TMI Blog2018 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... under the law relating to Sales Tax as may be in force in any other State or Union Territory by an importer who has purchased the specified goods in that State. It also further provides that amount of tax leviable under the Entry Tax Act, shall, subject to such conditions as may be prescribed, be reduced to the extent of the amount of tax paid, if any, under the Central Sales Tax Act, 1956 on the purchase of the specified goods in the course of inter State trade or commerce. As per sub-section( 5) of Section 8, no order of assessment under sub-section (3) or (4) shall be made after the expiry of three years from the last date prescribed for furnishing of returns of the particular period. It further provides that if for any reason, such order is not made within the period aforesaid, then the return so furnished shall be deemed to have been accepted as correct and complete for assessing the tax due from such person. As per the scheme of the Act and as per Section 10, a person liable to pay the tax, shall before furnishing return as required by sub-section( 1) of Section 7, first pay into the Government treasury in the prescribed manner, the whole of the amount of tax due from him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Singhi Co. For the Respondent(s) : Mr. Hardik Vora Agp, Notice Served By DS And MR. Hardik Vora AGP CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition being Special Civil Application No.5379 of 2016 under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, direction and order quashing and setting aside the impugned demand notice dated 20.02.2016. The petitioner has also prayed for an appropriate writ, direction and order to quash and set aside the impugned assessment order dated 13.06.2016. 1.1. The petitioner has also prayed for appropriate writ, direction and order permanently restraining the respondent from recovering the entry tax or penalty under the Entry Tax Act on purchase of Hydraulic Excavator made on 29.09.2016. 2.0. So far as Special Civil Application No.7844 of 2016 is concerned, the petitioner has also prayed to quash and set aside the impugned notices for payment of tax issued in Form 3 dated 13.04.2016 passed by the respondent no.2 herein. The petitioner has also prayed to quash and set aside the impugned notices for assessment issued in Form 2 dated 13.04.2016 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with penal interest and penalty. Vide communication dated 24.02.2016 the petitioner requested respondent authority to reconsider its decision. However, nothing further was done and the respondent authorities continue to demand the entry tax on the purchase of hydraulic excavator purchased in the year 2006. Hence, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India. Special Civil Application No. 7844 of 2016 4.0. The facts leading to the present Special Civil Application No.7844 of 2016 in nutshell are as under: 4.1. That the petitioner Ultratech Cement Limited purchased the following equipment from the respective vendors. Equipment Invoice Received Date Amount (in Rs.) Tata Hitachi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462419 dated 30.03.2012 23.04.2012 1,20,33,756/- Tata Hitachi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462291 dated 29.02.2012 02.04.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te for Singhi and Co, Advocate for the petitioner of Special Civil Application No.7844 of 2016 and Shri Hardik Vora, learned Assistant Government Pleader who has appeared on behalf of the respondent State. 6.0. Shri S.N. Soparkar, learned counsel for the petitioner of Special Civil Application No.7844 of 2016 has vehemently submitted that impugned assessment notice calling upon the petitioner to produce relevant data is coupled with the demand notice along with interest and penalty and therefore, same is nothing but an empty formality. It is further submitted that even the respondents have issued a notice for demand and has levied interest as well as penalty, even without carrying out any assessment, without affording any opportunity to the petitioner to make submissions. It is submitted that therefore, the initiation of proceedings by the respondents is itself erroneous and unlawful, and not in accordance with the provisions of the Entry Tax Act and the Entry Tax Rules. 6.1. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that in terms of the provisions of Section 8 of the Entry Tax Act, no order of assessment can be made after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said to be envisaging a situation wherein, even though a person is under a bonafide belief that the goods are not Specified Goods , is required to pay the Entry Tax. It is submitted that it is settled law that the liability to pay tax until filing of return would be in accordance with the assessee s own assessment of his tax liability, and not on the basis of filing assessment, and that the assessee s own assessment would include his bonafide claim to any deductions, exemption, or nontaxability of any turnover of sales or purchases, which will be subject to determination by the assessing authority. It is submitted that thus, the obligation of the Petitioner to pay the Entry Tax until filing of the return - cum - challan would be entirely on the basis of self-assessment. In support of his above submission, he has relied upon the decision in the case of Brooke Bond India Ltd. v. State of Gujarat , 1998 SCC OnLine Guj : (1999) 113 STC 185. 6.3. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that it is settled law that fiscal statutes are to be interpreted strictly. It is submitted that further, an assessee cannot be compelled to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 7844 of 2016. 7.0. Shri Uchit Sheth, learned advocate for the petitioner of Special Civil Application No. 5379 of 2016 has vehemently submitted that entry tax is leviable only on entry of specified goods. It is submitted that Section 3 of the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 (herein after referred to as the Entry Tax Act ) which is the charging section imposes tax only on the entry of specified goods . It is submitted that the phrase specified goods has been defined under Section 2(k) of the Entry Tax Act to mean goods specified in column 2 of the Schedule and such other goods as notified by the State Government. It is submitted that thus, entry tax is leviable only on entry of specified goods. The rates of entry tax are also prescribed only for such specified goods. 7.1. It is further submitted by Shri Sheth, learned advocate for the petitioner that even returns are required to be filed only if a person believes he is liable to pay entry tax. It is submitted that there is no provision requiring filing of Nil returns. It is submitted by Shri Sheth, learned advocate for the petitioner that Section 7 of the Entry Tax Act require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn under the Entry Tax Act, then in any case initiation of assessment proceedings in the case of the Petitioner is beyond the stipulated period of 3 years under Section 8(5) of the Entry Tax Act and therefore without jurisdiction, bad and illegal. 7.4. It is further submitted that the submission on behalf of the State Government that the time limit of 3 years is applicable only to persons who have filed return under the Entry Tax Act has no substance. It is submitted that only provisions for assessment under the Entry Tax Act are contained in Section 8(3) and 8(4) of the Entry Tax Act. It is submitted that it is categorically provided in Section 8(5) of the Entry Tax Act that no assessment order shall be passed under sub-sections (3) and (4) of the Entry Tax Act after expiry of 3 years from the last date prescribed for furnishing returns of the particular period . It is submitted that thus if at all it is held that assessment under Section 8 of the Entry Tax Act can be initiated even for persons who have not filed return under the Entry Tax Act, then the time limit which is stipulated for assessment under Section 8 of the Entry Tax Act would also be applicable and therefore i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 which requires payment of tax under the Vat Act within a period of 22 days from the end of the month. It is submitted that a registered dealer under the Vat Act is mandatorily required to file return under Section 29 of the Vat Act wherein he is required to show all purchases and sales made including purchases made from outside the State. It is submitted that since the entry turnover of purchases made from outside the State would be shown by a registered dealer in the returns filed under the Vat Act and the assessing authorities for the purpose of the Vat Act and the Entry Tax Act are common, the Entry Tax Rules require filing of returns only if the person believes that he has imported specified goods. It is submitted that the requirement of filing nil return under the Entry Tax Act even though the entire turnover of purchases is shown in the returns furnished under the Vat Act would only be duplication, therefore the Entry Tax rules consciously require filing of returns only in cases where the person believes that entry tax is payable on the transaction. 7.7. It is submitted that in the present case the purchase of excavator by the Petitioner is recorded in his books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before determining liability under the Vat Act. It is submitted that therefore, if a person believes that he has not imported specified goods and therefore he does not pay entry tax and if subsequently in assessment he is found liable to entry tax then he would be entitled to credit of such entry tax in assessment under the Vat Act. It is submitted that therefore, it is imperative that the assessment under the Entry Tax Act precedes the assessment under the Vat Act. It is submitted that therefore, it is for such reason that while the time limit for completion of assessment under Section 8(5) of the Entry Tax Act is stipulated to be 3 years, the time limit for initiation of scrutiny/audit assessment under the Vat Act is also stipulated to be 3 years under Proviso to Section 33(3) of the Vat Act. It is submitted that if the assessment under the Entry Tax is not completed prior to assessment under the Vat Act then this would lead to an anomalous situation in as much as while a dealer will be held liable to pay entry tax he would lose his right to be granted input tax credit under the Vat Act. It is submitted that such situation could never have been envisaged by the legislature parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside the impugned demand notice dated 20.2.2016 and impugned assessment order dated 13.6.2016 passed under the Entry Tax Act as time-barred as it is passed beyond the period of 3 years prescribed under section 8 of the Entry Tax Act and in any case after an inordinate delay of more than 9 years, without jurisdiction, bad and illegal and it is also prayed to hold that levy of entry tax on excavators at the rate of 15% even though the local rate of tax under the Vat Act on excavators during the period in question was 4% is contrary to the object and purpose of the Entry Tax Act, discriminatory and violating Article 304(a) of the Constitution of India as held by this Hon. Court in the case of Tractors and Farm Equipment Ltd. (supra). 8.0. Both these petitions are vehemently opposed by Shri Hardik Vora, learned Assistant Government Pleader appearing on behalf of the respondent State Authority. 8.1. It is vehemently submitted by Shri Vora, learned Assistant Government Pleader that the impugned assessment / demand notices are absolutely in consonance with the scheme of the Entry Tax Act. It is further submitted by Shri Vora, learned AGP that in the present case it is admitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 8.5. It is further submitted that there is no bar to issue demand notice prior to adjudication, if law permits. In support of his above submission, he has also relied upon Section 210(3) of the Income Tax Act, 1961 which gives power to the officers to issue demand notice at the stage of determining advance tax without any adjudication. 8.6. It is vehemently submitted by Shri Vora, learned Assistant Government Pleader that from reading of Entry Tax Act, the possible interpretation is that officer can issue demand notice once he is of the view that goods entered into territories of State are specified goods and no tax is paid thereon. It is submitted that dealer can thereafter pay tax and file return. It is submitted that on the basis of the filed return, assessment would be carried out. It is submitted that at that stage whether the goods are specified goods is required to be charged. It is submitted that any other interpretation would allow the dealer to escape from tax if not caught for non filing of return and / or non payment of tax. In support of his submissions, Shri Vora, learned AGP has heavily relied upon the decision in the case of M. Pentiah and ors vs. Muddal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and collected as octroi by a municipal corporation of a city constituted under the Bombay Provincial Municipal Corporations Act, 1949 or any other local authority, as the case may be, within its local area. Section 4: Reduction in tax liability . (1)The amount of tax leviable under this Act shall, subject to such conditions as may. Be prescribed , be reduced to the extent of the amount of tax paid, if any, under the law relating to Sales Tax as may be in force in any other State or Union Territory by an importer who had purchased the specified goods in that State. (2)The amount of tax leviable under this Act shall, subject to such conditions as may be prescribed , be reduced to the extent of the amount of tax to be paid, If any, under the Central Sales Tax, Act, 1956 on the purchase of the specified goods in the course of inter State trade or commerce. Section 7: Returns: (1) Every person liable to pay tax under this Act shall furnish returns in such from for such period, by such dates, and to such authority as may be prescribed. (2) If any person liable to pay tax under this Act, having furnished return under sub-section (1) discovers any commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the particular period, after giving the person a reasonable opportunity of being heard, reassess, to the best Of his judgement, the tax due from him. Section 10 .Payment of tax (1)The tax shall be paid in the manner hereinafter provided. (2)A person liable to pay the tax, shall, before furnishing return as required by sub-section (1) of section 7, first pay into the Government treasury in the prescribed manner, the whole of the amount of tax due from him according to such return. (3)If a person liable to pay the tax furnishes a revised return in accordance with sub-section (2) of section 7, and if such revised return shows that the amount of tax is larger than the amount of tax already paid or payable. He shall first pay into the Government treasury in the prescribed manner the additional amount of tax according to such revised return. (4)The amount of (I)tax due where return has been furnished without full payment thereof, or (ii) difference in the tax assessed under section 8 or reassessed under section 9 for any period and the sum already paid by the person in respect of such period, and (iii)penalty (if any) levied under section 17 shall be paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Authority may, after giving such person a reasonable opportunity of being heard, by, order in writing, impose on him, in addition to any tax payable, a sum by way of penalty not exceeding twice the amount of tax. (2) If the person does not, without reasonable cause, pay the tax within the time, he is required by or under the provisions of this Act, to pay it, the Assessing Authority may, after giving sllch person a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty, in addition to the amount of tax and penalty under sub-section (1), a sum of equal to eighteen per cent per annum for the period during the time the person continues to make default in the payment of tax. (3) If any person commits breach of any rule punishable with penalty, the Assessing Authority may, after giving such person a reasonable opportunity of being heard, by order in writing impose upon him a sum by way of penalty not exceeding the sum of penalty specified in the rule. Rule 3.Payment of Tax : Every importer, (a) Who is not a registered dealer shall, within two days of entry of specified goods into local area, pay into a Government Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the copy of the declaration mentioned in clause (b). Rule 6. Return - cum - chalan . (1)An importer shall furnish a return - cum - chalan in Form 1, appended to these rules, to the Assessing Authority within whose jurisdiction the specified goods are brought for consumption, use or sale. (2)An importer, ( a) Who is not a registered dealer shall furnish return - cum - chalan under subrule (1), within three days of entry of specified goods into local area, (b) Who is a registered dealer shall furnish return - cum - chalan under subrule (1), within a period of one month and fifteen days immediately succeeding the month for which return - cum - chalan is required to be furnished. (c).Notwithstanding anything contained in this rule, an electronic operator referred in clause (d) of rule 2, whether registered dealer or not, shall furnish online, a return Form 1A within a period of seven days immediately succeeding the month for which return is required to be furnished. Such importer shall also furnish the details in Form AA within three days of entry of specified goods into local area. Provided that the electronic operator, who deposits an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educed under sub-section (1) or (2) or Section 4 Amount of tax (deposit or) payable 1 2 3 4 5 6 7 ________________________________________________________________ Total ________________________________________________________________ The amount of tax as per column no. 7 being Rs. __________ _ Rs. ___________________ (in words) paid in cash /chaque No. ___ Dated _____ of _________ (Bank)_________ (Branch). The above statement is true to the best of my knowledge and belief. Date: Signatures Place: Status of importer FOR USE IN THE TREASURY Received Rs. ________, Rs (in words) _____________ Date of Entry ______ Chalan No. _______ From Mr./ Ms. ____________________________________________ Address. __________________________________________________ Signature of Treasury officer or Bank Officer or Assessing Authority 11.3. Notice fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red as an arrear of Land Revenue. Date: Signatures Place: Designation 11.5. Considering the relevant provisions of the Entry Tax Act, 2011 referred to and reproduced herein above and as per the scheme of the Act, on and from first day of September 2001, there shall be levied and collected entry of specified goods into local area, a tax on the purchase value thereof at such rates as may be fixed by the State Government by Notification in the Official Gazette but not exceeding the maximum rates specified in column no.3 of schedule. It further provides that such entry tax shall be in addition to the tax levied and collected, as octroi by a Municipal Corporations or any other local authority. It also further provides that amount of tax leviable, shall, subject to such conditions as may be prescribed, be reduced to the extent of the amount of tax paid, if any, under the law relating to Sales Tax as may be in force in any other State or Union Territory by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods into local area in case the importer is not registered dealer and in case importer is registered dealer shall furnish return cum challan under said Rule within a period of 21 days. Therefore, the limitation for assessment as provided under sub-section( 5) of Section 8 shall be three years from the last date prescribed for furnishing the return, provided the importer has filed the return. In case, the importer has not filed the return at all, sub-section( 5) of Section 8 shall not be applicable. We are fortified with the aforesaid view by the decision of the Kerala High Court in the case of A. Kunhikoya Thangal (supra). The Kerala High Court in the aforesaid decision while considering parimateria provisions under the Kerala Act has specifically observed and held that limitation apply to the cases where return has been filed by the assessee and the period of limitation not applicable, where no return is filed by the assessee. 11.6. Therefore, submission on behalf of the petitioner that impugned notice and / or assessment order are barred by limitation as provided under Section 8 of the Act is concerned, cannot be accepted. 12.0. Now, so far as submission on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity as provided under Section 4 of the Act. Even in the form 1 there is a specific column with respect to the reduction in tax liability as per Section 4(1)(2) of the Act. Therefore, while making payment of entry tax as demanded, the petitioner shall be entitled to deduction in tax liability as provided under Section 4 of the Act. In view of the above and for the reasons stated above, challenge to the impugned notice / demand cum notice fail. 14.0. Now, so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Standard Chartered Finance Ltd (supra) relied upon by Shri S.N. Soparkar, learned counsel for the petitioner of Special Civil Application No.7844 of 2016 is concerned, at the outset, it is required to be noted that on facts said decision shall not be applicable. It appears that in the case before the Hon'ble Supreme Court the assessee have filed its return for the relevant assessment year but no assessment order was passed and therefore, it is held that no assessment order is passed there could not be a notice for reassessment. 15.0. Now, so far as submission on behalf of the petitioner of SCA No. 7844 of 2016 that hydraulic exca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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