TMI Blog2015 (8) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... would form part of its exemption entitlement – Tribunal noticed that assesse had failed to file any list to show that there was sale of three-wheelers and therefore as per section 5(1C) of PGST Act, no such surcharge was leviable – There was no material to show that finding recorded by Tribunal was perverse or erroneous – Appeal dismissed – Decided against Assesse. - VATAPNo. 1 of 2009 (O&M) - - - Dated:- 9-4-2014 - AJAY KUMAR MITTAL AND JASPAL SINGH, JJ. G. R. Sethi and Varun Chadha for the appellant. Ms. Radhika Suri, Additional Advocate General, Punjab for the respondents. JUDGEMENT This appeal has been preferred by the appellant-assessee under section 68 of the Punjab Value Added Tax Act, 2005 (in short, the Punjab VAT Act ) against the order dated July 11, 2008, annexure A7 passed by the Punjab Value Added Tax Tribunal, Chandigarh (for brevity, the Tribunal ), proposing to raise the following substantial questions of law for determination of this court:- (i) Having regard to the facts and circumstances of the case and on true and correct interpretation, is surcharge exigible under section 5(1C) of the Punjab General Sales Tax Act, 1948 upon an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dable amount of ₹ 7,17,344, allowed refund of ₹ 7,12,344. The Assessing Authority while determining taxable turnover in the assessment order dated March 16, 2007, annexure A5 deducted ₹ 70,68,16,401 as exempted sales of tractors made within the State of Punjab and no tax was assessed on this turnover but while computing the quantum of monetary exemption availed of by the appellant during the year, he illegally included surcharge of ₹ 28,27,266 and reduced the available monetary exemption by ₹ 3,10,99,922. Aggrieved by the order, the assessee filed appeal before the Deputy Excise and Taxation Commissioner (Appeals) (DETC (Appeals)). Vide order dated September 6, 2007, annexure A6, the DETC (Appeals) held that tax under section 5 and surcharge under section 5(1C) of the PGST Act is to be assessed irrespective of the exempted units and the amount so calculated shall be reduced from the exemption amount granted to the units. The appellate authority also upheld the penalty of ₹ 5,000 imposed under section 23 of the PGST Act. Still not satisfied, the appellant filed second appeal before the Tribunal. Vide order dated July 11, 2008, annexure A7, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the State besides supporting the order passed by the Tribunal submitted that the surcharge was to be calculated on the net sales made by the assessee and had been rightly reduced from the exemption limit which was allowed to the assessee. 6. After hearing learned counsel for the parties, we do not find any merit in the appeal. 7. Question Nos. (i) and (ii) relate to whether surcharge was to be calculated on the taxable turnover and thereafter the total amount of tax and surcharge reduced from the exemption entitlement of the assessee. 8. It would be apposite to refer to certain relevant provisions:- (i) Section 5(1C) of the PGST Act provides for levy and collection of surcharge on the taxable turnover of a dealer which is to be calculated at the rate of ten per centum of tax payable by him under the Act. It reads thus: Section 5(1C) of PGST Act:- Notwithstanding anything contained in this Act, there shall be levied and collected on the taxable turnover of a dealer, a surcharge, which shall be calculated at the rate of ten per centum of the tax payable by him under this Act:- Provided that the aggregate of the tax and the surcharge payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, of goods for use by it in the generation or distribution of such energy; (v) sales or purchases of goods failing under section 29; (vi) the purchase of goods which are sold not later than six months after the close of the year to a registered dealer, or in the course of inter-State trade or commerce or in the course of export out of the territory of India:- Provided that in the case of such a sale to a registered dealer, a declaration, in the prescribed form and duly filled and signed by the registered dealer to whom the goods are sold is furnished by the dealer claiming deductions: (vii) such other sales or purchases as may be prescribed; (b) The amount of sales tax included in the gross turnover. (iii) Under section 30A of the PGST Act, the State Government is empowered to exempt any class of industries from the payment of tax in the interest of industrial development of the State subject to conditions and period as may be prescribed. It is couched in the following terms:- Power to exempt certain class of industries:-The State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this court in Hoshiarpur Large and Medium Industries Association's case[2002] 128 STC 637 (P and H) :[2002] 19 PHT 613. (v) Rule 4A of 1991 Rules relevant for present appeal is as under:- (1) Notwithstanding anything contained in any other provision of these Rules, and subject to the provisions of sub-rule (2):- (i) Group of industries which are set up in A category area on or after the first day of October 1992 and the goods produced by them shall be exempt from the payment of sales tax for a period of ten years commencing from the date of production for the first time in the State of Punjab, subject to the condition that the total sales tax exemption shall not exceed 300 per cent of their fixed capital investment:- Provided that all fly ash based units that is units which use at least twenty-five per cent fly ash as raw material by weight or by volume, shall be eligible for incentives which are available to the units located in A category area, irrespective of their location, throughout the State of Punjab.... According to the aforesaid rule, industries falling in A category area on or after October 1, 1992 producing goods shall be exempt for a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant is exempted unit as per entitlement certificate, still every year tax has to be calculated on the taxable turnover and then it has to be exempted within the exemption entitlement. The surcharge is leviable on tax payable and this shall also be added to the amount of tax for which exemption entitled is there since section 30AA added on November 7, 2001 has been omitted with effect from December 7, 2002. If that section had been there then surcharge was separately payable even inspire of exemption but in view of the fact that section 30AA had been omitted already in December 2002 and the present assessment year is 2003-04, the surcharge leviable on the tax has to be added towards the exemption entitlement. No fault can be found with the order of the authorities below in calculating the surcharge and then adjusting it against the exemption limit. Thus questions (i) and (ii) stand answered against the assessee. 10. Adverting to question No. (iii), the findings recorded by the Tribunal may be noticed as under:- It was further argued that there had been sale of three wheelers of the amount of ₹ 6,90,181 and as per second proviso to section 5(1C), no surcharge i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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