9911796707
TMI Blog2009 (8) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be transported only if advance tax was remitted reckoning the value at the rate of Rs. 60 per kg. as notified by the Commissioner. The goods as well as the vehicle were ordered to be released, pursuant to the interim order passed by this court on June 13, 2008, on condition that the petitioner remitted advance tax on the price provisionally fixed as Rs. 60 per kg. making it clear that the payment will be subject to the result of the writ petition. In all the other cases, "timber" of different types has been brought into the State as imported from abroad and otherwise. When the vehicles were intercepted at different places/check-posts insisting for payment of advance tax as contemplated under section 47(16A) of the Act on the minimum sale price notified by the Commissioner as per circular No. 28/08 dated June 19, 2008, the power, competence and jurisdiction of the Commissioner to issue such circular and as to the sustainability of the sale price fixed therein, have been subjected to challenge, seeking for appropriate reliefs. The vehicles and the goods have been released pursuant to the interim orders directing payment of advance tax reckoning the "provisional sale price" as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and imminent danger sustaining serious loss because of the delay, if any, persons like the petitioner are constrained to meet the demand put forth by the Departmental authorities, who extract huge amounts towards advance tax, under section 47(16A) of the Act, merely because of their higher bargaining power and without any regard to the actual market price. It is stated that such petitioners are confronted with a "do or die" battle and that there is no other alternative for them but to succumb to the pressure tactics applied by the officers. Even if the authorities at the checkpost are satisfied over the actual price paid by the petitioners, they are virtually prevented from collecting the actual tax payable, in view of the impugned circular issued by the Commissioner stating that such advance tax has to be collected on the basis of the higher sale price fixed in the circular. The learned counsel submits that the term "sale price" is defined under section 2(xliv) of the VAT Act. Connecting the same to the term "turnover" as defined under section 2(lii) and also section 6 providing for levy and the provision for self-assessment under section 21, "audit assessment" under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue circulars fixing the sale price, for the purpose of realising the advance tax. It is also brought to the notice of this court that the value of the commodity is having nexus with the charge/levy under section 6 of the Act and as such, the value is to be decided by the assessing authority and not by the Commissioner, particularly, since the essential legislative power, which is conferred on the Government cannot be delegated to the Commissioner in this regard. The learned senior counsel asserts that the power under section 3(2)(c) of the Act is only with regard to the administrative affairs, which, even by the farthest stretch of imagination, can never be pressed into service for fixing the "sale price" in view of the dictum in Choice Plywood Industries v. State f Kerala [2006] 147 STC 72 (Ker); [2006] 2 KLT 513. This is also sought to be supported in the light of the observations made by the apex court in State of Kerala v. Travancore Chemicals and Manufacturing Co. [1999] 112 STC 191; [1999] 1 KLT 91, where a provision was set aside, holding that the same conferred unbridled power on the Government, which is stated as squarely applicable to the cases in hand as well and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and contends that the impugned circular is against the mandate under section 47(2), which is more or less identical to the stipulation under section 119 of the Incometax Act. Reliance is sought to be placed on the decisions rendered by the apex court in Sirpur Paper Mill Ltd. v. Commissioner of Wealth-tax, Andhra Pradesh [1970] 77 ITR 6 and Mangesh Sudhakar Sarode v. State of Maharashtra [2004] 265 ITR 423 as well. Fixation of the market value by the Commissioner is stated as wrong and unsustainable, referring to the law declared by the apex court in State of Punjab v. Mohabir Singh [1996] 1 SCC 609. The learned counsel also submits that the tax is liable to be paid on the actual sale price and not on the probable price obtainable in future, placing reliance on the decision rendered by the apex court in State of Rajasthan v. Rajasthan Chemists Association [2006] 147 STC 542; [2006] 6 SCC 773. While mutually supporting the contentions raised by the petitioners in different cases, all the learned counsel appearing for the petitioners submit that, though sustainability of the power to issue circulars demanding "advance tax" can be justified (which position is not conceded in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings and that the assessing authority or the appellate authority, while exercising such jurisdiction, is not bound by the price shown by the Commissioner in the concerned circular. This is more obvious from the circular No. 53/2006 issued by the Commissioner himself, modifying the course stipulated in circular No. 50/2006, catering to the convenience of the dealers. The purpose behind the legislation, particularly when section 47(16A) was brought into existence, providing for collection of advance tax in respect of "evasion prone commodities" to be specified by the Commissioner is sought to be highlighted, asserting that the Commissioner is having all incidental powers for implementing the mandate under the statute with intent to prevent the evasion of tax. As observed hereinbefore, the constitutional validity of section 47(16A) was considered and dealt with in detail by this court in Fantacy Sales Corporation v. Sales Tax Inspector, Walayar [2007] 7 VST 323; [2007] 2 KLT 174 where the validity of the provision was upheld. Placing reliance on the decision rendered by the apex court on State of Rajasthan v. Rajasthan Chemists Association [2006] 147 STC 542; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s will be entitled to get refund or set-off, as the case may be. Almost all the decisions cited before this court appear to have been cited by the learned counsel while moulding the case in Fantacy Sales Corporation v. Sales Tax Inspector, Walayar [2007] 7 VST 323 (Ker); [2007] 2 KLT 174; the scope and applicability of which have been discussed in detail therein and hence do not require to be re-stated/re-appreciated, except to the extent as dealt with herein. This being the position, the challenge raised against the power, competence and jurisdiction of the Commissioner fixing the "provisional sale price" in the circular, which is also stated as on the basis of proper market study, cannot be sustained at all. It is to be noted that, by demanding the tax in advance, the State does not impose or levy any tax, which the State is not competent to levy. The attempt is only a measure to prevent evasion of tax, which the State is legitimately entitled to collect. It is never an attempt to tax the inter-State sale and free flow of goods is also not prevented by demanding tax in advance. As observed by this court in Fantacy Sales Corporation v. Sales Tax Inspector, Walayar [2007] 7 VST 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall accept such certificates and permit the consignments to be transported after satisfying the genuineness of the certificate with reference to the consignment. The said circular also points out the necessity to maintain the relevant registers by the "assessing authority" as well as the "check-post authorities" in this regard. In the earlier circular, 50/2006 dated December 18, 2006 providing for collection of advance tax on "evasion prone items", on the basis of the estimated sales turnover to be collected at the check-post, it was stipulated that while estimating the sale value, guidelines already circulated for valuation of items such as chicken, timber, etc., shall be followed. It was further stipulated that the dealers, who paid advance tax at the entry point, as above, can adjust the said amount against the output tax due for the month while filing return for the respective return period. This by itself shows that, it was at the option of the dealers; either to have paid advance tax at the check-post/entry point on the basis of the estimated sales turnover fixed on the basis of the guidelines issued, with liberty to have it adjusted against the output tax due for the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems brought in by the dealers, following the course stipulated thereunder. This is more so, since the goods are not brought in to cater to the requirements of the State/ Department and that the State/Department is not doing any business, dealing with the commodity in its day-to-day affairs. In so far as the State/ Department is concerned, the interest and concern is only to protect the revenue and to prevent evasion of tax in respect of the transactions pursued by the dealers and it is only to give "tooth and nail" to the said exercise, that the power to purchase the goods, if any "under-valuation" is doubted, is conferred under section 45 of the Act. The idea and understanding of the petitioners to the contrary is quite wrong and misconceived. It is very much relevant to note that section 47(16A), which was brought into effect from July 1, 2006 by virtue of the Kerala Finance Act, 2006, starts with a "non obstante clause". By virtue of the terminology used in the provision, paramount importance is given to the necessity to prevent any "evasion of tax" and it is with this intent that the power flowing therefrom is consciously conferred on the Commissioner. The above power coupled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, 2007, specifying the norms for issuing the green cards and the facilities conferred on the green card holder, is extracted below. Rule 21A: "(1) Every dealer satisfying the following criteria may be issued green cards by the Commissioner of Commercial Taxes under section 19A of the Act, namely:- (a) Dealers with annual net tax remittance of minimum rupees fifty lakhs in the previous financial year. (b) Dealers who have filed all returns in time without incurring any delay for the previous year. (c) Dealers who have submitted their statutory form like delivery notes and F form within the stipulated period for the previous year. (d) Dealers who have not been penalized by the Commercial Taxes Department for any offence for the previous three years. (2) Every green card holder shall be entitled to the following facilities, namely:- (a) Clearance of all their consignments at all check-posts within two hours. (b) Priority in issue of statutory forms like Delivery Note, C Form, F Form. (c) Grant of statutory forms like Delivery Note, C form, F form and salesman permit in one hour of application. (d) Grant of Branch Registration in one day within the same district and w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
