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2016 (8) TMI 475 - GUJARAT HIGH COURT

2016 (8) TMI 475 - GUJARAT HIGH COURT - TMI - Exemption under section 5A of the VAT Act - work contract service - SEZ - identical issue decided earlier - futile to relegate the petitioner to appellate authority which involve pre-deposit or waiver - Held that: - there is no reason to relegate the petitioner to the appellate remedy. Even the assessing authority in the impugned order after referring to the petitioner's contention that the issue is covered by the judgment of the High Court in case o .....

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ng Company Ltd 2015 (11) TMI 1496 - GUJARAT HIGH COURT. - The decision to treat the works contract of the petitioner executed in SEZ area as dutiable is set aside - petitioner's tax liability to be computed - writ petition disposed off. - SPECIAL CIVIL APPLICATION NO. 7391 of 2016 - Dated:- 4-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR.HARDIK VORA, AGP ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The p .....

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d that the issue decided by the competent authority in the impugned order is squarely covered by a judgment of this Court dated 11.09.2015 in case of State of Gujarat v. Shandong Tiejun Electric Power Engineering Company Ltd., passed in Tax Appeal No.614 of 2015. The authority, therefore, could not have taken a different view ignoring the decision of the High Court. Counsel clarified that except this issue which is already decided by the High Court, the petitioner raises no further dispute or co .....

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Shandong Tiejun Electric Power Engineering Company Ltd. (supra), he submitted that the assessing authority had computed the tax without the aid of the such judgment to keep the issue open for the Revenue since the department had already filed appeal before the Tribunal against the judgment of the High Court in the said case. 4. It can thus, be seen that the sole issue involved in the present proceedings is undisputedly covered by the judgment of the High Court in case of Shandong Tiejun Electric .....

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see was executing a works contract entered into with Adani Power Limited in SEZ area. Pursuant to the application under section 80 of the Act made by the assessee, the determining authority had held that the assessee was not liable to pay tax on the sale of goods in the SEZ to Adani Power Limited by virtue of section 5A of the Value Added Tax Act, which provides for zero rated sale for the purpose of the Act and tax credit on the purchase related to sale of goods to the Developer, Codeveloper or .....

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itioner and the Adani Power Limited, which is in the nature of a works contract, when construction materials are purchased by the assessee, they are purchased for sale in the course of execution of works contract, which is to take place at a later point of time on the principle of accretion. Therefore, at the time of entry of goods into the SEZ area, there is no sale to the SEZ unit or to the developer, but the sale takes place at a later point of time. In view thereof, the assessee with a view .....

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. Since the bills were raised after the goods had entered the SEZ area and after they had been used in the execution of the works contract, endorsement of the customs authority/ SEZ authority on such running bills was not possible. However, the State authorities have adopted an adamant and hypertechnical approach in insisting upon endorsement of the customs authority on the invoices itself. The appellate authority has failed to appreciate the fact that it is not possible to abide by subrule (2A) .....

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liance with the provisions of subrule (2A) of rule 42 of the rules. 7. Moreover, on the second count also, it cannot be said that there is any infirmity in the impugned order passed by the Tribunal whereby it has merely followed the decision of the jurisdictional High Court in the case of Torrent Energy Limited v. State of Gujarat (supra) wherein it is held thus: It can, thus, be seen that after April 1, 2008, the VAT Act has made provisions for collection of purchase tax even from units located .....

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the SEZ Act, no such tax can be levied. As noted above, in a fiscal statute, there is no room for intendment. If the statute validly permits the State to levy tax, the same must be allowed to be collected, no matter how harsh the consequences may be. Conversely, if in the plain terms the statute does not permit collection of tax, the same cannot be authorised by falling back upon any legislative intent. Section 21 of the SEZ Act in clear terms exempts all State taxes on sale or purchase of good .....

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21 of the Gujarat Special Economic Zone Act, the assessee is even otherwise entitled to exemption of tax on sale or purchase of goods within the SEZ area. Under the circumstances, it cannot be said that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law as proposed or otherwise. The appeal, therefore, fails and is, accordingly summarily dismissed. 5. When the respondents are unable to disp .....

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