VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 7 : ISSUE DATED 26-8-2016

HIGH COURT


Assessment--Value added tax--Default assessments--Notices calling for information relating to inter-State sales--No question of demand being raised under State Act--Notices stating turnover assessed zero, but showing tax assessed--No application of mind--Notices and demands quashed--Delhi Value Added Tax Act, 2004 (3 of 2005), ss. 32, 33, 59(2).--Bajrang Fabrics Pvt. Ltd. v. Commissioner of VAT (Delhi) . . . 111

Commissioner--Value added tax--Notice--Power to issue notices and summons in electronic form--Order that henceforth notices and summons would be uploaded onto individual dealer's page on Department website--Consistent with Information Technology Act--Dealer bound to access its account on Department website and be aware of such orders--Not entitled to plead ignorance of notice--Delhi Value Added Tax Act, 2004 (3 of 2005), s. 100A--Delhi Value Added Tax Rules, 2005, r. 62--Information Technology Act (21 of 2000), ss. 12, 13.--Bajrang Fabrics Pvt. Ltd. v. Commissioner of VAT (Delhi) . . . 111

Notice--Value added tax--Commissioner--Power to issue notices and summons in electronic form--Order that henceforth notices and summons would be uploaded onto individual dealer's page on Department website--Consistent with Information Technology Act--Dealer bound to access its account on Department website and be aware of such orders--Not entitled to plead ignorance of notice--Delhi Value Added Tax Act, 2004 (3 of 2005), s. 100A--Delhi Value Added Tax Rules, 2005, r. 62--Information Technology Act (21 of 2000), ss. 12, 13.--Bajrang Fabrics Pvt. Ltd. v. Commissioner of VAT (Delhi) . . . 111

----Value added tax--Default assessments--Notices calling for information relating to inter-State sales--No question of demand being raised under State Act--Notices stating turnover assessed zero, but showing tax assessed--No application of mind--Notices and demands quashed--Delhi Value Added Tax Act, 2004 (3 of 2005), ss. 32, 33, 59(2).--Bajrang Fabrics Pvt. Ltd. v. Commissioner of VAT (Delhi) . . . 111

Value added tax--See Assessment (Delhi) . . . 111

----See Notice (Delhi) . . . 111


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Construction of residential complex service--Service tax--Refund--Sale--Group housing scheme comprising 50 bungalows, 108 apartments and shops with common facilities--Appellants purchasing one three-storied bungalow, along with proportionate undivided "interest" in common areas and facilities--Residence part of complex--Exemption under Notification No. 25/2012-ST, dated June 20, 2012 not available--Vendor not in possession of completion certificate when consideration received--Transaction not within texception to declared service--However agreement between appellants and vendor for transfer of immoveable property by way of sale--Covered by exclusion from service in view of section 65B(44)(a)(i)--Appellant paying purchase price along with service tax in possession of receipt dated March 27, 2014 thereof--Tax collected from appellants by vendor and deposited in Government account without authority of law--Liable to be refunded--Finance Act (32 of 1994), ss. 65(91a), (105) (zzzh), 65B(44)(a)(i)--Central Excise Act (1 of 1944), s. 11B.--Sumeet C Tholle & Pratima S. Tholle v. Commissioner of Central Excise & Customs (CESTAT-Mum) . . . 123

Refund--See Service tax (CESTAT-Mum) . . . 123

Sale--See Service tax (CESTAT-Mum) . . . 123

Service tax--Refund--Sale--Construction of residential complex service--Group housing scheme comprising 50 bungalows, 108 apartments and shops with common facilities--Appellants purchasing one three-storied bungalow, along with proportionate undivided "interest" in common areas and facilities--Residence part of complex--Exemption under Notification No. 25/2012-ST, dated June 20, 2012 not available--Vendor not in possession of completion certificate when consideration received--Transaction not within exception to declared service--However agreement between appellants and vendor for transfer of immoveable property by way of sale--Covered by exclusion from service in view of section 65B(44)(a)(i)--Appellant paying purchase price along with service tax in possession of receipt dated March 27, 2014 thereof--Tax collected from appellants by vendor and deposited in Government account without authority of law--Liable to be refunded--Finance Act (32 of 1994), ss. 65(91a), (105) (zzzh), 65B(44)(a)(i)--Central Excise Act (1 of 1944), s. 11B.--Sumeet C Tholle & Pratima S. Tholle v. Commissioner of Central Excise & Customs (CESTAT-Mum) . . . 123


PRINT EDITION

VOLUME 93 : PART 3 : ISSUE DATED 26-8-2016


HIGH COURTS


Bifurcation of State--Telangana--Tax paid by dealer to Government of Andhra Pradesh cannot be adjusted against tax due to Government of Telangana.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Central sales tax--Registered dealers--Concessional rate of tax--Declaration in form C--No provision in Act or Rules enabling cancellation of C form--Cancellation of Central sales tax registration and consequently of C form retrospectively--Adversely affects rights of bona fide sellers in other States--Not contemplated by Act and Rules--Purchasing dealer possessing valid Central sales tax registration on date of transaction--Name of purchasing dealer shown in invoices and name and address of registered purchasing dealer as reflected in C forms issued by Department matching--Cancellation of registration of purchasing dealer subsequently--Retrospective cancellation of C form not permissible--Selling dealer entitled to treat C form as validly issued--Central Sales Tax Act (74 of 1956), s. 8(1)(b)--Central Sales Tax (Registration and Turnover) Rules 1957, r. 12(1)--Central Sales Tax (Delhi) Rules, 1957, r. 5(4).--Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of Value Added Tax (Delhi) . . . 326

----See also Writs under Constitution (Delhi). . . 326

Declaration form--Central sales tax--Registered dealers--Concessional rate of tax--Declaration in form C--No provision in Act or Rules enabling cancellation of C form--Cancellation of Central sales tax registration and consequently of C form retrospectively--Adversely affects rights of bona fide sellers in other States--Not contemplated by Act and Rules--Purchasing dealer possessing valid Central sales tax registration on date of transaction--Name of purchasing dealer shown in invoices and name and address of registered purchasing dealer as reflected in C forms issued by Department matching--Cancellation of registration of purchasing dealer subsequently--Retrospective cancellation of C form not permissible--Selling dealer entitled to treat C form as validly issued--Central Sales Tax Act (74 of 1956), s. 8(1)(b)--Central Sales Tax (Registration and Turnover) Rules 1957, r. 12(1)--Central Sales Tax (Delhi) Rules, 1957, r. 5(4).--Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of Value Added Tax (Delhi) . . . 326

----Writs under Constitution--Selling dealer constrained to challenge cancellation of registration of purchasing dealer pursuant to which C form cancelled--Not a case of proxy litigation--Important question of law regarding absence of power to cancel C form--Not appropriate to relegate petitioner to statutory remedy--Constitution of India, art. 226--Delhi Value Added Tax Act, 2004 (3 of 2005), s. 74(1)(b).--Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of Value Added Tax (Delhi) . . . 326

Double taxation--Works contract--Assessing authority for earlier years subjecting dealer to tax only when it received payment from contractees and not on value of goods when incorporated in works--Assessment for later periods on value of goods at stage of incorporation in works--Might result in same transaction of deemed sale of goods being subjected to tax twice--Direction to assessing authority to pass assessment order for later years after giving dealer an opportunity of being heard to enable dealer to seek refund.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Entries in Schedule--Value added tax--"Printed materials other than books meant for reading : stationery articles, namely, . . ."--Posters, vinyl hoardings, printed fabric banners, flex banners, bill boards--Not included--Karnataka Value Added Tax Act, 2003 (32 of 2004), s. 60(4) ; Sch. III, entry 71.--Repromen Offset Printers Pvt Ltd. v. State of Karnataka (Karn) . . . 383

----See also Writs under Constitution (T & AP). . . 258

Forfeiture--Unauthorised collection of tax in excess of liability--Only to extent of excess--Dealer entitled to show that tax collected at source not in excess of tax liability of dealer--Assessing authority required to put dealer on notice of intention to forfeit--No forfeiture permissible without notice.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Interpretation of taxing statutes--Meaning to be given to each and every word--Addition or deletion of words must be avoided.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Jurisdiction--See Writs under Constitution (T & AP) . . . 258

Natural justice--See Writs under Constitution (T & AP) . . . 258

Notice--Forfeiture--Unauthorised collection of tax in excess of liability--Only to extent of excess--Dealer entitled to show that tax collected at source not in excess of tax liability of dealer--Assessing authority required to put dealer on notice of intention to forfeit--No forfeiture permissible without notice.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----Value added tax--Not a final demand--Direction to dealer to raise objections before competent authority and to competent authority to decide--Jharkhand Value Added Tax Act, 2005 (5 of 2006), ss. 18(8), 40(2).--Adhunik Alloys and Power Ltd. v. State of Jharkhand (Jharkhand) . . . 356

Power to remove difficulties--Value added tax--Scope of--Only to extent necessary for applying or giving effect to Act--Works contracts--Order for removal of difficulties to effect tax to be collected at source with date of payment of respective bill as only criterion--Does not have effect of postponing liability to date of receipt of consideration --Telangana Value Added Tax Act (5 of 2005), s. 76(2)--G. O. Ms. No. 11, dated July 29, 2005.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Precedent--Ratio decidendi--Decision not proceeding on consideration of issue not law declared to have binding effect.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Proxy litigation--See Writs under Constitution (Delhi) . . . 326

Ratio decidendi--Precedent--Decision not proceeding on consideration of issue not law declared to have binding effect.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

Registered dealers--See Central sales tax (Delhi) . . . 326

Value added tax--Power to remove difficulties--Scope of--Only to extent necessary for applying or giving effect to Act--Works contracts--Order for removal of difficulties to effect tax to be collected at source with date of payment of respective bill as only criterion--Does not have effect of postponing liability to date of receipt of consideration--Telangana Value Added Tax Act (5 of 2005), s. 76(2)--G. O. Ms. No. 11, dated July 29, 2005.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----See also Entries in Schedule (Karn). . . 383

----See also Notice (Jharkhand). . . 356

----See also Works contract (T & AP). . . 258

Works contract--Assessing authority for earlier years subjecting dealer to tax only when it received payment from contractees and not on value of goods when incorporated in works--Assessment for later periods on value of goods at stage of incorporation in works--Might result in same transaction of deemed sale of goods being subjected to tax twice--Direction to assessing authority to pass assessment order for later years after giving dealer an opportunity of being heard to enable dealer to seek refund.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----Value added tax--Liability--Statutory obligation to file return and to pay tax on value of goods at stage of incorporation in works--Liability has no relation to receipt of consideration for goods sold--Provision enabling dealer to pay difference between tax as computed under rule 17(1)(e) and tax determined under rule 17(1)(d) at time of "finalisation of accounts"--Does not mean after completion of work--Telangana Value Added Tax Act (5 of 2005), s. 22(3)--Andhra Pradesh Value Added Tax Rules, 2005, rr. 17(1)(d), (e), 24.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----Writs under Constitution--Existence of alternative remedy--Allegation of lack of jurisdiction and violation of principles of natural justice--Grounds justifying entertainment of writ petition--But court will not re-appreciate evidence on record to substitute its views for those of assessing authority--Whether contracts pure labour contracts or involved both supply of material and sale of goods and supply of labour--Whether all goods supplied fell within ambit of entry 116 of Schedule IV or included goods, such as cement, which fell outside its ambit--Questions of fact not to be examined in writ jurisdiction--Constitution of India, art. 226.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----See also Value added tax (T & AP) . . . 258

Writs under Constituition--Existence of alternative remedy--Allegation of lack of jurisdiction and violation of principles of natural justice--Grounds justifying entertainment of writ petition--But court will not re-appreciate evidence on record to substitute its views for those of assessing authority--Whether contracts pure labour contracts or involved both supply of material and sale of goods and supply of labour--Whether all goods supplied fell within ambit of entry 116 of Schedule IV or included goods, such as cement, which fell outside its ambit--Questions of fact not to be examined in writ jurisdiction--Constitution of India, art. 226.--GVPR Engineers Limited v. State of Telangana (T & AP) . . . 258

----Selling dealer constrained to challenge cancellation of registration of purchasing dealer pursuant to which C form cancelled--Not a case of proxy litigation--Important question of law regarding absence of power to cancel C form--Not appropriate to relegate petitioner to statutory remedy--Constitution of India, art. 226--Delhi Value Added Tax Act, 2004 (3 of 2005), s. 74(1)(b).--Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of Value Added Tax (Delhi) . . . 326

----Value added tax--Notice--Not a final demand--Direction to dealer to raise objections before competent authority and to competent authority to decide--Jharkhand Value Added Tax Act, 2005 (5 of 2006), ss. 18(8), 40(2).--Adhunik Alloys and Power Ltd. v. State of Jharkhand (Jharkhand) . . . 356


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Advertising agency service--Service tax--Limitation--Penalty--April 1, 2000 to June 30, 2003--Agreement entered into between appellant, H a manufacturer of two wheelers and cricket players--Appellant appointed by H in connection with promotion or sales and publicity of its products and cricket players engaged through appellant to act as models and work with appellant, in conceptualizing, creating and producing advertising campaigns through television, radio, internet and other printed material--Payment towards advertisement performed by celebrities received by appellant--Appellant providing advertisement services to H--Liable to service tax--On facts extended period of limitation invocable--Penalties levied under sections 76 and 78 sustained--Finance Act (32 of 1994), ss. 65(3), (105)(e), 76, 78.--Percept D'Mark (India) Pvt. Ltd. v. Commissioner of Service Tax (CESTAT-Mum) . . . 358

Agent--See Service tax (CESTAT-Mum) . . . 338

Limitation--See Service tax (CESTAT-Mum) . . . 358

Penalty--See Service tax (CESTAT-Mum) . . . 358

Service tax--Advertising services--Limitation--Penalty--April 1, 2000 to June 30, 2003--Agreement entered into between appellant, H a manufacturer of two wheelers and cricket players--Appellant appointed by H in connection with promotion or sales and publicity of its products and cricket players engaged through appellant to act as models and work with appellant, in conceptualizing, creating and producing advertising campaigns through television, radio, internet and other printed material--Payment towards advertisement performed by celebrities received by appellant--Appellant providing advertisement services to H--Liable to service tax--On facts extended period of limitation invocable--Penalties levied under sections 76 and 78 sustained--Finance Act (32 of 1994), ss. 65(3), (105)(e), 76, 78.--Percept D'Mark (India) Pvt. Ltd. v. Commissioner of Service Tax (CESTAT-Mum) . . . 358

----Support services of business or commerce--Agent--Limitation--2006-07 and 2007-08--Appellant-company entering into agreements with its participating group companies to procure services on their behalf--Expenditure incurred in procuring services allocated to concerned group company/companies in pre-determined ratio and recovered by appellant--Services provided by third parties and/or employees employed by company--Company reimbursed expenses by recipient participating group companies--Company acted as agent for procuring services--Activity not a taxable service classifiable as "business support services"--On facts extended period of limitation not invocable--Finance Act (32 of 1994), s. 65(104c), (105)(zzzq)--Service Tax (Determination of Value) Rules, 2006, r. 5(2).--Reliance ADA Group Pvt. Ltd. v. Commissioner of Service Tax (CESTAT-Mum) . . . 338

Support services of business or commerce--Service tax--Agent--Limitation--2006-07 and 2007-08--Appellant-company entering into agreements with its participating group companies to procure services on their behalf--Expenditure incurred in procuring services allocated to concerned group company/companies in pre-determined ratio and recovered by appellant--Services provided by third parties and/or employees employed by company--Company reimbursed expenses by recipient participating group companies--Company acted as agent for procuring services--Activity not a taxable service classifiable as "business support services"--On facts extended period of limitation not invocable--Finance Act (32 of 1994), s. 65(104c), (105)(zzzq)--Service Tax (Determination of Value) Rules, 2006, r. 5(2).--Reliance ADA Group Pvt. Ltd. v. Commissioner of Service Tax (CESTAT-Mum) . . . 338
_____________
1

COMPANY LAW INSTITUTE OF INDIA (P) LTD.
No. 2 (Old No. 36), Vaithyaram Street,
T.Nagar, Chennai - 600017.
Phone: (044) 4217 8564, 2435 0752 - 755
Fax: (044) 2432 2015
info@cliofindia.com
To Unsubscribe : Reply back with "Unsubscribe" in subject followed by the key word "ITR" or "CC" or "VST" or "CCD" or "ITR (Trib)" or "GSTR", respectively or "All" if you do not want any Email. ITR : Income Tax Reports, CC : Company Cases, VST : VAT and Service Tax Cases, CCD : Consolidated Commercial Digest, GSTR : Goods and Service Tax Reports, ITR (Trib) : ITR'S Tribunal Tax Reports. Also send your feedback or comments to info@cliofindia.com

Formerly Commercial Laws of India P. Ltd. is now merged with Company Law Insititute of India Pvt. Ltd. by the order of the High Court dated September 3, 2015.