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2019 (6) TMI 314

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.... passed by the Chairman VAT Tribunal, Punjab, Chandigarh (in short, "the Tribunal") in Appeal No.299 of 2005-06 for the assessment year 1999-2000, claiming following substantial questions of law:- "i) Whether in the facts and in the circumstances of the case, the orders Annexure A.1, Annexure A.2 and Annexure A.3 are legally sustainable in law? ii) Whether in the facts and in the circumstances of the case, the VAT Tribunal, Punjab, Chandigarh has grossly erred in upholding the order of the Assessing Officer now known as Notified Authority cum Excise and Taxation Officer as upheld by the Deputy Excise and Taxation Commissioner (Appeals) Patiala more so by following the judgment of this Hon'ble Court which is still a matter under challenge before the Hon'ble Supreme Court of India and wherein leave has been granted? iii) Whether in the facts and in the circumstances of the case, the VAT Tribunal, Punjab, Chandigarh has grossly erred in upholding the order of the Assessing Officer now known as Notified Authority cum Excise and Taxation Officer as upheld by the Deputy Excise and Taxation Commissioner (Appeals) Patiala has grossly erred in upholding the order as within limitati....

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....eneral Sales Tax Act, 1948 (in short, "the 1948 Act") and the Central Sales Tax Act, 1956 (in short, "the CST Act"). The appellant is engaged in manufacturing of sugar, molasses, press mud and bagasse. It is authorized to purchase different kind of raw material for use in the manufacture of these goods. The sugarcane being the main raw material is being purchased from the members who are farmers and owner/tiller of land. The goods produced i.e. sugar, molasses are mainly sold under the government control orders. The rate of raw material purchased i.e. sugarcane is also fixed by the Government of India from time to time. The Government of India enacted an Act named Additional Duties of Excise (Goods of Special Importance) Act, 1957, whereby additional duties of excise were imposed on certain goods including sugar. The appellant filed its quarterly returns as per provisions of Section 10 of the 1948 Act within the stipulated time. The case was taken up for scrutiny assessment under Section 11 of the 1948 Act by issue of notice to the assessee. The Assessing officer while completing the assessment determined the purchase price of sugarcane for the purpose of levy of purchase tax at ....

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....t appeals by the appellant. 4. We have heard learned counsel for the parties. 5. It was not disputed by learned counsel for the parties that Question No. (i) is legal and formal. Question Nos. (ii) and (vi) are covered against the assessee by the judgment of this Court in M/s A.B.Sugars Limited's case (supra). Answered accordingly. Question No.(iii) was not pressed by the learned counsel for the appellant. Question No.(v) does not arise for consideration. 6. With regard to question No.(iv) qua levy of tax on the packing material of sugar under Section 4B of the 1948 Act, the assessee claimed that the gunny bags purchased by the appellant sugar mill and used as packing material for sugar, there was no tax applicable as the assessee sells sugar and not gunny bags. It was urged that no separate price was charged for the packing material which is essential for selling and stocking sugar. Support was gathered from the decision of the Apex Court in Raj Sheel and others Vs. State of A.P. and others, (1989) 3 SCC 262 and of this Court in Punjab Breweries Limited Vs. State of Punjab and others, (1998) 120 PLR 423. 7. In Raj Sheel's case (supra), the Apex Court held that where sale i....

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....ot bear alone or bottles alone. The agreement between the petitioner and the licensees involved sale of bottled beer. Therefore, there could be no justification to charge tax on the bottles at higher rate. The relevant observations read thus:- "36. The second question which deserves to be examined in these cases is whether the bottles sold along with beer can be subjected to higher 31/39 rate of tax, i.e., at the rate of 10 per cent as against 4 per cent tax levied on the beer. Shri Jhingan argued that the view taken by the Assessing Authority, the Appellate Authority and the Tribunal on the issue of levy of tax at the rate of 10 per cent is against the settled principles of law. He submitted that in view of their finding that the bottles in which beer was sold formed an integral part of transaction of the sale of goods, the respondents could not have charged tax on the price of bottles at the rate of 10 per cent. 'Shri Jhingan relied on State of Orissa v. Habib Rahimutulla & Co. [1982] 51 STC 403 (Ori) Raj Sheel v. State of Andhra Pradesh Malva Vanaspati & Chemicals Co. Ltd. v. Commercial Taxes Officer, Special Circle, Jaipur State of Tamil Nadu v. V. V. Vanniaperumal & Co.....

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....he assessee was rejected by the assessing authority and the appellate authority i.e. Deputy Excise and Taxation Commissioner (Appeals), [DETC (A)]. The relevant findings recorded by the DETC (A) in this regard read thus:- Rate of tax from 25.01.2000 to 31.03.2000 "The Assessing Authority has rightly charged purchase tax at the rate of 8.8% for the period from 25.01.2000 to 31.03.2000 during the year 1999-2000 and there is no ambiguity regarding the same. Prior to 25.01.2000 i.e. till 24.01.2000 the rate of tax was 2.2%. However, on 25.01.2000 the sugarcane was not mentioned in any of the schedule, meaning thereby that it was to be charged at the general rate of 8.8%. However, w.e.f. 23.01.2001 the rate of tax on sugarcane was again specified @ 1%. It is thus abundantly clear that from 25.01.2000 till 22.01.2001 sugarcane was taxed at the rate of 8.8.%. The dealer himself admits that the has moved the Government for making necessary notification for the intervening period. In the absence of any specific notification for the period mentioned above, I see no reason to differ with the reassessment order." 11. The Tribunal recorded findings on this question to the effect that in....