TMI Blog2020 (6) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the State of Tamil nadu or not and whether the liability to pay tax would be on the seller and on the buyer under section 3 of the Tamil Nadu VAT Act, 2006 would require determination by the Assessing Officer. There is no mechanism provided for payment of tax on the recipient of good on reverse charge basis under the Tamil Nadu VAT Act, 2006 except in the case of works contract under the Rules made thereunder. An agreement cannot shift the burden of tax on the buyer. It would not be correct to infer that the liability to pay tax can be shifted to the buyer namely Chennai Petroleum Corporation Ltd. However, Chennai Petroleum Corporation Ltd had agreed to pay tax from and on behalf of the suppliers. Each of the oil-producing companies where liable to pay proportionate tax on the crude oil explored and sold to Chennai Petroleum Corporation Ltd provided. However, tax is payable only if the sale had taken place within the State of Tamil Nadu. Whether or not the delivery of crude oil from the development area to the delivery point fell within the territorial jurisdiction of the State of Tamil Nadu or outside is a question of fact which require to be determined before the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roleum Corporation Limited by the Government of India to refine the crude oil. 7. Thus, a Crude Oil Sale Agreement dated 26.9.2003 was signed between the Chennai Petroleum Corporation Ltd and four crude oil producing companies with M/s. Hardy Exploration And Production (India) Inc. as the consortium leader. 8. Under clause 10.2 of the agreement, Chennai Petroleum Corporation Ltd. undertook the responsibility of payment of all taxes, duties, dues and charges which were necessary to, or payable in respect of the buying, taking, transporting and landing of crude oil from and downstream of the delivery point including, but not limited to sales-tax and for filing necessary returns with the statutory authorities in accordance with the applicable laws, rules or regulation. In the event that any such sum in respect thereof tax were paid by the seller in accordance with the applicable laws, same shall be reimbursed by the buyer namely Chennai Petroleum Corporation Ltd within 10 days of presentation of a duly substantiated debit note in accordance with clause 9.8 of the said agreement. 9. It is the case of the respective petitioners that the exploration and supply of petroleum crude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and that movement of goods from the State of Maharashtra to Mumbai HIgh did not constitute a movement from one State to another State as Mumbai High does not form part of any State in the Union of India. 16. A reference was also made to a decision of the Division Bench of Gujarat High Court in Larsen and Toubro Ltd Versus Union of India 2011 V IL 46 Gujarat wherein it was held that the sale of goods that took place at Mumbai High for which the goods moved from Hazira, West Bengal to Mumbai High did not get covered within the expression movement of goods from one state to another under section 3 (a) of CST, 1956. 17. The learned counsel for the petitioner also alternatively submitted that tax if any has been paid by the petitioner by book adjustment as purchase tax was revenue neutral as tax that is payable by the petitioner if any was available by way of Input Tax Credit under Section 12 (2) of the Tamil Nadu VAT Act, 2006. 18. On behalf of the other petitioner in W.P.No.7383 of 2012 (Hindustan Oil Exploration Company Ltd) it is submitted that The Production Sharing Agreement dated 30.12.1994 was signed under the aegis of Article 299 of the Constitution of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. MVRP. Firm Maur (1965)1SCC 815. The Court there held a particular income is either exigible to tax under the taxing statute or it is not. If not, the 1st respondent has no power to tax. It is therefore submitted that merely because the Chennai Petroleum Corporation Ltd had paid tax by itself could not mean that the transaction was taxable. 27. On behalf of the revenue it was contended that the present writ petitioner is liable to be dismissed inasmuch as the petitioner have challenged only the notice and therefore it was for the respective petitioners to participate in the adjudicatory mechanism under the Act. 28. It is further submitted that the fact that Chennai Petroleum Corporation Ltd ( Petitioner in W.P.No.27868 of 2014/W.P.No.28117 of 2014) had also filed returns and undertaken to pay purchase tax by way of book adjustment itself shows that the sale had taken place within the State of Tamil Nadu but it had wrongly debited the tax by making a book entry and adjustment to make it seem as if tax was paid without actually paying tax. 29. In this connection reference was made to the following cases on behalf of the revenue:- i) Karya Palak Engineer, CPWD, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and landing of Crude Oil and downstream of the delivery point including, but not limited to sales tax and filing of necessary returns to statutory authorities in accordance with applicable laws, rules or regulations. 34. In the event of any such sum in respect thereof which were paid by the seller in accordance with applicable law, same was to be reimbursed to the buyer-within 10 days of the presentation of a duly substantiated debit note in accordance with clause 9.8 of the said agreement. 35. Thus, it would not be correct to infer that the liability to pay tax can be shifted to the buyer namely Chennai Petroleum Corporation Ltd. However, Chennai Petroleum Corporation Ltd had agreed to pay tax from and on behalf of the suppliers. Each of the oil-producing companies where liable to pay proportionate tax on the crude oil explored and sold to Chennai Petroleum Corporation Ltd provided. However, tax is payable only if the sale had taken place within the State of Tamil Nadu. Whether or not the delivery of crude oil from the development area to the delivery point fell within the territorial jurisdiction of the State of Tamil Nadu or outside is a question of fact which require ..... X X X X Extracts X X X X X X X X Extracts X X X X
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