TMI Blog2023 (12) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax at the last point of taxation. Thus, the petitioner s contention that the Scheme of the Act does not entail a charge on sale of goods, is erroneous. The DVAT Act expressly provides for charge of tax on sale of goods subject to certain exemptions and adjustments provided for under the DVAT Act. The scheme of DVAT Act does provide for credit for the taxes already borne to avoid the cascading effect of tax on sale of goods. However, it would be erroneous to assume that charge of tax in not on the sale of goods. The contention that the petitioner is not liable to pay any tax on sale of goods on the ground that there is no value addition, is insubstantial. The petitioner s challenge to the constitutional validity of the definition of the dealer is founded on ex facie erroneous premise. The same is, accordingly, rejected. In HDFC Bank v. Commissioner of Value Added Tax, Delhi [ 2016 (10) TMI 1345 - DELHI HIGH COURT] , another Coordinate Bench of this Court had, following the decision of M/s Citi Bank v. Commissioner of Sales Tax M/s Citi Bank v. Commissioner of Sales Tax [ 2015 (12) TMI 1040 - DELHI HIGH COURT] , rejected an appeal against the decision of the VAT Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) Each autonomous or statutory body or corporation or company or society or any industrial, commercial, banking, insurance or trading undertaking, corporation, institution or company whether or not of the Union Government or any of the State Governments or of a local authority; (viii) Delhi Transport Corporation; (ix) Shipping and construction companies, air transport companies, airlines and advertising agencies. 3. The petitioner is a scheduled bank and its challenge is premised on the ground that the expansive definition of the word dealer militates against the object of the DVAT Act. The petitioner also impugns the definition of the word dealer as being ultra vires Article 265 of the Constitution of India. 4. The petitioner is, essentially, aggrieved by the notices issued under Sections 32 and 33 of the DVAT Act by the respondent notices dated 23.03.2018 seeking to recover tax and interest amounting to ₹39,35,466/- and penalty of ₹75,33,449/- and notices dated 06.03.2019 seeking to recover tax and interest amounting to ₹94,09,083/- and penalty of ₹1,79,71,806/-. The said notices (hereafter referred to as the impugned notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. Article 265 of the Constitution of India merely provides no tax will be levied without authority of law. Clearly, the DVAT Act is an enacted law and there is no dispute that the tax sought to be collected is in terms of said law. Thus, any challenge on the ground that the definition of dealer is ultra vires of the Constitution of India would have to be sustained on the basis of the same falling foul of any other provision of the Constitution of India. 11. The contention that the expansive definition of the term dealer carries it beyond the scope of the DVAT Act is also unpersuasive. It is necessary to read the object of the said Act for its true meaning and import. The opening sentence of the preamble indicates that it is an Act to consolidate and amend the law relating to levy of tax on sale of goods, tax on transfer of property involved in execution of works contracts, tax on transfer of the right to use goods and tax on entry of motor vehicles by way of introducing a value added tax regime. It is, thus, apparent that the object encompasses the law relating to levy of tax on sale of goods as well as right to use goods. 12. It is also relevant to refer the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was quoted in the said passage. The said Explanation as quoted by the Supreme Court in its decision is set out below: A turnover tax simply taxes every transaction made : wheat, flour, dough, bread. VAT is different because it does not include in the tax on the miller's flour that part of its value which came from the wheat he bought from the farmer. Instead, it taxes him only on the wage and salary cost of milling, and on the interest, rent, royalty, and profit cost of this milling stage of production. (That is, the raw material costs used from earlier stages are subtracted from the miller's selling price in calculating his value added and the VAT tax on value added .) 17. The aforesaid Explanation clearly brings out the difference between the incidence of VAT and a turnover tax. The tax is chargeable on sale of goods at multiple stages. But the credit for the taxes on inputs effectively reduces the quantum of tax to the value addition. However, the said explanation cannot be read to mean that the tax is not chargeable on the sale of goods. The machinery for collection of VAT takes into account the value added at each stage in the chain of transaction. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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