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Showing 321 to 340 of 899 Records
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2010 (8) TMI 864
Issues:
1. Challenge to recovery proceedings initiated during pendency of appeal before Karnataka Appellate Tribunal.
2. Interpretation of statutory provisions related to the timeline for filing appeals and coercive recovery proceedings.
3. Comparison with precedents from Madras High Court and Bombay High Court regarding recovery actions before appeal period expiry.
4. Legal impediments in recovery proceedings during pendency of stay application.
5. Consideration of conditions for granting interim stay orders.
Analysis:
1. The petitioner challenged the recovery proceedings initiated by the respondent while the appeal was pending before the Karnataka Appellate Tribunal (KAT). The petitioner's counsel argued that such actions should not be taken when the matter is sub judice before the tribunal, highlighting the potential impact on the petitioner's business operations.
2. The counsel relied on Section 18A(2) of the Central Sales Tax Act, 1956, which mandates filing an appeal within 60 days of the order communication. It was contended that initiating coercive recovery before the appeal period expiry would render the appeal remedy ineffective, citing the Madras High Court's decision emphasizing against precipitate recovery actions.
3. Reference was made to the Bombay High Court's Division Bench judgment in Mahindra & Mahindra Ltd. v. Union of India, where encashing a bank guarantee before the statutory period's completion, despite a pending stay application before the tribunal, was deemed improper. These precedents were cited to support the argument against premature recovery actions.
4. The respondent's counsel contended that there were no legal barriers to conducting recovery proceedings during the stay application's pendency. However, the court emphasized the need to balance the interests of both parties and ensure justice by directing the KAT to expedite the stay application's consideration.
5. The court decided to advance the appeal hearing date to promptly address the stay application, instructing both parties to appear before the KAT without further notice. The court left the decision on any funds received during the interim period to the KAT, including the possibility of imposing conditions on the petitioner for granting a stay order.
In conclusion, the court disposed of the petitions without costs, emphasizing the importance of timely resolution and fair treatment of parties involved in the legal proceedings.
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2010 (8) TMI 863
Whether cess payable under Act 20 of 1949 would form part of the sugarcane price and thereby would attract payment of sales tax under the provisions of the Tamil Nadu General Sales Tax Act?
Held that:- There is a statutory liability of inclusion of cess also in the price of the rubber payable by the manufacturer to the person concerned who is involved in the production of rubber for the purpose of levy of excise duty and collection of such levy either from the owner of the estate or from the manufacturer if there is one who uses such rubber. The honourable Supreme Court has dealt with the said consequence in paragraph Nos. 17 and 18 and therefore, it was held that the liability of tax as prescribed under the Kerala General Sales Tax Act, 1963 as per section 5 read along with entry 71 would include the cess payable under section 12 of the Act.
There is absolutely no scope for including the payment of cess for the purpose of assessing the liability of tax under the provisions of the Tamil Nadu General Sales Tax Act. Appeal allowed.
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2010 (8) TMI 862
Inclusion of payment of cess for the purpose of assessing the liability - Held that:- The case on hand is directly covered by the earlier Division Bench decision of this court in Cauvery Sugars and Chemicals Ltd. v. Joint Commercial Tax Officer [1971 (4) TMI 87 - MADRAS HIGH COURT] and therefore, there is absolutely no scope for including the payment of cess for the purpose of assessing the liability of tax under the provisions of the Tamil Nadu General Sales Tax Act. Appeal allowed.
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2010 (8) TMI 861
Whether the taxable event is not in existence and, therefore, the show-cause notice is without jurisdiction?
Held that:- The petitioner is admittedly a VAT dealer. Whether there is a taxable event by reason of the works undertaken by the petitioner, under the first and second contracts, is certainly a matter for enquiry. By reading of various clauses in the two agreements, a firm conclusion cannot be arrived at. Therefore, in the first instance, it is for the authority who issued show-cause notice to determine the matter. At this stage, no interference is called for. We leave the liberty to the petitioner to submit explanation with all the pleas highlighted in this writ petition. The first respondent shall then decide the issues, in the light of the law declared by the apex court.
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2010 (8) TMI 860
Whether the benefit of the exemption notification dated May 5, 1997, is not available for levy of tax under section 9B of the Madhya Pradesh Commercial Tax Act, 1994?
Held that:- Reading the exemption notification, as it is the reduction of tax is in respect of the levy of tax under section 9 of the Act only and not for the levy of tax under section 9B of the Act.
In view of the aforesaid analysis, the contention of the petitioner that the benefit of the exemption notification should also be available to the petitioner for the purpose of levy of tax under section 9B cannot be accepted. No error has been committed by the assessing authority and the revisional authority in this regard. Appeal dismissed.
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2010 (8) TMI 859
Issues:
Rate of tax on gold coins and medallions sold by the appellant during 2005-06 and 2006-07.
Analysis:
The judgment of the court, delivered by Justice C.N. Ramachandran Nair, addressed the question of the rate of tax applicable to various gold coins and medallions sold by the appellant. The appellant argued that the items should be classified as "bullion" under item 1 of the Second Schedule to the Kerala Value Added Tax Act, 2003. However, the Government Pleader cited a previous judgment where similar articles were classified as semi-finished gold articles falling under entry 4(4) of the Third Schedule to the KVAT Act. The court noted that the items in question, such as those embossed with pictures of deities and company logos, were not used as raw materials for making ornaments but were worn as accessories. Therefore, the court concluded that the items fell under entry 4(4) of the Third Schedule for tax levy, rather than the residuary entry as assessed by the Tribunal at 12.5 percent.
In line with a previous judgment, the court allowed the revisions in part by directing the assessment of the entire turnover of the items at a reduced rate of four percent, as opposed to the 12.5 percent assessed by the Department and confirmed by the Tribunal. This decision clarified the classification of the gold coins and medallions, providing guidance on the appropriate tax rate applicable to such items based on their intended use and characteristics.
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2010 (8) TMI 858
Disallowance of the exemption given on transit sales - Held that:- The impugned orders are liable to be quashed, however, with liberty given to the Revenue to proceed against the purchaser-dealer for any contravention in the manner known to law.
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2010 (8) TMI 857
Issues involved:
The judgment involves the quashing of an order passed by the Haryana Tax Tribunal regarding the refund of tax paid on raw materials used in manufacturing a product that was exported and did not attract tax under the Haryana Value Added Tax Act, 2003.
Details of the judgment:
The petitioner, a dealer under the Haryana Value Added Tax Act, 2003, sought a refund of tax paid on raw material "guar" used in manufacturing "guar gum", which was exported and not taxable under the Act. The petitioner's claim for refund was initially rejected but upheld by the appellate authority. However, the revisional authority later ruled against the refund, a decision upheld by the Tribunal. The Tribunal's finding emphasized the provisions of the Act regarding the computation of input-tax credit and the treatment of goods used in manufacturing taxable and non-taxable products.
The petitioner argued that the refund should follow the order of the appellate authority, with the only question in the refund proceedings being the quantification of the refund. Citing a judgment of the court in a similar case, the petitioner contended that the officer determining the refund amount cannot exercise powers of review, appeal, or revision, and must respect the order of assessment before proceeding to determine the refund amount. Based on these arguments, the court allowed the petition, setting aside the impugned order while clarifying that it does not affect the petitioner's liability in a pending appeal.
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2010 (8) TMI 856
Whether until assessment tax due under the Act is what is declared as due by them in the monthly and annual returns filed by them?
Held that:- The tax on excise duty became due from the petitioners "as tax due under the Act " after the pronouncement of law by the Full Bench of this court on December 16, 1992(1). We, therefore, hold that the petitioners are defaulters in payment of sales tax on excise duty from the monthly returns for January, 1993 onwards. There was delay in payment in some cases up to December, 1996 and in some other cases till March, 1997 and the petitioners are liable to pay interest for the belated payment of tax on excise duty from the monthly returns filed in January, 1993 onwards. Since tax was payable along with monthly returns, interest for default is to be reckoned from the due date on which tax was payable under the monthly returns filed in January, 1993 onwards. O.Ps. and S.T. Rv stand allowed in part by deleting levy of interest for periods up to monthly return filed till December, 1992, that is up to monthly return filed for November, 1992 and by sustaining the interest levied for the remaining period of default.
since all the petitioners are public sector companies, and considering the high rate of interest payable under section 23(3) which we have upheld for the periods commencing from the period after the Full Bench judgment, we feel if the petitioners clear the entire arrears of interest within one month from the date of receipt of a copy of this judgment, they should be exonerated from payment of penalty under section 45A of the Act for the assessment years 1988-89 to 1992-93 for the Indian Oil Corporation Ltd. , 1987-88 to 1990-91 for the Hindustan Petroleum Corporation and for the year 1987-88 for the Bharath Petroleum Corporation Ltd. However, if interest liability is not settled as above, penalty levied will stand sustained and if paid penalty levied will stand cancelled.The petitioners are free to adjust penalty if any paid against balance interest liability while settling interest liability as above
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2010 (8) TMI 855
Issues Involved:
1. Disallowance of exemption claim for returned medicines due to expiry, damage, and breakage.
2. Treatment of medicines distributed as free samples as intra-State sales.
Issue-wise Detailed Analysis:
1. Disallowance of Exemption Claim for Returned Medicines:
The petitioner, a consignment agent of M/s. Wyeth Limited, filed returns for the period 2004-05. The Deputy Commissioner of Commercial Taxes added back Rs. 11,54,872 to the gross turnover, treating it as intra-State sales. This amount included Rs. 10,38,542 for expired medicines and Rs. 1,16,320 for damaged and broken medicines. The petitioner argued that these should be deducted from the turnover as per section 2(40) of the West Bengal Sales Tax Act, 1994, and rule 159 of the Rules, 1995. The petitioner claimed that the credit notes were issued against sales for 2003-04 and that all relevant documents were produced, but the authorities failed to appreciate them.
The Tribunal recognized the peculiar nature of the medicinal business, where medicines have a specific life period and are often returned upon expiry. It noted that the assessing authority disallowed the adjustment of credit notes due to non-production of relevant documents. The Tribunal emphasized the necessity of producing a Chartered Accountant's certificate as per rule 159 and cross-verifying the records with invoices issued 2-3 years back. The Tribunal directed the assessing authority to reassess the matter, considering the peculiarities of the medicinal business and the directions given in a previous similar case (Case No. RN-650 of 2009).
2. Treatment of Medicines Distributed as Free Samples:
The petitioner also contested the addition of Rs. 32,81,050 to the gross turnover, which represented the value of medicines distributed as free samples. The petitioner argued that these medicines were imported for distribution as free samples for sales promotion and not for sale. The authorities treated this amount as intra-State sales due to the lack of sufficient reasons and relevant certificates from the principal company.
The Tribunal noted that the petitioner admitted the non-production of relevant certificates during the assessment hearing but later provided free goods approval forms from the principal company. The Tribunal acknowledged the explanation that distributing free samples is a common practice in the medicinal trade for sales promotion and market building. It found that the assessing and revisional authorities erred in treating the distribution of free samples as intra-State sales without considering the provided explanations and documents.
The Tribunal directed the assessing authority to reassess this matter as well, considering the explanations and documents provided by the petitioner and issuing a reasoned and speaking order.
Conclusion:
The Tribunal set aside the impugned orders and remanded the case back to the assessing authority for reassessment of the returns for the year 2004-05. The petitioner was directed to appear before the assessing authority by August 30, 2010, and the reassessment was to be completed by October 31, 2010. The application was disposed of with no order as to costs.
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2010 (8) TMI 854
Whether a recovery issued on February 16, 1985 even if it had remained unsatisfied can it be pressed into motion after 19 years and would not be barred by time?
Whether the payment of ₹ 845 and ₹ 3,36,000 satisfies the arrears of tax dues with interest accrued?
Held that:- The recovery of the tax dues as arrears of land revenue after 19 years may not be barred by limitation, nonetheless it is important to consider whether the said recovery after such a long lapse of time is legally justified or not. It was certainly unfair, unreasonable and unjust to press for it after a gap of 19 years that too without any prior intimation or notice.
The respondents are not justified in charging interest on the unpaid amount for all these years at least after 12 years which we have held to be a reasonable period to recover the amount in the present case. This entitles petitioner to have a clear statement of account of the amount of tax dues; the interest levied thereon; adjustment of the amount paid and realized towards the principal amount; and the calculation of the balance amount, if any
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2010 (8) TMI 853
Whether the proceedings have been initiated on account of change of opinion?
Held that:- In the assessment orders, for the assessment years 1997-98 and 1998-99, the claim of the petitioner that the value of the bottles or poly pouches was not liable to tax, has been considered in details; the facts that the prices of the liquor and the bottles and the poly pouches have been charged separately, have been noticed and on the consideration of the aforesaid facts, the assessing authority had held that the value of the bottles and poly pouches were not liable to tax in view of section 3AB of the Act as the country liquor is exempted from tax. Therefore, the reopening of the proceedings for the assessment years 1997-98 and 1998-99 are only on account of change of opinion and cannot be sustained. So far as the assessment years 1999-2000 and 2000-01 are concerned, learned counsel for the petitioner fairly admitted that the issue has not been considered in the original assessment orders, therefore, reopening of the proceedings under section 21 of the Act cannot be said to be on account of change of opinion inasmuch as no opinion has been expressed in the order. It is settled principle of law that each year is a separate assessment year for the purposes of assessment. Writ petition is allowed in part
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2010 (8) TMI 852
Whether the product di-calcium phosphate (animal feed grade) is classified under the First Schedule to the Act and, therefore, it is not liable to tax under the Act?
Held that:- Both the animal feed and feed supplement are exempted from duty. di-calcium phosphate, which is used in the preparation of animal feed is not an animal feed as such, it is a feed supplement. Entry No. 8 of the First Schedule clearly exempts from payment of duty both animal feed and feed supplement. In the view of the matter, the order passed by the Additional Commissioner of Commercial Taxes is patently illegal and requires to be set aside and the order passed by the first appellate authority is to be restored. Appeal allowed.
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2010 (8) TMI 851
Whether the assessee is not entitled to the exemption claimed and consequently liable for penalties levied under section 72(2) and 72(3) of the Karnataka Value Added Tax Act, 2003?
Held that:- It is brought to our notice that a beneficial circular has been issued by the Commissioner, how the question of penalty is to be imposed in the case of default especially keeping in mind, the change in the law and the jurisdiction, which came in the way of the assessee understanding the effect of change in law. Certainly, the assessing authority will take notice of the directions issued by the Commissioner to tide over the situation during this interregnum period while passing the final orders.
In so far as penalty is concerned, the learned single judge in the afore said writ petition has already quashed the findings recorded by both the authorities and remitted the matter back to the assessing authority for fresh consideration. It is unfortunate that the Tribunal has not noticed the said order of the learned single judge. Therefore, confirming the penalty as on the date of the order was passed is erroneous, illegal and without juris diction. Therefore, that portion of the order of the Tribunal is liable to be set aside and accordingly, it is set aside. Appeal allowed in part.
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2010 (8) TMI 850
Whether, in the facts and circumstances of the case, the order of the Tribunal is sustainable in law that D.E.T.C. (I) was competent to take action in the matter despite the pendency of the appeal before the Tribunal?
Whether, in the light of ratio of law laid down by the honour able Supreme Court in Tel Utpadak Kendra v. Deputy Commissioner of Sales Tax [1981 (7) TMI 80 - SUPREME COURT OF INDIA], where the decision relied upon by the Tribunal in Santoshi Tel Utpadak Kendra v. Deputy Commissioner [1978 (7) TMI 233 - BOMBAY HIGH COURT] stands reversed, the decision of the Tribunal dated January 16, 1997 is liable to be set aside?
Whether, in view of the retrospective effect of section 15A, Explanation by Act 7 of 1996 which has been made applicable to A.Y. 1983-84 also, the levy of tax on consumable store, etc., is sustainable in law?
Whether, in the facts and circumstances of the case, the ex parte decision of the Tribunal is legal and void?
Held that:- Appeal against assessment could result in assessment order being examined on the merits and even higher demand being raised which could not have been done in an application for revision filed by the assessee. This being the position, the judgment of the honourable Supreme Court is distin guishable. Question No.1 is accordingly answered against the assessee and in favour of the Revenue.
We accordingly answer the question Non 2 in favour of the assessee and against the Revenue and hold that the revision by officer of the same rank was not permissible.
The learned counsel for the assessee states that in view of decision of question (2), questions (3) and (4) do not survive. We accordingly leave the said questions unanswered.
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2010 (8) TMI 849
Whether the additional should be on the basis of the actual profits earned at the rate of 14.3 per cent and not at the rate of 30 per cent which the assessee had admitted in the course of assess ment proceedings?
Held that:- It is not in dispute that 30 per cent, which is the addition, is based on the claim of the assessee representing the profit on second dealer sales. It is not an actual profit earned by it. In order to claim exemption, as in the case of labour charges under works contract, it has estimated the said amount. The liability to tax under a fiscal legislation cannot be based on admissions. The liability has to be worked out under the provisions of the Act. When the material on record discloses the actual profit earned is 14.3 per cent, merely because the assessee for the purpose of claiming exemption had put forth a claim of 30 per cent profit, that cannot be the basis for addition as done by the assessing authority.
Appeal is allowed. The impugned order passed by the revisional authority is hereby set aside. The order passed by the appellate authority is restored.
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2010 (8) TMI 848
Issues:
Challenge against notice of reassessment dated February 3, 1999 on the ground of limitation under Article 226 of the Constitution of India.
Detailed Analysis:
1. Notice of Reassessment and Grounds Raised:
The petition challenged the notice of reassessment dated February 3, 1999, on the basis of being barred by limitation under section 35 of the Bombay Sales Tax Act, 1959. Other legal grounds were also raised but were deemed unnecessary for the decision.
2. Factual Background:
The original assessment order dated March 31, 1995, resulted in significant dues, which were later appealed. The Deputy Commissioner of Sales Tax allowed the appeal on October 29, 1996, directing a refund and setting aside the original assessment. Subsequently, a notice for revision was issued but was dropped following objections raised by the assessee. A search of the petitioner's premises in 1998 led to the issuance of the challenged notice of reassessment in 1999.
3. Submissions and Arguments:
The petitioner's counsel argued that the notice of reassessment was beyond the five-year limitation period prescribed by section 35 of the BST Act. It was contended that no material facts were suppressed, and therefore, the extended period of limitation should not apply. Various legal contentions were raised to challenge the notice.
4. Counter-Arguments:
The respondents' counsel acknowledged that there was no suppression of facts or misrepresentation by the petitioner. It was also recognized that invoking the extended period for reassessment was not justified, as the notice was issued beyond the five-year limitation period.
5. Court's Decision:
After considering the arguments, the court found that the notice of reassessment dated February 3, 1999, was indeed beyond the limitation period set by section 35 of the BST Act. As the limitation expired on March 31, 1997, and the notice was issued in 1999, it was deemed to be barred by limitation. Consequently, the court quashed and set aside the notice of reassessment, allowing the writ petition with no costs imposed.
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2010 (8) TMI 847
Whether the order passed by the Excise and Taxation Commissioner is sustainable in law?
Whether the respondent is entitled to input-tax credit on the purchase of diesel used in the generation of electrical energy for captive consumption especially when the word diesel has been specifically/specially mentioned in clause (b) of section 13(5) and excluded from section 13(4) of the Act?
Whether the learned Tribunal has misinterpreted the provisions of sections 13(4), 13(5), and 13(5)(i) of the Act?
Whether the order dated May 24, 2006 passed by the learned Tribunal is sustainable in law under the facts and circumstances of the case?
Whether the respondent is entitled to input-tax credit on the purchase of diesel at the rate prescribed in section 13(4) of the VAT Act especially when the word 'diesel' is not mentioned in it?
Held that:- Diesel is an item on which input-tax credit is not available unless as provided under clause (b). In view of such express provision, resort could not be had to clause (i). It is settled principle of law that an express and special provision excludes a general provision. The questions are, thus, answered in favour of the Revenue and against the assessee.
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2010 (8) TMI 846
Seizure of goods- documents showing transit of goods were manipulated - Held that:- As all the necessary documents accompanying the goods were duly produced and no discrepancy was found therein coupled with the fact that the two affidavits remained uncontroverted with no positive or constructive evidence to prove that the goods were actually loaded from Jhansi or that the consignor was fake and the goods were not traceable to him, therfore no ground for seizure of the goods existed and the Tribunal as such committed no error of law or jurisdiction in passing the impugned order setting aside the order of seizure dated June 15, 2010 passed under section 48 of the Act and the order dated June 25, 2010 affirming the same passed by the first appellate authority. Revision dismissed.
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2010 (8) TMI 845
Issues involved:
Denial of input-service tax credit on "goods transport agency (GTA) service" due to availing Cenvat credit of service tax on outward freight beyond the place of removal of the factory.
Analysis:
The appeal was filed against the denial of input-service tax credit on outward freight charges by the appellants. The investigation revealed that the appellants availed Cenvat credit of service tax on outward freight beyond the place of removal of the factory, leading to a show-cause notice for denial of credit, interest, and penalty. The appellants argued that the transportation cost was included in the price of goods and formed part of the assessable value, making them eligible for input-service tax credit as per Circular No. 97/8/2007-ST. They cited the Punjab and Haryana High Court's judgment to support their claim of retrospective effect of the circular. The ownership of goods remained with the appellants until delivery at the buyer's end, and the freight charges were integral to the finished goods, meeting the conditions of the circular.
The Departmental Representative contended that the appellants failed to provide documents proving ownership of goods during transit and lacked evidence such as insurance bills or chartered accountant certificates. The absence of such documentation raised doubts about the ownership status of the goods during transportation. After hearing both sides, the Tribunal noted the relevance of the circular and the necessity to verify ownership during transportation. While the appellants did not present a chartered accountant's certificate, they did provide purchase orders indicating delivery at the buyers' end, with transportation costs included in the assessable value. The Tribunal decided to remand the matter to the adjudicating authority for verification of ownership details during transportation. The authority was directed to allow credit if the facts were confirmed, providing the appellants with a fair opportunity to present their case.
In conclusion, the Tribunal set aside the impugned order and allowed the appeal by remanding the case for verification of ownership details during transportation. The decision emphasized the importance of fulfilling the conditions outlined in the circular to claim input-service tax credit on outward freight charges.
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