TMI Blog2015 (7) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the efforts made by the dealers for its enhancement. In view of whatever stated above, these petitions for writ deserve acceptance, accordingly, the same are allowed. The initiation of impugned proceedings against the petitioner as per Section 26 of the VAT Act is declared illegal and the notices issued thereunder and orders made thereon are also declared illegal, hence are quashed - Decided in favor of assessee. - DB Civil Writ Petition No. 3340/2014, DB Civil Writ Petition No. 4055/2010 , DB Civil Writ Petition No. 3620/2006 - - - Dated:- 29-6-2015 - Govind Mathur And Jaishree Thakur,JJ. For the Appellant : Mr. Dimesh mehta Mr. Ramit Mehta For the Respondent : Dr P S Bhati, Additional Advocate General JUDGMENT By the Court : The petitioner, a public limited company incorporated under the Companies Act, while questioning correctness of the order dated 21.3.2014, passed by Commercial Taxes Officer, Anti Evasion Circle, Bhilwara, has also challenged constitutional validity of Sections 26 and 82(3) of the Value Added Tax Act, 2003 (hereinafter referred to as 'the VAT Act'). The factual matrix deserve notice is that the Government of Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atch of goods to Head Office, Branch Office, Depot or agent outside the State for sale outside the State, during the relevant accounting year as against such percentage during the accounting year 1984-85; and (4) No claim for such reduction of tax shall be allowed in respect of levy- cement. Note.-- Claim, for partial exemption under this notfn. Dated 6.5.1986 (S.No.625) shall not be made and allowed in respect of the inter-State sales of levy cement, and of other cement made in accordance with S.No.928 dated 7.1.1994, and also of the following goods when the sales are made and CST paid thereon in accordance with the notfns mentioned against each :- (a) All edible oils (excluding hydrogenated oils, palm oil whether refined or not and refined coconut oil) S.No.649 dated 26.12.1986, S.No.793 dated 17.4.1990, pub.18.4.1990, S.No.934 dated 31.3.1994; (b) Solvent extracted edible oil; S.Nos.650 dated 26.12.1986 and 934 dated 31.3.1994; (c) Polyester filament yarn and nylon filament yarn : S.No.741 dated 2.3.1989; (d) Polymer chips and polypropylene filament yarn : S.No.741 dated 2.3.1989, w.e.f. 13.9.1989; (e) Polyester staple fibre and acrylic stable fibre : S.No.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a rectified assessment order dated 17.12.1990. The petitioner was allowed to have remission of tax on sales amounting to ₹ 4,50,13,857.21. The partial exemption on increase in inter-State sales as per the notification dated 6.5.1986 was also allowed to the petitioner from the assessment years 1988-89 to 1993-94 by Commercial Taxes Officer, Special Circle,Udaipur. The Commercial Taxes Officer, Special Circle, Bhilwara also allowed the same benefit to the petitioner for the assessment years 1994-95. For the subsequent years upto 1998-99 the Commercial Taxes Officer, Rajsamand allowed exemption as per the notification dated 6.5.1986. The claim of the partial exemption as per the notification dated 6.5.1986 was also accepted by the Assessing Officer for the years 1999-00, 2001-01, 2001-02, 2002-03 and 2003-04. For the period 2007-08 the Assessing Authority i.e. the Commercial Taxes Officer, Circle, Rajsamand, by assessment order dated 9.3.2010 allowed partial exemption in terms of the notification dated 6.5.1986. It shall also be appropriate to mention that the Commercial Taxes Officer, Anti Evasion, Bhilwara conducted survey at the business premises of the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitions were admitted for hearing after calling upon the respondents through a pre admission notice. Even otherwise,the concept of availing alternative remedy before approaching writ Court is having no application where a party comes to the Court with an allegation that his right has been or being threatened to be infringed by law that itself is ultra vires. So far as Section 26 of the VAT Act is concerned, that relates to 'escaped assessment' and reads as follows:- 26. Escaped assessment :- (1) An assessment - (a) of a person who is liable to get registration but has not got himself registered ; or b) in which, for any reason, the levy of tax or any fee or sum payable under this Act has been escaped wholly or in part; or (c) Wherein tax has been wholly or in part unassessed or under-assessed in any way or under any circumstances, shall be deemed to be an escaped assessment and the assessing authority or the officer authorized by the Commissioner, shall on the basis of the material on record or after making such enquiry as it may consider necessary, complete such assessment within the time limit provided in subsection (3). Explanation.- The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner submits that as a matter of fact in the case in hand there is no escape of tax liability, therefore, the powers under Section 26 of the VAT Act could have not been invoked. It is asserted that the partial exemption was extended to the petitioner as per the notification dated 6.5.1986 after due application of mind and that remained in currency for a period of more than 15 years. Respondent Commercial Taxes Officer, Anti Evasion, without satisfying himself as to whether the case of the petitioner falls under clause (b) or clause (c) of Section 26 of the VAT Act reopened the assessment. It is asserted that the petitioner neither escaped levy of tax nor any fee or sum payable under the VAT Act and there is also no case of unassessed tax under earlier assessment. The entire taxable turn over of inter State sales has already been assessed and taxed earlier. It is also urged that for the assessment year 2007-08, the assessing authority determined the inter State sales after due application of mind and taking into consideration the disclosure of facts made by the petitioner. The re-assessment notice too nowhere disputes about true and correct disclosure of all necessary and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in (1992) 2 SCC 411, and Kanthi Enterprises Ors. v. State of Karnataka Ors., reported in (2002)7 SCC 283, it is asserted that the registered dealer is not entitled to acquire any amount by way of tax at a rate or rates prescribed. If any person or a company or a dealer collects any amount of tax in violation of the provisions of the Act or the Rules or in excess to the rates prescribed, then such person, company or dealer is required to face criminal proceedings and to pay penalty as prescribed. The petitioner in the instant matter levied excessive tax and, therefore, that is to be deposited with the State. The petitioner is also liable to face penal action. According to learned Additional Advocate General, Section 26 of the VAT Act provides a complete mechanism for reassessment of sales, if any reason exists to believe that the levy of tax or any fee or any sum payable has been escaped or the tax has been under assessed. The power givenunder Section 26 of the VAT Act is neither arbitrary nor in excess to the competence available as that is to be exercised objectively and by providing an opportunity of hearing to the assessee, hence, the challenge to that is misconceiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods in the State of Rajasthan. Such dealers are entitled to claim partial exemption from the tax payable in respect of the sales of manufactured goods by them in the course of inter State trade or commerce by reduction @ 50% of the tax so payable or increased sales upto 50% and @ 75% of the tax so payable on increased sales made over and above aforesaid 50%. The exemption as aforesaid is subject to certain conditions referred in paras 1 to 4 of the notification. A threadbare reading of the notification makes it clear that to have benefit of partial exemption the dealer must have accurate determination of quantum of goods sold during whole accounting year and that can be settled by taking intoconsideration the quantum of goods sold within the State during accounting year; inter State sales i.e. goods sold in the course of inter State trade or commerce during the accounting year; and dispatches to other units like branch offices, depots or agents outside the State during the accounting year. This kind of dispatch is usually termed as 'branch transfers'. By having the facts noticed above, a percentage of inter State sales is required to be worked out as per the formulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve partial exemption at the end of the year. If the actual quantum of concession is not known to the dealer then in no case that can be applied with reduced tax liability. The stand taken by the respondents that the dealer should charge tax with reduced rates virtually amount to insist for doing something that cannot be done without having relevant facts which shall be coming on surface onlyat the end of assessment year. It is well settled that no one can be compelled to do something that is not possible to do. Much emphasis is given by the respondents about the law laid down by the Apex Court in the cases of Amrit Banaspati Co. Ltd. Anr. v. State of Punjab Anr., (supra) and Kanthi Enterprises Ors. v. State of Karnataka Ors. (supra). In these cases the Apex Court held that no law or order can be made for refund of a tax validly levied and further that exemption from tax can be made, if, the ultimate beneficiary is the consumer. True it is, in the instant matter the benefit of exemption given is retained by the petitioner and that has not been transferred to the consumer and in first glance it appears contrary to the concept of extending benefit of exemption to the consum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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