|
Advanced Search Options
Case Laws
Showing 41 to 60 of 285 Records
-
1991 (8) TMI 309
Issues Involved
1. Maintainability of the rectification application under Section 21-A of the Punjab General Sales Tax Act, 1948.
2. Whether the order of the Sales Tax Tribunal dated August 12, 1975, suffers from a mistake of law apparent on record needing rectification.
Issue-wise Detailed Analysis
Issue 1: Maintainability of the Rectification Application
The first issue concerns whether the State can apply for rectification under Section 21-A of the Punjab General Sales Tax Act, 1948. The court examined whether the term "person affected" includes the Assessing Authority/State of Punjab. The court concluded that the Assessing Authority is indeed a "person affected" as it is responsible for ensuring the correct assessment and recovery of tax within its jurisdiction. The law permits rectification even suo motu, making the source of the rectification motion immaterial. Therefore, the application for rectification filed by the State was deemed maintainable. The court answered this question in the affirmative, in favor of the State and against the assessee.
Issue 2: Mistake of Law Apparent on Record
The second issue pertains to whether the order of the Sales Tax Tribunal dated August 12, 1975, suffers from a mistake of law apparent on record. The Tribunal had interpreted the second proviso to Section 5(2)(a)(ii) of the Act to apply only to the contingency of goods used by the purchasing dealer in manufacture, excluding other contingencies like resale without manufacture. This interpretation was contrary to the decision in Fancy Nets and Fabrics v. State of Punjab [1971] 28 STC 433, which held that the second proviso would be attracted to any of the four eventualities mentioned in the section.
The State of Punjab filed an application for rectification, arguing that the Tribunal's order was at variance with the law laid down in Fancy Nets and Fabrics' case. The court found that the Tribunal's order did indeed suffer from a mistake of law apparent on the record, as it failed to align with the established precedent. The court held that the Tribunal's failure to take notice of a binding decision constitutes a mistake apparent on the face of the record, which can be rectified under Section 21-A(2) of the Act. The court referenced its earlier decision in Jagatjit Distilling and Allied Industries Limited v. Assessing Authority [1978] 42 STC 233, which supported the rectification of such mistakes.
In conclusion, the court held that the order of the Tribunal dated August 12, 1975, suffered from a mistake of law apparent on the record and required rectification. The court answered this question in the affirmative, in favor of the Revenue and against the assessee. No costs were awarded.
Conclusion
Both questions referred to the court were answered in the affirmative, favoring the State and against the assessee. The court held that the rectification application was maintainable and that the Tribunal's order did suffer from a mistake of law apparent on the record needing rectification.
-
1991 (8) TMI 308
Issues:
1. Interpretation of section 8(2A) of the Central Sales Tax Act, 1956.
2. Application of exemption notification under the Tamil Nadu General Sales Tax Act, 1959.
3. Assessment of inter-State sales turnover.
4. Judicial precedent regarding similar cases.
Detailed Analysis:
1. The primary issue in this case was the interpretation of section 8(2A) of the Central Sales Tax Act, 1956. The provision states that if the turnover of the sale of a particular commodity is exempt from tax generally under the State law, then the tax payable under the Central Sales Tax Act on such turnover shall be nil. The explanation to this section clarifies that certain conditions must be met for the exemption to apply. In this case, the Tribunal correctly applied this provision to the situation at hand, where the sale of cotton-seeds was exempt from tax under a notification. The Tribunal's decision aligns with the legal framework provided by section 8(2A) and the accompanying explanation.
2. Another issue involved the application of an exemption notification under the Tamil Nadu General Sales Tax Act, 1959. The assessee had purchased cotton-seeds from a specific entity, and an exemption was granted for the sale of this commodity by that entity. The assessing officer had assessed the inter-State sales turnover, arguing that since the cotton-seeds had not been taxed in the State, the inter-State sale should be taxed. However, the Tribunal correctly considered the exemption notification and ruled in favor of the assessee, stating that the transaction in the course of inter-State sale would be nil due to the exemption provided under the State Act.
3. The assessment of inter-State sales turnover was a crucial aspect of this case. The assessing authority and the Appellate Assistant Commissioner had initially held that the inter-State sale was liable to tax since the cotton-seeds had not been taxed within the State. However, the Tribunal overturned this decision based on the provisions of section 8(2A) of the Central Sales Tax Act and the exemption notification under the State Act. The Tribunal's decision to set aside the assessment on the turnover of the inter-State sales was upheld, emphasizing the importance of correctly applying the relevant legal provisions in such cases.
4. Lastly, the judgment referred to judicial precedents to support the Tribunal's decision. The decisions of the Allahabad High Court in Hindustan Safety Glass Works (P.) Ltd. v. State of Uttar Pradesh [1974] 34 STC 209 and Central Food Storage v. Commissioner of Sales Tax [1977] 40 STC 529 were cited as supporting authorities. These precedents further strengthened the Tribunal's interpretation and application of the law in the present case. Ultimately, the tax revision case was dismissed, and costs were awarded to the prevailing party, highlighting the significance of legal clarity and adherence to statutory provisions in tax matters.
-
1991 (8) TMI 307
Issues Involved:
1. Interpretation of sub-item (xv) of item (iv) in section 14 of the Central Sales Tax Act, 1956, and item 2(xv) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957.
2. Taxability of M.S. wires drawn from M.S. wire rods already subjected to tax under the State Act.
3. Application of sections 14 and 15 of the Central Sales Tax Act, 1956, on the State's power to levy sales tax on declared goods.
4. Validity of the clarification issued by the Commissioner of Commercial Taxes, Karnataka, regarding the taxability of M.S. wires.
Detailed Analysis:
1. Interpretation of Sub-item (xv) of Item (iv) in Section 14 of the Central Sales Tax Act, 1956, and Item 2(xv) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957:
The petitioners contended that the interpretation of sub-item (xv) of item (iv) in section 14 of the Central Sales Tax Act, 1956 (Central Act) should be consistent with item 2(xv) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957 (State Act). Section 14 of the Central Act declares certain goods as having special importance in inter-State trade, restricting the State's power to tax these goods as per section 15 of the Central Act. The petitioners argued that M.S. wire rods and M.S. wires should be treated as a single taxable commodity under sub-item (xv), meaning that M.S. wires drawn from tax-paid M.S. wire rods should not be taxed again.
2. Taxability of M.S. Wires Drawn from M.S. Wire Rods Already Subjected to Tax Under the State Act:
The petitioners, who are dealers in M.S. wires, asserted that they purchase M.S. wire rods within Karnataka, which have already been taxed, and subsequently draw M.S. wires from these rods. They argued that these M.S. wires should not be taxed again under the State Act. The court examined whether the transformation of M.S. wire rods into M.S. wires constitutes the creation of a new taxable commodity. The court referred to the Supreme Court's decision in State of Tamil Nadu v. Pyare Lal Malhotra, which emphasized that a new commercial commodity emerging from a manufacturing process could be taxed separately. However, the court distinguished this case by noting that both M.S. wire rods and M.S. wires fall under the same sub-item (xv) of section 14 of the Central Act, and thus should not be treated as separate taxable commodities.
3. Application of Sections 14 and 15 of the Central Sales Tax Act, 1956, on the State's Power to Levy Sales Tax on Declared Goods:
The court noted that sections 14 and 15 of the Central Act aim to minimize the tax burden on declared goods by ensuring that goods falling under the same sub-item are treated as a single taxable commodity. The court referred to several Supreme Court decisions, including State of Punjab v. Chandu Lal Kishori Lal and State of Tamil Nadu v. Mahi Traders, which supported the view that goods falling within the same sub-item should not be taxed multiple times. The court concluded that M.S. wires drawn from tax-paid M.S. wire rods should not be taxed again, as they fall under the same sub-item (xv) of section 14 of the Central Act.
4. Validity of the Clarification Issued by the Commissioner of Commercial Taxes, Karnataka:
The court examined the conflicting clarifications issued by the Commissioner of Commercial Taxes, Karnataka. The earlier clarification in 1975 stated that M.S. wires drawn from tax-paid M.S. wire rods were not taxable, while a later clarification in 1987 stated the opposite. The court held that the earlier clarification, issued shortly after the amendment to section 14 of the Central Act, reflected the correct legal position. The court declared the 1987 clarification invalid and not reflective of the correct legal position.
Conclusion:
The court allowed the writ petitions, declaring that M.S. wires drawn from tax-paid M.S. wire rods cannot be taxed again under the State Act, in accordance with sections 14 and 15 of the Central Act. The court quashed any assessment orders contrary to this declaration and permitted the petitioners to file objections to any ongoing proceedings based on the earlier notices. The court emphasized the importance of minimizing the tax burden on declared goods and ensuring consistency in the interpretation of tax laws.
-
1991 (8) TMI 306
The High Court of Madras ruled that the purchase of turmeric by the assessee and its conversion into powder did not attract purchase tax under section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The Court held that powdered turmeric is only a changed form of the purchased turmeric and not consumed in the manufacture of other goods for sale. The Tribunal's decision was deemed erroneous, and the revision petition was allowed, quashing the assessment of purchase tax under section 7-A. No costs were awarded.
-
1991 (8) TMI 305
Issues:
1. Classification of ammonium nitrate under the Tamil Nadu General Sales Tax Act, 1959.
2. Interpretation of entry 21 and entry 138 of the First Schedule to the Act.
3. Correct tax rate applicable to the turnover of ammonium nitrate.
Analysis:
The High Court of Madras addressed the controversy in a tax revision concerning the classification of ammonium nitrate under the Tamil Nadu General Sales Tax Act, 1959. The main issue was whether ammonium nitrate should be taxed at 3½ per cent under entry 21 or at 8 per cent under entry 138 of the First Schedule to the Act for the assessment year 1978-79. The assessing officer and the Appellate Assistant Commissioner considered it taxable at 8 per cent under entry 138, while the assessee argued for 3½ per cent under entry 21. The Tribunal sided with the assessee's view.
The Court examined the historical evolution of entry 21 in the First Schedule, noting that "ammonium nitrate" was originally listed under "chemical fertilisers" but was later deleted from the entry. The Tribunal's error lay in failing to distinguish between "ammonium nitrate" and "calcium ammonium nitrate," which were classified as separate items in the original entry. As "ammonium nitrate" was not specifically included in entry 21 at the relevant time, it could not be taxed at 3½ per cent under that entry.
Regarding entry 138 of the First Schedule, which encompassed "dyes and chemicals other than those specifically mentioned," the Court found that "ammonium nitrate" fell under this entry as it was only a chemical and was not explicitly mentioned in the Schedule after being deleted from entry 21. Consequently, the assessing authority's decision to tax "ammonium nitrate" at 8 per cent under entry 138 was deemed appropriate.
In conclusion, the Court held that "ammonium nitrate" should be classified under entry 138 of the First Schedule and not under entry 21. Therefore, the Tribunal's order was set aside, and the decision of the assessing authority and the appellate authority was reinstated. As there was no representation from the respondent, no costs were awarded.
-
1991 (8) TMI 304
Issues Involved:
1. Levy of sales tax on pens costing less than Rs. 10 per piece.
2. Interpretation of Section 5(1) and Section 5(3)(a) of the Karnataka Sales Tax Act, 1957.
3. Legislative intent regarding the taxation of low-priced pens.
4. Validity of the reopening of assessment under Section 12-A of the Act.
5. Prospective versus retrospective application of tax exemption notifications.
Detailed Analysis:
1. Levy of Sales Tax on Pens Costing Less Than Rs. 10 Per Piece:
The petitioner, a registered dealer under the Karnataka Sales Tax Act, 1957, challenged the levy of sales tax under Section 5(1) on pens costing less than Rs. 10 per piece. The assessing authority initially exempted these pens from tax, but this decision was later reversed under Section 12-A, leading to the imposition of a 7% tax on the turnover of low-priced pens.
2. Interpretation of Section 5(1) and Section 5(3)(a) of the Karnataka Sales Tax Act, 1957:
Section 5(1) mandates that every dealer pay tax on their taxable turnover at a prescribed rate, which was 7% during the relevant period. Section 5(3)(a) specifies that certain goods listed in the Second Schedule are subject to a single-point tax at the first or earliest dealer level. Pens costing Rs. 10 and above were listed in the Second Schedule, subject to an 8% tax, but the schedule was silent on pens costing less than Rs. 10. Consequently, the court held that low-priced pens were taxable under Section 5(1).
3. Legislative Intent Regarding the Taxation of Low-Priced Pens:
The petitioner argued that the classification of pens into those costing Rs. 10 and above and those costing less was intended to exclude low-priced pens from taxation to benefit poorer consumers. However, the court found no legislative intent to permanently exempt low-priced pens from taxation. The court cited precedents, emphasizing that it cannot supply omissions in the law or interpret statutes based on supposed legislative intent when the language is clear and unambiguous.
4. Validity of the Reopening of Assessment Under Section 12-A of the Act:
The assessing authority initially exempted low-priced pens from tax, but this decision was reopened under Section 12-A, which allows for reassessment if turnover has escaped assessment. The court upheld the reopening, noting that the Commissioner of Commercial Taxes had clarified that low-priced pens were taxable under Section 5(1), as they were not included in the Second Schedule.
5. Prospective Versus Retrospective Application of Tax Exemption Notifications:
The petitioner contended that a notification issued on August 7, 1986, which exempted low-priced pens from tax, should reflect the legislative intent to exempt these pens from the beginning. However, the court noted that the notification was prospective and did not grant retrospective exemption. The court emphasized that it is not within its power to retrospectively apply exemptions unless explicitly stated by the Legislature.
Conclusion:
The court dismissed the revision petition, holding that low-priced pens were taxable under Section 5(1) of the Karnataka Sales Tax Act, 1957, as they were not covered by the Second Schedule. The court found no legislative intent to permanently exempt these pens from taxation and upheld the reopening of the assessment under Section 12-A. The prospective nature of the exemption notification issued on August 7, 1986, was also affirmed. The petition was dismissed without any order as to costs.
-
1991 (8) TMI 303
Issues Involved:
1. Whether section 25A of the Bihar Finance Act is ultra vires due to unguided, uncanalised, and arbitrary power delegated to the executive.
2. Whether the State Government was required to issue a fresh notification under the amended section 25A or if the notification dated 7th November 1984 remains in force.
3. Whether the rate of deduction specified in the notification is arbitrary.
4. Whether tax is payable during the execution of the work or only after the transfer of property in goods upon completion of the contract.
Issue-wise Detailed Analysis:
1. Ultra Vires Nature of Section 25A:
The petitioners challenged the vires of section 25A on the grounds that it delegates unguided and uncanalised power to the executive to fix the rate of sales tax deduction from bills or invoices without providing any guidelines. They argued that this contravenes section 15 of the Central Sales Tax Act (CST Act) as it does not exclude tax-paid "declared" goods, leading to double taxation. The court held that section 12 of the Bihar Finance Act provides the necessary guidelines for fixing the rate of tax, thus rejecting the argument of excessive delegation. However, the court found that section 25A conflicts with section 15 of the CST Act as it mandates tax deduction on declared goods already taxed at the first point, thus leading to double taxation. Consequently, section 25A was struck down.
2. Requirement of Fresh Notification:
The petitioners argued that no fresh notification was issued under the amended section 25A, and thus, the notification dated 7th November 1984 could not be relied upon. The court examined section 27 of the Bihar and Orissa General Clauses Act, 1917, which deals with the continuation of notifications issued under repealed or amended provisions. The court concluded that the notification dated 7th November 1984 continues to be in force despite the amendment, as the amendment did not constitute a complete repeal but a modification, thus disposing of the second issue.
3. Arbitrariness of the Rate of Deduction:
The petitioners contended that the 4% deduction rate specified in the notification dated 7th November 1984 is arbitrary, as the actual tax liability on the transfer of property in goods during the execution of works contracts is much lower. The court held that the deduction rate of 4% is not arbitrary, considering that the general tax liability on goods other than declared goods ranges between 8% and 11%, and on declared goods, it does not exceed 4%. Thus, the deduction rate was deemed reasonable and not arbitrary.
4. Tax Payability During Execution of Work:
The petitioners argued that the transfer of property in goods occurs only upon the completion and handover of the work, and thus, no tax should be deducted during the execution of the work. The court referred to Article 366(29-A) of the Constitution, which includes tax on the transfer of property in goods involved in the execution of a works contract. The court also cited the Supreme Court's decision in Builders Association of India v. Union of India, which stated that the property in goods used in construction passes to the owner when incorporated into the building. Therefore, the court concluded that tax is payable during the execution of the work as the transfer of property in goods occurs progressively.
Separate Judgments:
While the majority judgment struck down section 25A as ultra vires due to its conflict with section 15 of the CST Act, one judge, Satyabrata Sinha, J., provided a separate reasoning, agreeing with the operative portion but differing on some points. He emphasized the lack of guidelines and the arbitrary nature of the power conferred by section 25A, ultimately concurring with the majority to declare section 25A ultra vires. Another judge, Sachchidanand Jha, J., dissented, upholding the constitutionality of section 25A, arguing that section 12 provides sufficient guidelines and that section 25A is not in conflict with section 15 of the CST Act. He would have dismissed the writ petitions.
-
1991 (8) TMI 302
Issues Involved:
1. Legality of the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, on maida, ravva, atta, sujji, and bran.
2. Whether these products can be considered as "declared goods" under section 14 of the Central Sales Tax Act, 1956.
3. Applicability of Article 301 of the Constitution of India.
4. Relevance of previous judgments by the Supreme Court and High Courts.
Detailed Analysis:
1. Legality of the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957:
The petitioners, roller flour mills, challenged the levy of sales tax on maida, ravva, atta, sujji, and bran, arguing that it was illegal, unjust, and violated Articles 265, 286, and 19(1)(g) of the Constitution of India. They sought a declaration that the levy under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, was unlawful and requested a refund of the sales tax collected.
2. Whether these products can be considered as "declared goods" under section 14 of the Central Sales Tax Act, 1956:
The court examined section 14 of the Central Sales Tax Act, which lists goods of special importance in inter-State trade or commerce, including cereals like wheat. However, the by-products of wheat, such as maida, ravva, atta, sujji, and bran, are not mentioned in section 14. The court noted that while by-products of coal and iron are explicitly listed, no such mention is made for wheat by-products. Consequently, these by-products cannot be considered "declared goods" under the Central Act.
3. Applicability of Article 301 of the Constitution of India:
Article 301 guarantees the freedom of trade, commerce, and intercourse throughout India. The court emphasized that this principle underpins sections 14 and 15 of the Central Sales Tax Act, which aim to facilitate free trade by declaring certain goods as having special importance in inter-State commerce. However, since maida, ravva, atta, sujji, and bran are not listed as declared goods, their taxation under state law does not violate Article 301.
4. Relevance of previous judgments by the Supreme Court and High Courts:
The petitioners relied on the Supreme Court's decision in Alladi Venkateswarlu v. Government of Andhra Pradesh, which held that parched rice and puffed rice are "rice" within the meaning of the Andhra Pradesh General Sales Tax Act. However, the court distinguished this case, noting that the Supreme Court's decision was based on the absence of separate entries for parched and puffed rice. In contrast, maida, ravva, atta, and bran are specifically listed under the State Act.
The court also considered the decision in State of Andhra Pradesh v. Vayugundla Venkata Subbaiah & Sons, which treated ravva as "rice" based on the Supreme Court's reasoning. However, the court found this inapplicable as the current case involves distinct entries for wheat by-products.
Additionally, the court referred to Udata Narasimha Rao and Co. v. State of Andhra Pradesh, which concluded that ravva from wheat or rice and fried gram dhall are not declared goods under section 14 of the Central Sales Tax Act. The court agreed with this reasoning.
Lastly, the court examined Dhanbad Flour Mills v. State of Bihar, where the Patna High Court treated atta, maida, and sujji as "wheat." However, the court reiterated that the specific entries in the Andhra Pradesh Act justify treating these products separately for taxation purposes.
Conclusion:
The court held that the levy of sales tax under section 5 of the Andhra Pradesh General Sales Tax Act, 1957, on maida, ravva, atta, sujji, and bran is legal. The writ petition was dismissed, and no costs were awarded. An oral request for leave to appeal to the Supreme Court was refused, as no substantial question of law of general importance was found.
Writ petition dismissed.
-
1991 (8) TMI 301
Issues Involved:
1. Whether the doctrine of ejusdem generis applies to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Whether the product "Thermofoam" falls under entry 40(v) of the First Schedule to the Act and is exigible to a single point rate of tax.
Detailed Analysis:
Issue 1: Doctrine of Ejusdem Generis
The core issue revolves around whether the doctrine of ejusdem generis can be applied to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. This doctrine is a principle of statutory interpretation where general words following specific words are construed to include only items of the same type as those listed.
Arguments and Authorities Cited:
- Assessee's Argument: The assessee argued that the principle of ejusdem generis should apply, meaning the general term "other articles" in entry 40(v) should be restricted to items similar to those specifically listed in sub-entries (i) to (iv), which are items used for rest and comfort of the human body.
- Government's Argument: The Additional Government Pleader contended that sub-entries (i) to (iv) do not form a distinct category, and thus, the general term "other articles" should not be restricted.
Case Laws Referenced:
- Burmah Shell Oil Storage and Distributing Company of India Limited v. State of Madras: The court held that for the ejusdem generis rule to apply, there must be a distinct category formed by the specific words.
- Controller of Estate Duty v. Ramachandra Gounder: The Supreme Court emphasized that general words should be construed ejusdem generis only if they follow specific words forming a distinct genus.
- Siddeshwari Cotton Mills (P.) Ltd. v. Union of India: The court elaborated that the general words should be limited to the same class as the specific words if a distinct category can be identified.
- Mangalore Electric Supply Co. Ltd. v. Commissioner of Income-tax: The Supreme Court noted that the ejusdem generis rule should not be pushed too far and is merely a presumption.
- Sukhu Ram Tamrakar v. State of Madhya Pradesh: The Full Bench observed that the rule should be applied with caution and only if a distinct category is present.
- Rao and Company v. State of Karnataka: The court held that the rule does not apply if the specific words do not form a distinct category.
Court's Analysis:
The court concluded that the rule of ejusdem generis must be applied with caution and should not be pushed too far. It was observed that sub-entry (i) "sheets" could not be clubbed with sub-entries (ii), (iii), and (iv) to form a single category. Therefore, the sub-entries do not form a distinct category, and the rule of ejusdem generis does not apply to entry 40.
Issue 2: Classification of "Thermofoam"
The second issue is whether "Thermofoam" falls under entry 40(v) of the First Schedule to the Act and is thus subject to a single point rate of tax.
Tribunal's Views:
- 1981-82 Assessment Year: The Tribunal initially held that "Thermofoam" falls under entry 40(v) and is subject to a single point rate of tax, arguing that the term "synthetic foam" is broad and not confined to a specific class.
- 1979-80 Assessment Year: A later Tribunal held the opposite view, stating that "Thermofoam" does not fall under entry 40(v) as it is not used for rest and comfort of the human body, thus should be taxed at a multi-point rate.
Court's Analysis:
The court examined the product "Thermofoam" and its uses as described in the pamphlet issued by the assessee. It was concluded that "Thermofoam" is a synthetic foam and falls under the general term "other synthetic foam" in entry 40(v). Consequently, the product is subject to a single point rate of tax.
Conclusion:
The court held that the rule of ejusdem generis does not apply to entry 40 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. Consequently, "Thermofoam" falls under entry 40(v) and is exigible to a single point rate of tax. The order of the Tribunal for the assessment year 1979-80 was set aside, and the appeal for the assessment year 1981-82 was dismissed.
-
1991 (8) TMI 300
Issues:
1. Challenge to circular imposing tax on transferred import licences under the Karnataka Sales Tax Act, 1957.
2. Determination of whether import replenishment licences (REP licences) qualify as "goods" under the Act.
3. Interpretation of the definition of "goods" under the Karnataka Sales Tax Act, 1957.
4. Assessment of the nature of REP licences as movable property or actionable claims.
5. Analysis of the legal entitlement and transferability of REP licences.
Analysis:
The judgment addresses the challenge to a circular issued by the 1st respondent imposing tax on transferred import licences under the Karnataka Sales Tax Act, 1957. The petitioners, who are manufacturers and exporters, argue that REP licences issued based on their export performance are not "goods" under the Act. They contend that REP licences represent an actionable claim falling outside the definition of "goods" and cite the Supreme Court's decision in Anraj v. Government of Tamil Nadu to support their position. The petitioners assert that REP licences are not treated as goods by accountants and do not confer rights akin to lottery tickets, which were deemed goods in the Anraj case.
The judgment delves into the definition of "goods" under the Act, which encompasses all movable property except newspapers, actionable claims, stocks, shares, and securities. The petitioners argue that REP licences can be classified at best as actionable claims, as defined in the Transfer of Property Act. However, the court determines that REP licences, being permits granting the right to import goods and conferring a competitive advantage, qualify as valuable rights in relation to goods and hence constitute movable property. The court concludes that REP licences are not merely beneficial interests but are freely transferable and thus fall within the definition of "goods" under the Act.
The court rejects the petitioners' contention that REP licences are not goods based on their commercial value and transferability. It emphasizes that the legal nature of the right to import goods under the licence is substantial and distinguishes it from ephemeral rights like lottery participation. The court holds that REP licences are merchandise for the purposes of the Act and are subject to tax under section 5(1) of the Karnataka Sales Tax Act, 1957. The judgment dismisses the challenge to the circular, affirming that REP licences are indeed considered goods and liable to taxation as per legislative policy.
In conclusion, the court upholds the imposition of tax on transferred import licences and dismisses the writ petitions challenging the circular. The judgment clarifies that REP licences are deemed goods under the Act due to their nature as valuable rights enabling the importation of goods and conferring a competitive advantage in the commercial market.
-
1991 (8) TMI 299
Issues: Interpretation of Notification dated 20th May, 1976 for taxation of station wagons under U.P. Sales Tax Act.
The judgment of the Allahabad High Court dealt with a writ petition seeking to quash assessment orders for the assessment years 1976-77 and 1977-78, imposing tax on station wagons at 12% under the U.P. Sales Tax Act. The petitioner argued that station wagons should be taxed at 7% as "motor cars" under entry 62(a) of the Notification dated 20th May, 1976. The petitioner contended that station wagons were akin to motor cars and should not be taxed at the higher rate of 12%. The court analyzed definitions from the Motor Vehicles Act, 1939, but concluded that these definitions did not specifically include station wagons. The court also examined dictionary definitions of "bus," "motor bus," "motor car," and "station wagon" to determine the correct classification for tax purposes. The court found that station wagons did not fall under the definition of "motor bus" but rather were described as automobiles with folding seats behind the driver. The court referred to a previous judgment where it was held that station wagons did not qualify as motor cars in common parlance and were rightly taxed at 12%. However, the court noted that the assessing authority had not determined whether station wagons should be classified as "motor buses" under entry 62(b) of the notification. Therefore, the court set aside the assessment orders and remanded the case to the authority to decide afresh after considering evidence on whether station wagons could be treated as "motor buses" under the notification. The court emphasized the importance of determining the common parlance understanding of the term "station wagon" for proper classification under the tax notification. The writ petition was allowed, and the case was remanded for fresh consideration.
-
1991 (8) TMI 298
Issues Involved:
1. Inclusion of loading charges in the sale price.
2. Interpretation of "sale price" under Section 2(h) of the Central Sales Tax Act, 1956.
3. Applicability of the Supreme Court's decision in Hindustan Sugar Mills Ltd. v. State of Rajasthan.
4. Distinction between different types of sales contracts (f.o.r. basis).
5. Relevance of the exclusion clause in Section 2(h) regarding freight and delivery costs.
Detailed Analysis:
1. Inclusion of Loading Charges in the Sale Price:
The primary issue is whether the loading charges incurred before the delivery of "Shahabad stones" to the common carrier should be included in the sale price. The assessing authority, first appellate authority, and the Appellate Tribunal all held that these charges were pre-sale expenses and hence formed part of the sale price. The Appellate Tribunal specifically relied on the Supreme Court's decision in Hindustan Sugar Mills Ltd. v. State of Rajasthan, which stated that "freight and handling charges in respect of the cost of transportation of goods before delivery of the goods will form part of sale price."
2. Interpretation of "Sale Price" under Section 2(h) of the Central Sales Tax Act, 1956:
Section 2(h) defines "sale price" as the amount payable to a dealer as consideration for the sale of any goods, inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof, but exclusive of the cost of freight or delivery if such cost is separately charged. The petitioner contended that the cost of freight or delivery should be excluded from the sale price, arguing that the delivery of goods to the common carrier was incidental to the contract of sale.
3. Applicability of the Supreme Court's Decision in Hindustan Sugar Mills Ltd. v. State of Rajasthan:
The Supreme Court's decision in Hindustan Sugar Mills Ltd. was pivotal in this case. The Supreme Court had held that the freight charges, even if separately mentioned, formed part of the sale price if they were part of the consideration for the sale. The Court distinguished between different scenarios, including those where the sale price was statutorily fixed and included freight charges, and where the dealer's obligation was to deliver goods to a destination railway station at his expense.
4. Distinction Between Different Types of Sales Contracts (f.o.r. Basis):
The Supreme Court identified three distinct situations:
1. The dealer delivers goods at a specific place, and the sale price includes all expenses incurred until delivery.
2. The contract is f.o.r. destination railway station, where the dealer is responsible for delivering goods to the destination at his expense.
3. A contract that superficially resembles an f.o.r. destination contract but places the responsibility for transportation and freight on the purchaser.
The Court emphasized that only the third category would attract the exclusion clause in Section 2(h).
5. Relevance of the Exclusion Clause in Section 2(h) Regarding Freight and Delivery Costs:
The exclusion clause in Section 2(h) specifies that the cost of freight or delivery is excluded from the sale price if separately charged. However, the Supreme Court clarified that this exclusion applies only to the second part of the definition of "sale price." If the freight cost is part of the sale consideration, the exclusion clause does not apply. The Appellate Tribunal did not have the benefit of the petitioner's counsel during the hearing, necessitating a re-examination of facts in light of the Supreme Court's decision.
Conclusion:
The Karnataka High Court set aside the order of assessment, which included the cost of freight/delivery in the taxable turnover, and remanded the matter to the assessing authority for reconsideration. The assessing authority was directed to re-evaluate the issue in light of the Supreme Court's decision and the observations made in this judgment. The petitioner was instructed to be present before the assessing authority for further proceedings.
Final Judgment:
The revision petition was allowed, and the case was remanded to the assessing authority for fresh determination. The order of assessment, as affirmed by the appellate authority and the Appellate Tribunal, was set aside to the extent of the inclusion of the cost of freight in the taxable turnover. The petitioner was to appear before the assessing authority on 30th September 1991.
-
1991 (8) TMI 297
Issues:
1. Deletion of penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 by the Tamil Nadu Sales Tax Appellate Tribunal.
2. Suppression of sales and levy of penalty based on best judgment assessment.
Analysis:
The case involved the deletion of a penalty levied under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 by the Tamil Nadu Sales Tax Appellate Tribunal. The dispute arose when the assessing authority added an amount to the taxable turnover due to alleged suppression of sales and levied a penalty of Rs. 19,239 under section 12(3) of the Act. The Appellate Assistant Commissioner reduced the addition to Rs. 58,110 and the penalty to Rs. 5,000, based on the actual suppressed turnover. The Tribunal upheld the addition to the turnover but deleted the penalty, leading to a revision before the High Court.
The High Court analyzed the facts, noting the recovery of a pocket note book with entries of premium received by the assessee, which was not included in the turnover. The Court emphasized that the levy of penalty under section 12(3) is not automatic with best judgment assessment and requires proper exercise of discretion by the assessing authority. Referring to precedent, the Court highlighted that inability to explain certain documents does not automatically imply wilful suppression. The Court considered the explanation provided by the assessee, which was not accepted by the authorities, but deemed relevant for assessing the discretion exercised by the Tribunal in deleting the penalty.
Ultimately, the High Court found that the Tribunal had properly and judiciously exercised its discretion in deleting the penalty, considering the facts and circumstances of the case. The Court observed that the Tribunal's decision was not perverse and did not warrant interference. Consequently, the High Court dismissed the revision, affirming the Tribunal's order to delete the penalty under section 12(3) of the Act. The Court concluded that in the absence of wilful suppression of turnover by the assessee, the Tribunal's decision was upheld, and no costs were awarded.
-
1991 (8) TMI 296
Issues:
- Rejection of revision petitions by the Deputy Commissioner under section 32 of the Tamil Nadu General Sales Tax Act, 1959, due to an amendment taking away suo motu powers.
- Contention regarding the revisional authority's obligation to consider revision petitions filed before the amendment.
- Application of the principle of audi alteram partem and principles of natural justice in the decision-making process.
Analysis:
The petitioners, a society assessed for tax by the Deputy Commercial Tax Officer, challenged the rejection of their revision petitions by the Deputy Commissioner under section 32 of the Tamil Nadu General Sales Tax Act, 1959, due to an amendment stripping the Deputy Commissioner's suo motu powers. The petitioners had filed revision petitions before the amendment, believing the principles set by the Sales Tax Appellate Tribunal would be followed. The rejection of the revision petitions solely based on the subsequent amendment was deemed unsustainable in law. Citing a Full Bench decision, it was argued that the revisional authority should have considered the petitions on their merits, irrespective of the amendment affecting suo motu powers.
The court emphasized that the revisional power under section 32 could not be denied based on a subsequent amendment withdrawing such powers. The Deputy Commissioner, having the authority to revise orders before the amendment, should have entertained the revision petitions filed by the petitioners pre-amendment. The failure to provide an opportunity for the petitioners to present their case and the absence of notice violated the principles of natural justice, specifically the audi alteram partem rule. Consequently, the impugned order was quashed, directing the Deputy Commissioner to entertain and decide the revision petitions on their merits in line with the Sales Tax Appellate Tribunal's legal position on similar matters.
Therefore, the court allowed the writ petitions, emphasizing the importance of affording parties the opportunity to be heard and directing the Deputy Commissioner to reconsider the revision petitions in accordance with the law established by the Sales Tax Appellate Tribunal.
-
1991 (8) TMI 295
Issues Involved:
1. Legality of search and seizure conducted on January 24, 1990.
2. Issuance of road permits and declaration forms.
3. Legality of garnishee notices and demand for security.
4. Retention and return of seized books and documents.
5. Prohibition on the use of seized materials for assessment.
Issue-wise Detailed Analysis:
1. Legality of Search and Seizure:
The applicants challenged the search and seizure conducted on January 24, 1990, as illegal, invalid, and without authority. The respondents justified the search and seizure, citing discrepancies between the sales returns and the actual sales records. The Tribunal found that the search and seizure were conducted in accordance with sections 14(3) and 14(4) of the Bengal Finance (Sales Tax) Act, 1941. It was noted that the respondents had reasons to suspect tax evasion based on the discrepancies observed during their visits on January 17 and January 22, 1990. The Tribunal concluded that the search and seizure were not violative of the Act and were justified.
2. Issuance of Road Permits and Declaration Forms:
The applicants sought directions for the issuance of road permits and declaration forms. The Tribunal noted that interim orders had already been passed, directing the respondents to issue road permits and declaration forms within specified timeframes. Since no arguments were advanced regarding non-compliance with these interim orders, the Tribunal found no need for further directions on this issue.
3. Legality of Garnishee Notices and Demand for Security:
The applicants challenged the garnishee notices issued on January 25, 1990, and the demand for security under section 7(4a)(i) of the Act. The Tribunal quashed the garnishee notices as the learned State Representative did not oppose their setting aside. However, the Tribunal upheld the demand for security, stating that the applicants were given an opportunity to be heard before the amount of security was fixed. The demand for security was deemed necessary for safeguarding State revenue and ensuring proper payment of tax.
4. Retention and Return of Seized Books and Documents:
The Tribunal held that the retention of seized books and documents beyond the statutory period without proper sanction and communication of such sanction to the applicants was improper and unauthorized. It was noted that the orders for extended retention were not communicated to the applicants within the prescribed period. Consequently, the Tribunal directed the respondents to return the seized books and documents to the applicants forthwith.
5. Prohibition on the Use of Seized Materials for Assessment:
The applicants sought an order prohibiting the respondents from using the seized materials for assessment purposes. The Tribunal referred to the Supreme Court's decisions in Pooran Mal v. Director of Inspection and Partap Singh v. Director of Enforcement, which held that the illegality of a search does not vitiate the evidence collected during the search. The Tribunal concluded that even if the searches were assumed to be illegal, the materials seized could still be used by the sales tax authorities for assessment purposes. Therefore, the prayer for prohibition on the use of seized materials was rejected.
Conclusion:
The applications were partly allowed. The Tribunal directed the respondents to return the seized books and documents to the applicants. The garnishee notices were quashed, but the demand for security was upheld. No further directions were issued regarding the issuance of road permits and declaration forms. The Tribunal rejected the prayer for prohibition on the use of seized materials for assessment. No order was made as to costs in any of the four cases.
-
1991 (8) TMI 294
The High Court of Madras dismissed the appeal filed by the assessee against the Joint Commissioner's order to revise the assessment under section 7-A of the Tamil Nadu General Sales Tax Act, 1959. The dispute was regarding the purchase turnover of lime shell, which was processed into lime powder. The court held that the lime shell was consumed in the manufacturing process, losing its identity, and therefore, the purchase turnover was rightly brought to assessment under section 7-A. The appeal was dismissed, and no costs were awarded.
-
1991 (8) TMI 293
Issues Involved:
1. Effective date of registration under the Central Sales Tax Act, 1956.
2. Effective date of registration under the Delhi Sales Tax Act, 1975.
3. Dealer's liability to pay tax and registration requirements.
4. Interpretation of relevant provisions of the Central Sales Tax Act and the Delhi Sales Tax Act.
Issue-wise Detailed Analysis:
1. Effective Date of Registration under the Central Sales Tax Act, 1956:
The primary issue was determining the effective date of registration for the dealer under the Central Sales Tax Act, 1956. The dealer argued that the registration should be effective from 10th June, 1976, when the goods were dispatched from Ahmedabad. The assessing authority, however, made the registration effective from 21st June, 1976, when the dealer took delivery of the goods. The Tribunal decided that the registration should be effective from 17th June, 1976, the date of the application for registration.
The Court examined Section 7 of the Central Sales Tax Act, which mandates that every dealer liable to pay tax must apply for registration within a prescribed time. Rule 4 of the Central Sales Tax (Registration and Turnover) Rules, 1957, requires the application to be made within 30 days from the date the dealer becomes liable to pay tax. Section 3 of the Act specifies that a sale or purchase of goods in the course of inter-State trade or commerce occurs if it occasions the movement of goods from one State to another.
The Court concluded that the dealer's liability to pay tax and the application for registration are coterminous. Therefore, the registration certificate should relate back to the date of the application if the application is made within 30 days of incurring the liability to pay tax. However, since the dealer incurred the liability to pay tax on 21st June, 1976, the registration certificate should take effect from that date.
2. Effective Date of Registration under the Delhi Sales Tax Act, 1975:
The Court also considered the effective date of registration under the Delhi Sales Tax Act, 1975. Section 14 of the Delhi Sales Tax Act is similar to Section 7 of the Central Act and mandates that no dealer shall carry on business unless registered. Rule 15(5) of the Rules under the Delhi Act prescribes a 30-day period for registration from the date the dealer becomes liable to pay tax.
Section 3 of the Delhi Sales Tax Act imposes the liability to pay tax on dealers who become liable or are registered under the Central Sales Tax Act. The Court concluded that the dealer's liability to pay tax and the requirement to get registered are coterminous under the Delhi Act as well. Therefore, the registration certificate under the Delhi Act should also take effect from 21st June, 1976, the date the dealer incurred the liability to pay tax.
3. Dealer's Liability to Pay Tax and Registration Requirements:
The Court emphasized that a dealer's liability to pay tax and the requirement to get registered are simultaneous. Section 7(1) of the Central Sales Tax Act and Section 14 of the Delhi Sales Tax Act mandate that a dealer must apply for registration within a prescribed time from the date of incurring liability to pay tax. The Court noted that a harmonious construction of the provisions indicates that the registration certificate should take effect from the date of application if filed within the prescribed time.
4. Interpretation of Relevant Provisions of the Central Sales Tax Act and the Delhi Sales Tax Act:
The Court interpreted the relevant provisions of the Central Sales Tax Act and the Delhi Sales Tax Act to determine the effective date of registration. The Court noted that Section 7 of the Central Act and Section 14 of the Delhi Act mandate registration for dealers liable to pay tax. Rule 4 of the Central Rules and Rule 15(5) of the Delhi Rules prescribe a 30-day period for applying for registration. The Court concluded that the registration certificate should take effect from the date of application or the date of incurring liability to pay tax, whichever is later.
Conclusion:
The Court held that the registration certificate under both the Central Sales Tax Act and the Delhi Sales Tax Act should take effect from 21st June, 1976, the date the dealer incurred the liability to pay tax. The Tribunal's decision to make the registration effective from 17th June, 1976, was not sustained. The question referred to the Court was answered in the negative, in favor of the sales tax authorities, with no order as to costs.
Reference Answered in the Negative.
-
1991 (8) TMI 292
What in service jurisprudence has come to be known as "sealed cover procedure"
What is the date from which it can be said that disciplinary/criminal proceedings are pending against an employee?
What is the course to be, adopted when the employee is held guilty in such proceedings if the guilt merits punishment other than that of dismissal?
To what benefits an employee who is completely or partially exonerated is entitled to and from which date?'
Held that:- Allow the appeal and set aside the finding of the Tribunal. If the Tribunal's finding is 'accepted it would mean that by giving him the Selection Grade w.e.f. July 30, 1986 he would stand rewarded notwithstanding his misconduct for the .earlier period for which disciplinary proceedings were pending at the time of the meeting of the DPC and for which again he was visited with a penalty.
-
1991 (8) TMI 291
Demand notice under section 156 - Held that:- Appeal dismissed. No reason to grant leave in these petitions which are, consequently, dismissed. We should, however, like to observe that, to avoid unnecessary controversies like this, the Department should, in future, adopt the salutary and useful practice of incorporating the entire tax calculations in I. T. N. S.. 65 Form itself or, in the alternative, make the I. T. N. S. 150 an annexure to form part of the assessment order, have it signed by the Income-tax Officer and have it served on the assessee along with I. T. N. S. 65. That will enable the assessee to have the full details necessary to enable him to file a proper appeal, if needed, against the order and demand.
-
1991 (8) TMI 290
Whether any action under Section 340 of the Code of Criminal Procedure is to be initiated or not?
Whether the laws are so petrified as to unable to respond to the challenges made will be dealt with in detail in our main judgment?
Held that:- Directions of Mr. Justice M.K. Chawla calling upon the CBI and the State to show cause as to why the proceedings initiated on the strength of the First Information Report dated 22.1.90 be not quashed, cannot be sustained. In the result, we agree with’ the first part of the Order dated 19.12.90 of Mr. Justice M.K. Chawla holding that Mr. H.S. Chowdhary and other intervening parties have no locus standi. We, however, set aside the second part of the impugned order whereby he has taken suo moto cognizance and issued show cause notice to the State and CBI and accordingly the Show cause notice issued by him is quashed. In view of the above conclusions, all the proceedings initiated in pursuance of the First Information Report dated 22.1.90 relating to Crime No. RCI(A)/90-ACU-IV on the file of the Special Judge, Delhi including the issuance of the letter rogatory/request as they stand now, remain unaffected and they can be proceeded with in accordance with law.
........
|
9911796707
