GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (5) TMI 666 - SUPREME COURT

2016 (5) TMI 666 - SUPREME COURT - [2016] 93 VST 441 (SC) - Reopening of the CST assessment - Sale of SF DOC in the course of inter-state trade - 'C' Forms obtained from the dealers in inter-state sales - whether the inter-state sale of SF DOC is liable to tax at 2% as per assessee or 4% as per succeeding assessing officer - Escapemant of tax - Held that:- by agreeing with the conclusion of the Hon'ble High Court in the case of M/s. Binani Industries Limited v. Assistant Commissioner of Commerci .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

idering the cumulative effect of the facts and law we have stated, we have not an iota of doubt in our mind that there should not have been reopening of assessment. However, the finding recorded by the High Court overturning the view of the tribunal that oil-cake and de-oiled cake are the same product and, therefore, both are liable to reduced rate of tax despite the notification only mentions oil-cake, is not defensible. The finding of the High Court as regards oil-cake and de-oiled cake being .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

granted. 3. The assessee-appellant is engaged in the manufacturing of refined edible oil by solvent extraction process and refining along with trading in edible oil and oil-cake. For the assessment year ending 31-3-2003 the assessee had filed Revised Annual Return in Form 4, declaring the Gross Taxable Turnovers at ₹ 19,76,37,615-00 and ₹ 1,60,93,055-00 respectively. 4. As the factual narration would show the appellant sold Sunflower De-oiled Cake (SF DOC) and several other goods in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vity, 'the CST Act') on 29th January, 2005, whereby it had expressed the view that a sum of ₹ 4,75,68,764/- was subjected to tax at 2 per cent. The assessing officer had granted the benefit on production of 'C' Form in terms of the Notification No.FD 119 CSL 2002 (2) dated 31st May, 2002. 5. After the order of assessment was passed, the succeeding assessing officer formed an opinion that there was an escapement of tax due to the reason that the inter-State sales of SF DOC w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns advanced on behalf of the assessee as well as the revenue and thereafter referred to Section 12-A of the Karnataka Sales Tax Act, 1957 (for short, 'KST Act') and referred to the decisions in the cases of Nagaraja Overseals Traders vs. The State of Mysore, JJ STC 315 Mahaveer Drug House vs. ACCT Gandhinagar, Bangalore, [1994] 93 STC 51 (Kar) State of Andhra Pradesh vs. Ampro Food Products, 96 STC 618 Giridharial Co. vs. State of Andhra Pradesh, 97 STC 442 C. Sathiragu and Sons vs. Stat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nal'), as the first Appellate Authority had not expressed any opinion with regard to rate of tax on oil-cake and de-oiled cake. It was contended before the Tribunal that the oil cake and de-oiled cake as per the commercial parlance are one and the same and, therefore, the rate of tax has to be at 2 per cent and not 4 per cent. The tribunal after noting the submissions referred to the schedule in the notification and the decision in M/s Sterling Foods vs. State of Karnataka, (1986) 63 STC 239 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n so far as it concerned levy of CST at 4% on inter-State Sales of sunflower de-oiled cake covered by C Forms by denying the benefit of reduction in the rate of CST to 2% granted in the Notification dated 31.05.2002 is liable to be held unsustainable and set aside. …. Consequential to the decision taken by us as above, the appellate order of the learned FAA is liable for modification accordingly. As regards the reassessment order set aside by the learned FAA on the basis of lay that reass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nalysis, the tribunal issued the following directions: (i) Reassessment order passed by the DCCT (Transition), Chitradurga under CST Act, 1956 for the year 2002-03 in respect of rate of CST levied at 4% on the turnover of ₹ 4,75,68,764 relating to inter-State sales of sunflower de-oiled cake covered by C Forms is modified to 2% allowing the benefit of reduction in the rate of CST to 2% granted in the Notification No.FD 119 CSL 2002 (2) dated 31-5-2002. (ii) The appellate order passed by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aka Appellate Tribunal in STA 425/2006 allowing the appeal is correct and in accordance with law? (ii) Whether on the fact and in circumstances of the case, can it be held that the Appellate Tribunal was right in law in ignoring that under the KST Act in the Second Schedule in serial No.1 of Part O, oil cake and de-oiled cake are listed under two separate sub-headings as two different commodities? 10. After deliberating on the aforesaid two questions, the High Court referred to the provisions of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be understood in common parlance as understood by a common man is even harder to accept. What a common man understands need not necessarily mean what is understood in accordance with law. In the instant case, the framers of the schedule were aware of the distinction between oil cake and de-oiled case. Accordingly, they have treated it as two different commodities. Therefore, to hold that the view of a common man has to necessarily over ride the view of the Legislature is difficult to accept. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eing of this view, it answered the two questions that were framed by it in favour of the Revenue and against the Assessee. The said judgment and order is the subject matter of challenge in this appeal by special leave. 11. We have heard Shri Dhruv Mehta, learned senior counsel along with Ms. Anupama, learned counsel for the appellant and Shri Basava Prabhu S. Patil, learned senior counsel along with Shri V.N. Raghupathy, learned counsel for the State. 12. First, we shall take up the issue pertai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct thereof, the assessing authority may, notwithstanding the fact that the whole or part of such escaped turnover was already before the said authority at the time of the original assessment or re-assessment but subject to the provisions of subsection (2), at any time within a period of [eight years] from the expiry of the year to which the tax relates, proceed to assess or re-assess to the best of its judgment the tax payable by the dealer in respect of such turnover after issuing a notice to t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng officer had accepted the 'C' Forms on verification and granted the benefit. The assessing officer on a proper security has accept the C Forms on the basis of which reduced rate of tax was claimed. The assessment was reopened as there was no escapement of tax due in respect of inter-State sale in respect of SF DOC. 14. Mr. Dhruv Mehta, learned senior counsel for the appellant, would submit that once an assessment order was framed on all the material available on record and the rate of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rabhu S. Patil, learned senior counsel, that claiming of benefit on production of 'C' Forms had nothing to do with the nature of product that was sold. Learned senior counsel would contend that the first Appellate Authority, as well as the tribunal, has been erroneously guided that there has been change of opinion. Learned senior counsel has submitted that the words reason to believe have to be expansively understood to import a meaning to the provision, for when the assessment has taken .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1 to 11 of the notification, subject to the condition that the Dealer produces declarations in Forms 'C' obtained from the registered Dealers/Government to whom the goods are sold. Be it noted oil cake is one of the goods specified in serial No. 6 of the notification. Submission of Mr. Mehta, learned senior counsel is that the High Court has clearly erred in law by distinguishing the facts and by opining that the judgment in the case of M/s Habeeb Protiens (supra) is not a decision in is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bsters would mean only raw shrimps, prawns and lobsters as caught from the sea or they also include process and frozen shrimps, prawns and lobsters. After referring to the various provisions and placing reliance on the decision in Dy. CST vs. Pio Food Packers 1980 Supp. SCC 174 the Court held as under:- …..when the State Legislature excluded processed or frozen shrimps, prawns and lobsters from the ambit and coverage of Entry 13a, its object obviously was that the last purchases of proces .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that in commercial parlance or according to popular sense, processed or frozen shrimps, prawns and lobsters are recognised as different commodity distinct from raw shrimps, prawns and lobsters. The question whether raw shrimps, prawns and lobsters after suffering processing retain their original character or identity or become a new commodity has to be determined not on the basis of a distinction made by the State Legislature for the purpose of exigibility to State Sales Tax because even where .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r and identity as shrimps, prawns and lobsters and do not become a new distinct commodity and are as much 'shrimps, prawns and lobsters', as raw shrimps, prawns and lobsters, sub-section (3) of section 5 of the Central Sales Tax Act would be attracted and if with a view to fulfilling the existing contracts for export, the assessee purchases raw shrimps, prawns and lobsters and processes and freezes them, such purchases of raw shrimps, prawns and lobsters would be deemed to be in course o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h should be perceived as one in commercial parlance. Thus, the emphasis is on the commercial parlance test. To bolster the said stand, reliance has been placed on M/s Habeeb Protiens case, wherein the Division Bench of the High Court of Karnataka has drawn a distinction between sunflower oil cake and groundnut oil cake on the one hand and de-oiled sunflower cake and groundnut oil cake on the other. The aforesaid analysis made in the said judgment should not detain us long, for Mr. Patil learned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oncern is not liable to pay any market fee on the de-oiled cakes sold by it which are stated to be the by-product in the course of manufacturing castor oil which is not one of the items enumerated in the Schedule to the Act and the notification issued by the Directorate? 18. Dealing with the distinction between the oil-cake and the de-oiled cake, the Court referred to the process and quoted from the findings referred by the learned Single Judge. Though the said decision was rendered in the backd .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dopted to determine the said goods for the purposes of Central Sales Tax Act. To have a complete picture, we may refer to the Notification dated 31.05.2002. The relevant part of it reads as follows : In exercise of the powers conferred by sub-Section (5) of Section 8 of the Central Sales Tax, 1956 (Central Act 74 of 1956), the Government of Karnataka, being satisfied that it is necessary so to do in the public interest, hereby directs that which effect from the First day of June, 2002, the tax p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tures 4. Edible oil-refined and non-refined 5. Khandasari Sugar 6. Liquid Glucose, Dextrine, Maixe Starch, gluten, grits, maize, husk, oil cake, corn steep liquor, dextrose, corn oil, maixe hydrol and maize germs. 19. From the said Notification, it is evident that the competent authority while exercising power under sub-section (5) of Section 8 of the CST Act, has kept the reduction of tax qua de-oiled cake from the purview of Notification and has only provided oil cake to be taxed at the reduce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version