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2015 (4) TMI 1082

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..... ed in the charging section, in the light of the aforesaid Division Bench judgment, the revisional authority was justified in dismissing the revision of the petitioner, therefore the entry tax is to be levied. Imposition of penalty - Non-payment of tax dues - Held that:- as per the statutory provision of law and the fact the liability of entry tax was not satisfied in time by the petitioner and the matter was hanging before various authorities and was also pending before this court. The State was certainly deprived of the Revenue which would have fetched interest and would have been used by the State Government and, therefore keeping in view section 69 of the Madhya Pradesh Commercial Tax Act, the authorities were justified in imposing penalty and the penalty is to be imposed. - Decided against the petitioner - Writ Petition Nos. 247, 248 of 2007, 462, 1841, 1843, 6587 of 2009, 2584, 4902, 8700, 9766 of 2010, 3914 of 2011, 5617, 10205 of 2012, 9535, 9537, 9539, 10593 of 2013, 6416 of 2014of 2013 - - - Dated:- 22-4-2015 - P.K. Jaiswal and S.C. Sharma, JJ. ORDER Regard being had to the similitude in the controversy involved in the present cases, the writ petitions we .....

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..... year 1998, the petitioner did not deposit entry tax on the unblended tea brought in the State of Madhya Pradesh for blending to the extent of transfer of blended tea out of State of Madhya Pradesh after its blending. It has been further stated that it was based upon the fact that no entry tax could be levied on the entry of goods which are not meant for consumption or use in local area. Petitioner has further stated that thereafter the company started paying entry tax at the time of entry of goods and on transfer of goods outside the State of Madhya Pradesh a claim for set off was made in accordance with the proviso to section 3(1) of the Entry Tax Act. Petitioner has further stated that the modus operandi was changed in view of the fact that there was a time lag between the entry of the goods and subsequent transfer outside the State after blending. Petitioner has further stated that the petitioner's claim for set off in respect of transfer of blended tea having been completed by the assessing authority up to 2002-03 and the petitioner assessment for the period with effect from April 1, 2002 to March 31, 2003 was completed vide order dated January 16, 2006 and the claim of the .....

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..... Entry Tax Act no such tax can be imposed upon the petitioner-company and the petitioner-company is entitled for a set off. Learned counsel for the petitioner has placed reliance upon the following judgments: (1) Nilgiri Ceylon Tea Supplying Co. v. State of Bombay [1959] 10 STC 500 (Bom). (2) Lipton India Limited v. State of Karnataka [1994] 95 STC 225 (Karn). (3) Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Pio Food Packers [1980] 46 STC 63 (SC). (4) Chowgule Co. Pvt. Ltd. v. Union of India [1981] 47 STC 124 (SC). (5) Divisional Deputy Commissioner of Sales Tax v. Bherhaghat Mineral Industries [2000] 120 STC 205 (SC); [2000] 246 ITR 230 (SC). (6) Commissioner of Sales Tax, U. P. v. Lal Kunwa Stone Crusher (P.) Ltd. [2000] 118 STC 287 (SC). (7) State of Maharashtra v. Mahalaxmi Stores [2003] 129 STC 79 (SC). and his contention is that in the aforesaid case mixing of different grades of tea does not constitute a process of manufacture and, therefore, once the process of manufacture is not taking place the question of using different grades of tea while conducting the blending process does not arise. The petitioner has pray .....

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..... se but which have been disposed of in any other manner; (iv) in respect of goods exempted from entry tax under section 10; and if tax on the entry of any goods specified in Schedule II or Schedule III effected during any period has been deposited by a dealer into the Government treasury and subsequent to such entry the goods are disposed of in the manner described in clause (ii) of this proviso, such dealer shall be entitled to a set-off of the tax already paid by him in respect of such goods and such set-off shall be adjusted towards the tax payable by him in such manner as may be prescribed: Provided further that notwithstanding anything contained in this Act, where a dealer in the course of his business, purchases goods from a person or a dealer other than a registered dealer who has effected entry of such goods into a local area prior to such purchase, the entry tax shall be paid by the dealer who has purchased such goods: Provided also that notwithstanding anything contained in this Act, where a dealer liable to pay tax under the Vanijyik Kar Adhiniyam in the course of his business into a local area, purchases goods specified in Schedule III, other than goods which .....

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..... s Department of the Government of Madhya Pradesh; and (c) have set up industry in any of the districts specified in Part I of the annexure. Two years from the date of commencement of production. The dealer specified in column (1) shall continue to furnish the prescribed returns under the Madhya Pradesh General Sales Tax Act, 1958, and shall produce before the assessing authority at the time of his assessment a certificate issued by the Director of Industries, Madhya Pradesh, or any officer authorised by him for the purpose, certifying that such dealer is eligible to claim the exemption and that he has not opted for the scheme of deferring the payment of tax, under the rules framed for this purpose.' Now, it is not disputed that the petitioner has set up an industry at Indore, which is one of the districts specified in the annexure to the notification. It is also not disputed that the petitioner holds a certificate of registration under the Act. The only ground on the basis of which eligibility certificate was refused to the petitioner was that the process of blending tea leaves carried on by the petitioner, did not amount to .....

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..... 10 STC 500 (Bom) and the facts of the present case, but we do not think we can accept the decision of the Bombay High Court in the Nilgiri Ceylon Tea Supplying Co.'s case [1959] 10 STC 500 (Bom) as laying down the correct law. When different brands of tea were mixed by the assesses in the Nilgiri Ceylon Tea Supplying Co.'s case [1959] 10 STC 500 (Bom) for the purpose of producing a tea mixture of a different kind and quality according to a formula evolved by them, there was plainly and indubitably processing of the different brands of tea, because these brands of tea experienced, as a result of mixing, qualitative change, in that the tea mixture which came into existence was of different quality and flavour than the different brands of tea which went into the mixture.' In view of the aforesaid observations of the Supreme Court, the contention advanced on behalf of the respondents that the petitioner was not engaged in the production of any article cannot be upheld. It is significant to note that in a subsequent notification dated October 16, 1986 issued under section 12 of the Act, 'blending of tea' is one of the industrial units specified, to whom exemption .....

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..... of user which is ordinarily spoken of as consumption of the particular commodity.' is covered by the word. The meaning was further explained by giving the illustration of utilization of consumption of cotton at different stages leading to the manufacture of wearing apparel and its ultimate consumption by men and women who use it as dress. In this context the court observed: It is usual and correct to speak of raw cotton being consume in ginning; of ginned cotton being consume in spinning; of spun yarn being consumed in weaving of woven cloth being consumed in the making of 'wearing apparel'. Further light on the meaning of the words 'consumption' and 'use' is thrown by the recent decision of the Supreme Court in Kathiawar Industries v. Jafftabad Municipality AIR 1979 SC 1721 where it was held that uncrushed salt brought within the municipality for being crushed in the appellant's factory before it was exported was brought for consumption or use within the municipal limits and octroi tax was payable on it. Although in this case it was observed that crushed salt was a new product. It does not appear that for 'consumption' or at any rate for &# .....

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..... 69. Power of Commissioner or appellate or revisional authority to impose penalty in certain circumstances.-(1) If the Commissioner or the appellate or revisional authority, in the course of any proceedings under this Act is satisfied that a dealer has concealed his turnover or the aggregate amount of purchase prices in respect of any goods or has furnished false particulars of his sales or purchases, as the case may be, in his return or returns for any year or part thereof or has furnished a false return or returns for such period, the Commissioner or the appellate or the revisional authority as the case may be, may initiate proceeding separately for imposition of penalty under this section. (2) The proceeding under sub-section (1) shall be initiated by the Commissioner or the appellate or revisional authority as the case may be, by issue of a notice in the prescribed form for giving the dealer an opportunity of being heard. On hearing the dealer, the Commissioner or the appellate or the revisional authority as the case may be, shall pass an order not later than one calendar year from the date of initiation of such proceeding or within such further time as allowed by the State .....

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