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TMI Blog2023 (12) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is liable to pay entry tax on damaged cement under the provisions of the Entry Tax Act and whether the appellant is not entitled for the refund or adjustment of the same? (III) Whether on the facts and in the circumstances of the case, the imposition of interest under Section 39 (4) of the VAT Act is arbitrary, illegal and without jurisdiction?" 2. The facts on which the above questions of law arise are as follows:- The appellant manufactures and sells cement across the country through its various sales unit, one of which is located at Patna and the appellant was also a registered dealer under the Bihar Value Added Tax Act, 2005 (for brevity, 'VAT Act'). The appellant imports cement into the State from outside the State of Bihar by way of stock transfer to its depot at Patna and the cement is sold within the capital city as also in other districts in the State. There are eight C&F agents appointed in Bihar for the fifteen Warehouses situated in different towns within the State, for storage of cement. 3. In the assessment year 2010-11, the appellant imported 10,12,535.90 MT of cement into the State from their own manufacturing units situated in Orissa, Chhattis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated Cement Company Limited v. State of Bihar; (2004) 7 SCC 642. Therein, despite there being no liability to tax for the goods sold within the State of Bihar, which was imported from outside the State, the entry tax paid at the time of import was permitted to be reduced from the total liability of the assessee. The learned counsel also placed a Division Bench decision of this Court in CWJC 19512 of 2010 dated 07.03.2011 M/s Shree Shankar Ice & Cold Storage vs. State of Bihar. 7. Learned Government Advocate, Sri Vikash Kumar, on the other hand, supported the order of 'the Tribunal' specifically relying on the words employed in the statute. It is pointed out that there is no evidence produced as to how the damaged goods were disposed of. The damaged goods in normal conditions would be returned to the manufacturing unit, in which event the assessee could have claimed the refund. The State asserts that the appeal is liable to be dismissed and there arise no question of law. The State relied on Indian Oil Corporation v. State of Bihar 2018 (1) SCC 242. 8. Section 3 (1) of the Entry Tax Act with the nominal heading 'Charge of Tax', levies tax on entry of scheduled goods into a local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are two different and distinct circumstances which cannot be mixed up in any manner. If the goods are imported for any purpose other than consumption, use or sale within the State, then the importer has to prove how the goods imported were disposed of. If the goods had, in the form in which it was imported or in any other form, incurred a liability under the VAT Act, then the tax paid on entry would be reduced from the liability incurred under the VAT Act. The appellant pleads neither but asserts; though the cement was imported for sale it was damaged and could not be sold and offers no explanation as to what happened to the huge quantity of damaged cement. 12. Hindustan Lever Ltd. (supra) was a case in which the assessee had C&F agents within the State of Bihar and purchased goods (hydrogenated vegetable oil) from two local areas within the State and brought it into the Patna local area from which it was sold to persons in other local areas and also stock transferred to outside the State. Assessee claimed exemption on the ground that the goods were not consumed, used or sold within the Patna local area. It was held that a levy under the Entry Tax Act would be enabled only whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication does not efface the liability created by the charging section, but merely absolves the assessee from paying the tax, was the finding rendered in favour of the assessee. 16. This does not come to the aid of the appellant in the facts of this case since there is no question raised of an exemption and the unsubstantiated version is that so much of the goods were damaged and were hence not sold and thus there was no liability incurred. In fact, going by the dictum of the cited decision, unless there is a liability incurred; to tax, there can be no adjustment of entry tax and in the instant case, the claim of the appellant for exemption going by the above dictum, has to fail. 17. In Shree Shankar Ice & Cold Storage (supra) the assessee challenged the demand of entry tax for containers imported into the local area on the ground of it having been packed with dry fruits and exported outside the State of Bihar. The Division Bench found that the containers since were packed with dry fruits, were consumed and used in the State and hence was liable to entry tax. This does not in any way help the appellant because they have already paid the entry tax, which liability is admitted, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fying the first condition and though the assessee was the importer of the goods, it had no liability to pay VAT on its sales to OMCs thus not satisfying the second & third condition. The assessee also did not satisfy the fourth condition since the words employed in the provision; 'or sale of goods manufactured by consuming such imported scheduled goods' which connotes a sale by the importer itself, who alone is entitled to the set-off as per the fifth condition. The dictum squarely applies in the instant case where admittedly the appellant- assessee did not suffer tax on the imported goods within the State of Bihar thus disabling the appellant from claiming set-off to the extent of such imported goods which did not suffer tax within the State of Bihar. 20. Associated Cement Company Limited (supra) strongly relied on by the assessee was distinguished in Ĭndian Oil Corporation Ltd. (supra) on two counts; one, that there the question was raised of an exemption which does not efface the liability to tax and next that the words: 'by virtue of sale of imported scheduled goods or sale of goods manufactured by consuming such imported scheduled goods' was added to the provision granti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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