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WHETHER THE PROVISIONS RELATING TO CLARIFICATION AND ADVANCE RULINGS CONTAINED IN SECTION 67 OF A.P.VAT ACT, 2005 WOULD AUTMATICALLY APPLY TO ASSESSMENTS UNDER THE CENTRAL SALES TAX ACT, 1956?

Value Added Tax - VAT and CST - By: - Mr. M. GOVINDARAJAN - Dated:- 25-5-2015 - Introduction The Central Sales Tax Act, 1956 is enacted by the Parliament under Article 246(1) of the Constitution of India pursuant to the exclusive power to make law with respect to the matters enumerated in Entry 92A and 92B in List - I in the Seventh Schedule. The Value Added Tax Act is enacted by Andhra Pradesh State Legislature under Article 246(2) of the Constitution of India with respect to the matters enumer .....

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f tax prevalent in the State is for the convenience of assessment as well as for the convenience of the parties so that they will not have to deal with two sets of officers and two sets of laws in addition to avoiding discrimination between inter-State and intra-State sales. The very purpose of the Act and its scheme would be defeated or at least considerably impeded if the rates of tax applicable in any State in respect of intra-State sales were not applicable to inter-State Sales where the Sta .....

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ding before any officer or authority of the Department or Appellate Tribunal or any Court; relates to a transaction or issue which is designed apparently for the avoidance of tax: Provided that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard and where the application is rejected, reasons for such rejections shall be recorded in the order. No officer or any other authority of the Department shall proceed to decide any .....

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clarifications shall have power to review, amend or revoke its rulings at any time for good and sufficient cause by giving an opportunity to the affected parties. An order giving effect to such review or amendment or revocation shall not be subject to the period of limitation. The Commissioner may also refer any matter for opinion of the Authority for clarification without prejudice to his authority. In Tirupati Chemicals V. DCTO - 2010 (11) TMI 864 - ANDHRA PRADESH HIGH COURT the High Court i .....

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evision order passed by the Commissioner), with regards classification of goods under different entries of the various schedules of the Act, or the rate of tax applicable to such goods etc., thereby authorities under the Act. It is in furtherance of this object that Section 67(2) and (3) of the Act respectively prohibit Advance Ruling Authority and the officers or subordinates in the commercial tax department, from entertaining an application seeking clarification, or to decide any issue for whi .....

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itute a State level authority for clarification and advance rulings comprising three officers not below the rank of Joint Commissioner to clarify in the manner prescribed any aspect of the implementation of the Act i.e., the said Authority can only clarify and aspect of the implementation of the VAT Act. Section 9(2) of CST Section 9(2) of the CST Act provides that subject to the other provisions of this Act and the rules made there under, the authorities for the time being empowered to assess, .....

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ers they have under the general sales tax law of the State ; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recov .....

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the matter of assessment, reassessment, collection and enforcement of payment of tax. The said Act, if it had intended, could have delegated to the State Government the power to frame rules providing for assessment, reassessment, collection and enforcement of payment of tax under the CST Act. Instead of doing so, by Section 9(2) of the Act, it had adopted the procedural law of the State, the Parliament cannot be said to abdicate its essential legislative function. In State of Tamil Nadu V.K.A. .....

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General Sales Tax Act, 1999. Case law relating to issue In Prathista Industries Limited V. Commercial Tax Officer, Bhongir - 2014 (9) TMI 301 - ANDHRA PRADESH HIGH COURT the petitioner is a company registered as a dealer under the A.P. Value Added Tax, 2005 and the Central Sales Tax Act, 1956. The petitioner is engaged in the manufacture of eco-friendly organic fertilizers for the benefit of various agricultural crops besides feed supplements, organic acids, chelated minerals/mineral mixtures f .....

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fall under Entry No. 19 of IV Schedule and they are liable to tax at the rate applicable in that schedule. The said order copy was received by the petitioner on 01.05.2012. Against the order of Advance Ruling Authority the petitioner filed an appeal before the Tribunal under Section 67(4) of the Act on 01.06.2012. While the appeal is pending before the Tribunal the Assessing Authority made assessments for the years 2005 - 06 and 2006 - 07 under the AP VAT Act and CST Act. The Appellate Authorit .....

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respectively at the applicable rates. Despite the objections raised by the petitioner the Assessing Authority confirmed the demand and issued notices to pay the assessed tax. The said orders have also been challenged by the petitioner before the High Court. The petitioner submitted the following before the High Court: The respective assessment orders impugned are void as the Assessing Authority has no jurisdiction to pass them in view of Section 67 of VAT Act being applicable to assessments and .....

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r the Central Sales Tax Act, 1956 for advance ruling as in the VAT Act; Merely because Section 9(2) of the CST Act states that the provisions of the general sales tax law of the appropriate state shall apply in respect of the assessment and collection of Central Sales Tax, it would not mean that Section 67 of the VAT Act dealing with clarification and advance are automatically applicable in respect of assessments under the CST Act; The High Court has to consider whether the provisions in Sectio .....

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sed by the Commissioner) with regard to the classification of goods under different entries of the various schedules to the Act or the rate of tax applicable to such goods etc., thereby avoiding conflicting orders passed by different Assessing/Appellate/Revisional Authorities. Such a mechanism can only be introduced by way of a substantive provision in a Statute and cannot be implied. The said view has been supported by Section of the Central Sales Tax Act, the High Court held that the Section 9 .....

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the provisions of the Central Sales Tax Act by the competent authorities under the VAT Act. The above activities, it cannot be denied, can be done by such authorities without benefit of an Advance Ruling also. It may be that the tax collected under the Central Sales Tax Act is ultimately assigned to the State in view of Article 269 of the Constitution and the Central Sales Tax though levied for and collected in the name of the Central Government is a part of the sales tax levied and imposed for .....

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