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PDP Steels Limited Versus State of Assam and another

2015 (11) TMI 713 - GAUHATI HIGH COURT

Exemption for payment of "entry tax" under section 3(2) of the Assam Entry Tax Act, 2008 - Import of hot rolled sheets in coil when processed to cold rolled sheets in coil form - Held that:- hot rolled coil, imported into local area in the State of Assam and the same is sold after processing it to a product which is called as cold rolled coil. It is found that both the products aforesaid are sold in coil form. Entry at Sl. No. 50 to the Schedule aforesaid reveals that sheets, hoops, strips and s .....

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present case since facts and circumstances in both the cases are strikingly similar. - Decided in favour of assessee. - Writ Petition (C) No. 1554 of 2015 - Dated:- 8-5-2015 - VAIPHEI T. AND SAIKIA P. K. JJ. Dr. A. Saraf, Senior Advocate, A. Goyal, P. Baruah, Z. Islam and P. Das for the petitioner. S. Chetia, Standing Counsel, Finance, for the respondents. JUDGMENT This writ petition has been filed challenging the Clarificatory Order No. CTS-91/2002/322 dated February 7, 2015, rendered by the C .....

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have heard Dr. A. Saraf, learned senior counsel, assisted by Mr. A. Goyal, Mr. P. Baruah, Mr. Z. Islam and Mr. P. Das, learned counsel for the petitioner. Also heard Mr. S. Chetia, learned Standing Counsel, Finance Department. The facts, necessary for disposal of the present writ petition, in short, are that the petitioner-company deals in the business of cold rolled sheets in coil form. In course of its business, the petitioner-company purchased hotrolled sheets in coil form and after its purch .....

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pite being processed to cold rolled coil does not cease to be a specified goods as mentioned in entry at serial No. 50(iv) to the Schedule attached to the Act of 2008. It has been contended that in terms of section 3(2) of the Act of 2008, no entry tax shall be payable on the goods, specified in the schedule, attached to the Act of 2008, if such specified goods are brought into local area and sold inside the State in the form of same specified goods and if tax is payable on sale of such specifie .....

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goods under the Act of 2003-argues learned senior counsel appearing for the petitioner. In support of its contention, learned senior counsel appearing for the petitioner, has relied on the decision of apex court in the case of State of Bihar v. Universal Hydrocarbons Co. Ltd reported in [1995] 96 STC 204 (SC); [1994] supp (3) SC 621 as well as decision of this court in the case of Tata Tea Ltd. v. State of Assam [2015] 81 VST 442 (Gauhati) (W. P. (C) No. 3938 of 2009). Such contention was consi .....

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entry tax as contemplated by the Act arises on the entry of specified goods into any local area for consumption, use or sale therein. The goods hot rolled coil is specifically enumerated under the Schedule of the Act. There is also no dispute that the petitioner imports specified goods into local area of Assam. His claim of exemption from entry tax is based on the argument that here occurs no consumption or lose of hot rolled coil in his activity of processing hot rolled coil into cold rolled c .....

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arging provisions as well as the exemption situation incorporated therein. Section 3(2)(i) reads as follows: 'if such specified goods are brought into any local area by a dealer registered under the Assam Value Added Tax Act, 2003 for the purpose of resale and such goods are sold inside the State and the dealer is liable to pay tax on the sales of such goods under the Assam Value Added Tax Act, 2003 (Assam Act VIII of 2005)' Further the exemption on this count is made available only subj .....

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ccurs in the same form without any processing whatsoever and independently of the fact whether the process amounts to manufacture or not. According to the own admission of the petitioner, the purpose of original import of hot rolled coil into local area of Assam is not its resale as such. The petitioner rather uses or consumes hot rolled coil so imported for obtaining cold rolled coil of lesser thickness firstly by cleansing of its surface oxides by means of an acid bath called pickling and furt .....

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ing Counsel, Finance, submits that there is no infirmity in the judgment under challenge since the hot rolled coil when changed to cold rolled coil, it no longer remains a goods, so specified in entry at Sl. No. 50 (iv) to the Schedule attached to the Act of 2008. We have considered the rival submissions, having regard to the decisions relied on. Before we proceed further, we find it necessary to reproduce the provision of section 3 of the Act of 2008 as well as the entry at Sl. No. 50(iv) to th .....

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Provided that no entry tax shall be levied under this section on the entry of specified goods into a local area, if it is proved to the satisfaction of the assessing authority, in such manner as may be prescribed, that such goods have already been subjected to entry tax or that the entry tax has been paid by the importer or any other person under this Act in respect of the same goods. (2) Notwithstanding anything contained in sub-section (1), and subject to production of documentary proof, no e .....

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or in the course of export out of the territory of India or such goods are otherwise dispatched outside the State by way of stock transfer by a dealer registered dealer under the Central Sales Tax Act, 1956; (iii) if such specified goods are imported into a local area in the course of import from outside the territory of India: Provided that, if any such dealer, after importing the specified goods, consumes such goods in any form or deals with such goods in any other manner, he shall inform the .....

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commerce or in the course of export out of the territory of India or are dispatched outside the State by way of stock transfer, the import value of such specified goods subsequently sold or sent out in the manner mentioned above shall, subject to production of proof, be deducted from the total import value to determine the taxable import value. (4) The State Government may, by notification in the Official Gazette, in the public interest or taking into account the infrastructure and amenities pro .....

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d cold rolled plain and corrugated, in all qualities, in straight lengths and in coil form, as rolled and in riveted condition." A conjoint reading of the above provision of law reveals that no entry tax on entry of goods, specified in Schedule, attached to the Act of 2008, which are brought into any local area is to be paid provided such specified goods are resold inside the State as the same specified goods and provided tax is payable under the Act of 2003 on the sale of such specified go .....

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d rolled coil, later does not cease to be the specified goods as mentioned in aforesaid entry and as such, the benefit under section 3(2) of the Act of 2008 needs to be extended to the petitioner provided VAT is also payable in respect of sale of such goods. Above conclusion of us finds support from the decisions of this court in the case Tata Tea Ltd. v. State of Assam [2015] 81 VST 442 (Gauhati). In Tata Tea [2015] 81 VST 442 (Gauhati), the petitioner therein imported tea from outside and blen .....

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d to the Act of 2008 and therefore, entry tax attracts and same was accordingly levied. However, such a view was disapproved by a Division Bench of this court in the following manner (page 444 in 81 VST): "Entry 40 of the Schedule discloses that tea is specified goods. Upon reading of sub-sections (1) and (2) of section 2, the view taken by the Commissioner does not appear to be correct. It may be that the petitioner imports the tea from outside and a part of it is sold in Assam by blending .....

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inter-State sale Central sales tax is paid and the tea even after blending very much remains as specified goods." Similar view was rendered by the apex court in the case of State of Bihar reported in [1995] 96 STC 204 (SC); [1994] Supp (3) SCC 621. The relevant part of the judgment is reproduced below (pages 209 and 210 in 96 STC): "17. We have already referred to entry relating to coke occurring under section 14(ia) of the Act. When the entry says 'coke in all its forms', ther .....

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iled of only if the same goods are subject to inter-State levy of tax. He opined the use of words 'such goods' under section 15(b) of the Act is of significance. 18. We are totally unable to accept this line of reasoning. Once the entry is 'coke in all its forms' irrespective of the fact raw petroleum coke loses its original identity or in the process of manufacture calcined petroleum coke is produced, cannot take calcined petroleum coke out of the purview of this entry. In more .....

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ceeding the one given in section 15(a) of the Central Act. The High Court was of the view that the word "coal" includes coke in all its forms in clause (i) of section 14 of the Central Act and must be taken to mean coke derived from coal. In other words it must be coke which had been derived or acquired from coal by following the usual process of heating or burning. The contention, therefore, of the appellant was negatived that petroleum coke was covered by the aforesaid provision of t .....

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of the dichotomy between raw and dressed hides and skins under the Tamil Nadu General Sales Tax Act. Under the Central Sales Tax Act, the appellant is in a much better position, because all the hides and skins are brought together in one entry. Whether raw or dressed, the product falls under the same entry. . . . The operation involved in leather manufacture however fall into three groups. Pre-tanning operations includes soaking, liming, de-liming, bating and pickling, and post-tanning operatio .....

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