9911796707
TMI Blog2012 (2) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... November 21, 2007, October 21, 2008 and November 13, 2009, issued by the first respondent. Apart from seeking invalidation of the Commissioner's circular, distinct consequent reliefs are sought in the several writ petitions. In W.P. No. 23547 of 2011 and W.P. No. 27345 of 2011, a direction to respondent Nos. 3 to 6 not to take any coercive steps pursuant to the impugned circular including collection of tax is sought. In W.P. Nos. 27312 and 27326 of 2011, a direction to the respondents (State Revenue Authorities) is sought, to direct them to adjust amounts already paid pursuant to the impugned circular in future tax liabilities of the petitioners. In W.P. No. 23547 of 2011, there are forty-two petitioners; in W.P. No. 27312 of 2011 nine petitioners; in W.P. No. 27326 of 2011 eighteen petitioners; and in W.P. No. 27345 of 2011, there are five petitioners, all rice millers operating in West Godavari District. The petitioners purchase paddy from farmers directly or from marketing committees, convert the same into rice by milling, for eventual sale. All the petitioners are VAT dealers registered with respective Commercial Tax Officers. Purchase of paddy, milling the same and sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice miller) VAT dealers, of that district. Pursuant to this query, the Commissioner issued the impugned circular. This circular reads: CCT'S Ref. No. AIII(1)/98/2010 dated May 22, 2010 Sub: APVAT Act and CST Acts-Determination of taxable T. O's-Rice Mills-Incentives bonus announced by the Central Government for procurement of paddy-Exemption from payment of tax on the turnover pertaining to bonus-Certain clarification requested-Issued-Reg. Ref: DC(CT) Kakinada Rc. No. G2/234/10, dated May 3, 2010. In the reference cited the Deputy Commissioner (CT) Kakinada, sought for clarification on the admissibility of deductions of incentive bonus, given by FCI (GOI) from the taxable turnover of the rice millers. In this regard, it is informed that the Government of India through FCI sanctions incentive bonus of Rs. 50 per quintal of paddy for the benefit of farmers. As per rule 16(c) of the APVAT Rules, the amounts of incentives, sanctioned by GOI or GOAP for the benefit of the farmers, are eligible for deduction from the taxable turnover. Such deduction is admissible in the case of rice millers to the extent of the incentive bonus of Rs. 50, sanctioned by the Government of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng contrary to the policy formulated by the Union of India is illegal; and (c) the circular could not have been issued without consulting the Central Government. The challenge and reliefs sought: In oral argument the contentions as pleaded are reiterated. In W.P. Nos. 23547 and 27345 of 2011, a prophylactic relief is sought even before assessment proceedings were initiated in respect of the returns filed by the petitioners for the respective tax periods and only invalidation of the Commissioner's circular is sought. In W.P. Nos. 27312 and 27362 of 2011 however, on the basis of the impugned circular issued by the Commissioner, the concerned assessing authorities had issued notices to produce the relevant books of account pertaining to the tax periods in question and show-cause notices were issued calling upon the petitioners why CST at four per cent be not collected on the non-levy sale component for that particular crop season. The petitioners assert to have paid the additional taxes demanded and while challenging the validity of the circular sought adjustment of the "excess and illegal" taxes paid, towards future tax liability of the petitioners. The defence: In the coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in general by either the Government of Andhra Pradesh or the Government of India with a view to extend any specific benefit to the agricultural farmers, subject to the guidelines issued by the Commissioner thereof." The letters addressed by the first respondent (dated November 21, 2007, October 21, 2008 and November 13, 2009), pertain to additional incentive bonus for paddy procured towards levy rice. The letters set out the policy of the Union, of providing additional incentive bonus for the procurement of paddy; the exclusive purpose of procurement being, for augmenting the food security of the nation. The payment of incentive bonus to the rice millers by the Union is through the FCI or other State Agencies. Each of the letters unambiguously delineates the policy of the Union, by enjoining that State Governments should ensure that the entire incentive bonus has been paid to all farmers whose paddy had been procured by FCI/State Agencies. In fact, para 6 of the first respondent's letter dated November 13, 2009 clearly exemplifies this policy by instructing that payment of incentive bonus to millers/dealers by FCI/State Agencies should only be made on production of proof of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise of powers under rule 16(2)(c) of the APVAT Rules, 2005. These rules are made by the State Government in exercise of powers under section 78 of the 2005 Act. In terms of rule 16(2)(c) only those amounts forming part of the sale price on account of any incentives, sanctioned or ordered specifically or in general, by either the Government of Andhra Pradesh or the Government of India with a view to extend any specific benefit to agricultural farmers, shall not be included for the purpose of determining the taxable turnover, but subject to the guidelines issued by the Commissioner of Commercial Taxes. Since the policy of the Union (set out in the three letters issued by the 1st respondent) enjoins payment of incentive bonus by the rice millers/dealers to the farmers in respect of procurement of paddy meant for supply of rice towards levy and enjoin payment of the incentive bonus to the dealers/rice millers and through FCI/State Agencies, there is clear indication that payment by the FCI/State Agencies is only for rice supplied by the rice millers/dealers towards levy. It is thus clear that exclusion from computation of taxable turnover is limited only for incentive bonus paid for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
