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VAT and Sales Tax - Case Laws
Showing 61 to 80 of 84 Records
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2015 (5) TMI 250 - MADRAS HIGH COURT
Challenge to the orders of assessment - Violation of principle of natural justice - Non consideration of assessee's objections - Held that:- Petitioner has given their objection by letter dated 03.09.2013, wherein, apart from raising factual objections on merits of the assessment, the petitioner requested for furnishing a photocopy of VST-3A proposal of the Deputy Commissioner (CT), Enforcement Central, Chennai, dated 10.07.2013 and this communication is said to have been served on the respondent by handing over in the office of the respondent by way of delivery book on 04.09.2013. Though the petitioner, in para 8 of the affidavit filed in support of the writ petition, has specifically stated that the communication was received in the office of the respondent on 04.09.2013, there is no specific denial of the said averment in the counter affidavit, more particularly, in para 9 of the counter affidavit. Therefore, this Court is inclined to accept the submissions made by the petitioner since they had objected the proposal of revision of assessment. However, other issues are not gone into. Hence, it is held that the impugned orders are in violation of principles of natural justice and the same calls for interference of this Court only on the ground of violation of principles of natural justice, since the objection filed on 03.09.2013 was not considered by the respondent. - Matter remanded back - Decided in favour of assessee.
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2015 (5) TMI 209 - KERALA HIGH COURT
Initiation of proceedings under Section 45A - Imposition of penalty of double the amount of tax Held that:- Admittedly, the appellant did not file return or remit tax during the period from April 2005 to January 2006 and November, 2006 and December 2006. This invited proceedings under Section 45A of the KGST Act. Though the maximum penalty of double the amount of tax was levied at the first instance, that is seen reduced by the first appellate authority and what is now levied is only equal amount of tax. The learned Single Judge has also waived the penal interest levied on the appellant. Therefore, maximum leniency has been shown to the appellant. In such circumstances, we do not find any reason to interfere with the judgment in appeal. - Be that as it may, having regard to the waiver of the penal interest ordered by the learned Single Judge, we direct that the said benefit would still be available to the appellant, provided the appellant remits the amount due within three months from the date of receipt of a copy of this judgment. - Decided against assessee.
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2015 (5) TMI 208 - MADRAS HIGH COURT
Detention of goods - vehicle was carrying the goods to warehouse without any documents, hence, the goods were detained - Held that:- without setting aside the impugned detention notice, there will be a direction to the petitioner to appear before the respondent along with the Demand Draft for ₹ 1,70,600/- as also a copy of this order and produce the same and the respondent shall receive the same and give liberty to the petitioner to file their objection to the detention notice. The petitioner is directed to file their objection in writing before the respondent within a period of three weeks from the date of receipt of a copy of this order. The respondent shall consider the same and pass a speaking order on merits and in accordance with law - Petition disposed of.
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2015 (5) TMI 207 - MADRAS HIGH COURT
Penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 - Personal hearing not granted - Held that:- On perusal of the show cause notice, dated 28.05.2014, it is evident that there was no proposal made for imposing penalty under Section 27(3) of the Act, therefore, such contention raised by the petitioner merits acceptance. So far as opportunity of personal hearing is concerned, Section 22(4) of TNVAT Act mandates that the dealer should have been heard personally, especially, in a case relating to revision of assessment. This has also not been followed by the respondent while passing the impugned order - The decision of the Honourable Division Bench of this Court in the case of V.Selladurai vs. Chief Commissioner of Income-Tax (OSD) and another, reported in [2007 (8) TMI 69 - HIGH COURT, MADRAS] supports the stand taken by the petitioner, wherein, it has been held that when no personal hearing was granted to the Assessee, there was a clear violation of principles of natural justice. Hence, on the above ground, the impugned order calls for interference. - Decided in favour of assessee.
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2015 (5) TMI 206 - MADRAS HIGH COURT
Detention of goods - Unregistered dealer - Compounding notice - Held that:- Consignee is an unregistered dealer is the only reason for detention of goods, based on which, the first respondent became suspicious about the transport of goods. The petitioner has clearly explained in its reply dated 24.10.2014, stating that M/s.Tansun Agency has applied for TNVAT registration and a copy of the acknowledgment has been annexed as Annexure-II. However, this has not been verified by the Authority till date and straight away, the impugned compounding notice has been issued. The other ground for detention, is that the goods will be released only after collecting tax and penalty. This observation made in the detention notice is contrary to the Circular issued by the Principal Secretary / Commissioner of Commercial Taxes, Chepauk, Chennai, dated 17.07.2014. Therefore, Ground No.(iv) of the detention notice is illegal. Consequently, the compounding notice demanding tax and compounding fee is held to be bad in law. - Decided in favour of assessee.
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2015 (5) TMI 172 - GUJARAT HIGH COURT
Validity of Tribunal's order - Tribunal decided appeal on merits instead of dismissing it for non deposit of pre deposit order - Held that:- Tribunal is bound to obey the decision of the High Court. It is not open for the learned tribunal to ignore the directions, observations or orders passed by the High Court. If instead of the learned tribunal any other person would have ignored the order passed by the High Court it would tantamount to Contempt of Court. However, we refrain ourselves from making any observations - Following decision of State of Gujarat Vs. Tudor India Ltd. [2015 (4) TMI 618 - GUJARAT HIGH COURT] - Decided in favour of Revenue.
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2015 (5) TMI 171 - RAJASTHAN HIGH COURT
Exemption on payment of exemption fees @ 1.5% - Assessing Officer (AO) was of the view that looking to the nature of the contract i.e. installation of plant & machinery including PSPO water treatment plants, laying of pipe line with material, it falls under the item/category 3 of the above mentioned notification and as such, is liable to charge exemption fees @ 2.25% - Held that:- It is essentially a finding of fact recorded by the lower authorities and the Tax Board, after appreciation of evidence, material on record and looking to the terms of the works contract, has clearly come to a definite finding of fact that the work assigned to the petitioner-assessee cannot be segregated and its main activity was construction/establishing plant & machinery of the sewerage treatment plant and that apart laying down pipelines with material which falls under the item/category 3 of the notification. It is also apparent that the work is a composite one and neither from the contract nor the activity undertaken by the petitioner-assessee, he has been able to segregate for the amount incurred by it on different activities separately. - On reading of the work assigned to the petitioner, and the Notification, in my view, there was composite agreement of contract and the major activity being of laying of pipeline with material, water treatment plant etc., then it would certainly be falling in item/category No.3 of the notification and all the three authorities in unison have come to a finding of fact based on the terms of the contract. Accordingly, once it is a finding of fact based on the terms of the contract, in my view, no question of law can be said to arise out of the order of the Tax Board and this Court does not find any perversity, illegality and impropriety in the order impugned so as to call for interference. - Decided against assessee.
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2015 (5) TMI 170 - GUJARAT HIGH COURT
Validity of Tribunal's order - Tribunal decided appeal on merits instead of dismissing it for non deposit of pre deposit order - Held that:- Tribunal is bound to obey the decision of the High Court. It is not open for the learned tribunal to ignore the directions, observations or orders passed by the High Court. If instead of the learned tribunal any other person would have ignored the order passed by the High Court it would tantamount to Contempt of Court. However, we refrain ourselves from making any observations - Following decision of State of Gujarat Vs. Tudor India Ltd. [2015 (4) TMI 618 - GUJARAT HIGH COURT] - Decided in favour of Revenue.
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2015 (5) TMI 169 - KARNATAKA HIGH COURT
Clim of interest with Refund claim - Excess tax paid - Tribunal deleted the levy of tax imposed by the respondent on parts and accessories of hearing aids and accessories effected under both KVAT Act and CST Act as well as the tax levied on the admitted interstate sales of hearing equipments under the CST Act - Held that:- It appears, till the re-assessment order reached finality, the amount is said to be in the custody of the State/respondent. Be that as it may, it is not that the amount is withheld deliberately for some other reason. The Karnataka Appellate Tribunal ultimately determined the amount holding that the tax levied on the admitted interstate sales of hearing equipments under KVAT Act is to be deleted as the same turnover is levied with CST under the CST Act. In that process, the amount so collected becomes excess and the same has to be refunded. In this regard, seeking for payment of interest may not be appropriate. - since from last five years, the amount is lying with the respondent. It appears, the act of the respondent is not deliberate, in the sense, while considering the case of the petitioner, considerable time has been taken and for that State is not responsible to pay interest. - Writ Petitions are disposed of with a direction to the petitioner to collect the cheque which is kept ready by the Government with respect to refund of the excess amount which was remitted to the government by the petitioner.
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2015 (5) TMI 141 - SUPREME COURT
Whether the respondent-Revenue could resile from a settlement entered into with the assessee on the basis of which the appellant has already paid and settled his dues under the Act - Held that:- Plain reading of Section 45 of the Act would indicate that the legislature has vested the power of remission of tax only with the Commissioner and subjected the exercise of said power in accordance with such circumstances and conditions as prescribed by the State Government under the Bombay Sales Tax Rules, 1959 (for short, “the Rules”). The proviso to the provision specifies that the remission of tax amount if exceeds ₹ 2000/- ought to be made by the Commissioner after obtaining sanction of the State Government. The Section neither speaks of any power to enter into a settlement for such purposes by the State Minister of Finance nor prescribes exercise of powers by the Commissioner in light of any such settlement.
The statute herein clearly and expressly provides for the limitation on exercise of powers of remission by the Commissioner and mandates them to be exercised only “in such circumstances and subject to such conditions as may be prescribed.” Section 2(21) of the Act provides that “prescribed” under the Act would mean as prescribed under the Rules and herein, the Rules being silent on any settlement of the nature allegedly entered into between the appellant and the State Government, the external circumstances including a settlement cannot be considered by the Commissioner while exercising power of remission of tax under the Act. - The convoluted mesh of facts and the extremely protracted proceedings which span over three decades, at the instance of appellant, indicate that the basis of case made out by the appellant does not exist in either the statute law or, in fact, any law applicable to the present proceedings. The settlement, if any, reached between the appellant and the State Government for part payment of tax liability by the partner of an assessee-Firm would not fall under the four corners of the Act or the Rules as has been claimed by the appellant since the beginning of the proceedings under the Act. - High Court has rightly examined the issues before it and the judgment and order passed by it does not suffer from any error - Decided against assessee.
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2015 (5) TMI 140 - GUJARAT HIGH COURT
Denial of refund claim - Denial on the ground that some reassessment proceedings have been initiated - Held that:- As per the assessment orders passed by the appropriate authority for the Financial Years 1999-00 and 2000-01, the petitioner is entitled to the refund of ₹ 9,95,749/- and ₹ 12,66,765/-. However, thereafter on the basis of the recommendation of the pre-audit department the reassessment proceedings are initiated, which are pending since 2004. No reasons whatsoever has been given for not deciding the reassessment proceedings, which are pending since 2004. Under the circumstances, to deny the refund, which the petitioner is entitled to as per the assessment orders for the Financial Years 1999-00 and 2000- 01 solely on the ground that the reassessment proceedings are pending since many years is absolutely illegal and most arbitrary. Hence, subject to the outcome of the reassessment, if at all it is permissible now, the petitioner is entitled to refund of the amount, which the petitioner is entitled to as per the assessment orders passed by the appropriate authority for the Financial Year 1999-00 and 2000-01.
As such there is no delay on the part of the petitioner at all. If at all there is any delay, there is a delay on the part of the appropriate authority to decide the reassessment proceedings, which are pending since 2004. There is no reason forthcoming for not concluding the reassessment proceedings, which are pending since 2004. If that be so, it is not open for the the State to take a plea of delay. - Refund granted.
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2015 (5) TMI 139 - KARNATAKA HIGH COURT
Revised return - Fresh assessment - Circular dated 07.07.2008 - Ignorance of circular - reassessment not done - Period of limitation - Held that:- Circular issued by the Commissioner would be binding on the Department. It is also not been disputed that the KVAT Act came into effect from 1st April 2005, prior to which Karnataka Sales Tax Act, was applicable. Thus, it can safely be said that with the change in regime of tax, the Commissioner of Commercial Taxes had issued the Circular to iron out the teething problems faced by the assessees. - order of assessment was passed totally ignoring the Circular of the Commissioner, inasmuch as, for the months of February and March 2006, which were within the period of limitation of six months, the Assessing Officer rejected the revised returns filed by the assessee, which could not have been done so. - No reason to interfere with the order passed - Decided against Revenue.
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2015 (5) TMI 138 - MADRAS HIGH COURT
Levy of VAT on third point of sale of liquor of foreign origin in the State at the rate of 14.5% - Constitutional validity - Whether the Amendment Act No.25 of 2012 Entry 2 of Second Schedule and Explanation No.1 of the Tamil Nadu Value Added Tax Act, 2006 is violative of Articles 14 and 19(1)(g) of the Constitution of India - Held that:- When a challenge is made to an enactment on the ground of Article 14 being violated, it must be demonstrated that there is an element of negation of equality. A mere discrimination per se cannot be termed as arbitrary, as a classification is meant for providing benefits to a group of persons. A differentiation must distinguish a group of persons or things identified as such from the things left out. While dealing with the classification, an accurate one is not possible. Revenue and economic considerations in taxing statute are permissible classifications. An objective must be a just one. It is a sine qua non for classification. A valid classification is a valid discrimination. A classification without reference to the object sought to be achieved would be hit by Article 14. Such a classification should not be arbitrary, artificial or evasive
While dealing with the classification qua the constitutional validity of a statute, a Court of law is required to deal with the facts which made the legislation in classifying a group. However, when the object of the classification itself is discriminatory, then there is no need to go into the classification. Courts are required to afford larger latitude to the legislature in its exercise of classification. In other words, what is reasonable is a question of practical approach. While testing the policy underlying the statute, the intended object is to be ascertained.
Goods that are specified in the Second Schedule are not vatable. A combined reading of Section 3(5) of the Act and the Second Schedule would make the said position very clear. Section 3(5) of the Act has not been put into challenge. The impugned Explanation 1 to the amended Entry 2 of the Second Schedule speaks only about the turnover as such. The classification made is perfectly in order. The petitioners, who are clubs and hotels, cannot be compared with the retail outlets of TASMAC. The customers of the TASMAC and the petitioners form two distinct and different categories based upon their respective socio-economic status. The petitioners are not prevented from doing their business. Therefore, there is no violation of Article 19(1)(g) involved. When the petitioners are selling liquor at a higher price than the TASMAC, they cannot seek parity. Having availed a set-off on the second point of sale, the petitioners cannot compel the respondents to extend the benefit at the third point of sale. With no grievance against the point of levy, the petitioners cannot challenge the manner in which it is imposed. The inclusion of certain goods including liquor in Second Schedule has not been put into challenge. Therefore, we are of the view that the petitioners cannot seek protection under Article 19(1)(g) of the Constitution of India. - Decided against assessee.
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2015 (5) TMI 105 - KARNATAKA HIGH COURT
Exemption from tax - Whether the commodity in question, i.e., White Oats would be exempted under Entry 16 of the First Schedule of the Karnataka Value Added Tax Act, 2003 or would be subjected to tax under the Act - Held that:- First clarification dated 03.06.2006 was issued by the Commissioner itself on a query made by another dealer with regard to the sale of White Oats, which was a product similar, if not identical to the product being dealt with by the assessee herein. When along with the query, the sample of the product had also been furnished by the dealer, it would be presumed that only after examining the said sample, the Commissioner had issued the clarification dated 03.06.2006. Once such clarification had been issued for exempting the product White Oats from payment of tax (even though the clarification order may have mentioned only Oats and not White Oats), then the question of payment of tax on the same would not arise. In fact, not only the assessee but the department itself was under a genuine belief or impression that the product in question was exempted from tax, as the department did not raise any question with regard to the monthly returns filed by the assessee right from April 2006 onwards and it accepted the same, which would amount to ‘deemed assessment’.
Where the Commissioner itself had issued a clarification dated 03.06.2006 with regard to the commodity in question, the assessee/dealer would be presumed to have a genuine belief that it was exempted from tax and thus, it cannot be said to be a case where the assessee had furnished any wrong information or concealed any material information. It is not the case where the sale of White Oats had not been disclosed by the assessee. It is not the assessee alone but, in the facts of the present case, we can safely say that even the department was under the genuine belief that the commodity in question was exempted from tax, until the second clarification dated 20.01.2010 was issued. After the issuance of the said clarification, the assessee (instead of getting into litigation by raising a dispute regarding the White Oat flakes being subjected to tax or not) started paying taxes on sale of the said commodity.
Clarification dated 03.06.2006 was issued under Section 59(4) of the Act. Such clarification is not applicable merely in the case of the applicant seeking clarification, but, to all registered dealers which are liable to pay tax under the Act. The clarification issued under Section 59 is different from the clarification or advanced ruling given under Section 60. In the latter case, the ruling of the authority would be binding only on the applicant which seeks such clarification, whereas in the former case (under Section 59 of the Act), it would be applicable to all registered dealers liable to pay tax. - Impugned orders are set aside - assessee/petitioner shall not be held liable for payment of tax with regard to the commodity in question (i.e., White Oats) till 20.01.2010 i.e., the date when the second clarification was issued by the Commissioner - Decided partly in favour of assessee.
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2015 (5) TMI 104 - PUNJAB & HARYANA HIGH COURT
Classification of goods - whether the Hooka, (brass/iron base) manufactured and sold by the petitioner is a "utensil", for purposes of payment of sale tax under the Haryana General Sales Tax Act, 1973 - Held that:- A Hooka, particularly in rural areas of the State of Haryana, is admittedly used to smoke tobacco at home. A hooka is also an integral part of social interactions in rural areas and is, therefore, used at home and in social and public interactions. A Hooka has a brass base fitted with two pipes. The first pipe is attached to an earthen pot where coal and tobacco are placed and the second pipe is used to puff tobacco smoke. The brass base is a receptacle used for storing water and for fixing the pipes of a Hooka. A Hooka, as referred to above, is used in rural societies, at home or outside and as it is a receptacle/container used for storing water, through which smoke is passed before it is inhaled it would necessarily partake the nature of a utensil. We are, therefore, inclined to hold that in the absence of any legislative intent to confine the meaning of the word "utensil, to any particular place, mode or manner of user, the hooka manufactured by the petitioner must necessarily fall within the meaning of the word "utensil". - Hooka and its parts manufactured/sold by the petitioner partake the nature of a "utensil", liable to sales tax at the rate of 3 paise in a rupee. - Decided in favour of assessee.
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2015 (5) TMI 102 - RAJASTHAN HIGH COURT
Imposition of penalty - declaration Form ST 18-A was incomplete - Held that:- If the declaration Form ST 18-A is incomplete or material particulars are lacking then the penalty is required to be imposed but in the instant case, the penalty is not leviable on an entirely different fact, noticed by this court, though the matter deserved to be restored for further verification and finding of fact but then it is a matter pertaining to the year 1998, it was thought prudent to decide the issue as facts are verifiable on perusal of the orders and the appeal can be decided. - crucial date is 21.2.1998 on which date the goods were being carried by the assessee from the Bombay Office to its Kota office and admittedly on stock/branch transfer, therefore the judgment relied upon by the revenue in the present case may not hold good and inapplicable on these facts found. It is an admitted position that as per the Notification issued by the Government of Rajasthan, bearing No./F.4 (1)FD/Tax/Div/2000-314 dated 30.3.2000 there was no requirement to carry the declaration Form ST 18-A prior to 30.3.2000 in case where goods were being transmitted/carried on stock/branch transfer. - since the issue involved in the instant case has already been settled and decided in the Case of Assistant Commercial Taxes Officer Vs.I.C.I. (India) Ltd. (2013 (5) TMI 764 - RAJASTHAN HIGH COURT), no penalty in law is leviable and penalty is not sustainable - Decided against Revenue.
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2015 (5) TMI 64 - GUJARAT HIGH COURT
Benefit of amnesty scheme - Held that:- AGP has stated at the bar, under instructions from Shri H.R. Varma, Assistant Commissioner Commercial Tax, Unit -15, Ahmedabad, that the application of the petitioner dated 19/06/2012 for availing the benefit of Amnesty Scheme, which was prevailing at the relevant time, shall be considered on merits. It is submitted that within a period of three months, the petitioner shall be communicated and / or informed the tax component for the relevant years for which the demand is raised. - In this view, the impugned order passed by the appropriate authority rejecting the application of the petitioner for availing the benefit of the Amnesty Scheme is hereby quashed and set aside. - Decided in favour of appellant.
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2015 (5) TMI 63 - KARNATAKA HIGH COURT
Reopening of assessment - Cancellation of assessment orders - Held that:- Considering the language and the provisions of S.63 A of the KVAT Act, once the order of cancellation of the assessment order had been passed by the Revisional Authority, it could not proceed to pass a fresh assessment order but could only direct the Assessing Officer to pass a fresh assessment order. - With the coming into force of the amendment made with effect from 1.4.2013 in the KVAT Act whereby the word 'or’ has been substituted by 'and’, after which it is now provided under the Act to the effect that the Revisional Authority can cancel the assessment order and direct fresh assessment, which would clearly mean that the same has to be read in conjunction and not separately. With this amendment, it is further fortified that after cancelling or setting aside the order of assessment, the Revisional Authority can only direct for a fresh assessment and not proceed to pass an order of reassessment. Thus, we are of the firm opinion that this is a case where the Revisional Authority has clearly exceeded its jurisdiction in proceeding to reassess the case and to that extent, the order passed by the Revisional Authority is wholly unjustified in law and liable to be quashed - earlier part of the order which relates to the reasons for cancellation or setting aside the assessment order is affirmed and is not being interfered with. - Decided partly in favour of assessee.
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2015 (5) TMI 62 - ORISSA HIGH COURT
Concessional rate of entry tax - Section 9C of the Orissa Entry Tax Act, 1999 - petitioner is engaged in business of generation of electricity and distribution thereof in the State of Odisha - whether generation of electricity is a manufacturing activity. - Held that:- Court in the case of Orient Paper & Industries Ltd. (1989 (1) TMI 138 - HIGH COURT OF ORISSA) while interpreting Section 2(b) of the Central Excise and Salt Act, 1944 has held that generation of electricity for the purpose of Central Excise and Salt Act is "manufacture or production of electricity", since the term "manufacture or production" is to be given a wide meaning. - In view of the definition of 'manufacture' as provided in Section 2(28) of OVAT Act read with Rule 2(1)(c) of the OET Rules and Section 2(q) of the OET Act and all the above judicial pronouncements of the Hon'ble Supreme Court and High Court, we are of the considered view that the activity of generating electricity in thermal power plant by using coal would qualify as a manufacturing activity.
Whether coal is a raw-material for generation of electricity in thermal power plant - Held that:- When the processes that are involved in manufacturing/ generation/production of electricity in a thermal plant as narrated in the preceding paragraph is considered in the light of the above observation of the Hon'ble Supreme Court, it can safely be concluded that coal is a raw material for production/generation of electricity. - perusal of the impugned assessment order reveals that before the Assessing Authority, the petitioner produced the expert opinion obtained from IIT, Kharagpur, wherein, it has been opined that coal is a raw material which results in the emergence of electricity.
Whether the reasons given by the learned Assessing Authority for disallowing the petitioner's claim to avail concessional levy of entry tax in terms of Rule 3(4) of the OET Rules are legally valid - Held that:- it extreme difficult to accept the above reasons given by the Assessing Authority to hold that coal is not a raw material for generation/production of electricity in thermal power station and that generation of electricity is not a manufacturing activity and therefore the petitioner is not entitled to avail concessional rate of entry tax as provided under Rule 3(4) of the OET Rules. - by no stretch of imagination, it can be said that the findings/observations of this Court that 'coal is a raw material for generation of electricity' are unnecessary for the decision of that case or it does not relate to the material facts in issue. Therefore, the learned Assessing Authority is wholly unjustified to hold that the observation of this Court in Bhusan Power and Steel Ltd. (2012 (11) TMI 696 - ORISSA HIGH COURT) that "coal is a raw material for generation of electricity" is a cursory remark, i.e., obiter dicta.
Even though the petitioner has filed a written submission in course of the assessment proceeding as evident from the impugned assessment order relying on various statutory provisions, the Supreme Court judgments, judgments of the High Court in support of its contention, the Assessing Authority without dealing with the contention of the petitioner with reference to the judgments relied upon by it passed the assessment order raising huge tax and penalty amounting to ₹ 7,22,44,608/-. Thus, the impugned order shows complete non-application of mind which ultimately amounts to judicial indiscipline and impropriety. The Assessing Authority, who is Joint Commissioner of Sales Tax, Sambalpur Range, Sambalpur, being a fairly senior officer is always expected to take note of various decisions of the Hon'ble Supreme Court/High Court placed before him by the assessee before passing any order. It may not be appropriate to say that competent and efficient Assessing Authorities are to be posted because the fate of litigants is dependent upon their proper adjudication. - petitioner is entitled to avail concessional rate of entry tax on coal in terms of Rule 3(4) of the OET Rules - Decidedin favour of assessee.
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2015 (5) TMI 61 - ANDHRA PRADESH HIGH COURT
Classification - Whether RB Acid Oil and RB Fatty Acid can be considered as distinct and different from Rice Bran Oil - Held that:- When un-refined raw rice bran oil is subjected to a process of refining, two distinct and different commodities namely RB Fatty Acid and RB Acid Oil had also emerged. Therefore, the manufacturing process had altered the identity of one commercial commodity and new commercial commodities had emerged. The law of sales tax is also concerned with goods of various descriptions. It cannot be disputed that the two commodities namely RB Fatty Acid and RB Acid Oil, which are of commercially different category and description, had emerged during the process of manufacture of Rice Bran Oil. The principle which is fairly well settled is that the words or expressions under the statute must be construed in the sense in which they are understood in the trade, by the dealer and the consumer because it is they who are concerned with it and it is the sense in which they understand it that constitutes the definitive index of the legislative intention when the Statute was enacted. Therefore, the test is how the product is identified by the class or section of people dealing with or using the product.
Rice Bran Oil which is fit for human consumption can only be a different and distinct commodity from the other two commodities viz., RB Fatty Acid and RB Acid Oil as the former is fit for human consumption while the latter two commodities are only used in the process of manufacture of soaps/cattle feed. It is pertinent to note that RB fatty acid and RB acid oil and Rice Bran oil are considered as distinct and different commodities for the purpose of levy and collection of excise duty. - As a sequel we find that the order of the respondent, which is impugned, is in accordance with the law and does not brook interference - Decided against assessee.
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