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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 108 Records
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2016 (10) TMI 1000
Demand and recovery of tax after 1485 days - validity of assessment orders - the assessment for the years from 1983-84 to 1996-97 were framed by the assessing authority by passing orders on different dates in April, 2002 - limitation bar u/s 11 (4) of the Act - Held that: - the decision in the case of State of Punjab and others vs. Patiala Cooperative Sugar Mills Limited, Rakhra, District Patiala [2015 (9) TMI 1327 - PUNJAB AND HARYANA HIGH COURT] relied upon where it was held that assessments upto the years 1997-98 could not validly be passed after April, 2001 - all assessment orders barred by limitation.
Condonation of delay not considered as will be a futile exercise to conduct another round of litigation as the matter is already decided on merits - appeal of state dismissed - tax cannot be recovered after 5 years - decided against Revenue.
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2016 (10) TMI 999
Maintainability of appeal when AO has rectified or refused to rectify an order - validity of Return memo - return of appeal petitions filed by the petitioner against the rectified assessment orders - appeals presented after a gap of more than ten months from the date of original order of assessment - what would be the effect of a rectified order? - Section 55(4) of the Act - Held that: - similar issue decided in the case of State of Tamil Nadu vs. Sabarigir Industries [2014 (3) TMI 193 - MADRAS HIGH COURT] where it was held that When the rectification proceedings resulted in a positive action, which has the effect of destroying the finality of original assessment, thereby reopening the assessment order itself, then the provisions relating to appeal would lie. On the other hand, when the Assessing Officer refuses to interfere with the original order and that order is allowed to remain intact, the said order would not be amenable normally to appeal remedy. In so holding, this Court referred to the provisions under Section 55(4) of the Tamil Nadu General Sales Tax Act, 1959, inserted by Amendment Act No. 31 of 1972, providing for appeal and revision remedy when an order of rectification is made, and not when the authority concerned refuses to pass an order of rectification - decided against Revenue.
Whether the appeal petition, which was filed after the passing of the revised order of assessment, could be held to be presented within time, in accordance with the provisions of Section 31 of the Tamil Nadu GST Act and whether remittance made by the petitioner recording the pre-depsoit was valid? - Held that: - The decision in the case of State of Tamil Nadu vs. E.P.Nawab Marakkadai [1995 (8) TMI 293 - MADRAS HIGH COURT] relied upon and it was held that limitation for filing the appeal would commence from the date of receipt of the rectified order i.e. dated 1.6.2016 and if the said date is reckoned, then the appeal petition is still within the period of limitation.
Petition disposed off - impugned return memos are set aside, leaving it open to the petitioner to raise all the contentions before the Appellate Authority. The petitioner is directed to re-present the appeal along with a copy of this order and the Appellate Authority shall entertain the appeal and deal with the same in accordance with law - decided partly in favor of petitioner.
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2016 (10) TMI 941
Withholding of Refund claim, which is already crystallised - whether the refund amount can be adjusted against the recoverable amount from the petitioner? - section 39 of the Gujarat Value Added Tax Act, 2003 - Power to withhold refund in certain cases - Held that: - A perusal of section 39(1) would show that refund payable to a dealer can be withheld if the order giving rise to such refund is subject matter of appeal or further proceeding or an other proceeding under the Act is pending and the Commissioner is of the opinion that grant of refund is likely to adversely affect the Revenue. It is true, that in the present case, for other period, the assessing authority has passed orders against the petitioners raising tax demands. However, such orders are challenged by the petitioner in appeal in which upon depositing ₹ 10 lacs, rest of the tax demand is stayed. When these tax demands are thus stayed, allowing the Commissioner to withhold the refund for such tax demand would frustrate the stay order. In effect the department would be recovering the amount in respect of which stay has been granted by the appellate authority against the recovery. Such indirect recovery in the guise of withholding of refund cannot be permitted. Power under section 39(1) of the Act would not empower the authority to frustrate stay order granted by the competent authority or Court.
There appears to be a clear non application of mind on part of the authority just to withheld the amount which is lawfully payable to the petitioner. One may notice that this amount which has been determined by the authority is by way of provisional refund amount and the same is determined to the extent of 90% of the original amount which was to be payable and therefore, while passing the order and sanctioning the amount of refund, sufficiently the interest of revenue has been protected and, therefore, we are of the opinion that since prima facie requirements to invoke the power to withhold the amount of refund are not available on record, such action is not possible to be confirmed and, therefore, the stand taken by the counsel for the Revenue is not possible to be accepted.
The respondent authority directed to release the amount of refund which has already been sanctioned in favour of the petitioners within a period of eight weeks - petition disposed off - decided in favor of petitioner.
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2016 (10) TMI 940
Entitlement for deduction u/r 8(5) of the Act - production of Form-S Certificate - unless and until the Department produce the Form-S Certificate, petitioner cannot do so - the dealers with whom petitioners had transactions are all reputed dealers, who are registered before the various Assessment Circles in Chennai District and they are regularly filing their monthly returns and paying taxes - when section 13 of the Act has been held to be only procedural and Section 5 of the Act being the charging section for levy of tax on deemed sale of works contract, failure to discharge the alleged procedure under section 13 of the Act does not give a jurisdiction to the respondent to invoke its revisional powers under section 27 of the Act, moreso, when the sub-contractor had filed their return and paid tax under section 5 of the Act and the petitioner is entitled for deduction under Rule 8(5) of the Act.
Completion of assessment solely on the instructions of the Audit Wing - Held that: - this should not be the sole reason for confirming the D-3 proposal and complete the assessment
Held that: - matter is remanded to the respondent to conduct a thorough verification of the details through their official channel, as to the stand taken by the petitioner stating that all the contractors are registered dealers as on date and they have been regularly filing returns before their respective Assessing Officer and paying the tax, after due verification, the respondent shall afford an opportunity of personal hearing to the petitioner and redo the assessments in accordance with law - petition disposed off - matter on remand.
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2016 (10) TMI 939
Power of revision of the assessment by the AO - Concessional rate of tax - delayed submission of forms under CST Act - Held that: - In the case of ARUL MURUGAN AND COMPANY[1982 (11) TMI 143) and the decision of the Hon'blel Supreme Court, in the case VIPRO FOUNDRY ENGINEERS LIMITED [1990 (12) TMI 302], the Commissioner of Commercial Taxes issued Circular dated 30.04.1993, as to how the Assessing Officer has to act when Declarations in Form-'E' and Form-'F' are produced after the assessment is completed - Decided in favor of the assessee.
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2016 (10) TMI 938
Levy of tax u/s 5(2) of the KGST Act on sales turnover - sale of home appliances under the brand name “Sansui” - first sale or second sale? - Whether the appellant-Company is the holder of the brand name in respect of the “Sansui” products sold by it or not? - Held that: - the sale by the brand name holder or the trade mark holder shall be the first sale for the purposes of the KGST Act, if following conditions are satisfied: (i) Sale of manufactured goods other than tea; (ii) Sale of the said goods is under a trade mark or brand name; and (iii) The sale is by the brand name holder or the trade mark holder within the State.
Applying the aforementioned conditions to the facts of the present case, it is an admitted fact that the goods sold by the appellant-Company are manufactured goods other than tea. The first condition is satisfied. The next condition to be satisfied is that the sale of goods is under a trade mark or brand name. It is an undisputed fact that the manufactured goods sold by the appellant-Company were home appliances under the brand name “Sansui”. Thus the second condition is also satisfied. Now the last condition to be satisfied in order to attract section 5(2) of the KGST Act is that the sale is by the brand name holder or trade mark holder within the State and whether the appellant-Company is a holder of the brand name “SANSUI” - when a product is marketed under a brand name, the Assessing Authority is entitled to assume that the sale is by the holder of the brand name or by a person, who is entitled to use the brand name in India. Apart from this, in this case, the marketing is actually done by fully owned subsidiary and/or a group company of the holding company, which was allowed to use the brand name “Sansui”.
If the sale between the holding company and the subsidiary company, both having the right to use the same brand name, is at realistic price and the marketing company namely, the appellant-Company charged only usual margins in the trade, then there is no scope for ignoring the first sale, particularly, when the first seller was also the holder of the brand name and was free to market the products in the brand name. However, the evidence on record shows that the margin charged by the appellant-Company while making the further sale of product is unusually high. So the inter se sale between the groups of companies under the control of the same family was only to reduce tax liability and was rightly ignored by the assessing officer by levying tax under Section 5(2) of the KGST Act.
The tax invoking Section 5(2) of the KGST Act was rightly levied on the appellant-Company for the relevant period as it is proved beyond reasonable doubt that the appellant-Company is the brand name holder of “Sansui” - appeal dismissed - decided against appellant.
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2016 (10) TMI 899
Validity of order of assessment - principles of natural justice - TNVAT Act, 2006 - CST Act, 1956 - application for revision of assessment u/s 84 of the State Act - Held that: - this Court is of the view that the application under Section 84 of the State Act having been filed before the respondent, it is but appropriate for the respondent to dispose of the same on merits and in accordance with law and not merely reject it by a single line order stating that the order of assessment has been validly passed. The respondent shall take note of the petitioner's case that the notice proposing revision itself is based on the audit conducted by the office of the Accountant General and the assessment was completed ex parte upon failure of the petitioner to submit their objections. In such circumstances, the respondent shall consider the petitioner's application under Section 84 of the State Act effectively, peruse the documents, ascertain the genuineness of the transaction and then pass an order giving reasons.
Petition allowed - decided in favor of petitioner by way of giving them one more opportunity of being heard and accepting the application u/s 84 of the act.
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2016 (10) TMI 898
Validity of assessment order - Section 26 of the BVAT Act, 2005 - no notice served upon the petitioner - Held that: - A registered notice sent on the proper address carries presumption of delivery in terms of Section 27 of the General Clauses Act although it gets returned.
Period of limitation - the order is beyond the period prescribed for completing the assessment - Held that: - The order of assessment itself stipulates that none has put in appearance on behalf of the petitioner even though notice under registered post was sent. A registered notice sent on the proper address carries presumption of delivery in terms of Section 27 of the General Clauses Act. Still further, merely because demand notice was sent after three years will not raise a presumption of ante-dating the order as it is categorically mentioned in the counter affidavit that the demand notice was prepared on the same date, but due to clerical mistake it could not be sent. Therefore, mere fact that the demand notice was sent in the year 2016 will not be enough to raise presumption that the order has been ante-dated.
The case of State of Andhra Pradesh Versus Khetmal Parekh & M. Ramakishtaiah and Co. [1994 (2) TMI 260 - SUPREME COURT OF INDIA] referred by petitioner do not apply to the present case as in the case the Department could not offer any explanation as to why there was delay in sending demand notice, but a perusal of the demand notice in the present case shows that it bears the same date as the date of order, but it has been delivered to the appellant only thereafter. Therefore, the explanation of the Department in the counter affidavit cannot be said to be unreliable.
No reason exist to doubt that the order of re-assessment was passed on the same date which bears the date, i.e. 20th June, 2013 - it is open to petitioner to avail statutory remedy under the Act in accordance with law - petition dismissed.
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2016 (10) TMI 897
Demand of tax - Section 3-F of the U.P. Trade Tax Act 1948 - works contract entered between NHAI and CDS - purchase of plant, equipments and other material from revisionist for carrying out the works contract - goods supplied to CDS to be treated as inter-state sales or intra-state sales? - Held that: - the Court finds that the findings in respect of taxability have come to be recorded by the authorities without due consideration being conferred upon the contract which was entered into between the parties as well as material in the shape of purchase orders and invoices which were already on record. This Court therefore is of the opinion that , the present revision which pertains to the Assessment Year 2001-02 would commend a remit to the assessing authority.
Revision allowed - matter remanded to the assessing authority for a decision afresh.
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2016 (10) TMI 896
Jurisdiction of action taken after 20 years without providing opportunity of being heard - TNVAT Act, 2006 - order of assessment or any notice not served to petitioner - action taken after 20 years - whether the impugned order of demand tenable? - Held that: - this impugned proceeding was without proper opportunity to the petitioner, and it is also barred by limitation. Above all, it has to be pointed out that the respondent would be entitled to effect recovery of the tax arrears, even assuming it is due only within a reasonable time, and considering somewhat similar provisions under the TNGST Act, the Hon'ble Supreme Court in the case of State of Punjab and others Vs. Bhatinda District Cooperative Milk Producers Union Ltd. [2007 (10) TMI 300 - SUPREME COURT OF INDIA] observed that, 'The Revisional Authority, being a creature of the statute, while exercising its revisional jurisdiction, would not be able to determine as to what would be the reasonable period for exercising the revisional jurisdiction in terms of Section 21 (1) of the Act'.
Court has no hesitation to hold that the impugned order is barred by limitation, and the action initiated for recovery of dues after about 20 years is highly unreasonable, rendering the impugned demand as unsustainable in the eye of law - petition allowed - decided in favor of petitioner.
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2016 (10) TMI 857
Claim of exemption from tax and Central Sales Tax (CST) - sale by the dealer to the exporter against Form-H - Nature of activity / processing amount to Manufacturing process or not - Section 2(16) of the Gujarat Sales Tax Act - Castor oil - conversion of commercial grade Castor oil to First Special Grade after refining process - Held that: - The word as may be prescribed as used under this definition clause is attracting the provision contained under Rule 3 of the rules in which the prescription is made and therefore, referring to this Rule 3 it can be seen that the process which has underwent on their product is not a manufacturing process and therefore, conjoin effect of the aforesaid statutory provision, it appears that the learned Tribunal has rightly come to the conclusion that the process carried out was not a manufacturing process as defined under Section 2(16) of the GST Act - reliance placed on the decision of SHYAM OIL CAKE LTD. Versus COLLECTOR OF CENTRAL EXCISE, JAIPUR [2004 (11) TMI 109 - SUPREME COURT OF INDIA] where it was held that merely because some process is carried out on the substance, the same is not to be treated as manufacturing process.
Whether the goods exported by the exporter was the same goods purchased from the respondent (dealer) and consequently sale by the dealer to the exporter would be sale prior to export sale and would be covered by section 5(3) of the Central Act? - Held that: - wherein the basic characteristic and the use is not drastically changed and since the learned Tribunal has come to the conclusion specifically with examination of process of the material sold by the purchaser is not out of any manufacturing process and therefore, the claim of exemption from the said Sales Tax Act is justified. The categorical finding that exporter who had purchased Castor oil from the opponent herein has not sold the Castor oil in the same form, but has done some process and therefore, it cannot be considered as a manufacturing process and therefore, it appears to this court also that the learned Tribunal has rightly come to the conclusion in passing the order impugned in the appeal.
No illegality or irregularity of any nature committed by the learned Tribunal - appeal dismissed - decided in favor of Tribunal.
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2016 (10) TMI 856
Condonation of delay - bona fide belief that since the second appeal in earlier point of time is very much pending which relates to the very same period and therefore, this subsequent first appeal against regular assessment order will be kept pending - Held that: - right from the beginning the innocence which has been tried to be projected appears to be not worthy to be accepted. We found that the conclusion arrived at by the Tribunal while exercising discretion is based upon the material on record and upon examination of it. Therefore, we see no reason to dislodge the said finding more particularly, when the petitioner has invoked extraordinary equitable jurisdiction. The very plea of not aware about the passing of an order by the first appellate authority is not cogently explained except by a mere assertion that neither the practitioner nor the advocate has ever informed the petitioner about the same and all thereabout for a pretty long period the petitioner has remained under a bona fide belief.
The decision in the case of Brijesh Kumar and ors vs. State of Haryana and ors [2015 (7) TMI 21 - SUPREME COURT] relied upon where it was held that this Court rejected the contention that a petition should be considered ignoring the delay and laches on the ground that he filed the petition just after coming to know of the relief granted by the Court in a similar case as the same cannot furnish a proper explanation for delay and laches. The Court observed that such a plea is wholly unjustified and cannot furnish any ground for ignoring delay and laches.
Delay cannot be condoned - petition dismissed.
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2016 (10) TMI 855
Reversal of input tax credit - non production of documents under Section 19(13) of the TNVAT Act - Held that: - the second respondent erroneously reversed the input tax credit on the ground of lack of clarity in the documents produced. If the second respondent was satisfied with the very same documents while considering the issue of cross-verification, this Court is at a loss to understand as to how they would not be relevant for consideration while deciding the issue of reversal of credit.
Even assuming that the registration certificates were cancelled retrospectively, that would not have any impact on the petitioner's right to claim input tax credit, as, admittedly, the petitioner had produced the original tax invoices and showed that the sale price includes VAT, that they discharged their liability and that payments were effected through bank transactions. That apart, the second respondent, while completing the assessment, stated that in the absence of clarity, the petitioner's contention is not acceptable. This finding lacks clarity - If the second respondent was of the view that there was lack of clarity, nothing prevented the second respondent from calling upon the dealer to appear in person and clarify the issues arising out of the documents, which they had submitted. In such circumstances, this Court is satisfied that the manner, in which, the impugned assessment orders have been passed, is not sustainable in law.
Writ petitions disposed off - finding given by the second respondent on the issue relating to reversal of the input tax credit for non production of documents under Section 19(13) of the TNVAT Act, is set aside - decided partly in favor of petitioner.
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2016 (10) TMI 854
Attachment of Bank Accounts - recovery of arrears of sales tax under the Central Sales Tax Act, 1956 - straight away garnishee order passed without serving any notice or passing any assessment order - Held that: - Considering the nature of allegation based on which, assessment has been completed and as it pertains only to production of 'C' forms, this Court is inclined to grant one more opportunity to the petitioner to produce all the documents. Accordingly, there will be a direction to the petitioner to appear before the respondent within a period of one week from the date of receipt of a copy of this order and produce all original 'C' forms and on production of the same, the respondent shall verify and if found to be in order, revise the assessment in accordance with law. If there are any other issues, the same should also be put to the petitioner and they should be able to file their objections as well - attachment order lifted.
The Commissioner directed that the Assessing Officers can allow Form-C, Form E-I, E-II and F-Forms, to be filed after completion of assessment on sufficient cause.
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2016 (10) TMI 853
Constitutional authority of Explanation V under Section 2(1)(aa) of the Tamil Nadu Additional Sales Tax Act, 1970 - explanation contrary to the provisions of law - Works Contract Service - pay tax under Section 7-C of the TNGST Act - levy of additional sales tax - explanation added to clear the provisions of law - Held that: - the Explanation normally should be read so as to harmonise with and clear up any ambiguity in the main section and it should not be so construed as to widen the ambit of the section and also to clarify the doubtful point in law and to serve as a proviso to main section.
The claim for additional sales tax by treating the contract value as the taxable turnover is not permissible under the provisions of either the TNGST Act or the Additional Sales Tax Act - there is no error apparent or infirmity in the reasons assigned in the impugned order in allowing the writ petition - appeal dismissed.
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2016 (10) TMI 815
Whether tax credit paid on purchases of Oxygen Gas and LPG used in cutting hull of the ship during ship breaking/scrapping process is admissible - The main thrust of the contention of the opponent was that the activity of ship breaking is a manufacturing activity and in that process since the Oxygen gas and LPG gas are being consumed, is entitled to have a tax credit - Held that: - the sales tax department since about 20 years by now has continued to assess the opponent as a manufacturer, there was no justifiable reason for determining authority to treat the activity not as a manufacturing activity - In case of Ship Scrap Traders 2001 (5) TMI 43 - BOMBAY High Court held that ship breaking activity gives rise to manufacture and production of altogether new commercial article or thing which is commercially indentifiable in the commercial world as other than ship and therefore, in that case, the assessee was entitled to claim deduction under Sections 80 HHA and 80-I of the Income Tax Act - opponent is engaged in ship breaking activity, which is nothing but a manufacturing process under the provisions of the VAT Act and the petroleum gases (LPG) and Oxygen gases are forming part of the said process, being raw material covered within the swip of Section 2(19) of the VAT Act, and since the same are the processing material and consumable stores in the activity, the tax credit of tax paid on purchases of these commodities is admissible under the Act - Decided in favor of the assessee.
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2016 (10) TMI 814
Levy of Penalty - Best judgment assessment - Period of limitation - Whether the initiation of proceedings and completion of assessment is within 5 years from last date of the return period or that there is an automatic extension of time as per the third proviso inserted from time to time - Held that: - Section 25(1) has to be taken only after issuing a notice on the dealer which apparently has to be done within five years from the last date of the year to which the return relates. The first proviso relates to a dealer being heard before making assessment under Section 25(1). The third proviso which was subsequently incorporated provides extended time for completion of assessments. It could only mean that time is extended only for completing assessment which have already been initiated after issuing notice under Section 25(1) within five years from the last date of the year to which the return relates - When a procedure under Section 25(1) is invoked, it has to be within the period of limitation and no exclusion can be claimed by the department merely for the reason that the assessee had opted for compounding and a procedure under Section 22(10) is being followed - Assessment proceedings are barred by limitation.
Every dealer, either registered or liable to be registered under the Act, is bound to file a return under Section 20 of the KVAT Act. The VAT regime had contemplated a self assessment which indicates that once the return had been submitted under Section 20(1) in the prescribed manner and accompanied by the prescribed documents, the assessment relating to the return period is deemed to have been completed on receipt of such return subject of course to the provisions of Sections 22, 24 and 25 - In view of the non obstante clause under section 25B, the Deputy Commissioner has the power to extend the time for taking steps under Section 25(1) in an instance where an investigation or enquiry is pending under the KVAT Act or any other law, or in instances where the assessment cannot be completed
It is clear from the statutory provisions aforestated that the penalty proceedings had to be completed within a specified time, i.e., within one year under Section 67 from the date of detection of offence mentioned under this section except where the extension of time is granted by the Deputy Commissioner. One year period aforementioned has been amended as three years with effect from 1/04/2005 - Held that: - But no materials are produced to support the stand that even after 25/4/2008, there was difficulty in taking penalty proceedings against the petitioners. When a specific contention is raised regarding limitation, it is for the respondents to justify the same by producing all necessary materials. In the absence of any material other than Ext.P7, it has to be assumed that the department was aware of the alleged offence as early as on 25/4/2008 - Petition allowed in favor of the assessee.
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2016 (10) TMI 813
Taxability - procurement of Fly Ash - exemption on clearance to SEZ - manufacture of PPC and OPC cement - service charges paid on procurement of Fly Ash - whether payment to Thermal Power Station is in the nature of royalty? - Held that: - the decision of the Hon'ble Supreme Court in the case of State of H.P. and others Vs Gujarat Ambuja Cement Ltd. and another [2005 (7) TMI 353 - SUPREME COURT OF INDIA] relied upon. Therefore, the finding to the said effect and the stand taken in that regard in the counter affidavit at paragraph No.7, deserves to be set aside.
Whether the respondent could have given different interpretation to the agreement which was entered into between the TNEB and the petitioner. The specific case of the petitioner is that if the agreement is treated to be as one of the agreement for sale, it would violate the notification issued by the Central Government of India as clearance of fly ash is a part of environmental protection exercise. However, this aspect has not been gone into in a proper prospective by the respondent.
Disallowance of exemption on clearance effected to SEZ - the respondent appears to have put the matter in cold storage for nearly ten months after the personal hearing and all of a sudden, has passed the impugned order that certain certificates produced by the petitioner are defective. However, it is seen that before doing so, no opportunity was granted to the petitioner. This Court had an occasion to consider the aspect, as regards the zero rated sale and exempted sale with regard to the sales effected to the units located in SEZ and a decision was rendered in the case of Tulsyan NEC Limited Vs Assistant Commissioner [CT] Harbour-[III], Assessment Circle, Chennai [2015 (2) TMI 564 - MADRAS HIGH COURT]. This decision also should have been borne in mind by the Assessing Officer, since the impugned assessment order was passed, much after the order in the case of Tulsyan. Thus, for all the above reasons, the impugned assessment under these two heads alone require to be reconsidered.
Writ Petition allowed - impugned order set aside insofar as the findings rendered by the Assessing Officer on the aforesaid two heads and the assessment shall be re-done, after affording an opportunity of personal hearing by clearly appreciating the scope of the agreement between the petitioner and the TNEB and the legal position which is prevailing as on date.
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2016 (10) TMI 812
Liability of petitioner in respect of a firm M/s. Industrial Engineering Corporation,Railway Station Road, Thrissur - petitioner stated that he was a partner of the said firm and later on denied to have any connection with the firm - Amendment to the affidavit to admit the liability - Held that:- The affidavit even admittedly filed in the year 2014. It is immediately after filing of the affidavit answer to the interrogatories that the present application for amendment has been filed by the petitioner when he came to know about the liability in respect of which he has been proceed with. It is true that the affidavit in connection with the interrogatories was submitted on 16.6.2014 but the amendment was filed in December, 2014. It cannot be said that there was undue delay in fling the application for amendment.
Further the amendment sought for is only clarificatory in nature and it cannot be said that new cause of action has been arisen for that purpose or new case has been introduced. By virtue of adding of the relief also that is not going to affect the structure of the suit as such as his case as a whole was that he was not liable to pay any amount to the department.
Further, the amendment will only help the court to decide the case in a right manner and that is required for proper adjudication of the case as well. - Amendment allowed subject to the payment of ₹ 5000/- to the Kerala Station Mediation Centre.
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2016 (10) TMI 786
Classification of goods - Out Board Marine Engine - classified under residuary entry and taxed at 12.5% or would fall under entry-42A as agricultural inputs and taxed at 4% - Whether on the facts and circumstances of the case, the Tribunal has rightly held that, the goods 'Out Board Marine Engine' commonly known as “Oil Engines” falls U/e No.42A of Schedule II of the Gujarat Value Added Tax Act,2003?
The assessee deals in Out Board Marine Engine of less than 15 HP capacity. Said engine is fitted on fishing boats and is used for the purpose of fishing. It is specially designed engine for such purpose - Held that: - the term 'agriculture' and the related terms have reference to cultivation of land. It would include floriculture, horticulture, the raising of crops, grass or garden produce, and grazing. All these activities would be in connection with the soil. By no stretch of imagination, activity of fishing would satisfy this definition. 11. A similar issue came up before the Supreme Court in case of Commissioner of Income-tax,West Bengal, Calcutta V/s. Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME Court] where it was held that Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, planting, and similar work done on the land itself. This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves upon the same. But if these basic operations are wanting the subsequent operations do not acquire the characteristic of the agricultural operations.”
Whether the goods fall entry-58A which pertains to plant and machinery? - Held that: - The term 'plant' in common parlance has thus acquired a definite meaning and would normally mean a self-contained area, structure or building containing one or more units with infrastructure such as an administrative section or storage or a laboratory, a building machinery etc. taken together that are used in the unit of industrial production are also categorized as plant. The fishing boat would certainly not fall within this description.
The entry-58A refers to plant and machinery and not plant or machinery. Accepting the contention of the assessee that the entry would include either plant or machinery would expand the scope beyond what the entry seeks to convey. Every piece of machinery whether part of a plant or not would come within its fold. When we hold that the boat is not a plant, an engine per-se which may be machine would not fit the description of said entry-58A. Shri Hemani however contended that such an interpretation would not be correct. He referred to definition of term 'capital goods' contained in Section 2(5) of the VAT Act which reads thus; “'Capital Goods' means plant and machinery (other than second hand plant and machinery) meant for use in manufacture of taxable goods and accounted as capital assets in the books of accounts.” He would submit that if same logic is applied here also, capital goods would include only machinery which part of a plant and not otherwise. We do not think so. This definition of term capital gods is worded as to mean plant and machinery used for manufacture of taxable goods. Word 'and' in this definition seems to have been used to convey the expression 'as well as'. A plant as well as machinery would therefore be capital goods if it is meant for manufacture of taxable goods. However, there are only passing remarks since we are not concerned with interpretation of definition of term 'capital goods.'
The judgment of the Tribunal set aside - The question answered in favour of the revenue - Tax Appeals allowed and disposed off.
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