|
Advanced Search Options
Case Laws
Showing 61 to 80 of 317 Records
-
1991 (7) TMI 330
Issues Involved:
1. Classification of "water for injection" under the Gujarat Sales Tax Act, 1969.
2. Binding nature of a previous determination order under the Bombay Sales Tax Act, 1959.
3. Prospective effect of the Deputy Commissioner's determination order under the Gujarat Sales Tax Act, 1969.
Issue-Wise Detailed Analysis:
1. Classification of "Water for Injection":
The primary issue was whether "water for injection" fell under entry 26(1) of Schedule II, Part A, or entry 13 of Schedule I of the Gujarat Sales Tax Act, 1969. The assessee argued that "water for injection" should be classified as water under entry 13, which would make it tax-free. The Tribunal, however, held that "water for injection" fell under entry 26(1) as it is used for medicinal purposes. The Court upheld this view, stating that the classification should be based on the "popular parlance" test established by the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer, which requires interpreting terms as understood by common people. The Court concluded that "water for injection" is not water simpliciter but medicinal water, thus falling under entry 26(1).
2. Binding Nature of Previous Determination Order:
The second issue was whether the previous determination order dated March 25, 1964, under the Bombay Sales Tax Act, 1959, was binding on the Sales Tax Department for all time. The Tribunal held that the previous determination order did not have finality for all time and was not binding on the Department. The Court agreed, referencing the Supreme Court's decision in Doma Sao Mohanlal v. State of Bihar, which stated that each assessment period is distinct and a decision in one period does not operate as res judicata for another period. The Court also cited Commissioner of Sales Tax v. Halward Engineers, supporting the view that subsequent determination orders could be made even if there was a previous order.
3. Prospective Effect of Deputy Commissioner's Determination Order:
The third issue was whether the Deputy Commissioner was justified in not giving prospective effect to his determination order under section 62 of the Gujarat Sales Tax Act, 1969. The Tribunal held that the Deputy Commissioner rightly exercised discretion in not giving prospective effect, aligning the effective date with the Government notification dated April 1, 1976, which provided a concessional tax rate for "water for injection." The Court upheld this view, noting that the notification was issued in response to recommendations by the Hathi Committee, which required special treatment for certain essential drugs. Therefore, the Tribunal's decision to apply the determination from the date of the notification was justified.
Conclusion:
The Court answered all three questions in the affirmative, ruling against the assessee and in favor of the Revenue. The classification of "water for injection" under entry 26(1) was upheld, the previous determination order was not considered binding for all time, and the prospective effect of the Deputy Commissioner's order was deemed appropriate from the date of the relevant Government notification.
-
1991 (7) TMI 329
The High Court of Andhra Pradesh quashed three letters issued by the first respondent as they were deemed illegal and without jurisdiction. The court allowed the writ petition partially and stated that the first respondent could take appropriate action for alleged tax evasion by the petitioner. The jurisdiction of the first respondent to issue a notice dated June 12, 1991, was questioned, and it was determined that any objections raised by the petitioner would be considered. The writ petition was partly allowed with no costs imposed.
-
1991 (7) TMI 328
Issues Involved:
1. Reopening of assessments under the Punjab General Sales Tax Act, 1948.
2. Classification of cotton-seed oil as edible or non-edible.
3. Validity of the orders passed by the Assistant Excise and Taxation Commissioner and the Sales Tax Tribunal.
4. Applicability of definitions from other statutory provisions.
5. Invocation of Section 21 of the 1948 Act.
6. Availability of alternative remedies under the Act.
Detailed Analysis:
1. Reopening of Assessments under the Punjab General Sales Tax Act, 1948:
The petitioners, engaged in the grinding of cotton-seeds and sale of cotton-seed oil, were initially assessed for sales tax on the premise that they were producing edible oil. These assessments were later suo motu reopened by the Regional Authority under the Punjab General Sales Tax Act, 1948, leading to the issuance of separate notices for different assessment years. The petitioners challenged these notices and the subsequent orders creating additional tax liabilities and interest.
2. Classification of Cotton-Seed Oil as Edible or Non-Edible:
The core issue was whether the cotton-seed oil produced by the petitioners was edible. The Assistant Excise and Taxation Commissioner found that the oil was not edible as it was produced in a crude form without the removal of free fatty acids and impurities. The oil was deemed edible only after further refining and purifying processes. The Tribunal upheld this view, stating that the oil sold by the petitioners was washed cotton-seed oil, not fit for direct human consumption.
3. Validity of the Orders Passed by the Assistant Excise and Taxation Commissioner and the Sales Tax Tribunal:
The Assistant Excise and Taxation Commissioner's findings were detailed, addressing various aspects such as the process of washing the oil with caustic soda and the necessity of further refining to render it edible. The Tribunal, in dismissing the revision petitions, emphasized that the washed cotton-seed oil did not meet the standards of edibility as per the Prevention of Food Adulteration Rules, 1955.
4. Applicability of Definitions from Other Statutory Provisions:
The petitioner's counsel argued that in the absence of a definition in the Punjab General Sales Tax Act, the meaning given to "edible oil" under other statutory provisions should be adopted. Reference was made to the Pulses, Edible Oil Seeds and Edible Oils (Storage Control) Order, 1977, and the Agricultural Produce (Grading and Marking) Act, 1937, which described washed cotton-seed oil as edible. The court, however, noted that the Prevention of Food Adulteration Act, 1954, and its rules provided a stringent standard for edibility, which the petitioner's product did not meet.
5. Invocation of Section 21 of the 1948 Act:
Section 21 allows the Commissioner to call for the record of any proceedings to satisfy himself as to the legality or propriety of such proceedings. The court found that the original assessments were neither illegal nor improper, and the reopening of settled assessments under Section 21 was unwarranted. The court highlighted that the petitioner had not concealed any information, and the original assessment was based on available evidence.
6. Availability of Alternative Remedies under the Act:
The respondents argued that the petitioners had an effective alternative remedy under Section 22(1) of the 1948 Act. The court, however, noted that the view of the authorities was apparent from the orders, and submitting to the jurisdiction of the departmental authorities would not serve any useful purpose. Therefore, the objections regarding alternative remedies were not sustained.
Conclusion:
The writ petitions were allowed, and the impugned orders and notices were quashed. The court held that the reopening of assessments was not justified, and the classification of the oil as non-edible was not supported by the evidence. The parties were left to bear their own costs.
-
1991 (7) TMI 327
Issues:
1. Levy of additional sales tax for the assessment year 1977-78.
2. Levy of surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971, for the assessment year 1977-78.
Detailed Analysis:
1. The assessee challenged the levy of additional sales tax for the assessment year 1977-78 in Tax Case (Revision) No. 1290 of 1981. The assessing authority had levied additional tax at 0.7 per cent on the taxable turnover under the Tamil Nadu Additional Sales Tax Act, 1970. The assessee contended that the goods should be treated as "declared goods," but the assessing authority upheld the levy. The court upheld the assessing authority's decision, stating that no fault could be found with the levy of tax. The court rejected the pleas raised by the assessee, similar to those in Tax Case (Revision) No. 1291 of 1981, and dismissed Tax Case (Revision) No. 1290 of 1981.
2. In Tax Case (Revision) No. 1291 of 1981, the assessee contested the levy of surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971, for the assessment year 1977-78. The assessing authority had determined the surcharge as per the provisions of the Act, and the appeals before the appellate authority and the Tribunal were unsuccessful. The assessee argued that the surcharge should only be levied if the transaction was related to "declared goods," but this plea was not accepted by the authorities. The court held that the liability to levy surcharge arises when the liability to pay tax under the Tamil Nadu General Sales Tax Act, 1959, has been determined. As the goods were not treated as "declared goods" during the assessment proceedings, the benefit of the proviso to section 3(1) of the Tamil Nadu Sales Tax (Surcharge) Act was not available to the assessee. The court concluded that the orders of the authorities below did not warrant interference, and Tax Case (Revision) No. 1291 of 1981 was rejected.
In summary, both tax revision cases challenging the levy of additional sales tax and surcharge were dismissed by the court, upholding the decisions of the assessing authority, appellate authority, and the Tribunal.
-
1991 (7) TMI 326
Issues Involved:
1. Whether form 25 declaration conclusively proves the purchaser is the last purchaser under section 5(1) of the Kerala General Sales Tax Act, 1963.
2. Validity of sales transactions covered by form 25 declarations for the assessment years 1983-84 and 1984-85.
3. Registration status and business activities of Janatha Enterprises, Jyothi Traders, and Bhaskar Traders.
4. The obligation of the assessing authority to verify the genuineness of transactions covered by form 25 declarations.
5. The impact of the cancellation of registration certificates on form 25 declarations.
6. The validity period of registration certificates under section 14 of the Kerala General Sales Tax Act.
Detailed Analysis:
1. Form 25 Declaration and Last Purchaser Status:
The primary issue was whether the form 25 declaration conclusively proves that the purchaser is the last purchaser under section 5(1) of the Kerala General Sales Tax Act, 1963. The court held that form 25 declarations should not be treated as providing conclusive proof of the genuineness of the transactions covered by them. The assessing authority must enquire into the genuineness of the transactions before accepting the form 25 declaration and making the assessment.
2. Validity of Sales Transactions for 1983-84 and 1984-85:
For the year 1983-84, the assessee sold pepper to Janatha Enterprises, which was covered by a form 25 declaration. For 1984-85, sales to Janatha Enterprises, Jyothi Traders, and Bhaskar Traders were also covered by respective form 25 declarations. The assessing authority was not satisfied with the genuineness of these transactions and issued pre-assessment notices, which led to the inclusion of these sales in the taxable turnover. The Tribunal, however, directed the assessing authority to redo the assessments, finding that the assessee was not the last purchaser.
3. Registration Status and Business Activities:
The court noted that Janatha Enterprises and Jyothi Traders did not have the requisite registration during 1984-85. Bhaskar Traders was found to be dealing only in groceries, which raised doubts about their transactions in pepper. The court emphasized that the registration status of these entities at the time of the transactions needed to be verified.
4. Obligation of the Assessing Authority:
The court highlighted that the assessing authority must verify the genuineness of transactions covered by form 25 declarations. This includes possibly requisitioning the services of counterparts in the jurisdiction of the purchaser and conducting an enquiry. The burden of proving that a transaction is not liable to tax lies on the dealer.
5. Impact of Cancellation of Registration Certificates:
The court referred to the Division Bench ruling in Deputy Commissioner of Sales Tax v. Debi Prasad Shyam Sunder & Sons, stating that the cancellation of a registration certificate subsequent to the issuance of a form 25 declaration does not invalidate the declaration if the dealer was registered at the time of the transaction.
6. Validity Period of Registration Certificates:
The court examined sub-sections (5) and (7) of section 14 of the Kerala General Sales Tax Act, concluding that a registration certificate is valid for one year and must be renewed annually. Failure to renew within the prescribed period results in the certificate's invalidity, and a fresh certificate must be obtained.
Conclusion:
The court set aside the assessment order and the orders of the appellate authorities, directing the assessing authority to redo the assessment for 1984-85, keeping in view the principles stated in the judgment. The assessment for 1983-84 was confirmed, while the assessment for 1984-85 was remanded for de novo consideration. The exemptions already granted were not to be reopened. The petitions were allowed with no costs.
-
1991 (7) TMI 325
Issues Involved:
1. Applicability of Section 35(1)(b) of the Bombay Sales Tax Act, 1959.
2. Estoppel from denying genuineness of sales.
3. Disallowance of deductions under Section 7(2)(iii) of the Bombay Sales Tax Act, 1959.
4. Applicability of Section 7(3) of the Bombay Sales Tax Act, 1959, and Section 9(4) of the Gujarat Sales Tax Act, 1969, to sales made to unlicensed dealers.
Detailed Analysis:
Issue 1: Applicability of Section 35(1)(b) of the Bombay Sales Tax Act, 1959
The Tribunal held that the applicant-firm suppressed material particulars relating to sales made to M/s. Vijay Traders. Consequently, the provisions of Section 35(1)(b) of the Bombay Sales Tax Act, 1959, were rightly invoked by the sales tax authorities, making the limitation of eight years applicable. The High Court affirmed this view, recognizing that the dealer's actions justified the extended limitation period.
Issue 2: Estoppel from Denying Genuineness of Sales
The Tribunal found that the applicant-firm was estopped from denying the genuineness of sales made to M/s. Vijay Traders, as evidenced by the returns filed by it. The dealer could not later contend that such transactions were mere "havala transactions" or accommodation sales. The High Court upheld this finding, stating that the dealer was bound by its earlier declarations and could not contradict them.
Issue 3: Disallowance of Deductions under Section 7(2)(iii) of the Bombay Sales Tax Act, 1959
Given the Tribunal's findings on the genuineness of sales, it held that deductions under Section 7(2)(iii) of the Bombay Sales Tax Act, 1959, were rightly disallowed. The High Court agreed, noting that the disallowance was justified based on the established facts and the Tribunal's interpretation of the law.
Issue 4: Applicability of Section 7(3) of the Bombay Sales Tax Act, 1959, and Section 9(4) of the Gujarat Sales Tax Act, 1969
The Tribunal ruled that if a licensed dealer made the first sale of declared goods to a dealer not holding a license, the protection under Section 7(3) of the Bombay Sales Tax Act, 1959, read with Section 9(4) of the Gujarat Sales Tax Act, 1969, was not available. The High Court concurred, stating that the dealer, being the last licensed dealer who sold goods to unlicensed dealers, was rightly assessed to tax. The Court rejected the notion of a "second last dealer," emphasizing that the tax was correctly levied on the last dealer in the chain.
Conclusion:
The High Court answered all the questions referred to it in the affirmative, against the assessee and in favor of the Revenue. The Court upheld the Tribunal's findings and the applicability of the relevant sections of the Bombay and Gujarat Sales Tax Acts, confirming that the dealer was liable for the assessed taxes. The reference was answered in the affirmative with no order as to costs.
-
1991 (7) TMI 324
The High Court of Punjab and Haryana ruled that electric fans and electric presses are considered electrical goods under Entry 17 of Schedule A of the Punjab General Sales Tax Act, 1948. The court applied the "common parlance" rule in interpreting the term "electrical goods." The judgment favored the Revenue and there was no order as to costs. The reference was answered in the affirmative.
-
1991 (7) TMI 323
Issues:
1. Classification of xerox machine under relevant tax entry.
2. Jurisdiction of the Tribunal in deciding the appeal.
3. Interpretation of relevant tax entries and application to xerox machines.
Detailed Analysis:
1. The case involved the classification of xerox machines for tax purposes under different entries of the Gujarat Sales Tax Act, 1969. The applicant-dealer contended that the xerox machines should be classified under entry 16 or entry 13, or alternatively under entry 79. The Tribunal concluded that the xerox machines fell under entry 79, which covers duplicating machines. The Tribunal relied on its previous decision and literature references to establish that xerox machines are duplicating machines. The Court upheld the Tribunal's decision, emphasizing that the primary function of a xerox machine is to make copies, regardless of the method used, and thus falls under the category of duplicating machines.
2. The Tribunal's jurisdiction in deciding the appeal was challenged by the applicant-dealer. However, the Court affirmed that the Tribunal had the authority to decide the appeal under section 65 of the Act. The Court highlighted that the appellate authority has the discretion to pass orders it deems just and proper within the scope of the Act. As long as the exercise of power is for the purpose of the Act and not influenced by extraneous considerations, the Tribunal's decision-making process was deemed appropriate.
3. The interpretation of the relevant tax entries, specifically entry 75 and entry 79, was crucial in determining the classification of xerox machines. The Court analyzed the functions and definitions of xerox machines in comparison to the descriptions in the tax entries. It was established that the xerox machines, despite having capabilities to enlarge or contract copies, are fundamentally copying machines falling under entry 79 as duplicating machines. The Court rejected arguments based on technical meanings or advertising distinctions, emphasizing that the common parlance test aligned with the technical and dictionary meanings in this case. Additionally, the Court dismissed claims related to legislative amendments, affirming that the position of xerox machines under entry 79 was clear even before the specified amendment date.
In conclusion, the Court affirmed the Tribunal's decision regarding the classification of xerox machines under entry 79, emphasizing the functional aspect of xerox machines as duplicating machines for tax purposes. The reference was answered in the affirmative, and the case was disposed of accordingly.
-
1991 (7) TMI 322
Issues:
Assessment based on best judgment, Failure to file returns and produce accounts, Levy of penalty under section 12(3) of the Act, Challenge to levy of penalty, Interpretation of Full Bench judgment on imposition of penalty.
Analysis:
The High Court of Madras addressed two tax revision cases concerning the assessment years 1974-75 and 1975-76, where the assessee, a varnish dealer, was assessed based on best judgment due to lack of maintained accounts and failure to explain large bank remittances. The assessing authority imposed tax on the remittances as taxable turnover, leading to penalty under section 12(3) of the Act. Appeals to the Appellate Assistant Commissioner and Sales Tax Appellate Tribunal upheld the assessment and penalty. The assessee argued that the detention of a partner under MISA caused non-filing of returns and account production, but the court found this argument baseless as the partner was released before the assessment proceedings. The court upheld the best judgment assessment as the assessee failed to provide explanations despite opportunities, leading to no interference in the assessment order.
The assessee contested the levy of penalty under section 12(3) of the Act, citing a Full Bench judgment emphasizing the need for judicial determination on penalty imposition. The court noted that the Tribunal did not address the challenge to the penalty levy, and the order lacked discussion on the grounds for penalty imposition. Relying on the Full Bench judgment, the court set aside the penalty levy and remanded the cases to the Tribunal for a proper judicial determination on the penalty issue. The court highlighted the requirement for a conclusive decision on penalty imposition based on judicial scrutiny of grounds. The judgment emphasized that the mere best judgment assessment does not automatically warrant penalty imposition, necessitating a higher degree of proof for penalty than for assessment.
In conclusion, the court partially allowed the tax revision cases, upholding the assessment order but remanding the penalty levy decision for a fresh determination by the Tribunal. The court clarified that the Tribunal must make a proper judicial assessment on the penalty issue after hearing both parties. The judgment highlighted the importance of a thorough examination of grounds before imposing penalties and the need for a conclusive decision based on judicial scrutiny.
-
1991 (7) TMI 321
Issues:
- Claim for exemption on a turnover representing the value of supply of machinery as a works contract.
- Interpretation of clauses in the contract for creation and supply of goods.
- Determination of whether the transaction constitutes a works contract or a sale of goods.
- Comparison with relevant case law on similar transactions.
- Upholding the concurrent findings of the assessing authority, appellate authority, and Tribunal.
Analysis:
The petitioner initially reported a total and taxable turnover but later claimed exemption on a substantial turnover representing the supply of machinery to a specific entity as a works contract. This claim for exemption was rejected by all relevant authorities, leading to the filing of the present revision. The primary contention raised by the petitioner was that the contract in question was for creation and not the supply of goods, emphasizing specific clauses in the contract to support this argument.
Upon examination of the clauses in the contract related to the scope of the contract and inspection procedures, the Court found that the supply of certain components by the contractee and the inspection of components at the contractor's works did not negate the essential nature of the transaction as a sale of goods. Additionally, the Court highlighted clauses indicating the procurement of raw materials by the contractor and the value of free issue materials provided by the contractee, which further supported the conclusion that the transaction was a sale of goods rather than a works contract.
In support of its decision, the Court referenced a judgment by the Supreme Court in a similar case involving the free supply of components, emphasizing that the transaction in question aligned with the general test for determining a sale of goods. The Court distinguished a different case cited by the petitioner, emphasizing the unique circumstances and nature of the contract involved. Ultimately, the Court upheld the concurrent findings of the lower authorities that the transaction constituted a sale of goods, dismissing the revision accordingly and ruling against the petitioner.
In conclusion, the Court's detailed analysis of the contract clauses, comparison with relevant case law, and affirmation of the lower authorities' findings established the nature of the transaction as a sale of goods rather than a works contract, leading to the dismissal of the revision.
-
1991 (7) TMI 320
Issues Involved:
1. Competence of Shri R.C. Minocha to pass the assessment order.
2. Justification for not remanding the case for fresh assessment by a competent authority.
Issue-wise Detailed Analysis:
1. Competence of Shri R.C. Minocha to Pass the Assessment Order:
The core issue was whether Shri R.C. Minocha, Assistant Sales Tax Officer, had the jurisdiction to pass the assessment order. The dealer contended that since the notice under form S.T. XIV was issued by Shri B.L. Gupta, only he had the jurisdiction to pass the assessment order. The Financial Commissioner accepted this contention, noting there was no specific order transferring the case from Shri B.L. Gupta to Shri R.C. Minocha. However, the court found that both Shri Gupta and Shri Minocha were appointed as assessing authorities for the same territory, and there was no legal prohibition against multiple officers having concurrent jurisdiction in a single territory. The court emphasized that the jurisdiction of an assessing authority is determined by the territory and not by the issuance of a notice in form S.T. XIV. The court concluded that Shri Minocha, having been appointed as the assessing authority for the entire Union Territory of Delhi, was competent to pass the assessment order.
2. Justification for Not Remanding the Case for Fresh Assessment:
The second issue was whether the Financial Commissioner was justified in not remanding the case for fresh assessment by a competent authority after concluding that Shri Minocha was not competent to pass the assessment order. The court found that the Financial Commissioner erred in quashing the assessment order, as procedural irregularities, such as the absence of a specific transfer order, did not invalidate the assessment. The court referenced previous judgments, including the case of Kishan Chand & Co. v. S.K. Jain, which held that an assessment made by an officer with territorial jurisdiction cannot be invalidated for want of a specific transfer order. The court also noted that the assessment proceedings were effectively conducted by Shri Minocha, and the dealer had been given a full opportunity to present its case. Thus, the court concluded that the Financial Commissioner was not justified in quashing the assessment order and that remanding the case was unnecessary.
Conclusion:
The court answered both questions in favor of the Commissioner of Sales Tax, holding that Shri R.C. Minocha was competent to pass the assessment order and that the Financial Commissioner was not justified in quashing the assessment order or remanding the case. The court emphasized that jurisdiction is determined by territorial appointment and not by procedural steps such as the issuance of a notice. The assessment order passed by Shri Minocha was upheld, and no costs were ordered.
-
1991 (7) TMI 319
Issues Involved:
1. Constitutionality of the Gujarat Sales Tax (Amendment) Act, 1985.
2. Validity of the Constitution (Forty-sixth Amendment) Act, 1982.
3. Tax on "transfer of right to use any goods" outside Gujarat or in inter-State trade.
4. Classification and taxation of plant and machinery as immovable property.
5. Inclusion of interest and service charges in the definition of "sale price."
6. Retrospective application of the tax on leases executed prior to August 6, 1985.
7. Classification of "specified sale" and its rational basis under Article 14.
Detailed Analysis:
1. Constitutionality of the Gujarat Sales Tax (Amendment) Act, 1985:
The petitioners argued that the Gujarat Sales Tax (Amendment) Act, 1985, is ultra vires the Constitution of India. They contended that the separate definition of "specified sale" and the distinct provisions regarding the turnover of specified sales lacked a rational basis. The court found that the amendment aligned the state legislation with the constitutional amendment introduced by the Constitution (Forty-sixth Amendment) Act, 1982, thereby widening the definition of "sale."
2. Validity of the Constitution (Forty-sixth Amendment) Act, 1982:
The petitioner in Special C.A. No. 6010 of 1988 challenged the validity of the Forty-sixth Amendment, claiming it affected the basic structure of the Constitution. However, this challenge was not pressed during the hearing, as the Supreme Court in Builders Association of India v. Union of India had upheld the amendment's validity.
3. Tax on "transfer of right to use any goods" outside Gujarat or in inter-State trade:
The petitioners contended that the amendment sought to levy tax on transactions occurring outside Gujarat or in inter-State trade. The court found no substance in this contention, as the Gujarat Sales Tax Act, 1969, explicitly prohibits such taxation under Section 87. The petitioners failed to point out any provision in the Amendment Act that contravened this section.
4. Classification and taxation of plant and machinery as immovable property:
The petitioners argued that classifying plant and machinery as goods in Schedule IV for taxation was incorrect, as they are immovable property. The court held that whether plant and machinery are considered immovable depends on the facts and circumstances of each case. The court concluded that plant and machinery are typically chattel unless proven otherwise, and thus, the contention lacked merit.
5. Inclusion of interest and service charges in the definition of "sale price":
The petitioners argued that the definitions of "turnover of specified sales" and "sale price" should distinguish between the price of goods and other components like interest and service charges. The court rejected this contention, noting that it is impractical and impossible to segregate these components, as they vary from dealer to dealer. The Legislature cannot be expected to enact laws that are intractable or impossible to implement.
6. Retrospective application of the tax on leases executed prior to August 6, 1985:
The petitioners contended that taxing leases executed before August 6, 1985, was retrospective and illegal. However, this contention was not pressed during the hearing, and the court clarified that the tax was not retrospective. The court cited the Supreme Court's definition of "retrospective" and concluded that the tax did not impair any vested rights or impose new obligations on past transactions.
7. Classification of "specified sale" and its rational basis under Article 14:
The petitioners argued that the classification of "specified sale" lacked a rational basis and violated Article 14 of the Constitution. The court found that the classification was based on intelligible differentia, distinguishing transactions where ownership of goods remains with the vendor from other types of sales. The court concluded that the classification had a rational relation to the object of augmenting state revenue and administrative convenience, thereby upholding its constitutionality.
Conclusion:
The court dismissed all three petitions, upholding the constitutionality of the Gujarat Sales Tax (Amendment) Act, 1985, and the validity of the Constitution (Forty-sixth Amendment) Act, 1982. The court found no merit in the petitioners' contentions regarding the various issues raised. The rule was discharged, and the petitions were dismissed.
-
1991 (7) TMI 318
Issues Involved:
1. Invocation and exercise of suo motu revision powers by the Assistant Commissioner of Sales Tax.
2. Legality and propriety of the pro rata method adopted by the Assistant Commissioner for estimating the breach of declarations in form 19.
3. Burden of proof under section 16(4) of the Gujarat Sales Tax Act, 1969.
Issue-wise Detailed Analysis:
1. Invocation and Exercise of Suo Motu Revision Powers by the Assistant Commissioner of Sales Tax:
The revisional powers are conferred upon the Commissioner of Sales Tax and the Tribunal under section 67 of the Gujarat Sales Tax Act. The Commissioner can delegate these powers to the Assistant Commissioner. The Assistant Commissioner, in this case, exercised his power under section 59 by issuing notice in form 45 to call for certain materials from the dealer. This was followed by a notice in form 49 to show cause for revising the Sales Tax Officer's order. The dealer argued that the Assistant Commissioner looked into new material not part of the assessment record. However, it was established that the material considered was the same as before the Sales Tax Officer. The Tribunal found no basis for the dealer's argument that the Assistant Commissioner wrongly invoked his revisional powers. The High Court affirmed that the revisional powers were rightly invoked and exercised by the Assistant Commissioner.
2. Legality and Propriety of the Pro Rata Method Adopted by the Assistant Commissioner:
The Assistant Commissioner adopted a pro rata method to determine the breach of declarations in form 19 for levying purchase tax. The dealer contended that the method was improper and that the production register maintained by them should be accepted. The Assistant Commissioner and the Tribunal found the production register to be notional and unreliable. The pro rata method was deemed the only reasonable method for calculating the use of goods purchased against form 19 declarations. The Tribunal relied on a similar case from the Bombay High Court (Commissioner of Sales Tax v. Berar Oil Industries), which upheld the pro rata method as a rational formula. The High Court agreed with the Tribunal's finding that the pro rata method was legal and proper.
3. Burden of Proof Under Section 16(4) of the Gujarat Sales Tax Act, 1969:
The dealer had the burden to prove that the purchase price of goods bought against form 19 declarations was not liable to be included in the turnover of purchases. The Assistant Commissioner and the Tribunal found that the dealer did not maintain credible records to prove this. The production register was found to be a figment of imagination and not reflective of actual usage. The High Court held that the dealer failed to discharge the burden of proof under section 16(4) of the Act.
Conclusion:
The High Court answered all three questions in the affirmative, in favor of the Revenue and against the assessee. The invocation and exercise of suo motu revision powers by the Assistant Commissioner were deemed proper. The pro rata method adopted for estimating the breach of declarations in form 19 was upheld as legal and proper. The dealer failed to discharge the burden of proof under section 16(4) of the Gujarat Sales Tax Act, 1969. The reference was answered accordingly, with no order as to costs.
-
1991 (7) TMI 317
The Revenue filed a revision against the Sales Tax Appellate Tribunal's order regarding the tax rate on furniture sold to match factories. The Tribunal erred in holding that the furniture did not fall under a specific tax entry. The High Court accepted the revision, setting aside the Tribunal's order and restoring that of the Appellate Assistant Commissioner. No costs were awarded. Petition allowed.
-
1991 (7) TMI 316
The High Court of Delhi ruled that hair removing soap is not considered a cosmetic under entry 17 of the Sales Tax Act, and therefore taxable at 5% instead of 8%. The judgment was in favor of the dealer. The reference was answered in the negative.
-
1991 (7) TMI 315
Issues Involved:
1. Whether the turnover of Rs. 27,80,122.34 was of sales inside Delhi and did not constitute inter-State trade and commerce under the Central Sales Tax Act, 1956.
2. Whether the sales of Rs. 27,80,122.34 were exempt from tax under rule 29(iii) of the Delhi Sales Tax Rules, 1951.
Issue-wise Detailed Analysis:
Issue 1: Nature of Sales - Intra-State vs. Inter-State
The primary issue was whether the sales amounting to Rs. 27,80,122.34 were intra-State sales within Delhi or inter-State sales under the Central Sales Tax Act, 1956. The Sales Tax Tribunal had found that the sales were completed in Delhi and did not occasion the movement of goods to another state as part of the contract. The Tribunal relied on certificates issued by the Officer Commanding, Composite Food Laboratory, ASC, stating that the goods were free on rail at Delhi and New Delhi, and the consignor was the army unit, not the dealer.
The High Court upheld the Tribunal's decision, emphasizing that for a sale to be considered inter-State, three conditions must be met:
1. An agreement to sell containing a stipulation regarding the movement of goods from one State to another.
2. The goods must move from one State to another in pursuance of that agreement.
3. A concluded sale must take place in the State where the goods are sent, different from the State from which the goods moved.
The Court referenced the Supreme Court's decision in Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC), which provided a similar illustration where the sale was considered an intra-State sale. The Court concluded that since the goods were delivered in Delhi and the movement of goods outside Delhi was not an integral part of the contract, the sales were intra-State.
Issue 2: Exemption under Rule 29(iii) of the Delhi Sales Tax Rules, 1951
The second issue was whether the sales were exempt from tax under rule 29(iii) of the Delhi Sales Tax Rules, 1951, which allows deduction of sales to the Ministry of Defence for official use from the taxable turnover. The Sales Tax authorities contended that the sales were made to the Ministry of Food and Agriculture, not the Ministry of Defence, and thus did not qualify for the exemption.
The High Court examined the contract and found that the acceptance of the tender by the Ministry of Food and Agriculture was for the supply of goods to the Defence Services. The Court noted five principal factors indicating that the Ministry of Defence was the actual purchaser:
1. Goods had to conform to ASC specifications of the Ministry of Defence.
2. The consignee was the Director of Supplies and Transport, QMG, Army Headquarters.
3. The inspecting authority was the Officer Commanding of the Army Service Corps.
4. Delivery was accepted by the military.
5. The price was debited to the account of the Controller of Defence Accounts (Western Command).
The Court applied the principle of an agent acting on behalf of a disclosed principal, concluding that the Ministry of Food and Agriculture was merely an agent for the Ministry of Defence. Therefore, the sales were indeed to the Ministry of Defence, qualifying for the exemption under rule 29(iii).
Conclusion
The High Court answered both questions in the affirmative and in favor of the dealer. The sales were intra-State and exempt from tax under rule 29(iii) of the Delhi Sales Tax Rules, 1951. The reference was answered in the affirmative with no order as to costs.
-
1991 (7) TMI 314
Issues involved:
The judgment addresses the issues of whether the assessee is engaged in business activities, the taxability of the assessment made under section 7-A, and the permissibility of enhancing the turnover for taxation under section 7-A.
Engagement in Business Activities:
The Tribunal found that the assessee, an association for research in the cement industry, did not engage in commercial activities related to the cement manufactured through research. The Tribunal concluded that the transactions did not result in any taxable event under sales tax law. The Revenue argued that the assessee's activities fell under the definition of a dealer as per section 2(d) of the Tamil Nadu General Sales Tax Act, citing the charging of excise duty on the cement sold. However, the Tribunal and the Court held that the mere payment of excise duty did not establish the assessee as a dealer under the Act.
Taxability under Section 7-A:
The Tribunal determined that the purchases and sales by the assessee were not subject to tax under section 7-A, as there was no commercial activity involved in the research-based manufacturing and selling of cement. The Court concurred with this finding, emphasizing that the assessee's activities did not constitute business in the nature of trade or commerce, as defined in the Act. The Court reiterated the applicability of a previous judgment that established the non-commercial nature of research-based organizations' transactions.
Enhancement Petition under Section 7-A:
The Revenue sought to enhance the turnover for taxation under section 7-A, arguing that the assessee's research activities constituted commercial dealings. However, both the Tribunal and the Court rejected this argument, maintaining that the assessee's research-focused operations did not amount to business activities subject to sales tax. The Court upheld the Tribunal's decision to dismiss the enhancement petition, stating that the assessee was not liable for sales tax or purchase tax under section 7-A.
In conclusion, the Court upheld the Tribunal's decision that the assessee was not a dealer engaged in taxable business activities, and therefore, the revisions filed by the Revenue were dismissed. The judgment reaffirmed that the research-oriented operations of the assessee did not fall within the definition of business under the sales tax law, and the payment of excise duty did not alter this characterization.
-
1991 (7) TMI 313
Issues Involved:
1. Classification of "mori basudi" for tax purposes under the Gujarat Sales Tax Act, 1969.
2. Applicability of entry 10 of Schedule I (tax-free entry) to "mori basudi."
3. Applicability of entry 50 of Schedule II, Part A to "mori basudi."
4. Applicability of residuary entry 13 of Schedule III to "mori basudi."
5. Application of the principle of popular parlance in determining the tax category.
Detailed Analysis:
1. Classification of "mori basudi" for tax purposes under the Gujarat Sales Tax Act, 1969:
The primary issue was whether "mori basudi" sold by the assessee was taxable under entry 50 of Schedule II, Part A, or exempt under entry 10 of Schedule I of the Gujarat Sales Tax Act, 1969. The assessee argued that "mori basudi," a form of condensed milk without sugar or masala, should be tax-free under entry 10 of Schedule I, which covers milk and milk products. However, the Deputy Commissioner and the Tribunal concluded that "mori basudi" did not fall under the tax-free category but within entry 50 of Schedule II, Part A, which pertains to sweets and sweetmeats.
2. Applicability of entry 10 of Schedule I (tax-free entry) to "mori basudi":
Entry 10 of Schedule I includes "Milk, whole or separated or reconstituted," along with buttermilk, curds, lassi, and chakka, which are tax-free. The Tribunal and the High Court applied the principle of popular parlance, determining that "mori basudi" is not considered milk by the general public. The court emphasized that a customer looking to buy milk would not consider "mori basudi" as milk, and thus it does not fall under entry 10 of Schedule I.
3. Applicability of entry 50 of Schedule II, Part A to "mori basudi":
Entry 50 of Schedule II, Part A, includes "Sweets and sweetmeats (including shrikhand, basudi, and doodpak)." The Tribunal concluded that "mori basudi," despite being unsweetened, is generally regarded as a sweetmeat. The High Court agreed with this classification, noting that "mori basudi" is treated and sold as a sweet prepared from milk, and thus falls under entry 50 of Schedule II, Part A.
4. Applicability of residuary entry 13 of Schedule III to "mori basudi":
The Deputy Commissioner initially classified "mori basudi" under the residuary entry 13 of Schedule III, which covers all goods not specified in other entries. However, the Tribunal overruled this classification, and the High Court upheld the Tribunal's decision, affirming that "mori basudi" falls within entry 50 of Schedule II, Part A, and not under the residuary entry.
5. Application of the principle of popular parlance in determining the tax category:
The principle of popular parlance, as established in Supreme Court decisions (Ramavatar Budhaiprasad v. Assistant Sales Tax Officer and Commissioner of Sales Tax v. Jaswant Charan Singh), was applied. This principle states that the classification of a commodity should be based on how it is commonly understood by people in the relevant area. The High Court noted that "mori basudi" is popularly understood as a sweet and not as milk, reinforcing its classification under entry 50 of Schedule II, Part A.
In conclusion, the High Court affirmed that "mori basudi" does not qualify for tax exemption under entry 10 of Schedule I and is correctly taxable under entry 50 of Schedule II, Part A. The reference was answered in the affirmative, in favor of the Revenue and against the assessee, with no order as to costs.
-
1991 (7) TMI 312
Issues Involved:
1. Whether there could be a resale of wooden boxes when sold along with oil engines.
2. Whether the Tribunal was right in allowing set-off for certain items u/r 42 of the Gujarat Sales Tax Rules, 1970.
3. Whether certain items could be classified as "consumable stores" u/s 13(1)(B) of the Gujarat Sales Tax Act, 1969.
Summary:
Issue 1: Resale of Wooden Boxes
The Tribunal held that there could not be a resale of wooden boxes when sold along with oil engines, based on the provisions of section 21 of the Gujarat Sales Tax Act, 1969. The High Court reframed the question and answered it in the negative, in favor of the dealer and against the Revenue. The Court emphasized that the question of whether the container forms part of the article or is a separate sale is a question of fact, as held by the Supreme Court in Raj Sheel v. State of Andhra Pradesh. The Tribunal should have examined the facts to determine if there were two separate sales'one for oil engines and another for wooden boxes.
Issue 2: Set-off for Certain Items u/r 42
The Tribunal allowed set-off for items like name-plates, wooden strips, cellac glue, hose pipes, hardware, packing material, and timber, applying the ratio of the judgment in Vasuki Carborundum Works. The High Court affirmed this decision, stating that these items are used in the manufacture of taxable goods. The Court noted that the expression "used in manufacturing" should not be given a restricted meaning and followed the principles laid down by the Supreme Court in Indian Copper Corporation Ltd. and J.K. Cotton Spinning & Weaving Mills Co. Ltd.
Issue 3: Classification as "Consumable Stores" u/s 13(1)(B)
The Tribunal classified items like acetylene gas, diamond dresser, hardware, emery cloth, color, pana-sets, cutting oil, welding rods, foundation bolts, painting brush, pressure gauge, emery paper, crankshaft, and machine tools as "consumable stores," except for "ghan" and "hammer." The High Court agreed with this classification, except for "ghan" and "hammer," which it held are tools and not consumable stores. The Court emphasized that the classification should be based on the use of the item in the manufacture of taxable goods and not on whether it forms part of the dealer's assets.
Conclusion:
The High Court answered the reference questions as follows:
1. In favor of the dealer and against the Revenue regarding the resale of wooden boxes.
2. In favor of the assessee and against the Revenue regarding the set-off for certain items u/r 42.
3. In favor of the Revenue and against the assessee regarding "ghan" and "hammer" but in favor of the assessee and against the Revenue for other items classified as "consumable stores."
-
1991 (7) TMI 311
Issues:
1. Assessment of suppressed transactions under the Gujarat Sales Tax Act and the Central Sales Tax Act.
2. Appeals before the Assistant Commissioner of Sales Tax.
3. Second appeals before the Tribunal.
4. Reference to the High Court on two specific questions.
Analysis:
1. The judgment pertains to a reference under section 69 of the Gujarat Sales Tax Act, 1969, involving an applicant who is a registered dealer carrying out the business of manufacturing aluminium utensils and circles. The Sales Tax Officer found suppressed transactions in sales and purchases, leading to an enhanced assessment and imposition of penalties under relevant provisions. The applicant-dealer appealed before the Assistant Commissioner of Sales Tax, who partially allowed the appeals resulting in a reduced liability of tax and penalty amounting to Rs. 2,54,725.62.
2. Subsequently, the dealer filed second appeals before the Tribunal challenging the assessments under both the Gujarat Act and the Central Act. The Tribunal dismissed both appeals through a common judgment, prompting the dealer to seek reference to the High Court on multiple questions. However, after due consideration, the Tribunal opined that only two questions required reference to the High Court, focusing on the nature of transactions and the reliance on seized records for assessment purposes.
3. Upon reviewing the Tribunal's judgment and relevant records, the High Court observed that the Sales Tax Officer and the Assistant Commissioner had appropriately relied on materials seized during the search, including records from a third party, for assessing the dealer's turnover of sales and purchases. The High Court emphasized that the correctness of evidence considered is a matter of fact, not a question of law. Consequently, the High Court deemed the first question referred as a question of fact and not necessitating a legal answer.
4. As for the second question regarding the authority of sales tax authorities to draw inferences from seized records, the High Court reiterated that since the first question was factual, the second question did not warrant a legal response either. Therefore, the High Court concluded that both questions did not involve legal considerations and did not require answers. The reference was thus answered accordingly, with no costs imposed on either party.
........
|
9911796707
