VAT AND SERVICE TAX CASES (VST)

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VOLUME 76 : PART 4 : ISSUE DATED 19-12-2014


HIGH COURTS


Account books--Trade tax--Best judgment assessment--Book of accounts--Rejection--Manufacturer--Rejection of account books for non-maintenance of stock register--Turnover to be determined to best of judgment of assessing authority on cogent basis--U. P. Trade Tax Act (15 of 1948), s. 12(2).--Narendra Products v. Commissioner of Commercial Tax (All) . . . 456

Appeal--Service tax--Pre-deposit--"Outdoor caterer"--Agreement with company for running catering service for supply of coffee and tea to employees at fixed rate--Appeal against order demanding service tax along with application for waiver of pre-deposit--Direction by Tribunal for deposit of Rs. 30,00,000 within specified period as a condition for entertainment of appeal--Plea by appellant that VAT already paid--Consideration of aspects of undue hardship and imposition of conditions to safeguard interests of Revenue--Order modified to extent of deposit of Rs. 15,00,000.--Perfect Vending India Pvt. Ltd. v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 443

----Service tax--Pre-deposit--Assessee rendering cargo handling service to Food Corporation of India charging and collecting service tax from it but not depositing in Government account--Order passed to recover amount from assessee with interest--Appeal to Tribunal along with stay application/application for waiver of pre-deposit--Tribunal directing petitioner to deposit Rs. 5 crores within specified period--Financial hardship not pleaded by assessee--Assessee liable to pay/deposit service tax in account of Central Government--Tribunal justified in not ordering full waiver of pre-deposit--Order modified to extent of deposit of three crores--Constitution of India, art. 226--Finance Act (32 of 1994), ss. 73A, 73B.--Kailash Enterprise v. Customs, Excise and Service Tax Appellate Tribunal (Guj) . . . 409

Best judgment assessment--Trade tax--Books of accounts--Rejection--Manufacturer--Rejection of account books for non-maintenance of stock register--Turnover to be determined to best of judgment of assessing authority on cogent basis--U. P. Trade Tax Act (15 of 1948), s. 12(2).--Narendra Products v. Commissioner of Commercial Tax (All) . . . 456

Cenvat credit--Service tax--Input service--Cenvat credit on certain services claimed by assessee allowed by adjudicating authority but disallowed by appellate authority--Tribunal denying Cenvat credit on bus transportation and event management services on ground no evidence on record to indicate that bus transportation related to transportation of staff, and that event took place resulting in promotion of sale of assessee's products--Not justified--That bus used by appellant for transportation of its employees or event management programme not occurred and expenses not incurred by appellant not in dispute--Tribunal went beyond admitted case of parties--Also no opportunity given to assessee to produce evidence--Order by Tribunal quashed--Finance Act (32 of 1994) --Cenvat Credit Rules, 2004, rr. 2(l), 9(1).--Hindustan Coca Cola Beverage Pvt. Ltd. v. Commissioner, Central Excise (All) . . . 430

Check-post--Sales tax--Penalty--Declaration form--Vehicle carrying goods from Bhiwadi to New Delhi--Builty and invoice produced by driver when vehicle checked--Declaration form No. ST-18C produced on demand within half an hour of checking of vehicle--Typographical error in declaration form with regard to number of vehicle--Inadvertent and bona fide--Penalty not attracted--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5)--Rajasthan Sales Tax Rules, 1995, r. 54.--Commercial Taxes Officer v. Phool Singh (Raj) . . . 438

----Sales tax--Penalty--Documents produced by driver of vehicle when vehicle checked--Not found to be incomplete or forged--That documents did not bear any stamp of any check-post--Does not warrant penalty--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(10A).--Assistant Commissioner of Commercial Tax v. Mukesh Singh Driver (Raj) . . . 491

----Sales tax--Penalty--Evasion of tax--Transport of goods from Delhi to Bikaner--All relevant documents produced when vehicle checked but Form No. ST-18A found to be incomplete--Penalty levied by assessing officer--Consistent finding by appellate authorities that only seller did not fill up columns in form and that no mala fide intention on part of purchaser for evading tax--Purchaser cannot be penalised for seller's lapse--Tax board justified in sustaining order by Deputy Commissioner (Appeals) deleting penalty--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5).--Commercial Taxes Officer v. Agrawal Plywood (Raj) . . . 435

Declaration form--See Check-post (Raj) . . . 435

----See Penalty (Raj) . . . 438

Deductions--Value added tax--Taxable turnover--Sales returns--Condition precedent--Allowable only in quarter in which goods been returned--Matter remanded--Haryana Value Added Tax Rules, 2003, r. 22(4).--Modern Dairies Limited v. State of Haryana(P&H) . . . 479

Deduction of tax at source--Value added tax--Works contract--Credit for--Dealer acting as sub-contractor--Assessing authority verifying payment of tax deducted at source by contractor and contractees and finalising assessment finding dealer entitled to refund subject to approval--Objections by approving authority to certain allowances and rates of tax applied--Rectification holding on all issues raised in objections against dealer and denying credit of tax deducted at source stating credit given to deductors--Writ petition--High Court--Direction to Department to make payment of refund, with liberty to take proceedings for reassessment or revision--Haryana Value Added Tax Act (6 of 2003), ss. 17, 34--Constitution of India, art. 226.--Dhani Ram Ram Chander v. State of Haryana (P&H) . . . 485

Evasion of tax--See Check-post (Raj) . . . 435

----See Revision (All) . . . 426

Event management services--See Service tax (All) . . . 430

Exemption--Trade tax--Eligibility--Industrial units--Expansion, diversification or modernization--Powder pesticides and liquid pesticides--Different items--Requiring different machines for their preparation--Unit going to manufacture liquid pesticides in addition to powder pesticides manufactured earlier--Investments made in different kinds of plants and machines--Cannot be said to be no expansion or diversification of unit--U. P. Trade Tax Act (15 of 1948), s. 4A.--Insecta Pesticides v. Commissioner of Trade Tax (All) . . . 474

----Trade tax--Eligibility--Industrial units--Expansion, diversification or modernization--Requirement pertaining to land regarding its ownership and tenancy for seven years--Not applicable--Tribunal going into question of lease deed, registration, etc.--Erroneous--U. P. Trade Tax Act (15 of 1948), s. 4A, Explns. (1), (5).--Insecta Pesticides v. Commissioner of Trade Tax (All) . . . 474

----See also Packing material (Raj) . . . 489

High Court--Value added tax--Revision--Scope of powers--Will not consider questions not raised before Tribunal--Will not disturb findings of fact recorded by Tribunal unless shown to be perverse--Seizure of goods for evasion of tax--Tribunal directing release of goods without security recording satisfaction that transactions recorded in books and no intention to evade tax--Finding of fact--Satisfaction not shown to be perverse--Court will not interfere--Court will not consider whether transactions inter-State sale--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 58.--Commissioner, Commercial Tax v. Tewari Export (All) . . . 426

----See also Works contract (P&H) . . . 485

Industrial units--Trade tax--Exemption--Eligibility--Expansion, diversification or modernization--Powder pesticides and liquid pesticides--Different items--Requiring different machines for their preparation--Unit going to manufacture liquid pesticides in addition to powder pesticides manufactured earlier--Investments made in different kinds of plants and machines--Cannot be said to be no expansion or diversification of unit--U. P. Trade Tax Act (15 of 1948), s. 4A.--Insecta Pesticides v. Commissioner of Trade Tax (All) . . . 474

----See also Exemption (All) . . . 474

Input service--See Service tax (All) . . . 430

Input-tax credit--Value added tax--Claim of input-tax credit relying upon invoices/bills and books of profit and loss--No document and/or material produced to show actual movement of goods from vendors to assessee--Concurrent findings by authorities below that alleged transaction not genuine and denial of input-tax credit--That registration of vendors cancelled not the only ground--Denial justified--Gujarat Value Added Tax Act, 2003 (1 of 2005).--Shreeji Impex v. State of Gujarat (Guj) . . . 451

Jurisdiction--Sales tax--Revision--Power to revise conferred on authorities under 2003 Act on March 31, 2003 whether properly conferred--Matter remanded to Tribunal to consider--Haryana Value Added Tax Act (6 of 2003), s. 34(2)--Central Sales Tax Act (74 of 1956), s. 6(2)(a).--Bharat Heavy Electricals Limited v. State of Haryana (P & H) . . . 482

Manufacturer--See Best judgment assessment (All) . . . 456

----See Set-off (Bom) . . . 419

Mens rea--Penalty--Levy of penalty--Scope of discretionary power of authorities.--Shree Renuka Sugars Ltd. v. State of Karnataka (Karn) . . . 463

----Sales tax--Penalty--Sales tax concession--New sugar units--Conversion of purchase tax to interest-free loan--Dealer-company granted unit certificate in its name certifying that dealer with effect from November 22, 1999 commenced commercial production in its unit at Munavalli--Dealer filing returns seeking benefit on premise that its other four units commencing production later being new industrial units also eligible for said tax incentive and not paying tax--Contents of certificate belies dealer's assertion that concession "company specific"--Claim of bona fides unacceptable--Order of Joint Commissioner reducing penalty levied by assessing authority to 50 per cent of tax due not challenged by Department--On facts revision petition against order of Tribunal confirming order of Joint Commissioner--Dismissed--Karnataka Sales Tax Act (25 of 1957), s. 25B.--Shree Renuka Sugars Ltd. v. State of Karnataka (Karn) . . . 463

Natural justice--See Service tax (All) . . . 430

Outdoor caterer service--See Service tax (Mad) . . . 443

Packing material--Sales tax--Rate of tax--Same as applicable to goods packed therein--Plastic bags purchased free of tax and in which salt packed and sold--Not liable to tax--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 4(2)--Central Sales Tax Act (74 of 1956), s. 8(1), (2)(b), (5)--Notification No. F.4(21)FD/Gr.IV/78-7 (S. O. 193) dated March 6, 1978.--Assistant Commercial Taxes Officer v. Rohit Salt Industries (Raj) . . . 489

Penalty--Levy of penalty--Mens rea--Scope of discretionary power of authorities.--Shree Renuka Sugars Ltd. v. State of Karnataka (Karn) . . . 463

----Sales tax--Check-post--Declaration form--Vehicle carrying goods from Bhiwadi to New Delhi--Builty and invoice produced by driver when vehicle checked--Declaration form No. ST-18C produced on demand within half an hour of checking of vehicle--Typographical error in declaration form with regard to number of vehicle--Inadvertent and bona fide--Penalty not attracted--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5)--Rajasthan Sales Tax Rules, 1995, r. 54.--Commercial Taxes Officer v. Phool Singh (Raj) . . . 438

----Sales tax--Check-post--Documents produced by driver of vehicle when vehicle checked--Not found to be incomplete or forged--That documents did not bear any stamp of any check-post--Does not warrant penalty--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(10A).--Assistant Commissioner of Commercial Tax v. Mukesh Singh Driver (Raj) . . . 491

----Sales tax--Check-post--Evasion of tax--Transport of goods from Delhi to Bikaner--All relevant documents produced when vehicle checked but Form No. ST-18A found to be incomplete--Penalty levied by assessing officer--Consistent finding by appellate authorities that only seller did not fill up columns in form and that no mala fide intention on part of purchaser for evading tax--Purchaser cannot be penalised for seller's lapse--Tax board justified in sustaining order by Deputy Commissioner (Appeals) deleting penalty--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5).--Commercial Taxes Officer v. Agrawal Plywood (Raj) . . . 435

----Sales tax--Determination of quantum--Revision--Order dated March 15, 2006 by assessing authority determining tax liability and imposing penalty--Order imposing penalty set aside by appellate authority, taking into consideration two payments, i.e., 70,000 and Rs. 26,000, by two cheques dated February 14, 2005 and March 29, 2006--Revisional authority noticing error committed by appellate authority in treating Rs.26,000 paid subsequent to assessment order as advance payment and correcting error--Order not to be interfered with--Karnataka Sales Tax Act (25 of 1957), ss. 12B(4), 22A(1).--Shifa Constructions v. Additional Commissioner of Commercial Taxes (Karn) . . . 494

----Sales tax--Sales tax concession--New sugar units--Conversion of purchase tax to interest-free loan--Dealer-company granted unit certificate in its name certifying that dealer with effect from November 22, 1999 commenced commercial production in its unit at Munavalli--Dealer filing returns seeking benefit on premise that its other four units commencing production later being new industrial units also eligible for said tax incentive and not paying tax--Contents of certificate belies dealer's assertion that concession "company specific"--Claim of bona fides unacceptable--Order of Joint Commissioner reducing penalty levied by assessing authority to 50 per cent of tax due not challenged by Department--On facts revision petition against order of Tribunal confirming order of Joint Commissioner--Dismissed--Karnataka Sales Tax Act (25 of 1957), s. 25B.--Shree Renuka Sugars Ltd. v. State of Karnataka (Karn) . . . 463

Pre-deposit--See Service tax (Guj) . . . 409, (Mad) . . . 443

Purchase tax--Sales tax--Set-off--Manufacturer--Sale--Works contract--Manufactured goods used in works contract in other States where certificate in "form 31C" produced by claimant/dealer--"Export" includes despatches made by dealer to his place of business or to his agent outside State--Branches of dealer registered under local Act and Central Sales Tax Act, qua those States--Whether definition of "sale" in other States law included works contract--Not relevant--Dealer entitled to set off of tax paid on purchases--Bombay Sales Tax Rules, 1959, r. 41D.--Commissioner of Sales Tax v. Shrike Construction Equipments (P) Ltd. (Bom) . . . 419

Rate of tax--Sales tax--Packing material--Same as applicable to goods packed therein--Plastic bags purchased free of tax and in which salt packed and sold--Not liable to tax--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 4(2)--Central Sales Tax Act (74 of 1956), s. 8(1), (2)(b), (5)--Notification No. F.4(21)FD/Gr.IV/78-7 (S. O. 193) dated March 6, 1978.--Assistant Commercial Taxes Officer v. Rohit Salt Industries (Raj) . . . 489

Rectification of mistake--See Works contract (P&H) . . . 485

Revision--Sales tax--Jurisdiction--Power to revise conferred on authorities under 2003 Act on March 31, 2003 whether properly conferred--Matter remanded to Tribunal to consider--Haryana Value Added Tax Act (6 of 2003), s. 34(2)--Central Sales Tax Act (74 of 1956), s. 6(2)(a).--Bharat Heavy Electricals Limited v. State of Haryana (P & H) . . . 482

----Sales tax--Penalty--Determination of quantum--Order dated March 15, 2006 by assessing authority determining tax liability and imposing penalty--Order imposing penalty set aside by appellate authority, taking into consideration two payments, i.e., 70,000 and Rs. 26,000, by two cheques dated February 14, 2005 and March 29, 2006--Revisional authority noticing error committed by appellate authority in treating Rs.26,000 paid subsequent to assessment order as advance payment and correcting error--Order not to be interfered with--Karnataka Sales Tax Act (25 of 1957), ss. 12B(4), 22A(1).--Shifa Constructions v. Additional Commissioner of Commercial Taxes (Karn) . . . 494

----Value added tax--High Court--Scope of powers--Will not consider questions not raised before Tribunal--Will not disturb findings of fact recorded by Tribunal unless shown to be perverse--Seizure of goods for evasion of tax--Tribunal directing release of goods without security recording satisfaction that transactions recorded in books and no intention to evade tax--Finding of fact--Satisfaction not shown to be perverse--Court will not interfere--Court will not consider whether transactions inter-State sale--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 58.--Commissioner, Commercial Tax v. Tewari Export (All) . . . 426

Sale--See Set-off (Bom) . . . 419

Sales returns--Value added tax--Taxable turnover--Deductions--Condition precedent--Allowable only in quarter in which goods been returned--Matter remanded--Haryana Value Added Tax Rules, 2003, r. 22(4).--Modern Dairies Limited v. State of Haryana (P&H) . . . 479

Service tax--Appeal--Pre-deposit--"Outdoor caterer"--Agreement with company for running catering service for supply of coffee and tea to employees at fixed rate--Appeal against order demanding service tax along with application for waiver of pre-deposit--Direction by Tribunal for deposit of Rs. 30,00,000 within specified period as a condition for entertainment of appeal--Plea by appellant that VAT already paid--Consideration of aspects of undue hardship and imposition of conditions to safeguard interests of Revenue--Order modified to extent of deposit of Rs. 15,00,000.--Perfect Vending India Pvt. Ltd. v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 443

----Appeal--Pre-deposit--Assessee rendering cargo handling service to Food Corporation of India charging and collecting service tax from it but not depositing in Government account--Order passed to recover amount from assessee with interest--Appeal to Tribunal along with stay application/application for waiver of pre-deposit--Tribunal directing petitioner to deposit Rs. 5 crores within specified period--Financial hardship not pleaded by assessee--Assessee liable to pay/deposit service tax in account of Central Government--Tribunal justified in not ordering full waiver of pre-deposit--Order modified to extent of deposit of three crores--Constitution of India, art. 226--Finance Act (32 of 1994), ss. 73A, 73B.--Kailash Enterprise v. Customs, Excise and Service Tax Appellate Tribunal (Guj) . . . 409

----Cenvat credit--Input service--Cenvat credit on certain services claimed by assessee allowed by adjudicating authority but disallowed by appellate authority--Tribunal denying Cenvat credit on bus transportation and event management services on ground no evidence on record to indicate that bus transportation related to transportation of staff, and that event took place resulting in promotion of sale of assessee's products--Not justified--That bus used by appellant for transportation of its employees or event management programme not occurred and expenses not incurred by appellant not in dispute--Tribunal went beyond admitted case of parties--Also no opportunity given to assessee to produce evidence--Order by Tribunal quashed--Finance Act (32 of 1994)--Cenvat Credit Rules, 2004, rr. 2(l), 9(1).--Hindustan Coca Cola Beverage Pvt. Ltd. v. Commissioner, Central Excise (All) . . . 430

Set-off--Sales tax--Purchase tax--Manufacturer--Sale--Works contract--Manufactured goods used in works contract in other States where certificate in "form 31C" produced by claimant/dealer--"Export" includes despatches made by dealer to his place of business or to his agent outside State--Branches of dealer registered under local Act and Central Sales Tax Act, qua those States--Whether definition of "sale" in other States law included works contract--Not relevant--Dealer entitled to set off of tax paid on purchases--Bombay Sales Tax Rules, 1959, r. 41D.--Commissioner of Sales Tax v. Shrike Construction Equipments (P) Ltd. (Bom) . . . 419

Transportation services--See Service tax (All) . . . 430

Turnover--See Deductions (P&H) . . . 479

Value added tax--See Deductions (P&H) . . . 479

----See Input-tax credit (Guj) . . . 451

Words and phrases--"Export".--Commissioner of Sales Tax v. Shrike Construction Equipments (P) Ltd. (Bom) . . . 419

Works contract--Value added tax--Deduction of tax at source--Credit for--Dealer acting as sub-contractor--Assessing authority verifying payment of tax deducted at source by contractor and contractees and finalising assessment finding dealer entitled to refund subject to approval--Objections by approving authority to certain allowances and rates of tax applied--Rectification holding on all issues raised in objections against dealer and denying credit of tax deducted at source stating credit given to deductors--Writ petition--High Court--Direction to Department to make payment of refund, with liberty to take proceedings for reassessment or revision--Haryana Value Added Tax Act (6 of 2003), ss. 17, 34--Constitution of India, art. 226.--Dhani Ram Ram Chander v. State of Haryana (P&H) . . . 485

----See also Set-off (Bom) . . . 419

Writs under Constitution--See Works contract (P&H) . . . 485


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Appeal--Excise Department--Appeal against order of adjudication--New grounds not forming part of adjudication order not permissible.--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

Excise Department--Appeal--Appeal against order of adjudication--New grounds not forming part of adjudication order not permissible.--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

Service tax--"Supply of tangible goods"--Assessee engaged in receiving, storing, re-gasification (at Gujarat) and marketing of liquefied natural gas (LNG) after importing LNG from Qatar through cryogenic ships--"Time Charter Agreements" entered into with foreign entities (owners) by assessee for hiring of vessels for transporting LNG from Qatar to Gujarat--Is transfer of right to use tangible goods, including possession and effective control of goods--Fall under exclusionary clause--Not taxable under category of "supply of tangible goods"--Also substantial period of their use by assessee outside Indian territorial waters--Assessee not liable under reverse charge mechanism under section 66A--Finance Act (32 of 1994), ss. 65(105)(zzzzj), 66A--Taxation of Services (Provided from outside India and received in India) Rules, 2006, r. 3(iii), proviso.--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

----"Supply of tangible goods"--Time Charter Agreements and delivery of tankers pursuant to agreements (taxable event), occurred prior to introduction of service--Outside purview of taxable service of supply of tangible goods--Finance Act (32 of 1994), s. 65(105)(zzzzj).--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

Supply of tangible goods service--Service tax--Assessee engaged in receiving, storing, re-gasification (at Gujarat) and marketing of liquefied natural gas (LNG) after importing LNG from Qatar through cryogenic ships--"Time Charter Agreements" entered into with foreign entities (owners) by assessee for hiring of vessels for transporting LNG from Qatar to Gujarat--Is transfer of right to use tangible goods, including possession and effective control of goods--Fall under exclusionary clause--Not taxable under category of "supply of tangible goods"--Also substantial period of their use by assessee outside Indian territorial waters--Assessee not liable under reverse charge mechanism under section 66A--Finance Act (32 of 1994), ss. 65(105)(zzzzj), 66A--Taxation of Services (Provided from outside India and received in India) Rules, 2006, r. 3(iii), proviso.--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

----Service tax--Time Charter Agreements and delivery of tankers pursuant to agreements (taxable event), occurred prior to introduction of service--Outside purview of taxable service of supply of tangible goods--Finance Act (32 of 1994), s. 65(105)(zzzzj).--Petronet LNG Limited v. Commissioner of Service Tax (CESTAT-New Delhi) . . . 371

Transfer of right to use goods--See Service tax (CESTAT-New Delhi) . . . 371


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