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VAT and Sales Tax - Case Laws
Showing 21 to 40 of 68 Records
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2017 (11) TMI 1163
Jurisdiction - Article 226 of the Constitution of India - alternative remedy of appeal - Held that: - contentions, on a plain reading of it, itself would show that, contentions are on merits and not on jurisdictional issue alone - In a case where the contentions urged have been dealt with and answered, it is neither permissible for the litigant to thereafter seek liberty of this Court to be relegated to pursue statutory remedies and thereby to get the whole judgment itself nullified - appeal dismissed - decided against appellant.
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2017 (11) TMI 1162
Validity of assessment order - rectification petition - alternative remedy of appeal - section 84 of TNVAT Act - Held that: - the orders of assessment dated 18.07.2016, were sought to be rectified by filing applications under Section 84 of the TNVAT Act, 2006 and finding that there is no error apparent on the face of the record, said petitions have been dismissed on 30.09.2016. Assessment orders merges with the orders passed in the rectification petitions. When the petitioner/appellant is aware of the dismissal of the rectification petitions, it is not known as to how, the petitioner/appellant, has not chosen to challenge the subsequent orders.
An order under rectification petition can be challenged only by way of a revision under Section 54 of the Act. Despite the same, exercising discretion in favour of the appellant, writ Court has granted liberty to file the appeal - When the writ Court has relegated the said issue to be adjudicated before the competent authority, if any appeal is filed, finding to be record by us on the above, would amount to transgressing the powers of the appellate authority to address both on facts and Law. Direction of the writ Court, cannot be said to be erroneous. When subject matter is relegated to the concerned forum or the authorities concerned, as the case may be, writ Court is not bound to record a finding either on fact or law. In such a view of the matter, contentions to the counter are not tenable.
On more than one occasion, the Hon'ble Supreme Court as well as this Court, consistently held that writ against the assessment orders, ought not to be interfered with, when there is an effective and alternative remedy under the taxation statute.
When a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation - The High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance.
Appeal dismissed - decided against appellant.
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2017 (11) TMI 1161
Reopening of assessment - imposing higher rate of tax - whether reopening of assessments are justified, when assesment are complete and tax has been already paid - Held that: - the issue involved in this writ petition is squarely covered by the decision of the Division Bench of this Court in the case of The Commissioner of Commercial Taxes, Chennai and another V. M/s.Sundek India Ltd. [2015 (9) TMI 45 - MADRAS HIGH COURT], where it was held that assessments in respect of respondent / assessee having been completed pursuant to order passed by Special Tribunal and tax at rate of 10% was also collected, Revenue was not justified in demanding tax at 16% by seeking to reopen concluded assessments by issuing clarification - the SCN is without jurisdiction - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1160
Exemption from tax - purchases of mentha oil - notification dated 12 February 1999 - denial on the ground that it was not the ultimate exporter of the goods and unless it were established that the manufacturer and ultimate exporter are one and the same, the benefit flowing from the said notification would not be available - Held that: - A plain reading of the terms of the notification establishes that the primary issue which must govern the grant of exemption is the export of the manufactured goods. The notification neither mandates nor provides that the manufacturer himself export the goods out of India. As is evident from a plain reading of "Condition (i)", the emphasis is on the manufactured goods being exported and not that the actual manufacturer export the goods. The crucial test, therefore, is whether the manufactured goods have ultimately been exported out of India. In view thereof, the Court finds that the reasoning which weighed with the Department to deny relief to the revisionist on this score cannot be sustained.
Admittedly the assessee was not the ultimate exporter of the goods. In order to succeed, therefore, it would be incumbent upon him to establish that the transactions fall within the ambit of Section 5 (3) of CST Act 1956. This issue as to whether the manufactured goods have moved in the course of export cannot be determined on the basis of the notification dated 12 February 1999 since this would principally have to be answered with reference to the provisions encapsulated in section 5.
Appeal allowed by way of remand.
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2017 (11) TMI 1091
Classification of goods - Parachute Coconut Oil - Medikar - Held that: - Entry 43 of Schedule II Part A of the U.P. VAT Act, 2008 mentions edible oil and oil cake therefore if Parachute pure coconut oil which is marked as "edible" on its packaging cannot be lebeled as hair oil and therefore an unclassified item liable to tax at 12.5% it must necessarily be classified as edible oil under Entry no. 43 of Schedule II Part A - Parachute oil would be liable to tax at 4% and not as an unclassified item taxable at 12.5%.
Medikar - Held that: - Mediker which is used for anti-lice treatment is a drug because of its medicinal affect - Once it is a drug, it cannot be a shampoo. As a natural corollary, it will not invite the liability of levy of entry tax.
Revision dismissed - decided against Revenue.
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2017 (11) TMI 1090
Arrears of sales tax - whether the petitioner can be proceeded against for the tax arrears payable to M/s.Karpaga Electronics (P) Ltd? - Held that: - there is no charge on the property and there is no doubt about the bonafide of the purchase made by the petitioner, because it is TIIC who brought the property for sale - reliance placed in the case of Rukmani Versus The Deputy Commercial Tax Officer I [2013 (3) TMI 205 - MADRAS HIGH COURT], where it was held that there is no material placed before them to prove that steps have been taken under the provisions of the Revenue Recovery Act against the delinquent or the subsequent first purchaser, and therefore the petitioner therein cannot be penalized - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1089
Validity of assessment order - time limitation - case of petitioner is that assessing authority could not have passed the order of assessment in October 2008 for the period for the assessment year 1993-94 - Even the order of assessment was never served to the petitioner - Held that: - The case of the petitioner is that he had discontinued the business and left the premises and therefore was neither aware of the pending assessment proceedings nor passing of the final order of assessment, irreparable loss would be caused to the petitioner if the order of assessment is not allowed to be challenged merely on the ground of delay. Further, the petitioner’s ground of the assessments being time barred would require a closer examination.
The petitioner’s appeals before the first appellate authority shall stand revived subject to the petitioner filing applications for and persuading the first appellate authority to condone the delay - petition allowed by way of remand.
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2017 (11) TMI 1088
Validity of assessment order and notices - it was alleged that the petitioner has not fulfilled the conditions so stipulated in Notification dated 20.8.2010 as well as the conditions so provided under Section 13(1)(f) of the U.P. VAT Act - input tax credit - Section 29 of the VAT Act - Held that: - no fresh information, material or fact or reason has been recorded by the assessing authority to establish the satisfaction of any of the required pre-conditions of the applicability of the provisions of Section 29 of the VAT Act.
Section 29 of the VAT Act provides for reassessment of tax on turnover escaping from assessment. It lays down that if the assessing authority has reason to believe that the whole or any part of a turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under the Act.
In the present set of facts, particularly when admittedly the transaction has properly been examined and verified and where there is no fresh material available with the assessing authority, re-assessment proceedings are nothing but are roving and fishing inquiry of the matter, which is not permissible under the law nor it is permissible under Section 29 of the VAT Act.
In the assessment orders the assessing authority has properly examined the entire material and thereafter has allowed input tax credit on the sale price by accepting the credit notes, which are issued by the seller and once this aspect has been considered and examined, there was no occasion to the assessing authority to seek permission for re-assessment for re-opening the matter and in view of the aforesaid reasons the writ petitions stand allowed - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1036
Principles of Natural Justice - validity of assessment order - Held that: - in the impugned assessment orders, there is no reference to the petitioner's objections dated 23.3.2017, which were received by the officer himself. In the written instructions given to the learned Special Government Pleader, the respondent accepted that he had received the objections. If the respondent received the objections, he should have afforded an opportunity of personal hearing to the petitioner, considered the documents that they may produce and then completed the assessment. Having not done so, the failure of the respondent would render the impugned orders unsustainable and are in violation of the principles of natural justice - the matters are remitted back to the respondent for a fresh consideration - petition allowed by way of remand.
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2017 (11) TMI 1035
Payment of tax on compounded basis - ice cream - the petitioner applied for payment of tax on compounded basis, by taking the view that the ice cream that was manufactured and sold by it, was an item of cooked food which was one of the items in respect of which an assessee could discharge tax on compounded basis u/s 8 of the KVAT Act - reassessment order - whether it was open to the respondent to propose a rejection of an application submitted by an assessee for payment of tax on compounded basis, at the fag end of the assessment year, in respect of which the compounding application was preferred?
Held that: - when the statutory provisions detailing the procedure to be followed by an assessee, for the purpose of payment of tax on compounded basis, contemplate the consideration, by the department, of an application preferred by an assessee, and an intimation to be given to the assessee as to whether or not his application was accepted, for the purposes of enabling the assessee to discharge his liability on compounded basis, the respondent cannot, by a delayed action on its part, prevent an assessee from discharging the liability on compounded basis - In the instant case, since the assessee, after opting to pay tax on compounded basis, had to commence payment of tax on the said basis in the first quarter of the assessment year in question, any communication rejecting the request of the assessee for payment of tax on compounded basis ought to have been served on the assessee before the expiry of the said quarter. Only in such an event, would the assessee have had an opportunity to pay tax in accordance with the regular provisions of tax, as against the provisions of Section 8 of the KVAT Act - The non communication of any such rejection order by the respondent, effectively estopped it from subsequently issuing an order rejecting the application, since by that time the assessee was justified in discharging its liability in accordance with Section 8 of the KVAT Act, for which he had opted.
The assessment orders impugned in these writ petitions cannot be legally sustained. The delayed action on the part of the respondent would, under the circumstances, amount to a mere change of opinion by the assessing officer and, it is trite, that in exercise of powers under Section 25(1) of the KVAT Act, a change of opinion by an assessing officer cannot be the basis of a reassessment against the assessee.
The proposal to reject the application submitted by the assessee was served on the assessee only on 06.02.2017, which is in the last quarter of the assessment year 2016-17. This amounts to a serious lapse on the part of the department in the matter of issuing notices to an assessee, who in their opinion, was not entitled to opt for payment of tax on compounded basis, in respect of the product dealt with by him during the previous assessment year - It is for the Commercial Tax Department in the State to look into this lapse on the part of the officers under the department and take appropriate action against the said officers, in the event of a finding that there was negligent conduct on the part of the officers in permitting the assessee to pay tax on compounded basis.
Petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1031
Validity of assessment order - TNGST Act - Jurisdiction - Held that: - identical issue decided in the case of M/s. Salem Steel Suppliers, M/s. Madras Steel Agencies, M/s. Rajyog Steels, M/s. Reliable Steels, M/s. Myco Steel Agency Versus The Deputy Commissioner (CT) , The Commercial Tax Officer [2017 (9) TMI 946 - MADRAS HIGH COURT], where it was held that The power under Section 16(1) is wide enough and cannot be said to be limited to assessment of assessable turnover under that sub-section by the Assessing Authority only. It is to be invoked in all cases, where, a statutory functionary under the Act assumes jurisdiction to assess the escaped turnover. Therefore, it was held that, in passing an original order of assessment, the Board exceeded its powers under Section 34, and that the order was also passed beyond time. Therefore, the order was held to be unenforceable in law. - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1029
Recovery of sales tax arrears - auction of personal property of petitioner to recover dues of Company - whether respondents 1 and 2 can proceed against the personal property of the petitioner for recovery of the sales tax arrears payable by the 3rd respondent/company? - Held that: - even as per the statement made by the first respondent, the company owns properties. Therefore, the impugned notice proposing an auction of the petitioner's personal property is wholly without jurisdiction - reliance placed in the case of Chamundeeswari Versus Commercial Tax Officer, Vellore Rural [2007 (1) TMI 254 - HIGH COURT OF MADRAS], where it was held that It is well-settled that a company is a legal entity by itself and it can sue or can be sued as a legal entity and any dues from the company have to be recovered only from the company and not from its directors - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 1028
Revision of return - validity of assessment order - Held that: - the petitioner had filed a revised return on 21.12.2015 upto October 2015. Admittedly these revised returns were made much prior to the inspection done by the Enforcement Wing officers which was carried out in the business premises of the petitioner on 29.12.2015 and 30.12.2015. Therefore, the respondent ought to have considered the revised return for the said period. The revised returns filed by the petitioner for November 2015 and December 2015, which was received by the respondent on 01.12.2016, could not have been considered in view of the legal embargo under Section 7(9) r/w.Section 19(11) of the TNVAT Act.
What has happened in the present case is that the respondent has taken total purchase from 2010-11 to 2015-16 and assessed the petitioner to tax in a single Assessment year 2015-16. Therefore, to that effect, there is an error in the Assessment Order.
Petition dismissed - decided against petitioner.
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2017 (11) TMI 1027
Levy of Trade Tax - classification of goods - Poultry Feed Supplements - Whether the Poultry Feed Supplements as sold by the Revisionist/Assessee under its respective brand names are covered under the Entry 'Poultry Feed' and accordingly, are liable for exemption from Trade Tax? - Held that: - mere fact that certain items may cure disease or strengthen bones, liver etc., for that reason alone they may not be held medicine and not Balanced Cattle Feed or Poultry Feed.
A Division Bench of this Court in Friends Medicon (P) Ltd. Vs State of U.P. and others, [1996 (12) TMI 402 - ALLAHABAD HIGH COURT], also considered true meaning and import of word "Poultry Feed". It observed that word ''Feed' means, food given to an animal fodder, pasture, meal etc.' Poultry feed' has acquired a definite connotation in livestock farming and there are certain ingredients used as ''concentrates' in such feeds for the health and strengthening of poultry livestock. Feed simplicitor is essential for the maintenance of poultry feed but the concentrates like vitamins etc. in the food stuff enable the poultry to maintain energy, to perform the vital process of life and provide material to replace essential tissues, breakdown of which occurs in the body continuously - Even in the present case it could not be disputed that it composed of water, and organic and mineral matters. Organic matter is composed of proteins, ats, crude fibre and soluble carbohydrates. There are certain substances known as vitamins, medicines to remove toxins for strength and development of poultry.
It is well settled that as also need of common parlance that an animal feed supplement or cattle feed supplement or poultry feed supplement or balanced cattle feed or poultry feed is actually used as energy nutrients as well as nutrients rich with substance needs for strengthening the body and its development so that a person engaged in such farming may have good yield of cattles and poultry as the case may be.
Tribunal has erred in law in holding the items traded by revisionists by treating the same as medicines or drug and not as poultry feed supplements. The items in view of the circular of Trade Tax Commissioner have to be considered as balanced poultry feed and would have dealt with accordingly - revision allowed - decided in favor of revisionist.
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2017 (11) TMI 1025
Jurisdiction - Whether un-constituted Tribunal i.e., Pondicherry Sales Tax Appellate can admit the Tax Appeal in respect of Puducherry Value Added Tax Act, 2007. The said Act came into force on the 1st of July' 2007. Whether is it sustainable in Law? - Whether non-issuing of notification has been issued by the Government for constitution of Pondicherry Value Added Tax Appellate Tribunal and non - appointing of a Judicial Officer to exercise the function conformed under the new Act is sustainable in Law? - Held that: - in exercise of the powers in Section 33 of the erstwhile Pondicherry General Sales Tax Act, appointment has been made and since then, the Appellate Tribunal is functioning - as rightly contended by the learned Government Advocate (Pondicherry), when notification had already been issued, under the erstwhile Pondicherry General Sales Tax Act, 1967, then the saving clause, is attracted - decided against petitioner.
Whether the Assessing Officer has got power to file the Tax Appeal before the Tribunal under Section 49(1) of the Pondicherry Value Added Tax, 2007and is it sustainable in Law? - Held that: - Object of the then Pondicherry General Sales Tax Act, 1967, is to levy general tax on sale or purchase of goods in the Union territory of Pondicherry and to validate the levy and collection of such tax under certain Act of Pondicherry. Pondicherry Value Added Tax Act, 2007 is enacted to provide for the levy and collection of value added tax on the sale or purchase of goods in the Union territory of Puducherry and for matters connected therewith or incidental thereto - Under Article 265 of the Constitution of India, Government is empowered to levy tax. Tax is paid to the Government and it is the duties and functions of the authorities in the Commercial Taxes Department, to implement the taxing laws. Ultimately, it is the revenue, which is collected by the Government, by way of tax. As regards intra-state sale, there are provisions, both in the PVAT Act, 2007 or TNVAT, 2006, as the case may be.
Finality of orders, against the Government, at the first appellate stage, at the instance of an assessee, ie., before the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein and the same cannot be questioned by the Government and that no officer, would not be in a position to challenge the correctness of the the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein, even if there is an incorrect approach, either on facts or law. In a lis, involving tax, it is the Government and assessee, who are the parties and the assessing officer, is only an officer, implementing the taxing laws, on behalf of the Government - If the Appellate Assistant Commissioner (CT), Commercial Taxes Department, Puducherry, 2nd respondent herein, has committed an error, on facts or law or both, as the case may be, certainly the Government or any authorised officer, to levy tax, on behalf of the Government, can always maintain an appeal to the Appellate Tribunal, testing the correctness of the order - Literal construction of the words, "any person", confining only to an assessee and not to any officer to file an appeal, against the order of the appellate authority, to the Tribunal, would result in absurdity and the same would not serve the purpose and object of the Act. Hypothetical construction of the words, "any person", to mean only the assessee, would be inconsistent with the object and policy of the Act. It would defeat or impair the policy of the Act. Object, aim and scope of the Act, should be kept in mind and meaning should be collected from the expressed intention of the legislature - the issue decided against petitioner.
Whether the Assessing Officer has got power to levy higher rate of tax by overlooking the Government order and whether is it sustainable in Law? - Held that: - perusal of the material on record shows that the Appellate Tribunal has analysed the evidence and recorded a categorical finding of misclassification of Liquefied Petroleum Gas (LPG) and filing of returns, to gain benefit of lesser tax. The Tribunal has properly applied the Government Orders, applicable to the period in question. There is no perversity. Hence, the Substantial Question of Law No.4, is answered in the negative, against the assessee. Considering the material on record, we are of the view that the petitioner has not made out a case for interference, with the order of the Appellate Tribunal, Puducherry, dated 28.06.2017 passed in Tax Appeal No.15 of 2015.
Revision dismissed - decided against revisionist.
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2017 (11) TMI 930
Scope of SCN - case of petitioner is that the notice issued under Section 29(7) of the Act related to the assessment year 2008-09 under U.P. VAT Act is invalid as well as illegal - Held that: - for the aforesaid relief, the petitioner has already filed a Writ Petition No.44316 of 2012 which is pending consideration. We cannot pass any order in this writ petition with regard to the said claim as there are no pleadings in the present writ petition - we permit the petitioner to withdraw the appeal, if so advised, pending before the appellate authority for assessment year 2009-10 - petition disposed off.
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2017 (11) TMI 929
Classification of goods - computer peripherals - Routers and Hubs - - Clarification issued by the first respondent/Commissioner of Commercial Taxes, dated 29.07.2004 - Section 28-A of the TNGST Act, 1959 - Held that: - the impugned clarification, dated 29.07.2004 cannot be treated as superseding the clarification, dated 24.08.1998, as it does not contain any reasons to the said effect. Merely stating that the impugned clarification modifies the earlier clarification is insufficient. Even assuming that there is modification done by the Commissioner, such modification should contain reasons, as to how, the Commissioner proposes to take a different stand from that of the earlier clarification, which, in the instant case, was given, after obtaining the opinion of ELCOT, which would bind the first respondent.
The appropriate classification of switches, hubs and routers dealt with by the petitioner should undoubtedly fall under Entry 18 (i) in Part B of the first schedule to the TNGST. The counter affidavit filed by the second respondent does not render much assistance to the case of the respondent/Department. One more factor, to be taken into consideration is the proceedings of the Authority for Clarification and Advance Ruling under Section 60 of the Karnataka Value Added Tax Act, 2003. Though the clarification given by the said Authority will not bind the respondent, it will be a good indicator, as to how, the products dealt with by the petitioner have been considered under the Karnataka Value Added Tax Act, 2003.
The decision, in the case of C.M.C Ltd., [2015 (4) TMI 167 - MADRAS HIGH COURT] would support the petitioner's case, insofar as the the product, routers is concerned, where it was held that the goods sold by the assessee, namely, router, is a computer peripheral, falls under Serial No.22, Entry 68 of Part B of I Schedule of TNVAT Act, 2006. - petition challenging the clarification dated 29.07.2004 is allowed - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 928
Penalty u/s 24 (3) of the TNGST, 1959 - Revision Petitions have been rejected only on the technical ground that, as against original assessment orders, dated 10.02.2003, the petitioner has not filed any Appeals but has preferred Revision Petitions against the orders passed by the third respondent - Held that: - Section 55 of the TNGST Act provides for a remedy for the assessee to approach the Assessing Officer for any rectification. This is precisely what the petitioner/assessee has done on receipt of assessment orders by filing the Petition before the third respondent to issue revised proceedings.
It cannot be disputed that, as against an order passed under Section 55 of the TNGST Act, a Revision lies to the second respondent. Therefore, the petitioner is entitled to question the orders passed by the third respondent, dated 20.02.2003, by way of Revision Petition, hence, the impugned orders passed by the second respondent, rejecting the Revision Petitions as not maintainable are incorrect.
The matters are remanded back to the second respondent, with a direction to take up the Revision Petitions filed by the petitioner u/s 55 of the TNGST Act - petition allowed by way of remand.
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2017 (11) TMI 927
Input tax credit - whether the petitioner is entitled to input tax credit on the tax amount shown in the invoices issued by the sellers who have availed benefit of remission under SRO 91 dated 16.03.2006 issued under Section 79 of the Jammu and Kashmir Value Added Tax, 2005?
Held that: - It is well settled in law that circular/clarification cannot be contrary to the provisions of the Act and the Rules and by issuing subsequent circular, the department cannot incorporate new condition or restrict the scope of a notification granting exemption or whittle it down. Some purpose and policy decision is behind the notification issued by the State Government in exercise of statutory powers and therefore such benefit has to be provided to the investor/manufacturer which cannot be defeated by interpreting the notification in a different way - It is equally well settled legal proposition that once tax is paid, the assessee gets a vested right to avail the exemption/ refund as per the statutory provisions.
Section 21(9)(X) restricts the benefit of input tax credit to a registered dealer who gets the benefit of tax remission. The tax remission is available under SRO 91 dated 16.03.2006 to the Industrial units that is the seller from whom petitioner has made purchases and not to the petitioner. Therefore, the restriction contained in Section 21(9)(X) does not apply to the case of the petitioner. The input tax liability of the petitioner has exceeded its tax liability, therefore, under Section 22 of the Act, the petitioner is entitled to refund of the input tax credit.
The clarification dated 10.12.2007 insofar as it provides that there is no scope for allowing the refund by way of input tax credit because the benefit of remission also passes on from the manufacturer to the purchaser as he pays the tax notionally to the manufacturer by price adjustment is quashed, being contrary to the provisions of the Act - The orders of assessment passed by the assessing authority as well as the demand notices are hereby quashed - petition allowed - decided in favor of petitioner.
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2017 (11) TMI 864
Waiver of penalty and interest - recovery of tax arrear - Karasamadhana scheme - Section 42 of Chapter-V - Sections 62(4) and 63(7) of the KVAT Act, 2003 - Held that: - Admittedly, the ‘KSS 2017’, is a self contained and special piece of legislation enacted under the special circumstances in the month of March, 2017, to pave the way and to provide the clean slate for the new indirect regime of GST to be implemented from 01.07.2017 with a view to put an end to the pending litigation and also to recover the arrears of revenue under the old Enactments which were to be repealed under the new GST law. The main object and urgency of the implementation of the said Scheme carved out the special provisions in the said Scheme for achieving the twin objectives of the quicker and easy recovery of the arrears of tax and other demands and putting an end to the pending litigation. Naturally, it was a beneficial and welfare Scheme to provide the win-win situation for both the tax payers and the tax collectors. Though the said provisions made in the Scheme cannot be read as repugnant and in conflict with the provisions of relevant statutes, which the said Scheme covered but the at the same time, it also cannot be said that the usual procedure of assessment, adjudication, appeals and recovery provisions under the statutes themselves can be given the overriding effect over the said Scheme ‘KSS 2017’, even to the extent of undoing the purpose of the Scheme itself.
The stand of the Respondents-Department in the present cases, is incongruous and unsustainable and the same defeats the purpose of the Scheme for the Dealers, who voluntarily opted for the same giving up their valuable rights of disputing the entire liability as per the adjudication orders passed by the Assessing Authorities and putting an end to the litigation and paying the remaining arrears of tax, interest and penalty as per the provisions of the Scheme and thus giving finality to the dispute and achieving the twin purposes of the Scheme itself.
Since under the ‘KSS 2017’, the arrears of tax as well as the arrears of interest and penalty were to be determined in terms of the assessment order itself and remaining unpaid as on 15.03.2017, as required in Clause 2.4 quoted above, while scrutinizing the applications as per Clause 3.2 of the ‘KSS 2017’ itself, the Assessing Authority is not entitled to undertake fresh adjudication process of computing or adjusting the amounts deposited, in the manner he chose or applying the provisions of Section 42(6) of the Act - The provisions of Section 42(6) of the Act, read in conjunction and on sequence with other Sub-sections of Section 42, upon a harmonious reading would reflect that normally assessee is expected to first square up its liabitlity to pay the tax with the returns itself and thereafter upon passing of the assessment order and if the amount paid falls short of the aggregate amount of tax and other amount (penalty) and interest payable, such amount paid shall be first adjusted against interest. This sequence of payments and adjustments under Section 42(6) does not govern the payments and adjustments subject to appellate proceedings under Sections 62 or 63 of the Act nor they are applicable to special Schemes like ‘KSS 2017’ in the present case. The said Scheme is a self contained Code in itself and envisages first the complete payment of tax assessed and then only 10% of assessed interest and penalty and therefore, adjustment of amount lying deposited or paid after the assessment order should also follow the same sequence and the order of preference.
The well settled rule of interpretation of Tax laws that in case the two views are possible, the one favourable to the assessee should be adopted, clearly leads this Court to the aforesaid conclusion. The stand of the Revenue on the contrary therefore is not in consonance with the over all objective and clear provisions of the ‘‘KSS 2017’, promulgated with the avowed purpose of quick recovery of arrears of tax, interest and penalty and putting a quicker end to the litigation for both the parties.
During the pendency of the appeal, the payment or the deposit made by the petitioners-assessees, after the assessment orders are passed, remains the colourless deposit and cannot be adjusted under any specific head of the ‘total demand’ comprising of tax, interest and penalty and the full effect and play of the ‘KSS, 2017’ can be given to the assessee on a beneficial and purposive interpretation of the provisions of the said Scheme, only if such payment or deposit is first adjusted against the outstanding or arrears of tax, then against interest and then against penalty amount.
This Court is of the clear opinion that the rejection of the applications filed by the petitioners-assessees under the Scheme ‘KSS 2017’, after adjustment of the amounts deposited by them after the assessment orders were passed, first under the head ‘interest’ and thereafter computing the arrears of tax, interest and penalty is unsustainable in law and illegal and the impugned orders therefore deserve to be quashed and set aside and the writ petitions deserves to be allowed - petition allowed - decided in favor of petitioner.
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