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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 76 Records
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2017 (10) TMI 1164
Validity of assessment order - TNGST Act - Section 54 of the TNGST Act - opportunity to cross-examine - Held that: - without affording an opportunity of cross examination of the other end dealer, there was no scope for the respondent to rely on the material relating to the said dealer for determination of the said liability on the petitioner - petition allowed.
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2017 (10) TMI 1102
Validity of protective assessment - Section 38(5) of the Act - KVAT Act - case of petitioner is that u/s 38(5) of the Act, the protective assessment can be issued only if the prescribed authority has reasons to believe that such dealer would fail to pay any tax, penalty or interest so assessed or imposed or payable. There was no reason whatsoever for the lower authorities to believe that the petitioner would fail to pay the taxes, penalties or interests' so assessed or imposed - Whether the authority was justified in invoking the provision of section 38(5) when a notice under Section 82 of the Karnataka Value Added Tax Act has already been issued?
Held that: - section 82 of KVAT Act does not give any inference that there is any prohibition for initiating action under section 38(5) of the Act, once a notice under section 82 of the Act is issued - Further, it is also not the case of the petitioner that the proceedings under section 82 of the Act has been concluded with respect to the relevant years 2005-06, 2006-07, 2007-08 and 2008-09. Thus, nothing has prevented the prescribed authority to initiate action under section 38 of the Act, provided the essential of the said section are met with.
The opinion expressed by the Apex Court in Larsen & Toubro Ltd. (supra) cannot be considered as an excuse for the dealer under the Act for non payment of his tax periodically. In the absence of any specific direction or stay order allowing him to desist or delay from making payment of tax, merely because of an opinion to refer a matter to a larger Bench by the Hon'ble Apex Court cannot be taken as reasonable excuse for the dealer for non-payment of the tax which is a revenue to the State, at the appropriate time. As such, the petitioner since had no valid reasons for non-payment of tax.
The prescribed authority had every reason to believe that the petitioner would fail to pay any tax, penalty or interest so assessed or payable by him. In this regard, the prescribed authority in its order under section 38(5) of the Act dated 11.11.2011 has given a detailed reasoning as to what made it to arrive at a belief that the petitioner would fail to pay the taxes, penalties and interests that are legally payable. We do not find any reason to disbelieve or reject those reasonings given by the prescribed authority.
Petition dismissed - decided against petitioner.
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2017 (10) TMI 1101
Best judgement assessment - Belated filing of returns - whether the impugned orders of assessment making a best of judgment assessment after the returns were filed, were just and proper? - Held that: - It is not in dispute that the returns for the relevant assessment years were filed by the learned counsel for the petitioner after the inspection was conducted in the place of business of the petitioner. However, the fact remains that the respondent accepted the belated returns by exercising its powers in levying a composition fee of ₹ 2,000/- for each assessment year in terms of Section 72(1)(b) of the said Act. On such returns being accepted after the levy of composition fee, it goes without saying that such returns, for all the practical purposes, shall be the returns and deemed to have been presented within the time permissible for the relevant assessment year.
Whether a best of judgment could have been made? - Held that: - there could not have been an estimate of turnover without any material especially when the returns filed by the petitioner, though belatedly, have been accepted by the respondent - the decision in the case of A.Ponnusamy Vs. Government of Madras [1967 (7) TMI 119 - MADRAS HIGH COURT], would be squarely applicable to the facts of the present case, where it was held that it is only any excess sales not covered by the purchases that can be added.
The matters are remitted back to the respondent for a fresh consideration - petition allowed by way of remand.
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2017 (10) TMI 1020
Constitutional validity of Section 9 (2) (g) of the Delhi Value Added Tax, 2004 - Articles 14 and 19 (1) (g) of the Constitution of India - failure to deposit VAT collected from its buyers, which included SCT - it was alleged that ITC availed by SCT on the purchases did not match with the sale details filed by the vendor.
Held that: - there is a singular failure by the legislature to make a distinction between purchasing dealers who have bona fide transacted with the selling dealer by taking all precautions as required by the DVAT Act and those that have not. Therefore, there was need to restrict the denial of ITC only to the selling dealers who had failed to deposit the tax collected by them and not punish bona fide purchasing dealers. The latter cannot be expected to do the impossible. It is trite that a law that is not capable of honest compliance will fail in achieving its objective. If it seeks to visit disobedience with disproportionate consequences to a bona fide purchasing dealer, it will become vulnerable to invalidation on the touchstone of Article 14 of the Constitution.
The purchasing dealer is being asked to do the impossible, i.e. to anticipate the selling dealer who will not deposit with the Government the tax collected by him from those purchasing dealer and therefore avoid transacting with such selling dealers. Alternatively, what Section 9 (2) (g) of the DVAT Act requires the purchasing dealer to do is that after transacting with the selling dealer, somehow ensure that the selling dealer does in fact deposit the tax collected from the purchasing dealer and if the selling dealer fails to do so, undergo the risk of being denied the ITC. Indeed Section 9 (2) (g) of the DVAT Act places an onerous burden on a bonafide purchasing dealer - All this points to a failure to make a correct classification on a rational basis so that the denial of ITC is not visited upon a bonafide purchasing dealer. This failure to make a reasonable classification, does attract invalidation under Article 14 of the Constitution, as pointed out rightly by learned counsel for the Petitioners.
It can straightway be seen that Section 48 (5) of the MVAT Act is not an exact replica of Section 9 (2) (g) of the DVAT Act. For instance, Section 48 (5) of the MVAT Act requires the selling dealer to have “actually paid” the tax collected by him with the Government for the purposes of the purchasing dealer availing ITC, whereas Section 9 (2) (g) of the DVAT Act requires the selling dealer to either “deposit” the tax collected or lawfully adjust it against his output tax apart from correctly reflecting the sale in his returns.
In the present case, the conditions imposed for the grant of ITC are spelt out in Sections 9 (1) and (2) of the DVAT Act and have been adverted to earlier. The claim of the purchasing dealer in the present case is not that it should be granted that ITC de hors the conditions. Their positive case is that each of them, as a purchasing dealer, has complied the conditions as stipulated in Section 9 and therefore, cannot be denied ITC because only selling dealer had failed to fulfil the conditions thereunder. More importantly, the Court finds that there is no provision in the MVAT Act similar to Section 40A of the DVAT Act. Section 40A of the DVAT Act takes care of a situation where the selling dealer and the purchasing dealer act in collusion with a view to defrauding the Revenue.
Whether Section 9 (2) (g) of the DVAT Act, requires to be struck down as violative of Article 14 or can be saved from invalidity by any known interpretational device? - Held that: - the expression “dealer or class of dealers” occurring in Section 9 (2) (g) of the DVAT Act should be interpreted as not including a purchasing dealer who has bona fide entered into purchase transactions with validly registered selling dealers who have issued tax invoices in accordance with Section 50 of the Act where there is no mismatch of the transactions in Annexures 2A and 2B. Unless the expression “dealer or class of dealers” in Section 9 (2) (g) is “read down” in the above manner, the entire provision would have to be held to be violative of Article 14 of the Constitution - the default assessment orders of tax, interest and penalty issued under Sections 32 and 33 of the DVAT Act, and the orders of the OHA and Appellate Tribunal insofar as they create and affirm demands created against the Petitioner purchasing dealers by invoking Section 9 (2) (g) of the DVAT Act for the default of the selling dealer, and which have been challenged in each of the petitions, are hereby set aside.
Petition allowed.
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2017 (10) TMI 1019
Rectification of error - rejection on the ground that the petitions do not involved any error apparent on the face of the record - TNVAT Act - Held that: - the tax paid by them has been realised by the respondent on 20.01.2014. For the assessment year 2014-2015, though the petitioner has requested for copies of the import documents, the respondent has not furnished the same and has rejected the petition filed under Section 84 of the Tamil Nadu Value Added Tax Act stating that there is no error apparent on the face of the record. The power conferred on the respondent under Section 84(1) of the Act is a power to rectify any error apparent on the face of the record. The statute does not state that such power can be exercised only to correct arithmetical or clerical errors. The language employed in Section 84 of the Act would confer power on the authority to review its decision, if there is error apparent on the face of the record.
The respondent should have passed a speaking order as to why he was convinced that there is no error apparent on the face of the record. It is not enough to refer to Section 84 and state that there is no error apparent on the face of the record - matter is remanded to the respondent for fresh consideration - petition allowed by way of remand.
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2017 (10) TMI 1018
Levy of purchase tax - The stand of the Department is that since the petitioner is not liable to pay tax on sales of treated Rubber wood by virtue of the exemption order, the petitioner cannot have the benefit of S.R.O.No.9/2007 - whether the petitioner is entitled for the benefit of exemption of purchase tax payable under S.5A of Kerala General Sales Tax Act, 1963? - Held that: - The petitioner themselves are the manufacturer. They are exempted from payment of sales tax. All manufacturers, who are liable to pay tax either under KGST Act or Central Sales Tax are eligible for exemption. Nobody has a case that the petitioner is not liable to pay tax but for the exemption given to them. Granting an exemption itself would show that the petitioner is liable to pay tax. Non-payment of tax itself will not make the manufacturer ineligible for the benefit of S.R.O.No.9/2007. Since the petitioner is liable to pay sales tax, though they need not pay tax by virtue of exemption, certainly, they would be entitled for the benefit of S.R.O.No.9/2007 - petition allowed.
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2017 (10) TMI 950
Manufacture - coal briquettes - case of assessee is that since there was no distinction between coal and coal briquettes, there could have been no levy of tax on coal briquettes on their sale within the State of U.P - Whether coal briquettes are as same as coal and hence no liability of tax can be fastened on the sale of coal briquettes? - Held that: - Admittedly the expression manufacture as defined under the Act, brings within its ambit various processes including the adaptation, treating and processing of goods - reliance placed in the decision in the case of Sonebhadra Fuels Versus Commissioner, Trade Tax, UP., [2006 (8) TMI 304 - SUPREME COURT OF INDIA], where it was held that the process of making coal briquettes will amount to a "manufacture" as it is processing, treating or adapting coal - revision application dismissed.
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2017 (10) TMI 949
Jurisdiction - power to revise - whether the writ court can revise the order of this court passed under section 11 of U.P. Sales Tax Act, 1948 which provides Revision by High Court in special cases?
Held that: - the judgment and order dated 13.7.2017 passed by this court in Trade Tax Revision No. 67 of 1994 cannot be annulled or reviewed by invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India inasmuch as the issue in question has been dealt, considered and decided by this Court in Trade Tax Revision against the petitioner. The writ court cannot sit in appeal over the judgment of this court passed in Trade Tax Revision. The petitioner has admittedly raised the issue raised herein before the Sales Tax Tribunal under section 10 of the U.P. Sales Tax, 1948. Admittedly, feeling aggrieved by order of Sales Tax Tribunal, the Revision under section 11 of the U.P. Sales Tax Act, 1948 was filed before this Court bearing Trade Tax Revision No. 67 of 1994 which has finally been decided vide judgment and order dated 13.7.2017.
The efficacious and appropriate remedy is not the writ petition but the order of the Trade Tax Revision could have been assailed before the Hon'ble Apex Court, if the petitioner so advised.
The petitioner may, therefore, approach the Hon'ble Apex Court, if so advised but it cannot re-agitate the same issue before the writ court by filing writ petition under Article 226 of the Constitution of India.
Petition dismissed.
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2017 (10) TMI 948
Manufacture - cold drink - whether the process of dilution amounts to "manufacture"? - Held that: - it cannot possibly be countenanced or accepted that the process which the assessee adopts does not result in the creation of a new marketable commodity. A cold drink concentrate and an aerated drink obtained after processing the concentrate can never possibly be viewed as being of the same genre or form. The process undertaken by the revisionist results in the formation of a commodity which obtains an identity which is distinct from the original product which was cold drink concentrate.
An aerated drink was manufactured from cold drink concentrate thus giving birth to a commercially distinct and independently recognized commodity - revision dismissed.
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2017 (10) TMI 947
Penalty u/s 10-A of the CST Act, 1956 - allegation against the petitioner is that they have purchased Wind Mill and other spare parts for mills and the Form 'B 'certificate issued to the petitioner for registration under the provisions of the CST Act does not include the Wind Mill - Held that: - The Hon'ble Full Bench of this Court in the case of State of Tamil Nadu v. Nu-Tread Tyres [2006 (7) TMI 578 - MADRAS HIGH COURT] has held that Section 10(b) of the CST Act provides for an offence if any person being a registered dealer falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration. The expression falsely represents, clearly shows that the element of mens rea is the necessary component of the offence.
The levy of penalty is not authorized, as there is no allegation of false representation or mis-representation on the part of the petitioner - petition allowed - decided on favor of petitioner.
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2017 (10) TMI 946
Principles of natural justice - service of notice - the petitioner was not issued any notice prior to completing the assessment and they had no opportunity to rebut the allegations against them - Held that: - the first respondent did not afford a reasonable opportunity to the petitioner before impugned assessment orders were passed. For the above reasons, this Court is inclined to grant relief to the petitioner - petitioners are directed to treat the impugned proceedings as show cause notice and to file their objections - petition allowed by way of remand.
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2017 (10) TMI 945
Validity of assessment order - TNGST Act - it was alleged that petitioners have effected transaction with the registration cancelled dealers - Held that: - The Hon'ble Supreme Court in State of Maharashtra Vs. Suresh Vs.Suresh Trading Company [1996 (2) TMI 451 - SUPREME COURT OF INDIA] has held that the subsequent registration cancellation does not effect the right of the purchasing dealer for deduction . Apart from this reason, there appears to be no other reason on which the petitioner has challenged the order of assessment - matter is remanded back to the respondent to assess the petitioner to the correct rate of tax without going into the aspect that the petitioner has effected transaction with the registration cancelled dealers - petition allowed by way of remand.
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2017 (10) TMI 885
Taxability - burnt coal - UPVAT Act - in the process of manufacturing paper and at the end of the manufacturing operation a residue of coal is left over which is then sold by the revisionist - classification of the residual item - taxable at 4% or 10%? - Held that: - the Department does not rest its decision on any evidence which may have established that the residual commodity had lost all its combustible properties. It is pertinent to note that it was the Department which was proceeding to reject the stand taken by the assessee that coal dust was not liable to be taxed at the rate of 4%.
While it is true that the principles of res judicata may not strictly apply to taxation assessments, insofar as generic issues inter partes are concerned, they must bind. In issues of classification, the Department cannot be permitted to vacillate unless there be new material and evidence which may justify or warrant a change in stance.
Revision allowed - decided in favor of assessee.
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2017 (10) TMI 884
Valuation - soft coke/ special smokeless fuel - Assessing Officer imposed tax on the petitioner under the VAT Act by treating the price of coal to be of ₹ 7000/- per Metric Ton instead of assessing the tax based on the actual sale price and the price of coal indicated in the Sale order @ ₹ 1740/- per M.T. - Held that: - if the transporter or the trader carries the identified goods at lesser price than the quoted minimum price, i.e. as indicated in the circular then an enquiry is conducted and if authenticity of rate claimed by the assessee is established then the price or rate claimed by the assessee can be accepted for imposition of duty/tax - In this case, if we go through the assessment order in question we find that merely because the price quoted in the invoice and the document produced by the assessee were lesser than the minimum price fixed in the circular the amount of excess tax was imposed.
When the evidence as is available on record shows that the coal is purchased @ 1740 per M.T. merely because of a circular issued by the State of Bihar fixing the minimum price of certain commodity, which is not the foundation price or the price of the commodities but is only a price indicated on the basis of some exercise done to stop evasion of duty, in the absence of any material or cogent evidence available to show that the petitioner has tried to evade duty by under-pricing the price of coal the State Government cannot act in an arbitrary manner and impose duty based on such a circular. The circular may be used for the purpose of verification and curtailing evasion of duty and for checking under-valuation of goods in the check-post but merely on the basis of the circular without there being any specific evidence to show under price and ignoring the material available on record any action done for imposing tax in duty is unsustainable.
Petition allowed - decided in favor of petitioner.
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2017 (10) TMI 883
Principles of Natural Justice - validity of assessment order - delay in communicating the impugned order - Held that: - the matter is remanded to the respondent for fresh consideration, who shall issue notice not only to the petitioner but also to the other end dealers, through the respective Assessing Officer, and conduct an enquiry and redo the assessment in accordance with law - appeal allowed by way of remand.
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2017 (10) TMI 882
Validity of assessment order - penalty u/s 9(2) of the CST Act - Held that: - the respondent has found fault with the petitioner in having produced the letter from the buyers, rectifying the defects in Form C. The petitioner explained that the defect has occurred on account of the purchasing dealer, and it is they, who have to rectify the defect. In that regard, the petitioner produced a letter from the dealer. Further, the petitioner explained that, however, had opportunity been granted to them, they would have been in a position to produce records to show that, whatever turnover, which was not reported in the return as transit sale, were assessed to tax and requisite amount of tax has already been paid.
There has been violation of principles of natural justice, and the petitioner did not have adequate opportunity to putforth their plea in spite of specific request made to the respondent for being heard in person. This Court is convinced that the matter should be remitted back to the Assessing Officer for redoing the assessment in accordance with law - petition allowed by way of remand.
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2017 (10) TMI 832
Issuance of Writ of prohibition - Revision of assessment - TNGST Act - It is the case of the petitioner that the exercise of option under Section 7(C) of the Act is at the discretion of the assessee and the Assessing Officer does not have any jurisdiction or power to refuse such an option exercised by the assessee and more so, when the assessment has already become final - Held that: - Admittedly, the respondent has power and jurisdiction to issue notice to revise a completed assessment. Therefore, it cannot be stated that the impugned notice is without jurisdiction.
The point that the petitioner seeks to canvass is on the ground that the Assessing Officer has no discretion, but to accept the option exercised by the dealer under Section 7 (C) of the Act. Apart from other contentions these aspects involves adjudication into facts. Equally, the issue relating to works contract is also a factual matter. Thus, the petitioner has to necessarily submit themselves to the jurisdiction of the respondent and file their objections to the notice dated 11.04.2005 - while declining to grant the prayer sought for, liberty is granted to the petitioner to submit their objections to the notice dated 11.04.2005 - petition dismissed.
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2017 (10) TMI 733
Scope of Entry 54 of List II of the Seventh Schedule to the Constitution of India - imposition of tax contrary to the tax on the sale of the undivided share in the land - works contract - Held that: - the petitioner-assessee can very well raise even the said issue raised before this Court in the present writ petition, namely, the taxability of the land cost, in the appeal filed before the said First Appellate Authority itself as the said questions are undoubtedly mixed questions of law and facts and the Authorities created under the Act including the Appellate Authorities are entitled to go into such mixed questions of facts and law and decide the same in accordance with law - petition disposed off.
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2017 (10) TMI 695
Continuation of attachment order - Attachment of stock, bank accounts and fixed assets - section 45 of the VAT Act - By orders dated 07.09.2016 and 08.09.2016, attachment orders were passed - Held that: - Sub-section (2) of section 45 of the Act, in plain terms, ensures that the life of a provisional attachment order does not extend beyond a period of one year. Therefore, unless the order of provisional attachment is withdrawn, recalled, set aside or merges into some final order earlier, the same would cease to have effect at the end of a period of one year - This would ensure that the authority would examine the current position and would take a fresh decision that to protect the interest of Government revenue, it is necessary to pass fresh order of provisional attachment and that the earlier order of attachment would not mechanically continue indefinitely.
The impugned orders of attachment were passed on 07.09.2016 and 08.09.2016. In terms of sub-section (2) of section 45, therefore they would become ineffective - petition allowed - decided in favor of petitioner.
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2017 (10) TMI 694
Validity of assessment order - TNVAT Act - petitioner's case is that the pre-revision notice was served on the petitioner and the notice had been returned with postal endorsement left - Rule 19 of the TNVAT Act - Held that: - this Court is of the view that the petitioner can be afforded one more opportunity to go before the Assessing Officer and put forth their objections as the pattern of assessment is identical to all the assessment orders and the revision of assessment itself is based upon report of the Enforcement Wing - the petitioner is to treat the impugned orders as show cause notices and submit their objections within a period of 15 days from the date of receipt of a copy of this order - matter on remand.
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