VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 8 : ISSUE DATED 17-2-2017


HIGH COURTS


Deduction of tax at source--Value added tax--Contractors--Credit for--General principles--Primary liability is on contractor--Contractor cannot be absolved of liability on presumption that tax deducted at source--Delayed payment of tax by contractee--Effect--Where certificates for tax deducted at source furnished--Liability of contractor to interest--Principles governing--Haryana Value Added Tax Act (6 of 2003), ss. 14(6), 24--Haryana Value Added Tax Rules, 2003, rr. 16 33, 49.--Cherryhill Interiors Limited v. State of Haryana (P&H) . . . 141

Exemption--Sales tax--Inter-State sale--Sales to Central Government--Sale to Prasara Bharathi in response to tender published in name of President of India--Is sale to Central Government--Dealer entitled to exemption--Central Sales Tax Act (74 of 1956), s. 8(4).--Canara Lighting Industries Pvt. Limited v. State of Karnataka (Karn) . . . 135

Government--See Inter-State sale (Karn) . . . 135

Inter-State sale--Sales tax--Exemption--Sales to Central Government--Sale to Prasara Bharathi in response to tender published in name of President of India--Is sale to Central Government--Dealer entitled to exemption--Central Sales Tax Act (74 of 1956), s. 8(4).--Canara Lighting Industries Pvt. Limited v. State of Karnataka (Karn) . . . 135

Interest--See Works contract (P&H) . . . 141

Natural justice--Value added tax--Penalty--Seizure of books pursuant to inspection--Notice of penalty issued and opportunity to take copies of seized documents granted within period of six months--Dealer not availing of opportunity and not filing objections--Not entitled to contend order imposing penalty was passed in violation of natural justice--Kerala Value Added Tax Act, 2003 (30 of 2004), ss. 44, 67(1).--Femin Rajappan Simon v. Intelligence Officer (Ker) . . . 128

Penalty--Value added tax--Seizure of books pursuant to inspection--Notice of penalty issued and opportunity to take copies of seized documents granted within period of six months--Dealer not availing of opportunity and not filing objections--Not entitled to contend order imposing penalty was passed in violation of natural justice--Kerala Value Added Tax Act, 2003 (30 of 2004), ss. 44, 67(1).--Femin Rajappan Simon v. Intelligence Officer (Ker) . . . 128

Search and seizure--See Natural justice (Ker) . . . 128

Value added tax--See Works contract (P&H) . . . 141

Works contract--Value added tax--Contractors--Deduction of tax at source--Credit for--General principles--Primary liability is on contractor--Contractor cannot be absolved of liability on presumption that tax deducted at source--Delayed payment of tax by contractee--Effect--Where certificates for tax deducted at source furnished--Liability of contractor to interest--Principles governing--Haryana Value Added Tax Act (6 of 2003), ss. 14(6), 24--Haryana Value Added Tax Rules, 2003, rr. 16, 33, 49.--Cherryhill Interiors Limited v. State of Haryana (P&H) . . . 141


PRINT EDITION

VOLUME 98 : PART 2 : ISSUE DATED 17-2-2017


SUPREME COURT


Deduction--Value added tax--Turnover--Discount--Post-sale discount through credit notes--Eligible for deduction--Intention of Legislature not to restrict deduction to discount reflected in sale invoice--Karnataka Value Added Tax Act, 2003 (32 of 2004), ss. 2(34), (36), 29, 30--Karnataka Value Added Tax Rules, 2005, rr. 3(2)(c), 31.--Southern Motors v. State of Karnataka (SC) . . . 207

Discount--See Turnover (SC). . . 207

Interpretation of taxing statutes--Anomaly or absurdity in literal construction--Language can be strained within permissible limits to find out underlying intention of Legislature.--Southern Motors v. State of Karnataka (SC) . . . 207

Turnover--Value added tax--Discount--Deduction--Post-sale discount through credit notes--Eligible for deduction--Intention of Legislature not to restrict deduction to discount reflected in sale invoice--Karnataka Value Added Tax Act, 2003 (32 of 2004), ss. 2(34), (36), 29, 30--Karnataka Value Added Tax Rules, 2005, rr. 3(2)(c), 31.--Southern Motors v. State of Karnataka (SC) . . . 207


HIGH COURTS


Assessing authority--See Value added tax authorities (All) . . . 153

Assessment--Natural justice--Assessment order passed without considering objections submitted by assessee before time-limit--That further time granted not communicated to assessee--Violation of principles of natural justice--Order set aside--Karnataka Value Added Tax Act, 2003 (32 of 2004).--Paharpur Cooling Towers Ltd. v. Assistant Commissioner of Commercial Taxes (Karn) . . . 150

----See Recovery of tax (Guj) . . . 235

Attachment--See Recovery of tax (Guj) . . . 235

Construction of taxing statutes--Entries in Schedule--Common parlance meaning.--Commissioner, Commercial Tax v. Catalysts Sahibabad (All) . . . 136

Declared goods--Value added tax--Entries in Schedule--Iron and steel--Rigid frame columns--Steel structurals--Items mentioned in parentheses thereafter--Illustrative and not exhaustive--Rigid frame columns are steel structurals though not mentioned in parentheses--Cannot be excluded merely because welded and not rolled--"Rolled" not term governing all items in entry--Rigid frame columns manufactured by dealer fall under "steel structurals"--Central Sales Tax Act (74 of 1956), s. 14(iv)(v)--Maharashtra Value Added Tax Act, 2002 (9 of 2005), Sch. C, entry 55(v).--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

Entries in Schedule--Construction of taxing statutes--Common parlance meaning.--Commissioner, Commercial Tax v. Catalysts Sahibabad (All) . . . 136

----Interpretation of taxing statutes--Description of product in invoice does not have to exactly tally or match description in Schedule entry.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

----Interpretation of taxing statutes--Parentheses.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

----Interpretation of taxing statutes--Technological advancements must be taken into consideration for classification of goods.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

----Trade tax--Rate of tax--Enzyme--Taxable as chemical at four per cent. and not as unclassified item at ten per cent.--U. P. Trade Tax Act (15 of 1948)--Notification No. Ka-Ni-2-1084/XI-9(51)/99-U. P. Act 15-48-Order-(8)-2003, dated February 25, 2003.--Commissioner, Commercial Tax v. Catalysts Sahibabad (All) . . . 136

----Value added tax--Iron and steel--Rigid frame columns--Steel structurals--Items mentioned in parentheses thereafter--Illustrative and not exhaustive--Rigid frame columns are steel structurals though not mentioned in parentheses--Cannot be excluded merely because welded and not rolled--"Rolled" not term governing all items in entry--Rigid frame columns manufactured by dealer fall under "steel structurals"--Central Sales Tax Act (74 of 1956), s. 14(iv)(v)--Maharashtra Value Added Tax Act, 2002 (9 of 2005), Sch. C, entry 55(v).--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

High Court--See Value added tax authorities (All) . . . 153

Input-tax credit--Value added tax--Recovery of tax--Attachment of property--Assessment--Attachment of immovable properties and stock of dealer on ground purchases made by dealer never shown by its sellers in returns nor tax paid--Rs. 17 lacs recovered by Department from dealer--Writ petition--Order of attachment modified to extent of lifting of stock of goods lying in godown provided dealer maintained specified minimum stock till assessment--Direction to department not to recover any further amount from dealer till assessment completed and to treat amount already recovered as deposit with Department to be adjusted towards its liabilities upon completion of assessment--Gujarat Value Added Tax Act, 2003 (1 of 2005).--Swastik Corporation v. State of Gujarat (Guj) . . . 235

Interpretation of taxing statutes--Entries in Schedule--Description of product in invoice does not have to exactly tally or match description in Schedule entry.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

----Entries in Schedule--Parentheses.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

----Entries in Schedule--Technological advancements must be taken into consideration for classification of goods.--Zamil Steel Buildings India Pvt. Ltd. v. State of Maharashtra (Bom) . . . 172

Jurisdiction--Value added tax--Value added tax authorities--Assessing authority--High Court--Change of business address--Online agency engaged in marketing and selling of consumer goods--Application dated December 5, 2013 by agency for change of address from Noida to Ghaziabad under its registration documents--Authority at Noida serving notice upon agency at Noida address, passing ex parte orders for provisional assessment and recovering amount from bank account of agency claiming to be outstanding tax dues for period 2013-14 and 2014-15--Court in writ petition setting aside orders on ground of lack of jurisdiction with strictures passed against authority and direction for refund of amount already recovered--Assessment orders passed again for assessment year 2014-15--Writ petition--Deputy Commissioner, Ghaziabad became assessing authority of agency with effect from January 20, 2013--Orders passed by authority without jurisdiction--Court saddling cost of Rs. 5,000 on authority for being guilty of compelling second round of litigation with direction to take appropriate disciplinary action against him--Uttar Pradesh Value Added Tax Act (5 of 2008). s. 75--Uttar Pradesh Value Added Tax Rules, 2008, r. 33.--Flipkart India Pvt. Ltd. v. Chandra Prakash Mishra (All) . . . 153

Limitation--Sales tax--Revision--Revision to bring sales to tax as inter-State sales--Order of revision passed in 2007--Writ petition--No order passed by assessing authority pursuant to revision order--No order can be passed to give effect to revision order--Question of law not decided--Bihar Finance Act (5 of 1981), s. 24.--Shree Shyam Coal Company Ltd. v. State of Jharkhand (Jharkhand) . . . 142

Natural justice--Assessment--Assessment order passed without considering objections submitted by assessee before time-limit--That further time granted not communicated to assessee--Violation of principles of natural justice--Order set aside--Karnataka Value Added Tax Act, 2003 (32 of 2004).--Paharpur Cooling Towers Ltd. v. Assistant Commissioner of Commercial Taxes (Karn) . . . 150

----Writs under Constitution--Alternative remedy--Petition against assessment order passed in violation of principles of natural justice--Maintainable--Constitution of India, art. 226.--Paharpur Cooling Towers Ltd. v. Assistant Commissioner of Commercial Taxes (Karn) . . . 150

Purchase tax--Sales tax--Dealer in edible oil and oil cakes--Purchase of oil seeds, oil cakes and refined oil and sale of finished product after processing--Tax paid on purchases under section 15B--No purchase tax payable under section 19A--Gujarat Sales Tax Act, 1969 (1 of 1970), ss. 15B, 19A, 45(6), 47(4A).--Jagdish Export Ltd. v. State of Gujarat (Guj) . . . 160

Rate of tax--Trade tax--Entries in Schedule--Enzyme--Taxable as chemical at four per cent. and not as unclassified item at ten per cent.--U. P. Trade Tax Act (15 of 1948)--Notification No. Ka-Ni-2-1084/XI-9(51)/99-U. P. Act 15-48-Order-(8)-2003, dated February 25, 2003.--Commissioner, Commercial Tax v. Catalysts Sahibabad (All) . . . 136

Recovery of tax--Value added tax--Attachment of property--Assessment--Attachment of immovable properties and stock of dealer on ground purchases made by dealer never shown by its sellers in returns nor tax paid--Rs. 17 lacs recovered by Department from dealer--Writ petition--Order of attachment modified to extent of lifting of stock of goods lying in godown provided dealer maintained specified minimum stock till assessment--Direction to department not to recover any further amount from dealer till assessment completed and to treat amount already recovered as deposit with Department to be adjusted towards its liabilities upon completion of assessment--Gujarat Value Added Tax Act, 2003 (1 of 2005).--Swastik Corporation v. State of Gujarat (Guj) . . . 235

Revision--Sales tax--Limitation--Revision to bring sales to tax as inter-State sales--Order of revision passed in 2007--Writ petition--No order passed by assessing authority pursuant to revision order--No order can be passed to give effect to revision order--Question of law not decided--Bihar Finance Act (5 of 1981), s. 24.--Shree Shyam Coal Company Ltd. v. State of Jharkhand (Jharkhand) . . . 142

Value added tax--See Entries in Schedule (Bom) . . . 172

----See Recovery of tax (Guj) . . . 235

----See Value added tax authorities (All) . . . 153

Value added tax authorities--Value added tax--Assessing authority--Jurisdiction--High Court--Change of business address--Online agency engaged in marketing and selling of consumer goods--Application dated December 5, 2013 by agency for change of address from Noida to Ghaziabad under its registration documents--Authority at Noida serving notice upon agency at Noida address, passing ex parte orders for provisional assessment and recovering amount from bank account of agency claiming to be outstanding tax dues for period 2013-14 and 2014-15--Court in writ petition setting aside orders on ground of lack of jurisdiction with strictures passed against authority and direction for refund of amount already recovered--Assessment orders passed again for assessment year 2014-15--Writ petition--Deputy Commissioner, Ghaziabad became assessing authority of agency with effect from January 20, 2013--Orders passed by authority without jurisdiction--Court saddling cost of Rs. 5,000 on authority for being guilty of compelling second round of litigation with direction to take appropriate disciplinary action against him--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 75--Uttar Pradesh Value Added Tax Rules, 2008, r. 33.--Flipkart India Pvt. Ltd. v. Chandra Prakash Mishra (All) . . . 153

Writs under Constitution--Alternative remedy--Natural justice--Petition against assessment order passed in violation of principles of natural justice--Maintainable--Constitution of India, art. 226.--Paharpur Cooling Towers Ltd. v. Assistant Commissioner of Commercial Taxes (Karn) . . . 150

----See also Revision (Jharkhand) . . . 142

----See also Value added tax authorities (All) . . . 153


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Construction of taxing statutes--Exemption notification--To be construed strictly.--Shree Rajasthan Syntex Ltd. v. CCE (CESTAT-New Delhi) . . . 164

Consulting engineer services--See Service tax (CESTAT-Chennai) . . . 238

Drawback--See Service tax (CESTAT-New Delhi) . . . 164

Erection, installation, commissioning service--Service tax--April 1, 1998 to June 30, 2003--Finding by investigating authority that appellant undertaking job of erection, installation and commissioning of textile machineries but appellate authority construing service as "consulting engineer's service"--Board's circular clarifying that Commissioning or installation service not chargeable under consulting engineer services--Erection, installation, commissioning service taxable only with effect from July 1, 2003--Adjudication order treating appellant as provider of consultation engineer's service during relevant period not sustainable--Finance Act (32 of 1994).--Voltas Limited v. Commissioner of Central Excise and Service Tax (CESTAT-Chennai) . . . 238

Exemption--Construction of taxing statutes--Exemption notification--To be construed strictly.--Shree Rajasthan Syntex Ltd. v. CCE (CESTAT-New Delhi) . . . 164

Exporter--See Service tax (CESTAT-New Delhi) . . . 164

Input-services--See Service tax (CESTAT-New Delhi) . . . 164

Refund--Service tax--Exporter--Input services--Drawback--Refund claim under notification--Taxes paid on terminal handling charges, transportation of empty containers from port to factory and agency charges of customs house agent services--Refund permissible--Where goods exported under claim of drawback under Rules, refund of tax paid on specified services not allowable--Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, rr. 2(a), 3(2)(ea)--Finance Act (32 of 1994), ss. 93A, 94(2)(hh)--Notification No. 41/2007-Service Tax, dated October 6, 2007.--Shree Rajasthan Syntex Ltd. v. CCE (CESTAT-New Delhi) . . . 164

Service tax--Erection, installation, commissioning service--April 1, 1998 to June 30, 2003--Finding by investigating authority that appellant undertaking job of erection, installation and commissioning of textile machineries but appellate authority construing service as "consulting engineer's service"--Board's circular clarifying that Commissioning or installation service not chargeable under consulting engineer services--Erection, installation, commissioning service taxable only with effect from July 1, 2003--Adjudication order treating appellant as provider of consultation engineer's service during relevant period not sustainable--Finance Act (32 of 1994).--Voltas Limited v. Commissioner of Central Excise and Service Tax (CESTAT-Chennai) . . . 238

----Refund--Exporter--Input services--Drawback--Refund claim under notification--Taxes paid on terminal handling charges, transportation of empty containers from port to factory and agency charges of customs house agent services--Refund permissible--Where goods exported under claim of drawback under Rules, refund of tax paid on specified services not allowable--Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, rr. 2(a), 3(2)(ea)--Finance Act (32 of 1994), ss. 93A, 94(2)(hh)--Notification No. 41/2007-Service Tax, dated October 6, 2007.--Shree Rajasthan Syntex Ltd. v. CCE (CESTAT-New Delhi) . . . 164


WEST BENGAL TAXATION TRIBUNAL


Appeal--Value added tax--Penalty--Appeal against additional demand pending--Dealer making payment in respect of disputed transactions--Direction for dealer to pay security--Direction to Department not to proceed with penalty proceedings till disposal of appeal.--Emami Agrotech Ltd. v. Senior JCCT, Large Tax Payer Unit (WBTT) . . . 146

Penalty--Value added tax--Appeal against additional demand pending--Dealer making payment in respect of disputed transactions--Direction for dealer to pay security--Direction to Department not to proceed with penalty proceedings till disposal of appeal.--Emami Agrotech Ltd. v. Senior JCCT, Large Tax Payer Unit (WBTT) . . . 146

Value added tax--See Penalty (WBTT) . . . 146
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