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ATUL AUTO LTD Versus STATE OF GUJARAT

Levy of additional tax under section 4A of the Gujarat Sales Tax Act, 1969 - adjusting the additional tax against the exemption limit - mode and manner of payment of such additional tax - appellant was required to deposit additional tax in cash - Held that:- Exigibility to tax is not the same as liability to pay tax. The former depends upon the charge created by the statute and the latter on the computation in accordance with the provisions of the statute and the rules framed thereunder, if any. .....

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eral sales tax or, as the case may be purchase tax.

If no sales tax, general sales tax or purchase tax is payable, there can be no additional tax thereon.

While it could be said that having regard to the first part of section 4A of the Act, additional tax is leviable, considering the second part of the section, such additional tax would be nil as the tax payable by the dealer on sale or purchase of goods which are wholly exempt from payment of sales tax, general sales tax .....

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w of the bar contained in section 56 of the Act, in case where the sale or purchase is exempt from tax, the dealer would not be in a position to recover the additional tax from the purchaser, thereby frustrating the very object of the provision namely, to tax the sale or purchase and would result in taxing the dealer instead of the sale or purchase.

The authorities under the Act, therefore, cannot recover additional tax under section 4A of the Act in relation to sale or purchase of go .....

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, either in cash or by way of adjustment against the exemption limit would not arise. The Tribunal was, therefore, not justified in holding that additional tax was payable under section 4A of the Act by the dealers even for the period prior to 3rd March, 2001, either in cash or by way of adjustment. To that extent, the impugned orders passed by the Tribunal, cannot be sustained. - Decided in favour of assessee. - Tax Appeal No. 35, 36, 37, 413, 414, 1337, 1338, 432, 433 of 2007, Special Civial A .....

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VA MEHTA, MR AKSHAY A VAKIL, ADVOCATE FOR THE OPPONENT : MS MAITHILI MEHTA, ASSISTANT GOVERNMENT PLEADER, MR UCHIT N SHETH, ADVOCATE, MR ANKIT Y BACHANI, ADVOCATE, MR NILESH A PANDYA, ADVOCATE, MR AJ SHAIKH, ADVOCATE, MS NIYATI N VAIDYA, ADVOCATE, MR MANISH K KAJI, ADVOCATE, MR TUSHAR P HEMANI, ADVOCATE, MR BS SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE HARSHA DEVANI) 1. All these appeals and writ petitions relate either to the levy of additional tax under section 4A of the Gu .....

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r, as the case may be, purchase tax under the relevant notification issued by the State Government in exercise of powers under sub-section (2) of section 49 of the Act. Under the incentive schemes framed under section 49(2) of the Act, exemption was granted to a particular limit calculated in terms of the Scheme. The Scheme also lays down the method for computing the entitlement limit of tax exemption. For the purposes of such computation, the amount of tax leviable under the relevant provisions .....

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omputed the additional tax and adjusted the same against the ceiling of exemption, however, according to the respondent authorities, additional tax not being a tax as envisaged under section 2(32) of the Act is not exempt under the Scheme and hence, could not be adjusted against the exemption limit and, therefore, the amount of additional tax was required to be paid in cash. Accordingly, recovery of additional tax adjusted against the exemption limit was sought to be made together with interest .....

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on, viz., 3rd March, 2001, the additional tax could be adjusted against the limit of exemption. The matters ultimately reached the Gujarat Value Added Tax Tribunal (hereinafter referred to as the Tribunal ), which by a common order dated 4th May, 2006 held that sub-section (1) of section 4A of the Act requires every dealer liable to pay tax under sections 3, 3A and 4 to pay additional tax. The dealers who are covered under sub-section (2) of section 49 of the Act are also dealers who are liable .....

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al followed its earlier decision rendered in Second Appeal No.18/2006 and 19/2006 and allied matters. The Tribunal, in the orders from which the writ petitions arise, held that the assessees are liable to pay additional tax under section 4A of the Act computed on the basis of the assessee s liability to pay tax under the provisions of sections 3, 3A and 4 of the Act, however, insofar as the adjustment of such amount against the exemption limit is concerned, the Tribunal deviated from the previou .....

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der section 4A of the Act, the dealers are in appeal and against the order of the Tribunal holding that the dealers are entitled to adjust the additional tax against the ceiling limit of exemption even prior to the notification dated 3rd March, 2001, the State of Gujarat has filed writ petitions. 4. Mr. Tanvish Bhatt, learned advocate for the appellants, referred to the provisions of section 4A of the Act to point out that a dealer who was liable to pay tax under sections 3 or 3A or section 4 of .....

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erence was made to the provisions of sub-section (33) of section 2 of the Act which defines taxable goods to mean goods other than those on the sale or purchase of which no tax is payable under section 5 or section 49 or a notification issued thereunder. It was submitted that, therefore, the subject goods which are exempt under section 49 are not taxable goods and hence, would not be exigible to additional tax. Next, it was pointed out that the State Government had subsequently issued a notifica .....

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no substance in any of the three grounds urged on behalf of the appellants for the reason that the present case is governed by the definition of the expression taxable goods in Section 2(33) of the Act. It is interesting to note that the Bombay Sales Tax Act, 1959 (Bombay Act 1 of 1959) which was in force in the State of Gujarat before the Act came into force and which was repealed by Section 88 of the Act contained the definition of the expression taxable goods in Section 2(33) thereof. The exp .....

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under if the State Government was satisfied that it was necessary so to do in the public interest. Still the definition of taxable goods in that Act did not refer to sales exempted under Section 41 thereof. But in the Act which repealed and replaced the Bombay Act the meaning of the expression taxable goods has been narrowed down as Section 2(33) of the Act reads - taxable goods means goods other than those on the sale or purchase of which no tax is payable under Section 5 (which corresponds to .....

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being satisfied even though the goods in question do not come under Schedule I. Secondly one has to wait till the disposal of the goods by the dealer to find out whether the goods are taxable goods or not in view of the definition of the said expression which takes away goods sold under circumstances attracting Section 49 from the scope of the meaning of that expression. Nor does the third ground survive for the very same reason. If the sale is exempt from tax under Section 49 of the Act, the go .....

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de under Section 50 has not been shown to have any effect in law on the liability of the appellants under Section 16. 4.1 Reference was made to the findings recorded by the Tribunal to submit that the Tribunal has overlooked the aspect that the additional tax under section 4A of the Act is payable only on the sales which are liable to tax under the Act. Since the sales of the appellants are wholly exempt from sales tax as envisaged under Entry 255 and 69 of the notifications issued under section .....

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State Government from payment of tax, he is also not liable to pay the additional tax under the Act. 4.2 It was contended that the Tribunal has erred in holding that the exemption by a notification under section 49(2) of the Act is neither given to the dealers nor to the goods but it is given to specified sales or purchases. According to the learned counsel, the observations made by the Tribunal are contrary to the definition of specified sales under section 2(33) of the Act. Reliance was placed .....

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the said Act. When there is no excise duty in force and levied on the goods, by virtue of the exemption notifications, it is not possible to bring in a fiction that the goods are amenable and liable for levy of excise duty and exemption notifications have only suspended such levy and on that basis, there could be levy of additional duty under section 3(1) of the Act. The court held that when the very measure for additional duty is not available, it would be doing violence to the express language .....

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learned counsel submitted that since the measure of the additional duty is dependent upon the computation of tax leviable under sections 3, 3A or 4A of the Act, there would be no measure available for the purpose of calculating the additional duty. 4.3 The learned counsel also placed reliance upon the decision of the Bombay High Court in the case of Tata Engineering and Locomotive Company Ltd. and another v. State of Maharashtra, 1992 Mh.L.J. 1030, for the proposition that there is a difference .....

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purchase of goods liable to tax under the Act; and the second part, which provides for the rate of such additional tax to be 10% of the sales tax, general sales tax or, as the case may be, purchase tax payable by such dealers. It was submitted that, therefore, the amount of additional tax has to be computed on the basis of the tax payable by the dealer, under the circumstances, having regard to the fact that the appellants are wholly exempt from payment of tax on the sales or purchases made by .....

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ase tax, it was still liable to pay additional tax under section 4A of the Act. 4.4 Alternatively, it was submitted that in case the court holds that the dealers are liable to pay tax under section 4A of the Act, the finding recorded by the Tribunal that such tax prior to the amendment of the aggregation clause with effect from 3rd March, 2001 is payable in cash, requires to be interfered with. 5. Mr. Uchit Sheth, learned advocate appearing on behalf of the respondents in the writ petitions reit .....

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breach of condition of exemption and lays down that if any specified class of sales or of specified sales or of purchases is exempted under section 49 from the whole or any part of any tax payable under the Act subject to any condition, then, in the event of a breach of such condition in respect of such goods sold or purchased, the seller or purchaser responsible for such breach shall be liable to pay tax on such sale, specified sale or purchase as the case may be, to the extent to which it was .....

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rs. Under the circumstances, it would not be permissible for the dealers to collect additional tax under section 4A from the purchasers. Therefore, a situation would arise whereby the dealer would be liable to pay tax under section 4A and not collect the same from the purchaser which could not have been the intention of the legislature. 5.1 It was pointed out that at the relevant time, when section 4A was brought on the statute book, it was never the intention of the legislature to levy tax in r .....

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gation clause, came to be amended by inserting the words and also the amount of additional tax under section 4A . Thus, the amendment notification expressly provided for curtailment of the incentive limit by the amount of additional tax under section 4A of the Sales Tax Act. It was pointed out that the scope of aggregation clause in an exemption notification has been examined by this court in the case of Apollo Tyres Limited v. Sales Tax Officer, (1997) 106 STC 218 (Gujarat), wherein it has been .....

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f revenue to the State even in respect of additional tax as a result of the exemption notification and, therefore, had provided for curtailment of the incentive limit. 5.2 It was pointed out that the Department is relying upon the amendment dated 3rd March, 2001 to the exemption notification to contend that prior to that date, additional tax was payable in cash. It was submitted that the clause for incentive limit does not confer any exemption to the dealers, but is a provision meant for capping .....

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ended on 3rd March, 2001, in fact supports the case of the dealer and not the case of the Department. Reliance was placed upon the decision of the Supreme Court in the case of State of Haryana and others v. Liberty Enterprises, (2009) 22 VST 1 (SC), for the proposition that curtailment of incentive limit reduces notional tax liability. Reliance was also placed upon the decision of the Karnataka High Court in the case of J.K. Industries Ltd. v. State of Karnataka and others, (2007) 10 VST 796 (Ka .....

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of section 19C of the Karnataka Sales Tax Act, 1957, a provision under which certain concessions are extended to a dealer under the Act by issue of an appropriate notification by the Government. 5.3 Mr. Sheth further submitted that the exemption notification requires the dealer to write on the face of the invoice that the buyer shall not be entitled to any drawback, refund or set-off. Thus, if the stand of the Department is accepted, then while the respondent dealer will be liable to pay additi .....

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in nature. Section 4A of the Sales Tax Act was enacted for a period of one year from 1st April, 2000 and the amendment was made on 3rd March, 2001. It was argued that the State Government could not have intended to make the amendment only for a period of twenty seven days. More so, because when the additional tax was levied earlier, the aggregation clause of the exemption notifications specifically provided for curtailment by amount of additional tax. The reference to additional tax in the aggr .....

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m the respondent dealer in cash for the period from 1st April, 2000 to 3rd March, 2001. There is no demand of additional tax after 3rd March, 2001, that is, after curtailment of incentive limit by the amount of additional tax was specifically provided in the notification. Thus, the Department has considered the curtailment of incentive limit as a mode of payment of tax. In other words, the stand of the Department is that additional tax was payable in cash prior to 3rd March, 2001 and it was paya .....

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rectly discharged liability of additional tax, if any, by curtailment of incentive limit. 5.6 Reference was made to the public circular dated 7th April, 2000, to point out that the understanding of the Department was also that the additional tax was payable on the amount of tax actually payable by a dealer. It was pointed out that for the dealers enjoying partial exemption from tax by virtue of the notification issued under section 49(2), it has been clarified in clause 3.7 of the public circula .....

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smuch as, if the sales are exempt from tax, there is no question of payment of any additional tax either by way of cash or adjustment by way of exemption limit. It was submitted that the first stage is the levy of tax as envisaged under the Sales Tax Act. For this purpose, while sales tax is leviable under section 7 of the Sales Tax Act on the turnover of sales of goods, resales of goods purchased by the dealer from a registered dealer are eligible for deduction under section 7(ii) of the Act. H .....

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titled to claim resale deduction, which effectively means that the tax becomes payable by the purchasing dealer on its subsequent sales. It was submitted that merely because the respondent dealer curtailed the exemption limit, he cannot be held liable to pay tax in cash. It was urged that if the court holds that the additional tax is not payable, the respondent cannot be in a worse position. 6. Mr. K.H. Kaji, learned advocate appearing on behalf of the respondents in Special Civil Applications N .....

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, (1962) 13 STC 180, wherein the court had observed that the tax payable was a yearly tax. Tax was payable in the first instance by a dealer whose gross turnover in the financial year immediately preceding 1st May, 1949 was above the taxable quantum. The tax was to be levied on the taxable turnover of the dealer every year. The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year, in some others, the tax is collected quarterly and .....

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nded that the exemption was to operate differently in the case of dealers for different intervals of assessment. Mr. Kaji submitted that, therefore, the notification dated 3rd March, 2001 would be applicable to the entire year and accordingly, the dealers were entitled to adjust the additional tax under section 4A of the Act against the exemption limit. It was submitted that the Tribunal was, therefore, wholly justified in holding that the dealers were not liable to pay additional tax in cash. U .....

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nor had it adjudicated the same, despite such issue having been specifically raised before the Tribunal. It was pointed out that the assessment order was initially made in the case of the respondent dealer on 27th October, 2004; notice for revision was issued on 22nd January, 2008 and the assessment order was passed on 31st January, 2008. It was argued that under section 67 of the Act, an order can be taken in revision within three years from the date of such order, whereas in the present case, .....

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red from 3rd March, 2001; however, prior thereto, additional tax was neither required to be adjusted nor paid in cash. It was submitted that for the entire year, the petitioner was under the bonafide belief that there was no liability either to adjust additional tax under section 4A of the Act against the exemption limit or to pay the same in cash. It was only after the amendment on 3rd March, 2001 that the liability to adjust the additional tax against the exemption limit arose. It was submitte .....

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by the petitioner, however, the same has not been dealt with by the Tribunal and the same may be dealt with by this court. It was submitted that the assessment order in this case is dated 31st January, 2005 whereas the notice of revision has been issued on 29th May, 2008 beyond a period of three years from the date of the assessment order and hence, the proceedings are clearly time-barred. It was, accordingly, urged that the petition deserves to be allowed by holding the proceedings to be time-b .....

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the same does not include additional tax. It was submitted that, therefore, additional tax is not a tax as envisaged under section 2(32) of the Act. Referring to the provisions of section 49(2) of the Act, it was submitted that what is exempted under sub-section (2) of section 49 is payment from the whole or any part of the tax payable under the provisions of the Act and that additional tax not being a tax as envisaged under section 2(32) of the Act, the same would not be exempt under sub-secti .....

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, 2004 taxmann.com 1911 (SC), for the proposition that exigibility to tax is not the same as liability to pay tax. The former depends upon the charge created by the statute and the latter on computation in accordance with the provisions of the statute and the rules framed thereunder, if any. The liability to pay tax chargeable under section 3 of the Bihar Finance Act is different from quantification of tax payable on assessment. Liability to pay tax and actual payment of tax are conceptually dif .....

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o liability under the Act. It was definitely liable to pay tax under the Act, but for the exemption. Ms. Mehta submitted that the contention of the appellants in the appeal and the respondents in the writ petitions that no additional tax was leviable in view of the fact that the dealers were not liable to pay tax under sections 3, 3A and 4A of the Act, therefore, cannot be countenanced. 9.1 The learned Assistant Government Pleader further submitted that additional tax is not a tax and is distinc .....

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out an exception in the case of declared goods by providing that additional tax shall not be levied on sale or purchase of declared goods. Therefore, as a necessary corollary, it follows that sales or purchases of all other goods, except declared goods, are exigible to additional tax under section 4A of the Act. It was urged that merely because goods are exempted under section 49(2) of the Act, the dealer would not be exempted from payment of additional tax also. 9.2 Next it was submitted that C .....

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, general sales tax or purchase tax, it does not partake the character of sales tax, purchase tax or general sales tax. It was submitted that as per Point 4 of the circular dated 7th April, 2000, even the units enjoying exemption under deferred payment scheme are required to pay additional tax. It was submitted that the said circular also clarifies that additional tax is distinct from sales tax, general sales tax and purchase tax and accordingly additional tax is not included in the term tax as .....

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or the purpose of interpreting any exemption of incentive provision, the benefit of doubt should be given to the State. In support of such submission, reliance was placed upon the decision of the Supreme Court in the case of Novopan India Limited, Hyderabad v. Collector of Central Excise and Customs, Hyderabad, 1994 Suppl. (3) SCC 606, for the proposition that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principl .....

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ommercial Tax and others, 1992 Suppl. (1) SCC 21, for the proposition that exemptions from taxation have a tendency to increase the burden on other unexempted class of tax payers and should be construed against the subject in case of ambiguity and that the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation. Reliance w .....

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nce by this court. However, to the extent the Tribunal has held that the dealers are entitled to adjust the additional tax against the exemption limit even prior to 3rd March, 2001, viz., the date on which aggregation clause contained in the exemption notification issued under sub-section (2) of section 49 of the Act came to be amended, the same is erroneous and hence, the writ petitions filed by the State deserve to be allowed by setting aside the impugned order to that extent. 10. The controve .....

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2) Whether the Gujarat Value Added Tax Tribunal has exceeded its jurisdiction in holding that the appellant was required to deposit additional tax in cash, when the said aspect was not even the controversy before it in the appeal of the appellant? 11. Tax Appeals No.413/2015 and 414/2015 have been admitted on the following two substantial questions of law:- (1) Whether the appellant is liable to pay additional tax under Sec.4A of the Gujarat Sales Tax Act, 1969 on the sales which are exempted by .....

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x U/s 4A of the Gujarat Sales Tax Act, 1969 on the sales which are exempted by Entry inserted pursuant to notification u/s 49(2) of the said Act? (ii) Whether on the facts and in the circumstances of the case, the Gujarat Value Added Tax Tribunal was right in law in holding that the Appellant was liable to pay additional tax u/s 4A of the Gujarat Sales Tax Act, 1969 on the sales made by it on the ground that once the dealer is liable to pay tax u/s 3 of the Act, it is entitled to pay additional .....

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s for incidence of tax , section 3A provides for liability of tax on the transfer of right to use any goods and section 4 provides for the liability of a dealer registered under Act No.LXXIV of 1956 to pay tax . Thus, the charging sections are sections 3, 3A and 4 of the Act. 14. Section 49 of the Act makes provision for Exemptions . Sub-section (2) thereof which is relevant for the present purpose provides that subject to such conditions as it may impose, the State Government may, if it conside .....

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is not a registered dealer by any eligible unit from whole of purchase tax under section 15 of the Act and sales by an eligible unit of goods manufactured by it including sales of intermediate products, bye-products or scrap/waste generated as incidental to manufacturing activities of the eligible unit are exempted from the whole of sales tax or general sales tax subject to the conditions specified therefor. Similar exemptions have also been granted vide Entry No.255. The present case relates to .....

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concerned in the present case reads thus:- 4A (1) There shall be levied and collected for a period of one year from the date commencement of the Gujarat Sales Tax (Second Amendment) Act, 2000, from every dealer liable to pay tax under section 3 or section 3A or under section 4; an additional tax on the sale or purchase of goods liable to tax under this Act, at the rate of ten paise in the rupee on the sales tax, general sales tax or, as the case may be, purchase tax, payable by such dealer : Pr .....

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trued as partaking the character of sales tax, general sales tax or, as the case may be, purchase tax, on which it is levied; and (b) the additional tax shall be distinct from sales tax, general sales tax or, as the case may be, purchase tax. 16. An analysis of section 4A of the Act shows that the same levies additional tax on every dealer liable to pay tax under section 3, section 3A or section 4 of the Act on the sale or purchase of goods liable to tax under the Act. Therefore, the dealer shou .....

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on operates after the levy and does not negate the liability to tax. Exemption can operate only when there has been a valid levy, for if there was no levy at all, there would be nothing to exempt. Despite an exemption, the liability to pay tax remains unaffected, only the subsequent requirement of payment of tax to fulfil the liability is done away with. (See Peekay Re-Rolling Mills (P) Ltd. v. Asstt. Commissioner, (2007) 4 SCC 30). As held by the Supreme Court in the case of Associated Cement C .....

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x to fulfil such liability is done away with. In other words, while there is a liability to pay tax, in view of the exemption, there is no obligation to pay tax. 18. It may, however, be recalled that the first part of section 4A of the Act fixes the charge on the basis of liability to pay tax under sections 3, 3A and 4 of the Act. Therefore, in the light of the above decisions, the liability to pay tax under sections 3, 3A and 4 of the Act would continue despite the fact that the sale or purchas .....

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the rate of ten paise in the rupee on the sales tax, general sales tax or, as the case may be, purchase tax payable by such dealer. Therefore, the sales tax, general sales tax or purchase tax payable by such dealer form the basis for computing the additional tax to be levied and collected from a dealer as the additional tax is at the rate of 10% thereof. It follows as a necessary corollary that if no sales tax, general sales tax or purchase tax is payable, there can be no additional tax thereon .....

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n a person is under an obligation to pay it. The expression payable refers to that which is to be paid, justly due or legally enforceable and the sum is said to be payable when a person is under an obligation to pay. There is a difference between the expression payable and leviable . 19. In Black s Law Dictionary, Sixth Edition, the expression payable has been defined as Capable of being paid; suitable to be paid; admitting or demanding payment; justly due; legally enforceable. A sum of money is .....

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er the second part of section 4A of the Act, levy of additional tax is at the rate of ten paise in the rupee (10%) on the sales tax, general sales tax or purchase tax payable by a dealer. It, therefore, follows that the dealer must be under an obligation to pay such tax, and it is on such tax which he is obliged to pay that additional tax at the rate of ten paise on the rupee is to be collected. Accordingly, when the sales and purchase of goods are wholly exempted from payment of sales tax, gene .....

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se may be, purchase tax payable by a dealer, so as to ensure that such tax is payable only when the sale/purchase of goods is otherwise exigible to tax. In other words, in case where no tax is payable on the sale or purchase of goods, the legislature did not intend that additional tax should be collected thereon. Otherwise, there was no need to add the words on the sales tax, general sales tax or, as the case may be, purchase tax, payable by such dealer . When the additional tax is to be compute .....

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is regard, it may be significant to note that the words employed in section 4A of the Act are tax payable by such dealer , which connotes tax actually payable, non-payment whereof would be followed by legal consequences. At this juncture, reference may be made to the decision of the Madras High Court in M/s. MRF Limited, Madras v. Union of India (supra), wherein it has been held that it is not possible to bring in a fiction that the tax is payable by the dealer when the very measure for addition .....

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urpose of the aggregation clause under the Incentive Scheme is only to devise a way for working out the entitlement limit of tax exemption. Thus, based on a fiction that such tax is actually payable, the tax liability is worked out for the purpose of ascertaining the entitlement limit of tax exemption. However, the tax calculated on such fictional basis cannot be taken into consideration for the purpose of computation of the additional tax which is at the rate of ten paise in the rupee of the sa .....

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, additional tax at the rate of ten paise in the rupee on sales tax, general sales tax or, as the case may be, purchase tax would be nil. Therefore, while it could be said that having regard to the first part of section 4A of the Act, additional tax is leviable, considering the second part of the section, such additional tax would be nil as the tax payable by the dealer on sale or purchase of goods which are wholly exempt from payment of sales tax, general sales tax or, as the case may be, purch .....

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to pay tax on such sale, specified sale or purchase, as the case may be, to the extent to which it was exempted under section 49 from the payment of tax. Section 56 of the Act provides that no person shall collect any sum by way of tax in respect of sale or specified sale of goods on which by virtue of section 5 or section 49 or a notification issued thereunder no tax is payable. Therefore, as a necessary corollary, such person cannot collect additional tax from the purchaser. Accordingly, when .....

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case, if the dealer is called upon to pay the additional tax in cash, an anomalous situation arises, inasmuch as, on the one hand, he has to bear the burden of tax and on the other hand, he cannot pass on the same to the purchaser. The additional tax being a tax on the sale or purchase of goods liable to tax under the Act, the legislative intent would normally be that such tax should be recovered from the buyer of the goods. However, in view of the bar contained in section 56 of the Act, in case .....

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as inter alia been clarified that in those cases, where the tax exemption under section 49(2) of the Act has been granted in part, due to which there is a reduction in the rate of tax, the additional tax shall be computed on the basis of the tax payable at the reduced rate. Therefore, even according to the respondents, in case where there is partial exemption, the rate of additional tax has to be computed at the reduced rate. Under the circumstances, if the contention of the respondents were to .....

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om payment of sales tax, general sales tax or, as the case may be, purchase tax, however, such additional tax can only be calculated at the rate of ten paise in the rupee on the sales tax, general sales tax or, as the case may be, purchase tax actually payable by the dealer. For the purpose of computation of additional tax, the authorities cannot fall back upon the fictional basis of computation of sales tax, general sales tax or, as the case may be, purchase tax adopted for the purpose of compu .....

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as a natural corollary that when the additional tax payable is nil, the question of payment of such tax either in cash or by way of adjustment against the exemption limit would not arise. Under the circumstances, till the date of amendment of the exemption notification, viz., 3rd March, 2001, whereby the aggregation clause came to be amended, the question of payment of additional tax, either in cash or by way of adjustment against the exemption limit would not arise. The Tribunal was, therefore, .....

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itation, inasmuch as, the Assessing Officer allowed the claim of the dealer by an order dated 27th October, 2004. The notice whereby the matter was taken in revision under section 67 of the Act came to be issued on 22nd January, 2008 and the order came to be passed thereon on 31st March, 2008 whereby it was held that additional tax could not be adjusted within the exemption limit and was to be paid in cash. The respondent assessee had raised a specific ground on the question of limitation before .....

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he thinks just and proper within twelve months from the date of service of notice for revision. 28. On a plain reading of the above provision, it is evident that the revisional powers under section 67 of the Act can be exercised by the Commissioner on his own motion within a period of three years from the date of the order passed by the officer appointed under section 27 to assist him. In the facts of the present case, the assessing authority had passed the order on 27th October, 2004, whereas t .....

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otice under section 67 of the Act came to be issued on 29th May, 2008. Clearly therefore, the notice under section 67 of the Act was beyond a period of three years from the date of the order passed by the assessing authority. Under the circumstances, the exercise of revisional powers by the Commissioner was clearly barred by limitation. 29. It may be noted that in five tax appeals, that is, Tax Appeals No.35/2007, 36/2007, 37/2007, 1337/2006 and 1338/2006, the second question which has been rais .....

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her the Assessing Officer was justified in adjusting the amount calculated as payable under section 4A of the Act against the ceiling limit of exemption as according to the appellants no additional tax was payable by them. In other words, the dispute was as regards the liability of the appellants to pay additional tax and not the mode of such payment. The question as to whether such amount was required to be deposited in cash or was to be adjusted was not before the Tribunal, inasmuch as, it was .....

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e been filed by the appellant of Tax Appeal No.35 of 2007. The controversy in the said case had arisen on account of the fact that the additional tax had been adjusted by the assessing authority against the ceiling limit of exemption as a result whereof the ceiling limit was exhausted, giving rise to tax demand in assessment year 2002-03. It appears that initially in view of the pendency of Tax Appeals No.35 to 37 of 2007 before this court, the Tribunal had adjourned the matters on the ground th .....

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