TMI Blog2015 (8) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... element could not have been, therefore, forming part of price and as depicted in invoices – Tribunal has correctly come to conclusion that sale effected by dealer is not liable for payment of sales tax – Therefore, calculation of CQB as made in applicant's case is not required to be altered or changed, such reason could not have been termed as perverse or vitiated – Decided in favour of Revenue. - Sales Tax Reference No. 62 of 2008 (Reference Application No. 17 of 2007) - - - Dated:- 11-8-2015 - S. C. Dharmadhikari And G. S. Kulkarni, JJ. For the Appellant : Mr C B Thakar For the Respondent : Mr V A Sonpal, Special Counsel JUDGMENT P. C. 1. This reference from the Maharashtra Sales Tax Tribunal seeks an opinion and answer to the following question and stated to be of law: In the facts and circumstances of the case and in view of and in the context of the express provision in rule 31AA of the Bombay Rules providing for calculation of CQB equal to the amount of sales tax, additional tax, surcharge, turnover tax which would have been payable by a dealer if he was not holding Certificate of Entitlement, whether the Tribunal is justified in not allowing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. 6. Mr.Thakar, learned Counsel appearing on behalf of the applicant and at whose instance this question has been referred, submits that there is an exemption certificate and which is carrying a monetary ceiling. Mr.Thakar would submit that the language of Rule 31AA enables calculation of CQB. In the case which is admittedly covered by subrules (1) and (2), the CQB has to be calculated in terms of subclauses (a) to (e) of subrule (2) and proviso below the same. Mr.Thakar would submit that in the present case the language of subclause (e) falls for consideration and determination. It is that language which enables the Authorities to calculate these benefits on notional or deemed basis. The legislature contemplates that the calculation has to be made by assuming that the tax liability falls on the applicant/dealer. Even if, he enjoys the package scheme of incentives and all benefits thereunder as far as he is concerned as well the calculation will have to be made by ignoring the certificate. If the price that is charged includes the component of tax, then, that component has to be clearly taken into account. That is on the language of Subclause (e) itself. That opens with the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued on 21.1.2000 and the period covered is 1.2.2000 to 31.7.2007. The ceiling amount is fixed at ₹ 34,62,750/-. Mr.Sonpal would submit that therefore, the language of Rule 46A has been taken assistance of and to hold that during the period under consideration namely 1.4.2000 to 31.3.2001 no tax could have been collected. There is an exemption. All invoices prior to 1.9.1997 are wholly irrelevant because the unit was not enjoying exemption. Mr.Sonpal submits that the sale price is the basis and there is no question of levy of tax when the entitlement certificate is of the above nature. The language of Rule 46A contemplates a tax which is payable. In this case no tax was payable. In the definition of the term 'sale price' as appearing in Section 2(29) of the Bombay Sales Tax Act,1959, Mr.Sonpal placed heavy reliance on Explanation II which denotes as to how component of tax has to be ignored for determining the sale price. Then, our attention is invited to Section 3, 8, 9 and 10 as well as Section 37 to urge that there is no question of any tax payable by the applicantdealer and when the exemption is enjoyed. In such circumstances, there was no question of the sale pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read as under:- [31AA. Calculation of the cumulative quantum of benefits :- (1) The cumulative quantum of benefits received by a dealer (hereinafter referred to as the said dealer ) to whom a Certificate of Entitlement has been granted by the Commissioner under entry 136 *[or entry 3 or entry 11 or entry 12 in Group E of the Government Notification, Finance Department ,No. STA. 1095/387/Taxation-2, dated 22nd September 1995, as a case may be,] of the Schedule to the notification issued under section 41 shall be calculated by the Commissioner in respect of any period commencing on or after the 1st January, 1980 in the manner prescribed herein. (2) The cumulative quantum of benefits received by the said dealer to whom the said certificate has been granted under the 1979 Package Scheme of Incentives including the amended 1979 Package Scheme of Incentives and the 1983 Package Scheme of Incentives shall be aggregate of the following sums, that is to say. (a) a sum equal to the amount of purchase tax which would have been payable on the purchase of raw materials to the Government by the said dealer under any of the provisions of the Act and the amount of additional tax in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods manufactured by him in the eligible unit and specified in the Eligibility Certificate granted to him in the course of interState trade or commerce to himself or to any agent situated outside the State otherwise than by way of sale, then the sums mentioned in clauses (a), (b) and (c) shall be increased by an amount equal to 6 per cent of the purchase price of raw materials (other than declared goods) corresponding to such goods sent by way of consignment transfer: Provided also that where by virtue of Rule 3 of the Bombay Sales Tax Rules, 1959, the process employed by the said dealer does not amount to a manufacture, then no sum shall be calculated under clause (e), if the corresponding purchases of raw materials are made from registered dealers. (3)(a) for the purpose of calculation of the cumulative quantum of benefits under the 1988 Package Scheme of Incentives, the provisions contained in subrule (2) [and under the 1993 Package Scheme of Incentives [or Power Generation Promotion Policy, 1998] the provisions contained in clauses (a), (b), (c) and (e) of subrule (2)] shall apply mutatis mutandis with the qualification that the expression finished products shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied day] on which the sales tax or general sales tax is payable by him either- (i) exclude the amount, if any, collected by him separately by way of sales tax or, as the case may be, general sales tax from the sale price on which tax is leviable, or (ii) deduct from the sale price of the goods a sum calculated in accordance with the formula given in the Table hereunder:- TABLE The formula shall be as follows:- R 100 + R 'R' means the rate of tax (other than retail sales tax, applicable to the sale of goods, that is to say, where the sale price is liable only to sales tax, the rate of sales tax, and where it is liable only to general sales tax, the rate of general sales tax, and where it is liable to sales tax and general sales tax both, the rate of both the taxes.] [(b) in respect of any sale effected on or after the notified day on which sales tax is payable by him either (i) exclude the amount, if any, collected by him separately by way of sales tax from the sale price on which tax is leviable, or (ii) if he has not separately collected any such amount by way of sales tax but has reimbursed himself in respect of any tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of the goods) if applicable. T= Rate of Turnover Tax, if applicable, to the sale of the goods.] Provided that for the purpose of subclause (ii) of clause (b), sale price means sale price reduced as per the provisions of rule 46B and rule 46C wherever applicable.] [(c) in respect of any sale effected on which resale tax under section 10 is payable by him either (i) exclude the amount, if any, collected by him separately by way of resale tax from the same price on which resale tax is leviable, or (ii) if he has not collected separately any such amount by way of resale tax but has reimbursed himself in respect of resale tax liability in the sale price itself, deduct from such sale price a sum calculated in accordance with the formula given in the Table hereunder: TABLE The formula shall be as follows: Sale Price X RT 100+ RT RT= Rate of resale tax applicable to the sale of the goods] 14. A bare perusal of Rule 31AA would denote as to how calculation of CQB has to be made. Subrule (1) postulates the case where the dealer like the applicant has in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CQB as made in the applicant's case is not required to be altered or changed. The sums that are referred to in clause (e) cannot be taken into consideration as far as the present applicant is concerned. Such a conclusion in the case of the present applicantdealer and concurrently reached, could not have been termed as perverse or vitiated by any error of law apparent on the face of the record. If on the plain, clear and unambiguous language of the Rule 31AA(2)(a) to (e), the Tribunal reached this conclusion, then, we do not see any need or occasion to make a reference to this Court as no question of law arises from the same. Be that as it may, the question as referred will have to be answered in favour of the Revenue and against the applicant-dealer. It is answered accordingly. 15. In reaching this conclusion, we are mindful of the fact that the Division Bench of this Court had in the cases of Prasad Power Control Pvt.Ltd. Anr. Vs. Commissioner of Sales Tax, Mumbai and others (supra) and Shakti Arora Exports Pvt. Ltd. Vs. State of Maharashtra (supra) concluded, as urged by Mr.Thakar, that there is a Government Resolution and which was to be interpreted. In interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fixing the price of the tea and thereby contravened the specific conditions laid down under Explanation III(a)(e) to the notification dated 19th June,1991. That is how an adverse order was passed and which was unsuccessfully challenged in the appeal. The Tribunal in second appeal referred the point to a Full Bench and which allowed the appeal of the assessee respondent. The Revenue approached the Hon'ble Karnataka High Court and the Bench agreed with the Tribunal. In agreeing, it held that unless the price of an article was controlled, it was always open to the buyer and the seller to agree upon the price to be payable and while doing so it was open to the dealer to include in the price the tax payable by him to the Government. If he did so he could not be said to be collecting the tax payable by him from his buyers. It is once again in the background of the admitted facts that the Tribunal inferred that the respondent collected the tax when there was a specific legend in the invoice that it was exempted from paying tax. It had also noticed that the 'consideration' concept could not be equated with the 'collection'. That is why the Tribunal's conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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