VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 5 : ISSUE DATED 31-7-2015

HIGH COURTS


Entertainment tax--Liability to tax--Proprietor--Definition--Multi-system operator--Is liable to pay entertainment tax on satellite or electronic television signals provided to cable operators, who further transmit them to consumers for entertainment--Rajasthan Entertainments and Advertisements Tax Act (24 of 1957), ss. 3(3AA), (3AAA), (4A), (5), (6), (8), (11A), 4AA, 4AAA.--Sky Media (P) Ltd. v. Assistant Commissioner, Commercial Taxes (Raj) . . . 96

Multi-system operator--Entertainment tax--Liability to tax--Proprietor--Definition--Is liable to pay entertainment tax on satellite or electronic television signals provided to cable operators, who further transmit them to consumers for entertainment--Rajasthan Entertainments and Advertisements Tax Act (24 of 1957), ss. 3(3AA), (3AAA), (4A), (5), (6), (8), (11A), 4AA, 4AAA.--Sky Media (P) Ltd. v. Assistant Commissioner, Commercial Taxes (Raj) . . . 96

Search and seizure--Value added tax--Seizure--Tanker carrying bitumen loaded at IOC, Mathura on June 27th for Bhopal and owned by petitioner--Transporter intercepted and detained--Rejection of petitioner's claim that tanker proceeded on June 30th after getting repaired and seizure of bitumen on ground that vehicle's number entered in records of toll plaza at Mahuwan on June 28, 2014, that bitumen down loaded at some place and that bitumen once again loaded transported illegally--Seizure not valid--Photostat copies of two other invoices of Refinery dated June 30, 2014 evidencing that bitumen loaded in two other tankers also bearing registration numbers with common last four numerical digits--Bills of repair of tanker and invoices of bitumen accompanying tanker not verified--Information received not tallying with full registration number of tanker in question not considered--Order of seizure and orders by Joint Commissioner and Tribunal confirming it set aside--Provisional release of tanker and bitumen by order dated August 28, 2014 confirmed--Cost of Rs. 20,000 payable by respondent awarded to petitioner in addition to compensation to be determined and paid within specified period--Uttar Pradesh Value Added Tax Act (5 of 2008), s. 48.--Sandeep Bulk Carriers v. State of U. P. (All) . . . 111

Value added tax--See Search and seizure (All) . . . 111

Words and phrases--"Proprietor"--Definition.--Sky Media (P) Ltd. v. Assistant Commissioner, Commercial Taxes (Raj) . . . 96


PRINT EDITION

VOLUME 82 : PART 4 : ISSUE DATED 31-7-2015


SUPREME COURT


Construction of taxing statutes--Purposive construction.--State of Kerala v. A. P. Mammikutty (SC) . . . 418

Luxury tax--Building consisting of different residential apartments--Levy of tax on residential building having plinth area above prescribed limit--Provision deeming individual apartments as separate buildings for calculation of plinth area on satisfying conditions of separate ownership and joint meeting of costs--Applicable to each independent apartment owned by separate person--Plinth areas of separate or distinct apartments owned by same owner to be clubbed together--Kerala Building Tax Act (7 of 1975), ss. 2(e), Expln. 2, (k), (l), 5A.--State of Kerala v. A. P. Mammikutty (SC) . . . 418


HIGH COURTS


Account books--Sales tax--Penalty--Concealment of transactions--Assessment--Sick industrial unit--Company declared sick with effect from June 28, 1991 by BIFR--Returns for financial years 1982-83 and 1989-90 filed and assessment made under section 33(3) levying penalty inter alia under section 36(2)(c), Explanation I--That dealer failed to disclose any transaction of sale or purchase not pointed out before first or second appellate authority--Tribunal deleting penalty levied under section 36(2)(c), Explanation I on ground no discrepancy in books of accounts produced and book results accepted though returns filed late--Also company incurring heavy losses resulting in erosion of capital--Lesser payment of taxes neither due to neglect nor wilful--Tribunal justified in deleting penalty--Bombay Sales Tax Act (51 of 1959), ss. 33(3), 36(2)(c), Expln. I--Central Sales Tax Act (74 of 1956), s.9(2).--Commissioner of Sales Tax v. New Standard Engineering Co. Ltd. (Bom) . . . 446

Advertisement service--See Service tax (All) . . . 488

Appeal--See Interest (Guj) . . . 384

Assessment--See Input-tax credit (Mad) . . . 457

----See Interest (Guj) . . . 384

----See Penalty (Bom) . . . 446

Cenvat credit--Service tax--Input service--Outdoor catering services provided in factory premises by assessees to their employees--Integrally connected with business of manufacturing final product--Are input services--Assessees entitled to credit of tax paid thereon--Cenvat Credit Rules, 2004, r. 2(l).--Commissioner of Central Excise v. Visteon Powertrain Control Systems (P) Limited (Mad) . . . 491

----Service tax--Input services--Subscription for international taxation, consultancy service, medical group insurance services, outdoor catering service and advertisement service and sponsorship service--Services admissible as input services--Appeal dismissed--Cenvat Credit Rules, 2004, r. 2(l).--Commissioner of Central Excise v. HCL Technologies (All) . . . 488

Composition of tax--Value added tax--Works contract--Fee payable on total consideration under contract including labour charges--Contract for installation, erection and commissioning of wind turbine generator--Single integrated contract--Composition fee payable on full contract amount--That part of contract liable to service tax not ground to segregate it for computation of composition fee--Karnataka Value Added Tax Act, 2003 (32 of 2004), s. 15(1)(b).--Suzlon Infrastructure Ltd. v. State of Karnataka (Karn) . . . 504

Consultancy service--See Service tax (All) . . . 488

Doctrine of merger--See Interest (Guj) . . . 384

Input services--See Cenvat credit (Mad) . . . 491

----See Service tax (All) . . . 488

Input-tax credit--Value added tax--Contract with Electricity Board--Specific clause in contract that entire tax as per actuals on basis of invoice liability of Board--Condition that tax payable to Government would be paid by Board itself and not paid to dealer--Input-tax credit available to dealer to be paid by purchaser, i.e., Board--Condition in contract not to be understood as waiver by dealer--Kerala Value Added Tax Act, 2003 (30 of 2004).--K. A. Devassykutty v. Kerala State Electricity Board (Ker) . . . 468

----Value added tax--Reversal--Notice issued on premise that dealer's vendors either had not paid taxes or were unregistered dealers--Dealer in reply requesting for exact details of transactions in relation to which mismatch alleged and filing ledger confirmation received from vendors--Explanation that dealer had claimed input-tax credit based on valid tax invoices issued by seller and request to Assistant Commissioner advise dealer about further course--Copies of confirmation letters, tax invoices and certificates of registration and website information of sellers produced--Assistant Commissioner passing non-speaking order stating dealer had not filed any documentary evidence--In counter-affidavit, Assistant Commissioner admitting dealer had produced verification vouchers and evidence for payment of tax--Sellers stated to be unregistered dealers in order, in fact registered dealers, holding valid registration--Order vitiated on account of non-application of mind--False statement in assessment order that dealer had not produced any document--Assessment order arbitrary and vitiated--Tamil Nadu Value Added Tax Act (32 of 2006), s. 19.--Infiniti Wholesale Limited v. Assistant Commissioner (CT) (Mad) . . . 457

----Value added tax--Rule-making power--Iron and steel--Rate of tax on sale reduced and rule amended providing that input-tax credit with respect to goods lying in stock shall be admissible at reduced rate prevalent on date of sale--Amendment in Act empowering rule-making authority to bring such rule brought later--Rule can be enforced only from date of amendment in Act--Punjab Value Added Tax Act (8 of 2005), ss. 2(o), (p), (s), (zc), (zd), (zm), 13, 15--Punjab Value Added Tax Rules, 2005, r. 21(8).--Jalandhar Iron & Steel Merchants Association (Regd.) v. State of Punjab (P&H) . . . 472

----See also Cenvat credit (Mad) . . . 491

Interest--Value added tax--Refund--Interest on refund--Payable where refund arises pursuant to order in appeal--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 54(1)(aa).--State of Gujarat v. Jupiter Engineer (Guj) . . . 399

----Value added tax--Refund--Interest on refund--Provision for payment of interest on refund arising out of assessment--Refund arising pursuant to order in appeal--Doctrine of merger--Interest payable--Interest can be awarded as measure of compensation and to avoid discrimination--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 54(1)(aa).--State of Gujarat v. Doshi Printing Press (Guj) . . . 384

Iron and steel--See Input-tax credit (P&H) . . . 472

Medical group insurance services--See Service tax (All) . . . 488

Natural justice--Value added tax--Certificate of registration--Cancellation--Condition precedent--Notice to dealer to show cause against cancellation--Notice calling for documents and clarification of discrepancies in transactions--Dealer complying--Cancellation of certificate of registration--Cancellation without notice--Not sustainable--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 27(5)(i).--Scrap Recycling Private Limited v. State of Gujarat (Guj) . . . 410

Notice--See Registration certificate (Guj) . . . 410

Outdoor catering service--See Cenvat tax (Mad) . . . 491

----See Service tax (All) . . . 488

Packing materials--Sales tax--Rate of tax--Law prior to amendment in 1995--Separate sale of goods and packing materials permissible--Question of fact--Cement sold in HDPE bags--Invoice clearly showing sale of cement and packing material not an integrated sale but distinct sales--Levy of tax on bags at rate applicable to cement--Not justified--Andhra Pradesh General Sales Tax Act (6 of 1957), s. 6C (prior to amendment in 1995) ; Sch. I, entries 18, 188.--Andhra Cements Company Limited v. Commissioner of Commercial Taxes (T and AP) . . . 431

Penalty--Sales tax--Concealment of transactions--Assessment--Sick industrial unit--Company declared sick with effect from June 28, 1991 by BIFR--Returns for financial years 1982-83 and 1989-90 filed and assessment made under section 33(3) levying penalty inter alia under section 36(2)(c), Explanation I--That dealer failed to disclose any transaction of sale or purchase not pointed out before first or second appellate authority--Tribunal deleting penalty levied under section 36(2)(c), Explanation I on ground no discrepancy in books of accounts produced and book results accepted though returns filed late--Also company incurring heavy losses resulting in erosion of capital--Lesser payment of taxes neither due to neglect nor wilful--Tribunal justified in deleting penalty --Bombay Sales Tax Act (51 of 1959), ss. 33(3), 36(2)(c), Expln. I--Central Sales Tax Act (74 of 1956), s.9(2).--Commissioner of Sales Tax v. New Standard Engineering Co. Ltd. (Bom) . . . 446

Rate of tax--Sales tax--Packing materials--Law prior to amendment in 1995--Separate sale of goods and packing materials permissible--Question of fact--Cement sold in HDPE bags--Invoice clearly showing sale of cement and packing material not an integrated sale but distinct sales--Levy of tax on bags at rate applicable to cement--Not justified--Andhra Pradesh General Sales Tax Act (6 of 1957), s. 6C (prior to amendment in 1995), Sch. I, entries 18, 188.--Andhra Cements Company Limited v. Commissioner of Commercial Taxes (T and AP) . . . 431

----See also Input-tax credit (P&H) . . . 472

Refund--Value added tax--Interest on refund--Payable where refund arises pursuant to order in appeal--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 54(1)(aa).--State of Gujarat v. Jupiter Engineer (Guj) . . . 399

----Value added tax--Interest on refund--Provision for payment of interest on refund arising out of assessment--Refund arising pursuant to order in appeal--Doctrine of merger--Interest payable--Interest can be awarded as measure of compensation and to avoid discrimination--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 54(1)(aa).--State of Gujarat v. Doshi Printing Press (Guj) . . . 384

Registration certificate--Value added tax--Certificate of registration--Cancellation--Condition precedent--Notice to dealer to show cause against cancellation--Notice calling for documents and clarification of discrepancies in transactions--Dealer complying--Cancellation of certificate of registration--Cancellation without notice--Not sustainable--Gujarat Value Added Tax Act, 2003 (1 of 2005), s. 27(5)(i).--Scrap Recycling Private Limited v. State of Gujarat (Guj) . . . 410

Rule-making power--Value added tax--Input-tax credit--Iron and steel--Rate of tax on sale reduced and rule amended providing that input-tax credit with respect to goods lying in stock shall be admissible at reduced rate prevalent on date of sale--Amendment in Act empowering rule-making authority to bring such rule brought later--Rule can be enforced only from date of amendment in Act--Punjab Value Added Tax Act (8 of 2005), ss. 2(o), (p), (s), (zc), (zd), (zm), 13, 15--Punjab Value Added Tax Rules, 2005, r. 21(8).--Jalandhar Iron & Steel Merchants Association (Regd.) v. State of Punjab (P&H) . . . 472

Service tax--Cenvat credit--Input service--Outdoor catering services provided in factory premises by assessees to their employees--Integrally connected with business of manufacturing final product--Are input services--Assessees entitled to credit of tax paid thereon--Cenvat Credit Rules, 2004, r. 2(l).--Commissioner of Central Excise v. Visteon Powertrain Control Systems (P) Limited (Mad) . . . 491

----Cenvat credit--Input services--Subscription for international taxation, consultancy service, medical group insurance services, outdoor catering service and advertisement service and sponsorship service--Services admissible as input services--Appeal dismissed--Cenvat Credit Rules, 2004, r. 2(l).--Commissioner of Central Excise v. HCL Technologies (All) . . . 488

----See also Composition of tax (Karn) . . . 504

Sick industrial unit--See Penalty (Bom) . . . 446

Sponsorship service--See Service tax (All) . . . 488

Subscription for international taxation--See Service tax (All) . . . 488

Value added tax--Contract with Electricity Board--Specific clause in contract that entire tax as per actuals on basis of invoice liability of Board--Condition that tax payable to Government would be paid by Board itself and not paid to dealer--Input-tax credit available to dealer to be paid by purchaser, i.e., Board--Condition in contract not to be understood as waiver by dealer--Kerala Value Added Tax Act, 2003 (30 of 2004).--K. A. Devassykutty v. Kerala State Electricity Board (Ker) . . . 468

----Input-tax credit--Reversal--Notice issued on premise that dealer's vendors either had not paid taxes or were unregistered dealers--Dealer in reply requesting for exact details of transactions in relation to which mismatch alleged and filing ledger confirmation received from vendors--Explanation that dealer had claimed input-tax credit based on valid tax invoices issued by seller and request to Assistant Commissioner advise dealer about further course--Copies of confirmation letters, tax invoices and certificates of registration and website information of sellers produced--Assistant Commissioner passing non-speaking order stating dealer had not filed any documentary evidence--In counter-affidavit, Assistant Commissioner admitting dealer had produced verification vouchers and evidence for payment of tax--Sellers stated to be unregistered dealers in order, in fact registered dealers, holding valid registration--Order vitiated on account of non-application of mind--False statement in assessment order that dealer had not produced any document--Assessment order arbitrary and vitiated--Tamil Nadu Value Added Tax Act (32 of 2006), s. 19.--Infiniti Wholesale Limited v. Assistant Commissioner (CT) (Mad) . . . 457

----See also Composition of tax (Karn) . . . 504

----See Input-tax credit (P&H) . . . 472

----See Refund (Guj) . . . 399

----See Registration certificate (Guj) . . . 410

Works contract--Value added tax--Composition of tax--Fee payable on total consideration under contract including labour charges--Contract for installation, erection and commissioning of wind turbine generator--Single integrated contract--Composition fee payable on full contract amount--That part of contract liable to service tax not ground to segregate it for computation of composition fee--Karnataka Value Added Tax Act, 2003 (32 of 2004), s. 15(1)(b).--Suzlon Infrastructure Ltd. v. State of Karnataka (Karn) . . . 504

Writs under Constitution--Alternative remedy--Assessment order passed without application of mind--Existence of alternate remedy not a bar to maintain writ petition--Constitution of India, art. 226--Infiniti Wholesale Limited v. Assistant Commissioner (CT) (Mad) . . . 457


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL


Advertisement services--See Service tax (CESTAT-New Delhi) . . . 484

Cenvat credit--Service tax--Advertisement and sponsorship services--Denial of Cenvat credit on ground assessees advertised themselves as HCL, which was reflective of entire HCL group--Not justified--No such allegation in show-cause notice--Order cannot travel beyond notice--Tax paid by assessee--Cenvat credit available--Matter remitted for enquiry regarding production of documentary evidence--Cenvat Credit Rules, 2004.--Commissioner of Central Excise v. HCL Technologies Ltd. (CESTAT-New Delhi) . . . 484

----Service tax--Medical group insurance, legal consultancy services, outdoor catering services and subscription for international taxation--Covered by decisions of courts including various High Courts--Commissioner (Appeals) justified in allowing credit of tax paid thereon--Cenvat Credit Rules, 2004.--Commissioner of Central Excise v. HCL Technologies Ltd. (CESTAT-New Delhi) . . . 484

Legal consultancy services--See Service tax (CESTAT-New Delhi) . . . 484

Medical group insurance services--See Service tax (CESTAT-New Delhi) . . . 484

Outdoor catering services--See Service tax (CESTAT-New Delhi) . . . 484

Service tax--Cenvat credit--Advertisement and sponsorship services--Denial of Cenvat credit on ground assessees advertised themselves as HCL, which was reflective of entire HCL group--Not justified--No such allegation in show-cause notice--Order cannot travel beyond notice--Tax paid by assessee--Cenvat credit available--Matter remitted for enquiry regarding production of documentary evidence--Cenvat Credit Rules, 2004.--Commissioner of Central Excise v. HCL Technologies Ltd. (CESTAT-New Delhi) . . . 484

----Cenvat credit--Medical group insurance, legal consultancy services, outdoor catering services and subscription for international taxation--Covered by decisions of courts including various High Courts--Commissioner (Appeals) justified in allowing credit of tax paid thereon--Cenvat Credit Rules, 2004.--Commissioner of Central Excise v. HCL Technologies Ltd. (CESTAT-New Delhi) . . . 484

Sponsorship services--See Service tax (CESTAT-New Delhi) . . . 484

Subscription for international taxation--See Service tax (CESTAT-New Delhi) . . . 484

Tax paid by assessee--See Service tax (CESTAT-New Delhi) . . . 484
_____________
1

COMMERCIAL LAWS OF INDIA (P) LTD.
No. 2 (Old No. 36), Vaithyaram Street,
T.Nagar, Chennai - 600017.
Phone: (044) 4217 8564, 2435 0752 - 755
Telefax: (044) 2815 1144
info@clipl.com
To Unsubscribe : Reply back with "Unsubscribe" in subject and Also send your feedback or comments to info@clipl.com