VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 3 : ISSUE DATED 25-7-2014

HIGH COURT


Appeal--Sales tax--Recovery of tax--Notices for invocation of bank guarantees issued before expiry of time for filing appeal--Not justified--Karnataka Sales Tax Act (25 of 1957), s. 22.--Sap India Private Limited v. Deputy Commissioner of Commercial Taxes (Karn) . . . 113

----Sales tax--Writs under Constitution--Assessment including sales claimed to have been made entirely in Gujarat--Writ petitions against assessment dismissed relegating dealer to remedy of appeal--Appeals filed and pending--Rectification of assessments sought by refused--Writ petition against such refusal--Petitions dismissed with direction to dealer to raise objections in appeal--Direction for deposit of 50 per cent. of balance without including penalty--Karnataka Sales Tax Act (25 of 1957), s. 20--Constitution of India, art. 226.--SAP India Private Limited v. Deputy Commissioner of Commercial Taxes (Karn) . . . 110

Assessment--See Writs under Constitution (Karn) . . . 110

Eligibility certificate--See Exemption (All) . . . 86

Exemption--Trade tax--New industrial unit--Eligibility certificate--Curtailment of period of exemption for want of registration under Factories Act--Writ--High Court--Contention of dealer that number of workers in unit less than ten at relevant time and registration as factory not mandatory--Direction to Divisional Level Committee to ascertain how many workers working in unit and decide afresh whether or not dealer entitled to benefit from date of first production and if not, up to which date--U. P. Trade Tax Act (15 of 1948), s. 4A.--Ishwar Packaging Products Private Ltd. v. State of Uttar Pradesh (All) . . . 86

Hotels and restaurants--See Service tax (Chhattisgarh) . . . 94

Legislative powers--Service tax--Provision providing that service portion in activity of supplying food or any drink as part of activity constitutes service--Valid--Finance Act (32 of 1994), ss. 65B(44)(ii), 66E(i) --Constitution of India, art. 366(29A)(f).--Hotel East Park v. Union of India (Chhattisgarh) . . . 94

New industrial unit--See Exemption (All) . . . 86

Parliament--See Service tax (Chhattisgarh) . . . 94

Pre-deposit--See Writs under Constitution (Karn) . . . 110

Recovery of tax--Sales tax--Appeal--Notices for invocation of bank guarantees issued before expiry of time for filing appeal--Not justified--Karnataka Sales Tax Act (25 of 1957), s. 22.--Sap India Private Limited v. Deputy Commissioner of Commercial Taxes (Karn) . . . 113

Rectification of mistake--See Writs under Constitution (Karn) . . . 110

Sale--See Service tax (Chhattisgarh) . . . 94

Service tax--Provision providing that service portion in activity of supplying food or any drink as part of activity constitutes service--Valid--Finance Act (32 of 1994), ss. 65B(44)(ii), 66E(i).--Constitution of India, art. 366(29A)(f).--Hotel East Park v. Union of India (Chhattisgarh) . . . 94

----See also Writs under Constitution (Karn) . . . 103

Value added tax--Writs under Constitution--Existence of alternative remedy--Transactions of lease of transponders on satellite whether liable to value added tax levied by State where service tax levied under Central enactment--Writ petitions--Single judge relegating dealers to remedy of appeal holding questions of law requiring examination of facts, and in view of law on subject being in formative stage, matters to be examined by authorities in first instance and then by hierarchy of authorities under respective enactment--Proper--Karnataka Value Added Tax Act, 2003 (32 of 2004)--Central Sales Tax Act (74 of 1956), s. 4--Finance Act (32 of 1994)--Constitution of India, art. 286 ; Sch. VII, List I, entry 97, List II, entry 54.--SAP India Private Limited v. State of Karnataka (Karn) . . . 103

Writs under Constitution--Sales tax--Appeal--Assessment including sales claimed to have been made entirely in Gujarat--Writ petitions against assessment dismissed relegating dealer to remedy of appeal--Appeals filed and pending--Rectification of assessments sought refused--Writ petition against such refusal--Petitions dismissed with direction to dealer to raise objections in appeal--Direction for deposit of 50 per cent. of balance without including penalty--Karnataka Sales Tax Act (25 of 1957), s. 20--Constitution of India, art. 226.--SAP India Private Limited v. Deputy Commissioner of Commercial Taxes (Karn) . . . 110

----Value added tax--Existence of alternative remedy--Transactions of lease of transponders on satellite whether liable to value added tax levied by State where service tax levied under Central enactment--Writ petitions--Single judge relegating dealers to remedy of appeal holding questions of law requiring examination of facts, and in view of law on subject being in formative stage, matters to be examined by authorities in first instance and then by hierarchy of authorities under respective enactment--Proper--Karnataka Value Added Tax Act, 2003 (32 of 2004)--Central Sales Tax Act (74 of 1956), s. 4--Finance Act (32 of 1994)--Constitution of India, art. 286 ; Sch. VII, List I, entry 97, List II, entry 54.--SAP India Private Limited v. State of Karnataka (Karn) . . . 103

PRINT EDITION

VOLUME 72 : PART 3 : ISSUE DATED 25-7-2014


HIGH COURTS


Appeal--Value added tax--Appeal to Appellate Tribunal--Limitation--Delay in filing--Condonation of delay--General principles--Plea that representative suffering from depression and undergoing treatment and most of time was out of office--Plausible--Delay to be condoned--Haryana Value Added Tax Act (6 of 2003), s. 33--Limitation Act (36 of 1963), s. 5.--Super Metal v. State of Haryana (P&H) . . . 296

----Value added tax--Appellate Tribunal--Dismissal of first appeal for failure by dealer to make pre-deposit--Appeal challenging dismissal of appeal in limine and on merits--Tribunal entitled to go into merits.--Madhav Steel Corporation v. State of Gujarat (Guj) . . . 318

Burden of proof--Value added tax--Input-tax credit--Denial of input-tax credit for failure to prove movement of goods--Proper--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 11.--Madhav Steel Corporation v. State of Gujarat (Guj) . . . 318

----See also Exemption (Uttara) . . . 345

Central sales tax--See Exemption (MP) . . . 283

Check-post--Value added tax--Check-post officer--No jurisdiction to go into disputed question of nature of item and rate of tax applicable--Nature of transaction and goods to be determined by assessing authority--Punjab Value Added Tax Act (8 of 2005), s. 51.--State of Punjab v. Genus Overseas Electronics Limited (P&H) . . . 338

Commissioner--Trade tax--New industrial unit--Exemption--Eligibility certificate--Power to rectify--Certificate issued by Divisional Level Committee set aside by Commissioner but restored by Tribunal in appeal--Order of Tribunal becoming final--No jurisdiction thereafter in Commissioner to make any other modification in certificate--U. P. Trade Tax Act (15 of 1948), s. 4A(3).--Ramco Confectionery P. Ltd. v. Commissioner, Trade Tax (All) . . . 348

----Value added tax--Determination of disputed questions--Application for determination as to under which entry and at what rate "aluminium conductor" was liable to be taxed--Commissioner not following procedure prescribed and holding goods taxable at higher rate rejecting contention of applicant-Order quashed by issuance of writ of certiorari--Assam Value Added Tax Act, 2003 (8 of 2005), s. 105.--Assam Conductors Manufacturer Association v. State of Assam (Gauhati) . . . 302

----Value added tax--Determination of disputed questions--Scope of power--Assam Value Added Tax Act, 2003 (8 of 2005), s. 105.--Assam Conductors Manufacturer Association v. State of Assam (Gauhati) . . . 302

Construction of taxing statutes--Court to adopt plain construction of words used by Legislature.--Daurala Organics v. Commissioner of Central Excise (All) . . . 309

Declaration form--Sales tax--Exemption--Dealer holding eligibility certificate in terms of notification in respect of unit in backward area and entitled to exemption up to limit of capital investment--Failure by dealer to produce C forms resulting in levy of tax at higher rate in respect of inter-State sales--Dealer entitled to set off higher tax within limit in terms of eligibility certificate--Madhya Pradesh General Sales Tax Act, 1958 (2 of 1959), s. 12--Central Sales Tax Act (74 of 1956), s. 8(5).--Marvel Vinyls Ltd. v. State of M. P. (MP) . . . 283

Eligibility certificate--See Commissioner (All) . . . 348

Entries in Schedule--Entry tax--Electrical tools operated by power--Whether parts and accessories of machinery--Matter remanded for consideration afresh--Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sales Therein Act (27 of 1979)--Notification No. FD 11 CET 2002 dated March 30, 2002.--State of Karnataka v. Kraft Sales & Services India Ltd. (Karn) . . . 288

Entry tax--Entries in Schedule--Electrical tools operated by power--Whether parts and accessories of machinery--Matter remanded for consideration afresh--Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sales Therein Act (27 of 1979)--Notification No. FD 11 CET 2002 dated March 30, 2002.--State of Karnataka v. Kraft Sales & Services India Ltd. (Karn) . . . 288

Exemption--Sales tax--Dealer holding eligibility certificate in terms of notification in respect of unit in backward area and entitled to exemption up to limit of capital investment--Failure by dealer to produce C forms resulting in levy of tax at higher rate in respect of inter-State sales--Dealer entitled to set off higher tax within limit in terms of eligibility certificate--Madhya Pradesh General Sales Tax Act, 1958 (2 of 1959), s. 12--Central Sales Tax Act (74 of 1956), s. 8(5).--Marvel Vinyls Ltd. v. State of M. P. (MP) . . . 283

----Sales tax--Unit registered with Khadi and Village Industries Board--Exemption on purchase of handmade paper or papier mache as raw material for manufacture of other products--No proof that handmade paper purchased used for this purpose--Dealer not entitled to exemption--U. P. Trade Tax Act (15 of 1948)--Notification dated February 22, 1997.--Packwell Print Industrial Co-operative Society Limited v. Commissioner, Commercial Tax (Uttara) . . . 345

----Trade tax--Country made liquor--Refund of tax--No admission by dealer in returns or at any stage of proceedings that turnover liable to tax--Finding by Tribunal that price fixed by Excise Department did not include sales tax as no sales tax was payable on country made liquor--Dealer entitled to refund of tax deposited--U. P. Trade Tax Act (15 of 1948), s. 29(3).--Commissioner of Commercial Tax v. Bazpur Co-operative Sugar Factory Ltd. (Uttara) . . . 343

----Trade tax--New industrial unit--Eligibility certificate--Commissioner--Power to rectify--Certificate issued by Divisional Level Committee set aside by Commissioner but restored by Tribunal in appeal--Order of Tribunal becoming final--No jurisdiction thereafter in Commissioner to make any other modification in certificate--U. P. Trade Tax Act (15 of 1948), s. 4A(3).--Ramco Confectionery P. Ltd. v. Commissioner, Trade Tax (All) . . . 348

----See also Service tax (Bom). . . 272

Export of services--Service tax--Exemption--Assessee providing technical inspection and certification agency service and technical testing and analysis agency service--Clients of assessee located abroad--Tests conducted and reports prepared in India and certificates forwarded to clients abroad--Clients paying for services in foreign convertible currency--Benefit of services accrued to foreign clients outside India--"Export of service" not taxable--Finance Act (32 of 1994), s. 65(48), (105)--Notification No. 6/99-ST dated April 9, 1999--Notification No. 2/03-ST dated March 1, 2003--Notification No. 21/03-ST dated November 20, 2003--Circular No. 56/5/03-ST dated April 25, 2003.--Commissioner of Service Tax, Mumbai-II v. SGS India Pvt. Ltd. (Bom) . . . 272

Goods transport agency services--Service tax--Recipient of service--Recovery of tax--Penalty--Interest--Jurisdiction--Department has jurisdiction to issue show-cause notices under amended section 73 of Finance Act, 1994 with effect from September 10, 2004, on recipient of such services during period from November 16, 1997 to June 2, 1998, for failure to file returns or pay tax on or before November 13, 2003--On facts penalty not warranted--Interest leviable--Finance Act (32 of 1994), ss. 65(41)(m), 68(1) proviso, 70, 71A, 73 (as amended with effect from September 10, 2004), 75, 80--Service Tax Rules, 1994, r. 7A.--Commissioner of Central Excise v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 241

----Service tax--Recipient of service--Recovery of tax--Show-cause notice--Limitation--Recipient of goods transport operators service during period November 16, 1997 to June 2, 1998 failing to file return and pay tax on or before November 13, 2003--Show-cause notices issued within period of one year from November 13, 2003--Not barred by limitation--Finance Act (32 of 1994), ss. 65(41)(m), 68(1) proviso, 70, 71A, 73, 75, 80--Service Tax Rules, 1994, r. 7A.--Commissioner of Central Excise v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 241

Input-tax credit--Value added tax--Denial of input-tax credit for failure to prove movement of goods--Proper--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 11.--Madhav Steel Corporation v. State of Gujarat (Guj) . . . 318

Inter-State sales--See Exemption (MP) . . . 283

Interest--See Service tax (Mad) . . . 241

Jurisdiction--See Check-post (P&H) . . . 338

----See Commissioner (All) . . . 348

----See Service tax (Mad) . . . 241

Limitation--Value added tax--Appeal to Appellate Tribunal--Delay in filing--Condonation of delay--General principles--Plea that representative suffering from depression and undergoing treatment and most of time was out of office--Plausible--Delay to be condoned--Haryana Value Added Tax Act (6 of 2003), s. 33--Limitation Act (36 of 1963), s. 5.--Super Metal v. State of Haryana (P&H) . . . 296

----See also Service tax (All) . . . 241, 309

New industrial unit--See Commissioner (All) . . . 348

Notice--See Service tax (Mad) . . . 241

Penalty--Service tax--Limitation--Reasonable cause--Show-cause notices issued On January 7, 2008 and March 11, 2008 invoking extended period of limitation for levy of tax under intellectual property services--Entire amount of tax with interest as demanded in notices for period from October 1, 2004 to December 31, 2007 paid in December 2008 by assessee complying thereafter--Adjudicating authority holding that extended period invocable not imposing any penalties invoking section 80--Correct in view of overriding non obstante provision in section 80 operating even in relation to provisions of section 78--Exercise of revisional jurisdiction by Commissioner to levy penalties and conclusion by Tribunal that confirmation of tax demand invoking extended period of limitation and invocation of section 80 cannot go hand in hand--Not valid--Finance Act (32 of 1994), ss. 73(1) proviso, 76, 77, 78, 80.--Daurala Organics v. Commissioner of Central Excise (All) . . . 309

----See also Service tax (Mad) . . . 241

Recipient of service--See Service tax (Mad) . . . 241

Recovery of tax--See Service tax (Mad) . . . 241

Refund--Trade tax--Country made liquor--Exemption--Refund of tax--No admission by dealer in returns or at any stage of proceedings that turnover liable to tax--Finding by Tribunal that price fixed by Excise Department did not include sales tax as no sales tax was payable on country made liquor--Dealer entitled to refund of tax deposited--U. P. Trade Tax Act (15 of 1948), s. 29(3).--Commissioner of Commercial Tax v. Bazpur Co-operative Sugar Factory Ltd. (Uttara) . . . 343

Sales Tax Tribunal--See Commissioner (All) . . . 348

Service tax--Export of services--Exemption--Assessee providing technical inspection and certification agency service and technical testing and analysis agency service--Clients of assessee located abroad--Tests conducted and reports prepared in India and certificates forwarded to clients abroad--Clients paying for services in foreign convertible currency--Benefit of services accrued to foreign clients outside India--"Export of service" not taxable--Finance Act (32 of 1994), s. 65(48), (105)--Notification No. 6/99-ST dated April 9, 1999--Notification No. 2/03-ST dated March 1, 2003--Notification No. 21/03-ST dated November 20, 2003--Circular No. 56/5/03-ST, dated April 25, 2003.--Commissioner of Service Tax, Mumbai-II v. SGS India Pvt. Ltd. (Bom). . . 272

----Goods transport agency services--Recipient of service--Recovery of tax--Penalty--Interest--Jurisdiction--Department has jurisdiction to issue show-cause notices under amended section 73 of Finance Act, 1994 with effect from September 10, 2004, on recipient of such services during period from November 16, 1997 to June 2, 1998, for failure to file returns or pay tax on or before November 13, 2003--On facts penalty not warranted--Interest leviable--Finance Act (32 of 1994), ss. 65(41)(m), 68(1) proviso, 70, 71A, 73 (as amended with effect from September 10, 2004), 75, 80--Service Tax Rules, 1994, r. 7A.--Commissioner of Central Excise v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 241

----Goods transport agency services--Recipient of service--Recovery of tax--Show-cause notice--Limitation--Recipient of goods transport operators service during period November 16, 1997 to June 2, 1998 failing to file return and pay tax on or before November 13, 2003--Show-cause notices issued within period of one year from November 13, 2003--Not barred by limitation--Finance Act (32 of 1994), ss. 65(41)(m), 68(1) proviso, 70, 71A, 73, 75, 80--Service Tax Rules, 1994, r. 7A.--Commissioner of Central Excise v. Customs, Excise and Service Tax Appellate Tribunal (Mad) . . . 241

----Penalty--Limitation--Reasonable cause--Show-cause notices issued On January 7, 2008 and March 11, 2008 invoking extended period of limitation for levy of tax under intellectual property services--Entire amount of tax with interest as demanded in notices for period from October 1, 2004 to December 31, 2007 paid in December 2008 by assessee complying thereafter--Adjudicating authority holding that extended period invocable not imposing any penalties invoking section 80--Correct in view of overriding non obstante provision in section 80 operating even in relation to provisions of section 78--Exercise of revisional jurisdiction by Commissioner to levy penalties and conclusion by Tribunal that confirmation of tax demand invoking extended period of limitation and invocation of section 80 cannot go hand in hand--Not valid--Finance Act (32 of 1994), ss. 73(1) proviso, 76, 77, 78, 80.--Daurala Organics v. Commissioner of Central Excise (All) . . . 309

Value added tax--See Appeal (Guj) . . . 318, (P&H) . . . 296

----See Check-post (P&H) . . . 338

----See Commissioner (Gauhati) . . . 302

----See Input-tax credit (Guj) . . . 318

VAT authorities--Value added tax--Check-post--Check-post officer--No jurisdiction to go into disputed question of nature of item and rate of tax applicable--Nature of transaction and goods to be determined by assessing authority--Punjab Value Added Tax Act (8 of 2005), s. 51.--State of Punjab v. Genus Overseas Electronics Limited (P&H) . . . 338

VAT Tribunal--Value added tax--Appeal--Appellate Tribunal--Dismissal of first appeal for failure by dealer to make pre-deposit--Appeal challenging dismissal of appeal in limine and on merits--Tribunal entitled to go into merits.--Madhav Steel Corporation v. State of Gujarat (Guj) . . . 318

----See also Appeal (P&H) . . . 296

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL

Commercial training and coaching--Service tax--Exemption--Vocational training institute--Assessee imparting coaching/training in several areas relevant to journalism, print or audio visual and documentary film making--Is entitled to exemption as a vocational training institute--"To seek employment or undertake self-employment", meaning of--Finance Act (32 of 1994), s. 65(26), (27).--IILM Film and Media School v. CST (CESTAT-New Delhi) . . . 291

Exemption--See Service tax (CESTAT-New Delhi) . . . 291

Notice--See Service tax (CESTAT-Chennai) . . . 294

Penalty--Service tax--Delay in payment of tax--Tax and part of amount due as interest paid and returns filed before issuance of show-cause notice--Show-cause notice only for recovery of amount short-paid--Penalty reduced from Rs. 1,95,000 to Rs. 50,000 by Commissioner further reduced to Rs. 12,500--Finance Act (32 of 1994), ss. 73, 76.--I. A. B. Photos (Coimbatore) Pvt. Ltd. v. Commissioner of Central Excise (CESTAT-Chennai) . . . 294

Service tax--Commercial training and coaching--Exemption--Vocational training institute--Assessee imparting coaching/training in several areas relevant to journalism, print or audio visual and documentary film making--Is entitled to exemption as a vocational training institute--"To seek employment or undertake self-employment", meaning of--Finance Act (32 of 1994), s. 65(26), (27).--IILM Film and Media School v. CST (CESTAT-New Delhi) . . . 291

----Delay in payment of tax--Tax and part of amount due as interest paid and returns filed before issuance of show-cause notice--Show-cause notice only for recovery of amount short-paid--Penalty reduced from Rs. 1,95,000 to Rs. 50,000 by Commissioner further reduced to Rs. 12,500--Finance Act (32 of 1994), ss. 73, 76.--I. A. B. Photos (Coimbatore) Pvt. Ltd. v. Commissioner of Central Excise (CESTAT-Chennai) . . . 294

----Quasi-judicial authority--To record reasons for arriving at a conclusion.--IILM Film and Media School v. CST (CESTAT-New Delhi) . . . 291

Vocational training institute--See Service tax (CESTAT-New Delhi) . . . 291

Words and phrases--"To seek employment or undertake self-employment", meaning of.--IILM Film and Media School v. CST (CESTAT-New Delhi) . . . 291


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