VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 8 : ISSUE DATED 20-1-2017


HIGH COURT


Passive infrastructure service--See Transfer of right to use goods (Ker) . . . 50

Telecommunication--Value added tax--Transfer of right to use goods--Assessee providing passive infrastructure services to telecommunication operators on a shared basis under master service agreement--Passive infrastructure consisting of towers, shelters, diesel generator sets, air conditioners, DC power system, battery bank, etc., owned and maintained by assessee while active infrastructure consisting of base terminal stations, associated antenna, back-haul connectivity, etc., required to provide services at telecommunication sites other than passive infrastructure, owned and operated by sharing telecom operators--Possession and ownership of passive infrastructure remaining with assessee--No right in passive infrastructure transferred to mobile service operators --Only limited permission to use infrastructural facility in accordance with agreement given--Assessee providing infrastructural facilities to be tapped into by mobile services operators on payment of fee as consideration--Transaction not transfer of right to use goods--Kerala Value Added Tax Act, 2003 (30 of 2004), s. 6(1)(c).--Indus Towers Limited v. Union of India (Ker) . . . 50

Transfer of right to use goods--Value added tax--Assessee providing passive infrastructure services to telecommunication operators on a shared basis under master service agreement--Passive infrastructure consisting of towers, shelters, diesel generator sets, air conditioners, DC power system, battery bank, etc., owned and maintained by assessee while active infrastructure consisting of base terminal stations, associated antenna, back-haul connectivity, etc., required to provide services at telecommunication sites other than passive infrastructure, owned and operated by sharing telecom operators--Possession and ownership of passive infrastructure remaining with assessee--No right in passive infrastructure transferred to mobile service operators--Only limited permission to use infrastructural facility in accordance with agreement given--Assessee providing infrastructural facilities to be tapped into by mobile services operators on payment of fee as consideration--Transaction not transfer of right to use goods--Kerala Value Added Tax Act, 2003 (30 of 2004), s. 6(1)(c).--Indus Towers Limited v. Union of India (Ker) . . . 50

Value added tax--See Transfer of right to use goods (Ker) . . . 50


PRINT EDITION

VOLUME 97 : PART 3 : ISSUE DATED 20-1-2017


HIGH COURTS


Assessment--Value added tax--Writs under Constitution--Existence of alternative remedy--Petition against assessment order and dismissal of application of rectification--Remedies under statute available--Writ petition not maintainable--Karnataka Value Added Tax Act, 2003 (32 of 2004).--TTP Technologies Pvt. Ltd. v. State of Karnataka (Karn) . . . 308

Change of law--See Legislative powers (All) . . . 262

----See Works contract (Karn) . . . 258

Commissioner--Trade tax--Reassessment--Manufacturers of zinc oxide, red lead and lead ingot--Assessment orders passed accepting production disclosed by manufacturers--Subsequent proposal sent to Additional Commissioner by assessing authority for grant of authorisation for reassessment on ground some turnover escaped assessment as per scientific formula--Acceptance of explanation of manufacturers by assessing authority, Additional Commissioner and Tribunal in earlier and subsequent years holding chemical formula in question could not be applied as a matter of rule, and that, production depended upon quality of raw material--Authorisation orders and notices issued without jurisdiction--Quashed--U. P. Trade Tax Act (15 of 1948), s. 21(2), proviso.--United Chemicals Industries v. State of U. P. (All) . . . 332

Deferment of tax--Value added tax--Interest--Failure to file return--Delay in payment of tax--Dealer granted exemption under 1981 Act for ten years--Enactment of 2005 Act with effect from April 1, 2005-- Transitory provisions enabling dealer who has not availed of full entitlement to opt for deferment of tax liability under 2005 Act in prescribed manner--Dealer failing to opt for deferment within prescribed time--Effect--Dealer liable to pay value added tax in terms of 2005 Act failure to pay which attracts interest--Option for deferred payment of tax exercised late--Delayed payment of deferred tax attracting interest--Nothing to show burden of interest not passed on to consumers--Dealer could not claim that interest not payable--Bihar Finance Act (5 of 1981), s. 7(3)(b)--Bihar Value Added Tax Act (27 of 2005), ss. 24(10), 96(3)(b)--Bihar Value Added Tax Rules, 2005, r. 57.--Lumbini Beverages Private Limited v. State of Bihar (Patna) . . . 325

----See also Sales tax incentive scheme (Bom) . . . 349

Entries in Schedule--Sales tax--Entry including sheets, rods, brass slabs, blocks, ingots, circle and scrap of non-ferrous metals and alloys--Inclusive entry--Brass wires would fall in entry--Gujarat Sales Tax Act, 1969 (1 of 1970), Sch. II, Part A, entry 27.--Nakoda Metal Industries v. Commissioner of Sales Tax (Guj) . . . 315

----Sales tax--Manufacture--Definition--Conversion of coal into smokeless soft fuel, i.e., smokeless coke by application of mechanised plants--Is manufacture--Not excluded by notification--Coal is distinct product from smokeless coke--Dealer liable to pay tax on sale of smokeless soft fuel--Madhya Pradesh Commercial Tax Act, 1994 (5 of 1995), ss. 2(o), 9 ; Sch. II, Part V, entry 22.--Deshlahara Coke Industries (P) Ltd. v. Commissioner of Commercial Tax (MP) . . . 285

Exemption--See Interest (Patna) . . . 325

----See Legislative powers (All) . . . 262

Goods--Value added tax--Input-tax credit--Conditions precedent for grant--"Goods", "input", "input tax"--Definitions--DEPB licences--Are goods--But not enumerated in First Schedule to Act--No input-tax credit allowable in respect of duty paid by dealer on purchase of DEPB licences--Tamil Nadu Value Added Tax Act (32 of 2006), ss. 2(21), (23), (24), 3(3), 19, 60(1).--Sha Kantilal Jayantilal v. State of Tamil Nadu (Mad) . . . 295

Input-tax credit--Value added tax--Conditions precedent for grant--"Goods", "input", "input tax"--Definitions--DEPB licences--Are goods--But not enumerated in First Schedule to Act--No input-tax credit allowable in respect of duty paid by dealer on purchase of DEPB licences--Tamil Nadu Value Added Tax Act (32 of 2006), ss. 2(21), (23), (24), 3(3), 19, 60(1).--Sha Kantilal Jayantilal v. State of Tamil Nadu (Mad) . . . 295

Interest--Value added tax--Failure to file return--Delay in payment of tax--Dealer granted exemption under 1981 Act for ten years--Enactment of 2005 Act with effect from April 1, 2005--Transitory provisions enabling dealer who has not availed of full entitlement to opt for deferment of tax liability under 2005 Act in prescribed manner--Dealer failing to opt for deferment within prescribed time--Effect--Dealer liable to pay value added tax in terms of 2005 Act failure to pay which attracts interest--Option for deferred payment of tax exercised late--Delayed payment of deferred tax attracting interest--Nothing to show burden of interest not passed on to consumers--Dealer could not claim that interest not payable--Bihar Finance Act (5 of 1981), s. 7(3)(b)--Bihar Value Added Tax Act (27 of 2005), ss. 24(10), 96(3)(b)--Bihar Value Added Tax Rules, 2005, r. 57.--Lumbini Beverages Private Limited v. State of Bihar (Patna) . . . 325

Legislative powers--Value added tax--State Government--Rule-making authority--Exemption--New units--Dealers holding exemption certificates allowing exemption up to prescribed limit or till expiry of 15 years, whichever was earlier--Change of scheme during period of exemption--Amendment providing for payment of tax in "prescribed manner" and refund thereafter--Rules pursuant to amendment prescribing time for payment framed after expiry of periods mentioned therein for payment--Impossibility of compliance--Rule invalid--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 42(4), (5) (as amended by Uttar Pradesh Value Added Tax (Amendment) Ordinance, 2008)--Uttar Pradesh Value Added Tax Rules, 2008, r. 70(5) (as amended by Uttar Pradesh Value Added Tax (First Amendment) Rules, 2009).--Uflex Limited v. State of U. P. (All) . . . 262

Manufacture--Sales tax--Entries in Schedule--Definition--Conversion of coal into smokeless soft fuel, i.e., smokeless coke by application of mechanised plants--Is manufacture--Not excluded by notification--Coal is distinct product from smokeless coke--Dealer liable to pay tax on sale of smokeless soft fuel--Madhya Pradesh Commercial Tax Act, 1994 (5 of 1995), ss. 2(o), 9 ; Sch. II, Part V, entry 22.--Deshlahara Coke Industries (P) Ltd. v. Commissioner of Commercial Tax (MP) . . . 285

Principles--Taxation--General principles--Law cannot compel a man to do the impossible.--Uflex Limited v. State of U. P. (All) . . . 262

Rates of tax--Value added tax--Works contract--Amendment with effect from April 1, 2006 prescribing rates for types of works contracts--Goods used in execution of works contracts prior to that date--Taxable at rates prescribed therefor--Bitumen and jelly taxable at four per cent.--Karnataka Value Added Tax Act, 2003 (32 of 2004), s. 4 ; Sch. III, entries 11, 83.--State of Karnataka v. Soma Enterprises Limited (Karn) . . . 258

Reassessment--Sales tax--Deferral of tax--Scheme of incentives--Dealer granted eligibility certificate stating goods to be manufactured, capacity of unit, capital cost of project, maximum entitlement of sales tax incentives and period of validity--No embargo or prohibition on augmentation or increase in production capacity and expansion sanctioned--Period of eligibility not expired and quantum fixed not achieved--Assessment allowing incentives--Subsequent amendment of provisions restricting exemption to sanctioned capacity--Not to be invoked to revise assessment to restrict concession--Bombay Sales Tax Act (51 of 1959), s. 41D--Bombay Sales Tax Rules, 1959, rr. 31AAA, 31B, 31C.--Finolex Cables Limited v. State of Maharashtra (Bom) . . . 349

----Trade tax--Commissioner--Manufacturers of zinc oxide, red lead and lead ingot--Assessment orders passed accepting production disclosed by manufacturers--Subsequent proposal sent to Additional Commissioner by assessing authority for grant of authorisation for reassessment on ground some turnover escaped assessment as per scientific formula--Acceptance of explanation of manufacturers by assessing authority, Additional Commissioner and Tribunal in earlier and subsequent years holding chemical formula in question could not be applied as a matter of rule, and that, production depended upon quality of raw material--Authorisation orders and notices issued without jurisdiction--Quashed--U. P. Trade Tax Act (15 of 1948), s. 21(2), proviso.--United Chemicals Industries v. State of U. P. (All) . . . 332

Rectification--See Writs under Constitution (Karn) . . . 308

Return--See Interest (Patna) . . . 325

Rule-making authority--Value added tax--Legislative powers--State Government --Exemption--New units--Dealers holding exemption certificates allowing exemption up to prescribed limit or till expiry of 15 years, whichever was earlier--Change of scheme during period of exemption--Amendment providing for payment of tax in "prescribed manner" and refund thereafter--Rules pursuant to amendment prescribing time for payment framed after expiry of periods mentioned therein for payment--Impossibility of compliance--Rule invalid--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 42(4), (5) (as amended by Uttar Pradesh Value Added Tax (Amendment) Ordinance, 2008)--Uttar Pradesh Value Added Tax Rules, 2008, r. 70(5) (as amended by Uttar Pradesh Value Added Tax (First Amendment) Rules, 2009).--Uflex Limited v. State of U. P. (All) . . . 262

Sales tax incentive scheme--Sales tax--Deferral of tax--Scheme of incentives--Dealer granted eligibility certificate stating goods to be manufactured, capacity of unit, capital cost of project, maximum entitlement of sales tax incentives and period of validity--No embargo or prohibition on augmentation or increase in production capacity and expansion sanctioned--Period of eligibility not expired and quantum fixed not achieved--Assessment allowing incentives--Subsequent amendment of provisions restricting exemption to sanctioned capacity--Not to be invoked to revise assessment to restrict concession--Bombay Sales Tax Act (51 of 1959), s. 41D--Bombay Sales Tax Rules, 1959, rr. 31AAA, 31B, 31C.--Finolex Cables Limited v. State of Maharashtra (Bom) . . . 349

State Government--See Legislative powers (All) . . . 262

Taxation--General principles--Law cannot compel a man to do the impossible.--Uflex Limited v. State of U. P. (All) . . . 262

Value added tax--See Input-tax credit (Mad) . . . 295

----See Interest (Patna) . . . 325

----See Legislative powers (All) . . . 262

----See Works contract (Karn) . . . 258

----See Writs under Constitution (Karn) . . . 308
Words and phrases--"Goods", "input", "input tax".--Definitions.--Sha Kantilal Jayantilal v. State of Tamil Nadu (Mad) . . . 295

----"Manufacture"--Definition.--Deshlahara Coke Industries (P) Ltd. v. Commissioner of Commercial Tax (MP) . . . 285

Works contract--Value added tax--Rates of tax--Amendment with effect from April 1, 2006 prescribing rates for types of works contracts--Goods used in execution of works contracts prior to that date--Taxable at rates prescribed therefor--Bitumen and jelly taxable at four per cent.--Karnataka Value Added Tax Act, 2003 (32 of 2004), s. 4 ; Sch. III, entries 11, 83.--State of Karnataka v. Soma Enterprises Limited (Karn) . . . 258

Writs under Constitution--Value added tax--Existence of alternative remedy--Petition against assessment order and dismissal of application of rectification--Remedies under statute available--Writ petition not maintainable--Karnataka Value Added Tax Act, 2003 (32 of 2004).--TTP Technologies Pvt. Ltd. v. State of Karnataka (Karn) . . . 308


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Online information and data base access or retrieval service--See Service tax (CESTAT-Mum) . . . 338

Reverse charge mechanism--Service tax--Foreign airline companies having branch offices in India--Booking of tickets done using global distribution system platform provided by companies outside India operating computerised reservation system--Payment made to companies by head offices for services used by Indian branch for passengers in India--Not chargeable to service tax under category of "online information and data base access or retrieval service" under reverse charge mechanism--Finance Act (32 of 1994), ss. 65(75), (105)(zh), 66A.--Qatar Airways v. Commissioner of Service Tax (CESTAT-Mum) . . . 338

Service tax--Foreign airline companies having branch offices in India--Booking of tickets done using global distribution system platform provided by companies outside India operating computerised reservation system--Payment made to companies by head offices for services used by Indian branch for passengers in India--Not chargeable to service tax under category of "online information and data base access or retrieval service" under reverse charge mechanism--Finance Act (32 of 1994), ss. 65(75), (105)(zh), 66A.--Qatar Airways v. Commissioner of Service Tax (CESTAT-Mum) . . . 338


WEST BENGAL TAXATION TRIBUNAL


Registration--Value added tax--Registration of dealers--Provision giving opportunity to dealers who had failed to get registered, to apply for registration within stated time-limit--Disqualification where notice for determination of liability issued--Notice issued to dealer for prior years after date of notification bringing amended provision into force--Dealer not disqualified to apply for registration--West Bengal Value Added Tax Act (37 of 2003), ss. 24A (as amended by West Bengal Finance Act, 2015), 66.--Sri Bijoy Shaw v. Joint Commissioner, ITC Investigation Unit (WBTT) . . . 319

Value added tax--See Registration (WBTT) . . . 319

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