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2015 (4) TMI 777 - GUJARAT HIGH COURT

2015 (4) TMI 777 - GUJARAT HIGH COURT - TMI - Whether in the facts and circumstances of the case, the Appellate Tribunal erred in holding that the transaction of exchange of goods by the Appellate to the consumers during the Warranty Period amounts to sale and consequent levy of VAT under the provisions of the Gujarat Value Added Tax Act, 2003 - Held that:- Tribunal has confirmed the imposition of tax and interest on sales of parts during the warranty period of motor cars and tax element is to b .....

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it is not in dispute that as such the appellant - assesseedealer is purchasing the parts from the open market and is replacing the same in place of defective parts during the warranty period of motor cars and for which manufacturer is issuing credit notes. - as manufacturer would have paid taxes if he brought defective parts from market, the position would not be different in case of assessee who supplied parts and received price for it. - Tribunal has not committed any error in dismissing the a .....

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stion of law and facts arise in this group of appeals and as such they arise out of the impugned judgment and order passed by the Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter referred to as the Tribunal ) and even the dispute is between the same parties but with respect to different Assessment Years, all these appeals are decided and disposed of by this common judgment and order. 2.0. Feeling and aggrieved and dissatisfied with the impugned common judgment and order passed by the lea .....

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n2 Ahmedabad. The Assessing Authority stated in its order that the business place of the appellant was visited on 17.2.2014. That the appellant was a Maruti Cars dealer. It was found by the Assessing Authority that the appellant had not paid tax on sales of parts during the warranty period of the motor cars; that on asking the appellant to pay up the tax and the penalty, the appellant had given the cheques of tax and the interest but he did not agree to pay penalty. The Assessing Authority also .....

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at Value Added Tax Act, 2003? 2.2. That feeling aggrieved and dissatisfied with the aforesaid separate Provisional Assessment Order dated 16.4.2014, the dealer / assessee preferred three separate appeals before the First Appellate Authority - Deputy Commissioner of Commercial Tax II, Ahmedabad. The First Appellate Authority directed the appellant to make the payment of predeposit. However, the appellant did not make the payment of predeposit as directed and instead contended that the during the .....

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al Nos. 411 of 2014 to 413 of 2014 and by impugned common judgment and order, the learned Tribunal Tribunal has partly allowed the said appeals removing penalty imposed, however confirmed the imposition of tax and interest. It appears that thereafter the assessee / dealer preferred three rectification application nos. 20 of 2014 to 22 of 2014 to rectify, clarify and / or modify the earlier common order that the tax element is to be deducted from the credit notes received for the spare parts and .....

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n of tax and interest on sales of spare parts during the warranty period of the motor cars, for which, manufacturer used to give credit notes, the common appellant has preferred present Tax Appeals. 3.0. Ms. Gargi Vyas, learned advocate for the appellant has vehemently submitted that learned Tribunal has materially erred in confirming the imposition of tax by the Assessing Authority on sales of parts during the warranty period of the motor cars. It is vehemently submitted by Ms. Gargi Vyas, lear .....

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r instead of replacing the defective parts is giving the credit notes. It is submitted that therefore, when there is no element of sale there shall not be any liability of any tax on the amount mentioned in the credit notes. 3.1. Ms. Gargi Vyas, learned advocate for the appellant has heavily relied upon the recent decision of the Rajasthan High Court in the case of C.T.O (AE) vs. Marudhara Motors reported in (2009) 12 VAT Reporter 17; RLW2009(2) Raj 1430 in support of her above submissions. It i .....

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sessee/ dealer has submitted that as such the decision of the Division Bench of this Court in the case of Ruby Laboratories vs. Commissioner of Sales Tax reported in (1971) 27 STC 326 shall not be applicable to the facts of the case on hand. It is submitted that in the case before the Division Bench, it was found that the cost which manufacturer incurred in manufacturing samples were taken in to account at the time of fixing price of rest of the articles. It is submitted that on finding above, t .....

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d the only question submitted before the learned Tribunal was with respect to the penalty. It is submitted that in fact the purshis was also submitted before the learned Tribunal submitting that as the assessee / dealer had already made payment of tax and interest, the penalty be removed. It is submitted that considering the purshis submitted by the assessee / dealer before the learned Tribunal, the Tribunal had by common judgment and order removing the order of penalty by observing that the ass .....

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as rightly relied upon the decision of the Hon'ble Supreme Court in the case of Mohd. Ekram Khan and Sons (supra) as well as decision of the Division Bench of this Court in the case of Ruby Laboratories (Supra) and has rightly held that assessee / dealer is liable to pay tax on the credit notes. It is submitted that in the present case the assessee / dealer has specifically admitted that it used to purchase the parts from the market and on purchase of said parts they were replaced in place o .....

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te their liability to pay tax on the credit notes issued by the manufacturer with respect to sale of parts during the warranty period of motor cars. Making above submissions and relying upon above decisions, it is requested to dismiss the present Tax Appeals. 5.0. Heard the learned advocates for the respective parties at length. That by the impugned common judgment and order, the learned Tribunal has confirmed the imposition of tax and interest on sales of parts during the warranty period of mot .....

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it is required to be noted and it is not in dispute that as such the appellant - assesseedealer is purchasing the parts from the open market and is replacing the same in place of defective parts during the warranty period of motor cars and for which manufacturer is issuing credit notes. The aforesaid issue / issues involved in the present appeal is as such squarely covered by the decision of the Hon'ble Supreme Court in the case of Mohd. Ekram Khan and Sons (supra). While considering the pro .....

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that as manufacturer would have paid taxes if he brought defective parts from market, the position would not be different in case of assessee who supplied parts and received price for it. In the case before the Hon'ble Supreme Court also assessee had supplied the goods for which he had received the consideration by way of credit notes and / or other mode of payment. Under the circumstances, as such issued involved in the present appeal is squarely covered by the decision of the Hon'ble .....

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