax on the sale to the assessee, the tax under Section 6 is not applicable. The court held that the procurement agent is liable to pay tax when the goods are dispatched outside the State, as per Section 6 of the Act.
3. Deduction of Tax Paid on Levy-Paddy:
The third issue was whether the assessee is entitled to a deduction of tax paid on levy-paddy under the third proviso to Section 5(4) of the Act. The court acknowledged that the assessee is entitled to such a deduction if the tax has already been paid on the paddy. However, the court noted that the assessee did not make this claim before the assessing officer and only raised it before the first appellate authority. The court allowed the assessee the liberty to make a claim for a refund of the tax paid on the paddy sold to it, within five months from the date of receipt of the court's order. The assessing officer was directed to consider this claim on its merits, without raising any objection regarding the period of limitation.
Conclusion:
The court dismissed the petitions, upholding the orders of the lower authorities. The assessee was given the opportunity to claim a refund for the tax paid on levy-paddy, but this did not absolve the assessee from its liability to pay tax under Section 6 of the Act. The court emphasized that the procurement agent must comply with the assessment orders and make the necessary payments.
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2003 (9) TMI 713
Issues Involved:
1. Applicability of Notification S.O. No. 154 dated January 28, 1985, under section 13(1) of the Bihar Finance Act, 1981.
2. Inclusion of packing materials made out of paper in the registration certificate for concessional tax rates.
3. Validity and impact of the notification excluding paper materials from the operation of section 13 of the Act.
4. Interpretation of amendments to sections 13 and 21 of the Bihar Finance Act, 1981, by the Bihar Finance (Amendment) Act, 1985.
Issue-wise Detailed Analysis:
1. Applicability of Notification S.O. No. 154 dated January 28, 1985:
The petitioner sought a direction to prevent enforcement of the notification issued under the proviso to section 13(1) of the Bihar Finance Act, 1981, which excluded paper materials from the operation of section 13. The State contended that the notification remained valid despite the amendment to section 13, which added clause (e) providing concessional tax rates for packing materials specified in the registration certificate.
2. Inclusion of Packing Materials Made Out of Paper:
The petitioner applied for the inclusion of packing materials made out of paper in the registration certificate to avail concessional tax rates. The Deputy Commissioner of Commercial Taxes rejected this request, citing the notification that excluded paper materials from the benefits of section 13. The Court upheld this decision, stating that the notification explicitly excluded paper materials from concessional tax rates.
3. Validity and Impact of the Notification:
The Court examined whether the notification issued on January 28, 1985, was nullified or repealed by the amendment adding clause (e) to section 13(1). It concluded that the notification remained effective and applicable to the newly added clause (e). The proviso to section 13(1) empowered the State Government to exclude any goods from the operation of section 13, and the notification was issued under this power. The Court emphasized that the notification's purpose was to exclude paper materials from concessional tax rates, and this exclusion applied to all relevant clauses of section 13, including the newly added clause (e).
4. Interpretation of Amendments to Sections 13 and 21:
The amendments to sections 13 and 21 introduced by the Bihar Finance (Amendment) Act, 1985, were analyzed. The amendment to section 13(1) added clause (e), which included sales or purchases of packing materials specified in the registration certificate for concessional tax rates. However, the Court ruled that the notification excluding paper materials from the operation of section 13 remained valid and applicable to clause (e). The amendment to section 21 removed the exclusion of packing materials from taxable turnover, but the notification's exclusion of paper materials from concessional tax rates under section 13 was not affected.
Conclusion:
The Court dismissed the writ application, holding that the notification excluding paper materials from the benefits of section 13 remained valid and applicable to the newly added clause (e). The decision to exclude packing materials made out of paper from the registration certificate for concessional tax rates was upheld. The notification was neither nullified nor superseded by the amendment, and it continued to apply to all relevant provisions of section 13, including clause (e).
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2003 (9) TMI 712
Issues:
1. Interpretation of G.O. Ms. No. 354 dated May 29, 2001 regarding the procedure for passing formal orders based on audit reports.
2. Jurisdiction of the High Court under Article 226 of the Constitution of India in the context of appeal remedy availability.
3. Compliance with formal order requirements by the assessing authority under A.P. General Sales Tax Act, 1957.
Analysis:
Issue 1:
The petitioner, a registered dealer in vegetable oil, filed an audit report claiming exemption on the purchase of groundnut seeds. The Government issued G.O. Ms. No. 354, stating that the assessing authority must pass a formal order within fifteen days of receiving the audit report. The petitioner contended that the assessing authority did not follow the procedure outlined in the G.O. and passed an order requiring the petitioner to pay tax. The Court noted that the assessing authority should issue a notice if there are objections or deviations from the claim made by the assessee. The Court found that the assessing authority did not follow the proper procedure and set aside the impugned order, remitting the matter back to the assessing authority for appropriate orders.
Issue 2:
The Special Government Pleader argued that the petitioner should have pursued the appeal remedy available under Section 19 of the A.P. General Sales Tax Act before approaching the High Court under Article 226 of the Constitution of India. The Court acknowledged the remedy of appeal but found that due to the nature of the dispute and the assessing authority's failure to follow proper procedures, it was a fit case for the High Court's interference under Article 226. The Court set aside the order and directed the petitioner to deposit a specified amount pending further proceedings.
Issue 3:
The Court observed that the order passed by the assessing authority, though labeled as formal, did not fully accept the petitioner's statement. The Court held that the assessing authority should have issued a notice to allow the assessee to provide additional material. Consequently, the Court set aside the order, allowing the petitioner to file objections and directing the assessing authority to decide the matter expeditiously after considering the objections. The Court also required the petitioner to deposit a specific amount pending the outcome of the assessment.
In conclusion, the High Court intervened under Article 226 due to procedural irregularities by the assessing authority, setting aside the order and remitting the matter for proper consideration while directing the petitioner to deposit a specified amount.
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2003 (9) TMI 711
Issues:
1. Liability to pay turnover tax on commission sales turnover.
2. Interpretation of Notification S.R.O. No. 717/88 and its impact on turnover tax liability.
3. Effect of Notification S.R.O. No. 1008/91 on turnover tax liability.
4. Applicability of judgments in similar cases on turnover tax liability of commission agents.
Analysis:
1. The case involved the assessment of turnover tax on commission sales turnover by the assessee, a partnership concern dealing in hill produce. The assessee contended that it was not liable to pay turnover tax under section 5(2A) of the Act on the turnover of commission sales. However, this contention was not accepted by the assessing authority, first Appellate Authority, and the Tribunal. The Tribunal considered whether the petitioner was liable to turnover tax on the total turnover, including goods sold on commission basis for principals. A previous Full Bench decision affirmed by the Court established that turnover tax includes the purchase value of goods sold on commission basis.
2. The petitioner argued based on Notification S.R.O. No. 717/88, claiming that liability was only on the registered dealer for whom they acted as commission agents. However, the government pleader contended that this notification was superseded by Notification S.R.O. No. 1008/91, making the assessee liable to pay turnover tax at all points of purchases in the State. The Court noted that the latter notification applied from August 1, 1991, and for the period before that, the earlier notification would apply. A division Bench judgment clarified that commission agents are also liable to turnover tax on goods sold for registered dealer principals.
3. The Court referenced previous judgments, including one in which a division Bench concluded that commission agents are liable to turnover tax on goods sold for registered dealer principals. The Court found no merit in the revision petition and dismissed it based on the precedents and established interpretations of the law. The judgment emphasized the consistent application of the law in similar cases and upheld the liability of commission agents to pay turnover tax on sales made on behalf of principals who are registered dealers.
This detailed analysis of the judgment highlights the key issues of liability to pay turnover tax on commission sales turnover, the interpretation and impact of relevant notifications, and the applicability of previous judgments in determining the turnover tax liability of commission agents.
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2003 (9) TMI 710
Whether The search and seizure can be faulted for the reason of the same having taken place not on spot but in the customs office?
Held that:- Section 42(2) is not applicable when search seizure etc. is conducted by a Gazetted Officer under Section 41(2) and (3), the further contention of Mr. Jain that an attempt was made by the respondent to fill up lacuna to show compliance of Section 42(2) of the NDPS Act as a result of observations made in the order granting bail to the appellants as noticed hereinbefore becomes inconsequential and, therefore, it is not necessary to examine it. The impugned judgment of the High Court cannot be faulted. Thus, sustaining the conviction and sentence of the appellants, the appeals are dismissed.
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