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2022 (5) TMI 73 - HC - VAT and Sales TaxLevy of tax and interest on sales made by the petitioner - sale in the course of Import - warehoused goods - resale of goods in Daman - first point of sale - constitutional validity of Section 3 of the MVAT Act read with notification No. VAT/1511/C.R.-57/Taxation-1 dated 30th April, 2011 - levy of Central Sales Tax is contrary to the constitutional scheme of taxation or not - revenue neutrality - levy of tax is contrary to Article 265 and 300A of the Constitution of India or not? - HELD THAT:- A perusal of the record indicates that, the impugned levy under the assessment year 2016-2017 is in respect of point to point sales. The petitioner has been also levied highest rate of tax despite having been paid on the resale by the purchasing dealer (M/s Damania Enterprises) in the destination state Daman inspite of non issuance of C-Form. During the pendency of this writ petition C-Forms have been already furnished to the petitioner. The petitioner is at liberty to submit such C-Forms before the assessing authority in so far as high rate of tax demanded from the petitioner for not having been submitted the C-form earlier. The Hon’ble Supreme Court in a case of HOTEL ASHOKA (INDIAN TOURISM DEVELOPMENT CORPN. LTD.) VERSUS ACCT AND ANR. [2012 (2) TMI 62 - SUPREME COURT] has held that, no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the territory of India. If any transaction of sale or purchase takes place when the goods are imported in India or they are exported from India, no State can impose any tax thereon. The Supreme Court considered the situation whether the goods brought from foreign countries by the assessee had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. It is held by the Supreme Court that, when the goods are kept in bonded warehouses, it cannot be said that the said goods had crossed the customs frontiers. The goods are not cleared from the customs till they are brought in India by crossing the customs frontiers. When the goods are lying in the bonded warehouses, they are deemed to have been kept outside the customs frontiers of the country. Since the goods in question were sold by the petitioner from its bonded warehouse at Panvel to the bonded warehouse of the said M/s ASK Agencies at Kalamboli, New Mumbai, the sale was required to be treated as, “Sale in the course of import” and thus the petitioner rightly did not pay any tax on the said transaction being a bond to bond sale. In view of Section 3 and 41 of the MVAT Act read with Notification No. VAT/1511/C.R.-57/Taxation-1 dated 30th April, 2011, which are applicable to the facts of this case, the tax was required to be paid only in relation to sales of liquor which were purchased from the registered dealer on or after 01st May, 2011. This position is also reflected in the trade circular dated 4T of 2013 dated 26th June, 2013 - since the goods in question were transferred from the petitioner to M/s ASK Agencies suffer a single levy at the point of first sale, the tax in question already having been levied on the goods in question a fresh levy proposed to be made by the assessing officer in the hands of the petitioner is clearly in the teeth of Section 3 of the MVAT Act read with notification No. VAT/1511/C.R.-57/Taxation-1 dated 30th April, 2011 and is beyond scope and jurisdiction of the charging section and other provisions of the MVAT Act. A perusal of the Section 3 of the MVACT Act clearly indicates that, the levy under the said provision qua goods is in the hands of the dealer. Under Section 41(5) of the MVAT Act levy is only on the licensor. The levy of tax on the transaction has been already extinguished in view of the payment thereof already made by M/s ASK Agencies - In the facts of this case, the rate of customs duty would be applicable when the goods were cleared from the warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of said goods was presented by the assessee for clearance U/Sec. 68(1)(5) of the Customs Act. The said M/s ASK Agencies had cleared the goods for home consumption. The petitioner in this case has impugned the assessment order on various grounds including on the ground that tax demanded from the petitioner by the assessing officer is in excess of jurisdiction, without authority of law and unsustainable as the transaction is inter state (within Maharashtra) - Though an alternate remedy against the impugned assessment order is available to the petitioner since the impugned order is in excess of jurisdiction, bar to the maintainability would not apply to the facts of this case. The impugned assessment order thereby imposing a levy of fresh tax at this stage on the same transaction which has been already paid by M/s ASK Agencies is contrary to and in the teeth of Articles 265, 286 and 300A of the Constitution of India and thus deserves to be quashed and set aside on this ground also - Petition allowed.
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