TMI Blog2015 (1) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... his attention, whether the movement of goods from one State to another has taken place due to e-auction or not. If answer is negative, the CST is not leviable. There may be second sale. Subsequent purchaser may purchase the same goods. Now, if due to subsequent sale, if, the very same goods are moving from one State to another, therefore seller of goods of first transaction cannot levy CST but he can levy only VAT - the CST, levied at the rate of 5% by respondent no.6 is impermissible in the eyes of law. Instead of that, it should have been VAT under the Jharkhand Value Added Tax Act, 2005 - petition allowed - decided in favor of petitioner. - W.P. (T) No.5523 of 2013 - - - Dated:- 20-1-2015 - HON'BLE MR. JUSTICE D. N. PATEL AND HON'BLE MR. JUSTICE PRAMATH PATNAIK For the Petitioner: M/s. N.K. Pasari, Ranjana Mukherjee For the Respondents: M/s. J.C. to Mr. Ananda Sen, Biren Poddar, D.P. Mishra. JUDGEMENT Per D.N. Patel, J 1) This writ petition has been preferred mainly on the ground that respondent No.6 has raised tax invoice levying Central Sales Tax (hereinafter referred to as 'CST' for the sake of brevity) instead of Value Added Tax (hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 3(a) of the Central Sales Tax Act, 1956, but, Section 3(a) of the Central Sales Tax Act, 1956 is not applicable to the transaction of the sale of coal through e-auction between the petitioner (registered dealer within the State of Jharkhand) and the respondent No. 6 (coal Company), as both are situated within the State of Jharkhand and the respondent No.6 is not concerned with the second sale between the petitioner and the purchaser from Uttarakhand. Section 3(a) of the Act of 1956 is talking about one transaction of sale or a purchase and if for one sale or purchase of goods, if the movement of the goods is from one State to another State, then Section 3(a) of Act of 1956 is applicable, but, in the facts of the present case, second sale is altogether another sale, which is between this petitioner and the purchaser from Uttarakhand. There is no privity of contract between the purchaser of Uttarakhand and the respondent No.6-Coal Company. Hence, Section 3(a) of the Act of 1956 is not applicable in the facts of the present case and, hence, CST is not leviable from this petitioner as mentioned in Tax Cum Excise Invoice which is at Annexure 4 and, hence, instead of CST, it sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has not been properly appreciated by the respondent No.6. (vi) It further appears that respondent No.6 has to levy VAT at the rate of 5% and not CST at the rate of 5%. (vii) Because of sale of coal, between the petitioner and respondent no.6, there is no movement of coal from one State to another Sttae. Therefore, no CST can be levied. The goods in question has moved out of State i.e. from one State to another, due to subsequent sale (between petitioner and purchaser from Uttarakhand), with which respondent no.6 has nothing to do, as there is no privity of contract between respondent no.6 and subsequent purchaser of coal of Uttarakhand. Therefore, respondent no.6 cannot levy CST, but it can levy only VAT. (viii) It is submitted by the counsel for the respondents that as per section 3 of the Central Sales Tax Act, 1956, they have levied CST at the rate of 5% on the sale value. This is a misconception in the mind of respondent No.6 that CST is applicable in a transaction between the petitioner and the respondent No.6. The movement of the goods which has taken place from one State to another State is not in one sale or in a first sale. This movement from one State to anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice (Annexure 4). (xii) Moreover, it makes no difference to respondent No.6 financially, because the rate of CST as well as the rate of tax of VAT are similar. Both are at the rate of 5%, but it will surely make a difference to the petitioner, because if he is paying VAT, he will get Input Tax Credit under Section 18 of the Jharkhand Value Added Tax Act, 2005 together with Rule 26 of Jharkhand Value Added Tax Act, 2005. There is one more advantage to the petitioner to the effect that subsequent purchaser at Uttarakhand will have to pay CST at the rate of 2% instead of 5%, because the petitioner is a registered dealer and he has paid VAT at the rate of 5% within the State of Jharkhand. The respondent No.6 will have to now issue JVAT-404 Form as prescribed under the Act of 2005. (xiii) The movement of goods from one State to another is not due to incidence of e-auction of coal between respondent no.6 and petitioner. Therefore, CST cannot be levied, by respondent No.6, but, only VAT can be levied. The movement of goods - coal from Jharkhand to Uttarakhand is independent of incidence of e-auction. (xiv) It has been held by High Court of Madras in the case of Surya Vinayaka Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Tamil Nadu was done by the State of Tamil Nadu. The State Government would only be interested in getting the highest price for the sandalwood, and it would hardly be concerned with the question whether the sandalwood after the auction sale is consumed within the State of Tamil Nadu or goes to some other State. Hence, it cannot be said even by implication that the State of Tamil Nadu had entered into any covenant with the petitioner/appellant for transportation of the sandalwood to Karnataka after the sale. The movement of goods from Tamil Nadu to Karnataka can also not be said to be an incidence of the auction sale, rather the auction sale had nothing to do with the transport of the goods to Karnataka. In the auction sales (for all we know) there may have been bidders who wanted to purchase the sandalwood for use within the State of Tamil Nadu and not for transport outside the State. The State Government authorities would hardly be interested in the question whether the sandalwood after purchase in the auction sale is sent to Karnataka or U.P. or some other State, or remains within Tamil Nadu. Hence, it cannot be said that the movement of goods to Karnataka was an inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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