TMI Blog2017 (3) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner that the tax of which the set off is claimed has been paid by the original dealer from whom he has purchased the goods. As with respect to other two transactions the learned Tribunal has remanded the matter to the first Appellate Authority which according to the appellant are similar to that of other three transactions for which the learned Tribunal has rejected the appeal and the order with respect to other two transactions has attained the finality, we deem it fit to remand the matter to the adjudicating Authority to consider the set off claimed by the assessee in light of the observations made hereinabove i.e. the assessee has to prove to the satisfaction of the adjudicating Authority / Commissioner that the tax has been paid by the original dealer and that the assessee is also required to produce certificate in Form 40 issued by the dealer. As observed hereinabove when the aforesaid twin conditions are satisfied, then and then only the assessee shall be entitled to the set off, otherwise not. Appeal allowed in part and part matter on remand. - TAX APPEAL NO. 1816 of 2009 - - - Dated:- 8-2-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE APPELLANT : MR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and that the purchaser had failed to satisfy that the original dealer had paid the tax of which the set off is claimed, the purchaser is not entitled to set off under Rule 44 of the Rules, 1970. Thereby the Assessing Officer rejected the set off claimed by the purchaser. [2.2] Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer rejecting the set off claimed by the purchaser, the purchaser preferred appeal before the first appellate authority. That the first appellate Authority dismissed the said appeal. Against the order passed by the first appellate authority, the purchaser preferred Second Appeal No.590/2005 before the learned Tribunal. That by impugned judgment and order the learned Tribunal has partly allowed the said appeal. That the learned Tribunal has confirmed the order passed by the Assessing Officer as well as the first Appellate Authority rejecting the claim for set off under Rule 44 of the Rules, 1970 for purchase from three dealers viz. (1) Virkrupa Trading Company, (2) Uma Trading Company and (3) New Bhumi Enterprise for a sum of ₹ 12,62,84,840/-. However, with respect to the claim for set off on transaction with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of ₹ 12,62,84,840/-. [5.1] It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that on one hand the learned Tribunal has remanded the matter to the first Appellate Authority with respect to similar transactions with (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., however, has confirmed the order passed by both the authorities below with respect to set off claimed with respect to transactions with other three dealers. It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the appellant that with respect to the transactions of (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., the learned Tribunal has remanded the matter to the first Appellate Authority by observing that on production / submission of Form 40, thereafter the Assessing Officer is required to hold inquiry whether on such transactions of which the set off is claimed, the tax has been paid in the government by the original dealer or not. It is submitted that in the present case also with respect to transactions with other three dealers also, Form 40 was submitted. It is submitted that even the transactions with the aforesaid three deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed has been paid by the original dealer or not. It is submitted that therefore when in the present case the purchaser had submitted the Form 40 signed by the dealers from whom the appellants purchased the goods during the course of interState sale, purchaser is entitled to set off under Rule 44 of the Rules, 1970 for the purchase from dealers from whom the purchaser has purchased the goods during interState sale. [5.4] Alternatively, it is submitted that as by impugned judgment and order the learned Tribunal has remanded the matter to the first Appellate Authority with respect to the purchase from the dealers viz. (1) Urvil Sales Corporation and (2) Urvil Exim Ltd., even the claim for set off from the purchase from the remaining three dealers is required to be remanded to either first Appellate Authority or to the original Assessing Officer, as there is no difference in transaction with Urvil Sales Corporation and Urvil Exim Ltd. on one hand and the purchases from the remaining three dealers i.e. (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise. Making above submissions and relying upon above decision, it is requested to answer the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat thereafter if the Assessing Officer doubts the same, is required to hold the inquiry whether in fact the tax for which set off is claimed has been paid by the original dealer or not. [6.4] It is submitted that in the present case admittedly goods were purchased by the dealer from whom the purchaser has purchased the goods from one Shreeji Agro whose registration has been canceled ab initio on nonpayment of tax. It is submitted that even the dealer has not claimed any set off in monthly, quarterly and yearly return. [6.5] It is submitted that even the findings recorded by the learned Tribunal are contradictory findings with respect to the purchases from (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise on one hand and (1) Urvil Sales Corporation and (2) Urvil Exim Ltd. on other hand. It is submitted that with respect to the purchases from three dealers viz. (1) Virkrupa Trading Company, (2) Urmi Trading Company and (3) New Bhumi Enterprise, the learned Tribunal has observed and held that submitting Form 40 alone is not sufficient and/or conclusive proof to establish and prove that tax on such transaction has been paid. However, with resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of interState trade or commerce or of export out of the territory of India, within six months from the date of purchase thereof, or (B) have been transported by the assessee outside the State of Gujarat but within India, to his own place of business or as the case may be, to the place of business of his agent or of his principal, within six months from the date of purchase thereof and are sold there, or (C)(i) have been despatched by the assessee outside the territory of India, to his own place of business or to the place of business of his agent or of his principal or as the case may be, to any other person with the intention of selling such goods to the said person, and (ii) the goods have been actually resold there by the assessee, his agent or, as the case may be, his principal: (a) within a period of thirtysix months from the date of purchase thereof, if the goods are precious stones, synthetic or artificial precious stones and pearls, real, artificial or cultured, (b) within a period of eighteen months from the date of purchase thereof if the goods are raw wool; and (c) in the case of any other class of goods within a period of twelve months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State of Gujarat, the goods having been transported there, by the assessee to his own place of business or to the place of his agent or as the case may be, or his principal, on or after the appointed day : PROVIDED FURTHER that in respect of the goods falling in entries 1 and 2 in Schedule E of the Bombay Sales Tax Act, 1959 purchased by the assessee before the appointed day and held by him in stock on the appointed day, and in respect of the goods falling in entries 1 and 2 in Schedule II of the Act purchased by the assessee on or after the appointed day, the amount to be deducted under the aforesaid proviso, shall be calculated at the rate of one half per cent only of the sale price of such goods. (C) Notwithstanding anything contained in clause (A) or clause (B) above (i) no drawback, setoff or as the case may be, refund shall be granted under this rule where the assessee is entitled to refund under section 53 of the Act on the interState sales of declared goods; (ii) no drawback, setoff or as the case may be, refund shall be granted under this rule in respect of the purchases of those goods, which have been resold by the assessee in the course of the interState t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, if any, by him under the Act, on such turnover has been or as the case may be, will be paid within the time laid down in rule 31, the assessee/purchaser shall be entitled to set off of such tax paid by the original dealer. Thus, the onus is upon such assessee who claims set off, to prove to the satisfaction of the Commissioner that the tax of which the set off is claimed has been paid by the original dealer from whom he has purchased the goods. Simultaneously, the assessee is also required to produce certificate in Form 40 issued by the dealer from whom such goods were purchased by the assessee. Even if one looks at Form 40 the dealer certifies that either the tax has been paid or will paid within the time, specified in Rule 31. Therefore, submission of Form 40 cannot be said to be the conclusive proof to prove the actual payment of tax by the original dealer. The onus is upon the assessee who claims set off, to prove to the satisfaction of the Commissioner that the relevant tax is paid by the original dealer from whom such goods were purchased by the assessee. Therefore, the submission on behalf of the assessee that once the Form 40, signed by the dealer is produced by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has to prove to the satisfaction of the adjudicating Authority / Commissioner that the tax has been paid by the original dealer and that the assessee is also required to produce certificate in Form 40 issued by the dealer. As observed hereinabove when the aforesaid twin conditions are satisfied, then and then only the assessee shall be entitled to the set off, otherwise not. [9.0] In view of the above and for the reasons stated above, present Tax Appeal succeeds in part. The impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad in Second Appeal No.590/2005 is hereby quashed and set aside and the matter is remanded to the adjudicating Authority to consider the set off claimed by the assessee afresh in light of the observations made hereinabove. With the consent of learned Advocates appearing for respective parties and even with respect to other two transactions for which the learned Tribunal has remanded the matter to the first Appellate Authority, the same is remanded to the Adjudicating Authority. The aforesaid exercise shall be completed within the period of 3 months from the date of receipt of the present order. The appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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