VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 8 : ISSUE DATED 30-6-2017


HIGH COURTS


Assessment--Sales tax--Limitation--Extension of time--Notification extending time after period has lapsed--Cannot revive assessment proceedings--Chhattisgarh Commercial Tax Act, 1994 (5 of 1995), s. 27(8), (9).--Sunil Steels Prop. Sunil Rerollers & Steels Pvt. Ltd. v. State of Chhattisgarh (Chhattisgarh) . . . 556

----Sales tax--Return--Limitation--Returns filed in form 18--Assessment barred by time--Bombay Sales Tax Act (51 of 1959), s. 33(4A)--Bombay Sales Tax Rules, 1959, r. 22(3)(b).--Commissioner of Sales Tax v. Associated Cement Co. Ltd. (Bom) . . . 602

Deduction of tax at source--See Revision (Tripura) . . . 545

Deductions--Value added tax--Works contracts--Rule providing for deductions at standard percentages for labour and other items from gross receipts for determination of value of goods transferred in works contracts--Rule to be read down to apply only in cases where dealer not in position to identify value of goods transferred in execution of works contract--Enhancement of rate of tax on works contracts--Valid--Provision for deduction of tax at source from gross receipts of works contract--Valid--No prejudice to dealer--Where deduction is in excess of tax actually payable dealer entitled to refund after assessment--Goa Value Added Tax Act (9 of 2005), s. 28(1)--Goa Value Added Tax Rules 2005, r. 4A.--All Goa Contractors Association v. State of Goa (Bom) . . . 578

Double taxation--See Revision (Tripura) . . . 545

Exemption--Sales tax--Promissory estoppel--Scheme introduced in exercise of powers under Act, pursuant to Industrial Policy--Policy nowhere stating that manufacture, processing or blending and packaging of tea will be exempt--Scheme specifically excluding tea from scope of exemption--Dealer cannot claim promissory estoppel--Assam Industries (Sales Tax Concessions) Scheme, 1995, cl. 12.--Bhawani Tea Industries v. State of Assam (Gauhati) . . . 605

----Sales tax--Value added tax--Dealer holding eligibility certificate from Khadi Board and exemption certificate under sales tax law--Coming into force of value added tax regime and rescission of all notifications under earlier law--Decision of court directing exemptions in force to continue till expiry of period--Notification under new law providing for refund to certified manufacturers of tax charged by registered dealer from whom goods purchased--Condition, inter alia, that registered dealer should be certified by Khadi Board--No indication in notification that exemption to continue in perpetuity upon mere renewal of eligibility certificate by Khadi Board--Exemption beyond April 1, 2006 only till end of period of eligibility certificate--Department renewing exemption certificates and issuing certificates of entitlement--Retrospective withdrawal of exemption certificates bad in law--Gujarat Sales Tax Act, 1969 (1 of 1970), s. 49(2)--Gujarat Value Added Tax Act, 2003 (1 of 2005)--Notification No. (GHN-8) VAT-2009/S.40(1)(5)-TH, dated February 27, 2009.--Shree Shiv Shakti Oil Mill v. State of Gujarat (Guj) . . . 562

Government--Recovery of tax--Priority of debts--Assets of defaulting dealer taken over and brought to sale by State Financial Corporation--Government has first charge over dealer's asset for satisfaction of sales tax liability--Corporation liable for arrears of sales tax due to Government--Orissa Sales Tax Act (14 of 1947), s. 13.--Orissa State Financial Corporation v. Commr. of Commercial Taxes(Orissa) . . . 551

----See also Recovery of tax (T&AP) . . . 590

High Court--Precedent--Decision of Division Bench of High Court--Binding until quashed or set aside by superior court.--Commissioner of Sales Tax v. Associated Cement Co. Ltd. (Bom) . . . 602

Input-tax credit--Value added tax--Registered dealers--Cancellation of registration--Grounds for--Reversal of input-tax credit or wrongful claim of input-tax credit--Not ground to cancel registration of dealer--Whether seller sold goods to dealer or wrong plea set up is for Department to investigate--Uttar Pradesh Value Added Tax Act (5 of 2008), ss. 13, 14, 17(11)(ix).--Sevak Enterprises v. Commissioner, Commercial Tax (All) . . . 541

Limitation--Sales tax--Assessment--Extension of time--Notification extending time after period has lapsed--Cannot revive assessment proceedings--Chhattisgarh Commercial Tax Act, 1994 (5 of 1995), s. 27(8), (9).--Sunil Steels Prop. Sunil Rerollers & Steels Pvt. Ltd. v. State of Chhattisgarh (Chhattisgarh) . . . 556

----Sales tax--Return--Assessment--Returns filed in form 18--Assessment barred by time--Bombay Sales Tax Act (51 of 1959), s. 33(4A)--Bombay Sales Tax Rules, 1959, r. 22(3)(b).--Commissioner of Sales Tax v. Associated Cement Co. Ltd. (Bom) . . . 602

Precedent--High Court--Decision of Division Bench of High Court--Binding until quashed or set aside by superior court.--Commissioner of Sales Tax v. Associated Cement Co. Ltd. (Bom) . . . 602

Promissory estoppel--Sales tax--Exemption--Scheme introduced in exercise of powers under Act, pursuant to Industrial Policy--Policy nowhere stating that manufacture, processing or blending and packaging of tea will be exempt--Scheme specifically excluding tea from scope of exemption--Dealer cannot claim promissory estoppel--Assam Industries (Sales Tax Concessions) Scheme, 1995, cl. 12.--Bhawani Tea Industries v. State of Assam (Gauhati) . . . 605

Rate of tax--See Works contract (Bom) . . . 578

Recovery of tax--Priority of debts--Assets of defaulting dealer taken over and brought to sale by State Financial Corporation--Government has first charge over dealer's asset for satisfaction of sales tax liability--Corporation liable for arrears of sales tax due to Government--Orissa Sales Tax Act (14 of 1947), s. 13.--Orissa State Financial Corporation v. Commissioner of Commercial Taxes (Orissa) . . . 551

----Sales tax--Priority of debts--State Financial Corporation--Garnishee proceedings--Provision creating first charge in favour of Department on properties of dealer for satisfaction of dues--Effect--Garnishee notice issued to banker of State Financial Corporation attaching proceeds of sale of dealer's assets--Not strictly a case of Corporation holding moneys due to dealer--But notice to be understood as exercise of first charge by Department--Charge applies to dues for all years including periods prior to coming into force of provision--Financial facilities advanced to dealer by two Corporations--One alone challenging provision creating first charge on properties of dealer in favour of Department--Other Corporation cannot claim to be ignorant of details or not to be bound by interim order of court in writ petition--Court by interim order in writ petition directing sum originally claimed by Department to be set aside by Corporation out of sale proceeds and placed in interest bearing deposit--Department not entitled now to claim interest thereon in terms of sales tax law--Sum originally claimed alone to be paid over to Department with interest at six per cent. per annum--Andhra Pradesh General Sales Tax Act (6 of 1957), s. 16C--Andhra Pradesh Value Added Tax Act (5 of 2005), s. 29(1).--Andhra Pradesh Industrial Development Corporation Ltd. v. State Bank of India (T&AP) . . . 590

Registered dealers--See Input-tax credit (All) . . . 541

Registration certificate--Value added tax--Registered dealers--Cancellation of registration--Grounds for--Reversal of input-tax credit or wrongful claim of input-tax credit--Not ground to cancel registration of dealer--Whether seller sold goods to dealer or wrong plea set up is for Department to investigate--Uttar Pradesh Value Added Tax Act (5 of 2008), ss. 13, 14, 17(11)(ix).--Sevak Enterprises v. Commissioner, Commercial Tax (All) . . . 541

Retrospective legislation--See Exemption (Guj) . . . 562

Return--See Assessment (Bom) . . . 602

Revision--Sales tax--Works contractor--Deduction of tax at source--Dealer denied credit for tax deducted at source for failure to produce certificate of tax deduction at source--Production of certificate before revisional authority--Revisional authority ought to take certificate into consideration--Affirmation of assessment order and demand amounts to double taxation--Orders set aside and direction to assess afresh on basis of certificate to be produced before authority--Tripura Sales Tax Act (11 of 1976), ss. 2(b), 21(2).--K. D. Industries v. State of Tripura (Tripura) . . . 545

Value added tax--See Exemption (Guj) . . . 562

----See Input-tax credit (All) . . . 541

----See Works contract (Bom) . . . 578

Works contract--Sales tax--Works contractor--Deduction of tax at source--Dealer denied credit for tax deducted at source for failure to produce certificate of tax deduction at source--Revision--Production of certificate before revisional authority--Revisional authority ought to take certificate into consideration--Affirmation of assessment order and demand amounts to double taxation--Orders set aside and direction to assess afresh on basis of certificate to be produced before authority--Tripura Sales Tax Act (11 of 1976), ss. 2(b), 21(2).--K. D. Industries v. State of Tripura (Tripura) . . . 545

----Value added tax--Rule providing for deductions at standard percentages for labour and other items from gross receipts for determination of value of goods transferred in works contracts--Rule to be read down to apply only in cases where dealer not in position to identify value of goods transferred in execution of works contract--Enhancement of rate of tax on works contracts--Valid--Provision for deduction of tax at source from gross receipts of works contract--Valid--No prejudice to dealer--Where deduction is in excess of tax actually payable dealer entitled to refund after assessment--Goa Value Added Tax Act (9 of 2005), s. 28(1)--Goa Value Added Tax Rules 2005, r. 4A.--All Goa Contractors Association v. State of Goa (Bom) . . . 578



WEST BENGAL TAXATION TRIBUNAL


Penalty--Value added tax--Seizure--Seizure of truck carrying consignment of goods on ground of excess quantity of goods and notice for levy of penalty issued--On facts allegation of excess quantity and under-valuation not proved--Differences in description of goods and variations in quantity with reference to invoice as seen in physical verification report--Ignored as clerical mistake--Notice of demand of penalty and pre-seizure report quashed--Direction to release goods on payment of Rs. 25,000 on account of clerical error--West Bengal Value Added Tax Act (37 of 2003), s. 77.--DK Bakings Pvt. Ltd. v. STO (WBTT) . . . 587

Seizure--Value added tax--Penalty--Seizure of truck carrying consignment of goods on ground of excess quantity of goods and notice for levy of penalty issued--On facts allegation of excess quantity and under-valuation not proved--Differences in description of goods and variations in quantity with reference to invoice as seen in physical verification report--Ignored as clerical mistake--Notice of demand of penalty and pre-seizure report quashed--Direction to release goods on payment of Rs. 25,000 on account of clerical error--West Bengal Value Added Tax Act (37 of 2003), s. 77.--DK Bakings Pvt. Ltd. v. STO (WBTT) . . . 587


PRINT EDITION

VOLUME 101 : PART 4 : ISSUE DATED 30-6-2017


HIGH COURTS


Appeal--Sales tax--Appeal to Appellate Tribunal--Right of appeal--Not restricted to dealer--Department has right to appeal--That Commissioner empowered to revise orders suo motu does not preclude right of Department to appeal to Tribunal--Haryana General Sales Tax Act (20 of 1973), ss. 39, 40.--State of Haryana v. Limtofit Pvt. Ltd. (P&H) . . . 274

Assessment--Value added tax--Writs under Constitution--Petition against order of assessment--Existence of alternative remedy--Not bar to entertainment of petition where lack of jurisdiction contended--Constitution of India, art. 226.--Transocean Off- shore, International Ventures Limited v. Union of India (T&AP) . . . 292

----See also Check-post (T&AP) . . . 286

Check-post--Value added tax--Paddy and rice--Sensitive commodities--State re-organisation--Assessment--Paddy imported from Bihar from unregistered dealer intercepted when goods off-loaded from railway wagons and loaded onto lorries--Petitioner paying tax as demanded to avoid detention on ground advance way bills not produced--Writ petition--Railway wagons fall under definition of "goods vehicle"--Notification dated March 25, 2010, notifying paddy and rice as sensitive commodities--Not annulled as not been revoked or adapted with modifications--Place of detention--Court cannot go into disputed questions of fact whether goods detained before goods loaded into lorries or after lorries left after being loaded--Petitioner paying tax at intervention of association of dealers in paddy--Question of assessment does not arise--Prayer for refund of tax paid rejected--Telangana Value Added Tax Act (5 of 2005), s. 2(17)--Andhra Pradesh Reorganisation Act (6 of 2014), s. 101--Telangana Value Added Tax Rules, 2005, r. 55(2)--Notification No. D2/723/05, dated March 25, 2010.--Aditya Rice Industries v. Assistant Commercial Tax Officer (T&AP) . . . 286

Commissioner--Sales tax--Appeal to Appellate Tribunal--Right of appeal--Not restricted to dealer--Department has right to appeal--That Commissioner empowered to revise orders suo motu does not preclude right of Department to appeal to Tribunal--Haryana General Sales Tax Act (20 of 1973), ss. 39, 40.--State of Haryana v. Limtofit Pvt. Ltd. (P&H) . . . 274

Compounding of offence--Inter-State sale--Detention of goods--Mobile phones claimed to have been sent to Chennai for repairs and despatched back after repair--Commercial Tax Officer conceding there was no sale but levying tax and compounding fee for lack of proof that goods sent to a third party were for repairs--Direction to dealer to make deposit as token of bona fides and Department to release goods against deposit, without prejudice to dealer's rights and contentions.--Excellence Mobile Tech India Private Limited v. Checkpost Officer/Commercial Tax Officer (Mad) . . . 282

----Inter-State sale--Mobile phones claimed to have been sent to Chennai for repairs and despatched back after repair--Dealer seeking to show that IMEI numbers were same--Notice for compounding without completing exercise of tallying IMEI numbers and without considering contention--Not proper.--Excellence Mobile Tech India Private Limited v. Checkpost Officer/Commercial Tax Officer (Mad) . . . 279

Detention--Value added tax--Penalty--Paddy and rice--Notice--Paddy imported from Bihar from unregistered dealer intercepted when goods off-loaded from railway wagons and loaded onto lorries--Petitioner paying tax as demanded to avoid detention on ground advance way bills not produced--Show-cause notices for imposition of penalty at 100 per cent. issued after goods cleared--Writ petition--Petitioner paying tax at place where goods threatened to be detained and approaching court only after show-cause notices issued--Assessing officer to show lenience in imposing penalty--Telangana Value Added Tax Act (5 of 2005), s. 45(7)(a).--Aditya Rice Industries v. Assistant Commercial Tax Officer (T&AP) . . . 286

Inter-State sale--Compounding of offence--Mobile phones claimed to have been sent to Chennai for repairs and despatched back after repair--Dealer seeking to show that IMEI numbers were same--Notice for compounding without completing exercise of tallying IMEI numbers and without considering contention--Not proper.--Excellence Mobile Tech India Private Limited v. Checkpost Officer/Commercial Tax Officer (Mad) . . . 279

----Detention of goods--Compounding of offence--Mobile phones claimed to have been sent to Chennai for repairs and despatched back after repair--Commercial Tax Officer conceding there was no sale but levying tax and compounding fee for lack of proof that goods sent to a third party were for repairs--Direction to dealer to make deposit as token of bona fides and Department to release goods against deposit, without prejudice to dealer's rights and contentions.--Excellence Mobile Tech India Private Limited v. Checkpost Officer/Commercial Tax Officer (Mad) . . . 282

Jurisdiction--Value added tax--None of contracting parties having registered office or principal office or sub-office within State--Non-judicial stamp paper for agreement purchased--Arbitration clause stipulating venue of arbitration to be at Mumbai and agreement subject to exclusive jurisdiction of Mumbai courts--Rigs located beyond jurisdiction of taxing authorities of Andhra Pradesh--Merely because person registered as dealer in State, assessing authority does not get jurisdiction to tax events happening beyond territorial limits of State--Agreements cannot be presumed to have been entered into in Andhra Pradesh--Assessment without jurisdiction.--Transocean Offshore, International Ventures Limited v. Union of India (T&AP) . . . 292

Notice--See Penalty (T&AP) . . . 286

Penalty--Value added tax--Paddy and rice--Detention--Notice--Paddy imported from Bihar from unregistered dealer intercepted when goods off-loaded from railway wagons and loaded onto lorries--Petitioner paying tax as demanded to avoid detention on ground advance way bills not produced--Show-cause notices for imposition of penalty at 100 per cent. issued after goods cleared--Writ petition--Petitioner paying tax at place where goods threatened to be detained and approaching court only after show-cause notices issued--Assessing officer to show lenience in imposing penalty--Telangana Value Added Tax Act (5 of 2005), s. 45(7)(a).--Aditya Rice Industries v. Assistant Commercial Tax Officer (T&AP) . . . 286

Registered dealers--Value added tax--Jurisdiction--None of contracting parties having registered office or principal office or sub-office within State--Non-judicial stamp paper for agreement purchased--Arbitration clause stipulating venue of arbitration to be at Mumbai and agreement subject to exclusive jurisdiction of Mumbai courts--Rigs located beyond jurisdiction of taxing authorities of Andhra Pradesh--Merely because person registered as dealer in State, assessing authority does not get jurisdiction to tax events happening beyond territorial limits of State--Agreements cannot be presumed to have been entered into in Andhra Pradesh--Assessment without jurisdiction.--Transocean Offshore, International Ventures Limited v. Union of India (T&AP) . . . 292

Revision--Sales tax--Appeal to Appellate Tribunal--Right of appeal--Not restricted to dealer--Department has right to appeal--That Commissioner empowered to revise orders suo motu does not preclude right of Department to appeal to Tribunal--Haryana General Sales Tax Act (20 of 1973), ss. 39, 40.--State of Haryana v. Limtofit Pvt. Ltd. (P&H) . . . 274

Sales Tax Department--See Appeal (P&H) . . . 274

Sales Tax Tribunal--See Appeal (P&H) . . . 274

State reorganisation--See Check-post (T&AP) . . . 286

Transfer of right to use goods--Value added tax--Sub-contract for deploying on charter hire basis, jack up drilling rig and requisite personnel for operating drilling unit and carrying out offshore drilling operations--Dealer owner of drilling unit and having adequate and necessary personnel for performing offshore drilling operations including deployment of drilling unit and personnel--Entire control with regard to manning, operating and navigating retained by dealer--No transfer of right to use goods, either in favour of contractor or in favour of dealer--Andhra Pradesh Value Added Tax Act (5 of 2005), s. 4(8).--Transocean Offshore, International Ventures Limited v. Union of India (T&AP) . . . 292

Value added tax--See Check-post (T&AP) . . . 286

----See Jurisdiction (T&AP) . . . 292

----See Penalty (T&AP) . . . 286

----See Transfer of right to use goods (T&AP) . . . 292

----See Writs under Constitution (T&AP) . . . 292

Words and phrases--"Goods vehicle".--Definition.--Aditya Rice Industries v. Assistant Commercial Tax Officer (T&AP) . . . 286

Writ petition--Value added tax--Paddy and rice--Sensitive commodities--State reorganisation--Check-post--Assessment--Paddy imported from Bihar from unregistered dealer intercepted when goods off-loaded from railway wagons and loaded onto lorries--Petitioner paying tax as demanded to avoid detention on ground advance way bills not produced--Railway wagons fall under definition of "goods vehicle"--Notification dated March 25, 2010, notifying paddy and rice as sensitive commodities--Not annulled as not been revoked or adapted with modifications--Place of detention--Court cannot go into disputed questions of fact whether goods detained before goods loaded into lorries or after lorries left after being loaded--Petitioner paying tax at intervention of association of dealers in paddy--Question of assessment does not arise--Prayer for refund of tax paid rejected--Telangana Value Added Tax Act (5 of 2005), s. 2(17)--Andhra Pradesh Reorganisation Act (6 of 2014), s. 101--Telangana Value Added Tax Rules, 2005, r. 55(2)--Notification No. D2/723/05, dated March 25, 2010.--Aditya Rice Industries v. Assistant Commercial Tax Officer (T&AP) . . . 286

Writs under Constitution--Value added tax--Petition against order of assessment--Existence of alternative remedy--Not bar to entertainment of petition where lack of jurisdiction contended--Constitution of India, art. 226.--Transocean Offshore, International Ventures Limited v. Union of India (T&AP) . . . 292
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