TMI Blog2021 (1) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... st appellate authority in para 8 of its order. On the basis of the aforesaid material, the adjudicating authority as well as the first appellate authority held that the petitioner had complied with the requirements of Section 15(5)(b) of the Act and therefore, it is entitled to benefit of the amounts paid to registered sub contractors to the extent of certificates / declarations filed - it is held that the finding recorded by the tribunal that the petitioner had not substantiated its claim for deduction of excess unabsorbed sub contractor payments before the adjudicating as well as first appellate authority is perverse and the aforesaid finding is therefore, set aside. Whether petitioner, which is a joint stock holding company can be permitted to carry forward unabsorbed sub contractor payments accumulated during its status as a partnership firm? - HELD THAT:- In the instant case, the erstwhile partnership firm has been converted to joint stock holding company by operation of law under Part-IX of the 1956 Act as ongoing concern and continues the business of the partnership firm, which is now being carried on by the company with all its assets movable and immovable, debts and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yle of M/s Concorde Housing Corporation Pvt. Ltd. and was incorporated on 24.06.2008 under the 1956 Act. After the conversion of the partnership firm into joint stock company, the petitioner obtained registration under the Act. The petitioner after conversion into joint stock company filed revised return in Form VAT- 120 for the period from 24.06.2008 to 30.06.2008 on 16.08.2008, wherein the petitioner claimed deduction of ₹ 3,96,82,936/- as 'sub contractors turnover'. The petitioner also filed annual return in Form VAT- 240 wherein negative turnover of ₹ 3,96,82,936/- was disclosed. 3. The Deputy Commissioner of Commercial Taxes issued a notice dated 23.12.2010 under Section 39(1) of the Act to the petitioner and thereafter, two notices dated 21.01.2011 demanding tax assessed along with penalties and interest one for the period June 2008 to March 2009 and another for period 2009-10. The Assessing Authority by an order dated 21.01.2011 inter alia held that petitioner is not entitled to carry forward deduction of unabsorbed contractor payments and is also not entitled to carry forward the deduction of unabsorbed sub contractor payment, when there is a change i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Learned counsel for the petitioner submitted that the findings recorded by the tribunal are erroneous inasmuch as the authorities under the Act had held that sufficient evidence was adduced by the petitioner in support of its claim for deduction of excess unabsorbed sub contractor payments. The Deputy Commissioner of Commercial Taxes recorded a finding in this regard in para 3(d) of the order and the finding to the similar effect was recorded by first appellate authority by order dated 28.02.2011 in para graph 8 of its order. However, the tribunal has ignored the aforesaid material evidence and has recorded a finding that the petitioner has not substantiated its claim before the adjudicating authority as well as the first appellate authority. In support of aforesaid submissions, reliance has been placed on decisions in 'RECKITT COLMAN OF INDIA LTD. VS. COLLECTOR OF CENTRAL EXCISE', 1996 (88) ELT 641 (SC), 'GUJARAT STATE FERTILIZERS CO VS. COLLECTOR OF CENTRAL EXCISE 1997', 1997 (91) ELT 3 (SC), 'SACI ALLIED PRODUCTS LTD. VS. COMMISSIONER OF CENTRAL EXCISE', 2005 (183) ELT 225 (SC). 6. It is further submitted that under part-IX of the 1956 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹ 3,96,82,936/- has not been substantiated. It is also urged that it has also been found by the tribunal that details of sub contractors to whom payments have been made have neither been furnished nor reflected in the annual report. It is also pointed out that it has also been held that apart from filing Form VAT- 240, the petitioner has not placed any material on record in support of its claim. It is also contended that tribunal has rightly held that there is no provision under the Act which permits unabsorbed sub contractor payments can be carried forward when the status of a dealer changes and therefore, no interference is called for with the findings recorded by the authorities under the Act and the tribunal. 8. It is also argued that when there is a change in the status of ownership of business, under Section 27(1)(b) of the 1983 Act, the prescribed authority is required to cancel the registration of the dealer and the dealer is under an obligation to inform the prescribed authority and to surrender the registration certificate as well as to apply for registration afresh. From the scheme of the provisions of the Act, it is clear that once there is a chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the petitioner has not substantiated its claim for deduction of excess unabsorbed sub contractor payments. For yet another reason, the aforesaid finding recorded by the tribunal cannot be sustained as the aforesaid issue was not an issue, which was for consideration before the tribunal and therefore, the tribunal ought not to have examined the same. Therefore, it is held that the finding recorded by the tribunal that the petitioner had not substantiated its claim for deduction of excess unabsorbed sub contractor payments before the adjudicating as well as first appellate authority is perverse and the aforesaid finding is therefore, set aside. 11. Now we may advert to the second issue viz., Whether petitioner is a joint stock holding company can be permitted to carry forward unabsorbed sub contractor payments accumulated during its status as partnership firm. Before proceeding further, it is apposite to take note of relevant extract of certain statutory provisions viz., Section 575 of the 1956 Act, Section 27(1) (2), Section 28(2), Section 46(1) and (2) of the Act, which read as under: 575. Vesting of property on registration. All property, movable and immovable (inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) there is any change in the status of the ownership of the business, such registered dealer shall surrender the certificate of registration already issued in respect of the business and apply for registration afresh in the prescribed manner. Section 46 - Tax payable on transfer of business, assessment of legal representatives, etc (1) When the ownership of the business of a dealer is transferred, the transferor and the transferee shall jointly and severally be liable to pay any tax or penalty or any other amount remaining unpaid at the time of transfer or that may become payable in respect of such business after the date of transfer but relating to the years up to the date of transfer and for the purpose of recovery from the transferee, such transferee shall be deemed to be the dealer liable to pay the tax or penalty or other amount due under this Act. (2) When a firm liable to pay the tax or penalty is dissolved, the assessment of the tax and imposition of penalty shall be made as if no dissolution of the firm had taken place, and every person who was at the time of dissolution a partner of the firm and the legal representative of any such person who is dece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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