VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 2 : ISSUE DATED 18-4-2014

HIGH COURT


Appeal--Sales tax--Appealable orders--Order dismissing application for cancellation of assessment--Not appealable before Joint Commissioner (Appeals) but only before Tribunal--Dismissal of appeal by Joint Commissioner (Appeals) as not maintainable--Proper--No appeal filed thereagainst before Tribunal within time prescribed--Dismissal of appeals by Tribunal proper--Dismissal of application for rectification proper--Karnataka Sales Tax Act (25 of 1957), ss. 12D, 20(1), 22(1), (2), (6).--Rangoli Paints v. State of Karnataka (Karn) . . . 453

Arms and ammunitions--Trade tax--Liability--Liability to tax only on manufacturer or importer--"Manufacturer"--Definition--Dealer must make purchase from another dealer or first sale of goods in State after manufacture--Purchase from licensees--No finding that licensees carried on business of sale and purchase of arms and ammunition--Purchases from them not purchases from "dealers"--Sale by dealer not first sale after manufacture--Dealer cannot be treated as manufacturer--Dealer not liable to tax--U. P. Trade Tax Act (15 of 1948), s. 2(c), (ee).--B. S. A. Corporation v. Commissioner of Trade Tax (All) . . . 464

Assessment--Sales tax--Appeal--Appealable orders--Order dismissing application for cancellation of assessment--Not appealable before Joint Commissioner (Appeals) but only before Tribunal--Dismissal of appeal by Joint Commissioner (Appeals) as not maintainable--Proper--No appeal filed thereagainst before Tribunal within time prescribed--Dismissal of appeals by Tribunal proper--Dismissal of application for rectification proper--Karnataka Sales Tax Act (25 of 1957), ss. 12D, 20(1), 22(1), (2), (6).--Rangoli Paints v. State of Karnataka (Karn) . . . 453

----Sales tax--Jurisdiction--Survey--Assessment order passed by assessing authority, anti-evasion, pursuant to survey by anti-evasion wing of Department challenged before Deputy Commissioner (Appeals)--Matter remitted to regular assessing officer without considering merits--Tax Board holding correct jurisdiction to pass order with regular assessing officer and upholding directions by Deputy Commissioner (Appeals)--No question of law decided by Tax Board warranting interference by court in revision--Rajasthan Sales Tax Act, 1994 (22 of 1995).--Assistant Commercial Taxes Officer v. Prakash General and Medical Store (Raj) . . . 459

Compounding of offence--See Turnover (Karn) . . . 436

Entry tax--Interest--Delay in payment of tax--Deposit of part of tax in time and balance after delay--Deposit of balance to be taken as pursuant to revised return--Dealer liable to interest--Madhya Pradesh Commercial Tax Act, 1994 (5 of 1995), s. 26(4)(a).--Badrilal Vitthaldas v. Commissioner, Commercial Tax (MP) . . . 461

High Court--See Assessment (Raj) . . . 459

Interest--Entry tax--Delay in payment of tax--Deposit of part of tax in time and balance after delay--Deposit of balance to be taken as pursuant to revised return--Dealer liable to interest--Madhya Pradesh Commercial Tax Act, 1994 (5 of 1995), s. 26(4)(a).--Badrilal Vitthaldas v. Commissioner, Commercial Tax (MP) . . . 461
Jurisdiction--Sales tax--Assessment--Survey--Assessment order passed by assessing authority, anti-evasion, pursuant to survey by anti-evasion wing of Department challenged before Deputy Commissioner (Appeals)--Matter remitted to regular assessing officer without considering merits--Tax Board holding correct jurisdiction to pass order with regular assessing officer and upholding directions by Deputy Commissioner (Appeals)--No question of law decided by Tax Board warranting interference by court in revision--Rajasthan Sales Tax Act, 1994 (22 of 1995).--Assistant Commercial Taxes Officer v. Prakash General and Medical Store (Raj) . . . 459

Limitation--See Appeal (Karn) . . . 453

Manufacturer--Trade tax--Liability--Arms and ammunition--Liability to tax only on manufacturer or importer--Definition--Dealer must make purchase from another dealer or first sale of goods in State after manufacture--Purchase from licensees--No finding that licensees carried on business of sale and purchase of arms and ammunition--Purchases from them not purchases from "dealers"--Sale by dealer not first sale after manufacture--Dealer cannot be treated as manufacturer--Dealer not liable to tax--U. P. Trade Tax Act (15 of 1948), s. 2(c), (ee).--B. S. A. Corporation v. Commissioner of Trade Tax (All) . . . 464

Offence--Value added tax--Turnover--Dealer issuing pro forma invoices giving value of machinery to be supplied and machinery manufactured to requirement of customers--Sum accounted in books of account found less than amount mentioned in pro forma invoices--Dealer compounding offence and paying tax--Categorical finding that dealer did not maintain true and correct books of account and attempted to suppress sales turnover--Contention that pro forma invoice could not be basis for calculating total turnover not tenable--Karnataka Value Added Tax Act, 2003 (32 of 2004).--Narayanaswamy Naidu v. State of Karnataka (Karn) . . . 436

Rectification of mistake--See Appeal (Karn) . . . 453

Reimbursement--See Service tax (Bom) . . . 441

Return--See Entry tax (MP) . . . 461

Revision--See Assessment (Raj). . . 459

Sales Tax Tribunal--See Appeal (Karn) . . . 453

Service tax--Cenvatable service tax--Contract awarded by respondent to appellant in connection with a project for flare system for a project--Providing for reimbursement of Cenvatable service tax by respondent at actuals against submission of documentary evidence--Appellant mentioning 25.30 lacs in SP 2 form of Schedule of rates annexed to letter of acceptance stating by letter after acceptance of contract amount be corrected to Rs. 76.68 lacs--Arbitrator holding that petitioner not entitled to claim in excess of that stipulated in contract--Dismissal of appeal against award by single judge--Justified in view of specific reference to details provided in form SP2 in purchase order and special conditions of contract--Arbitration and Conciliation Act (26 of 1996), s. 34.--Airoli Flaregas (India) Pvt. Ltd. v. Hindustan Petroleum Corporation Ltd. (Bom) . . . 441

Survey--See Assessment (Raj) . . . 459

Turnover--Value added tax--Dealer issuing pro forma invoices giving value of machinery to be supplied and machinery manufactured to requirement of customers--Sum accounted in books of account found less than amount mentioned in pro forma invoices--Dealer compounding offence and paying tax--Categorical finding that dealer did not maintain true and correct books of account and attempted to suppress sales turnover--Contention that pro forma invoice could not be basis for calculating total turnover not tenable--Karnataka Value Added Tax Act, 2003 (32 of 2004).--Narayanaswamy Naidu v. State of Karnataka (Karn) . . . 436

Value added tax--See Turnover (Karn) . . . 436

Words and phrases--"Manufacturer"--Definition.--B. S. A. Corporation v. Commissioner of Trade Tax (All) . . . 464


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PRINT EDITION

VOLUME 69 : PART 5 : ISSUE DATED 18-4-2014


HIGH COURTS


Admitted tax--See Penalty (All) . . . 426

Appeal--Trade tax--Pre-deposit--Condition precedent for entertainment of appeal--Satisfactory proof of payment of tax due--Mandatory condition--Sick industrial company--Deferment of tax only by special order of Government--Mere declaration of company as sick not sufficient--Conditions for protection under 1985 Act not satisfied--Dealer not entitled to entertainment of appeal without compliance with pre-condition--U. P. Trade Tax Act (15 of 1948), ss. 9(1B), 38--Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), s. 22.--Triveni Structurals Ltd. v. Commissioner of Trade Tax (All) . . . 432

----Value added tax--Appeal to High Court--Powers of court--Condonation of delay--Appeal by Department--Delay of 1205 days--No proper or sufficient explanation for delay--Delay not condoned--Gujarat Value Added Tax Act, 2003 (1 of 2005).--State of Gujarat v. Swet Zink Ltd. (Guj) . . . 429

----Value added tax--Stay--Value Added Tax Tribunal--Application for stay further operation of Tribunal's order setting aside levy of tax on performance/inspection charges and allowing set-off in respect of packing materials during pendency of main appeal--Rejection of application--Liberty granted for reassessment for subsequent assessment years subject to final outcome of main appeal--Gujarat Value Added Tax Act, 2003 (1 of 2005).--State of Gujarat v. Dresser Rand India Pvt. Ltd. (Guj) . . . 423

----See also Writs under Constitution (P&H) . . . 451, 453

Burden of proof--Value added tax--Entries in Schedule--Interpretation of taxing statutes--Tests--Goods declared as "H. L. medicines" by dealer--Onus on Department to prove misdeclaration--Department failing to prove goods were "appetite tonic"--Seizure set aside--Matter remanded for determination of classification of goods--Department to adopt twin tests--Common parlance test and scientific test--Tripura Value Added Tax Act, 2004 (1 of 2005), Sch. II(a), entry 67(i), Sch. II(b), entry 183.--New Medical (Agartala) Pvt. Ltd. v. Superintendent of Taxes (Gauhati) . . . 465

Central sales tax--See Writs under Constitution (P&H) . . . 453

Change of law--Value added tax--Refund--Application for--Limitation--Amendment reducing time-limit for making application for refund from three years to eighteen months--Prospective--Application made within three-year period--To be treated as made within time--Maharashtra Value Added Tax Act, 2002 (9 of 2005), s. 51.--Vaibhav Steel Corporation v. Additional Commissioner of Sales Tax (VAT) (Bom) . . . 460

Check-post--Sales tax--Penalty--All documents produced at time of checking but seal of check-post not available--Seal not mandatory--Penalty not leviable--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(2)(b).--Bhure Khan v. Assistant Commercial Taxes Officer (Raj) . . . 458

Commissioner--See Reassessment (All) . . . 418

Declaration forms--See Writs under Constitution (P&H) . . . 453

Entries in Schedule--Value added tax--Interpretation of taxing statutes--Tests--Goods declared as "H. L. medicines" by dealer--Onus on Department to prove misdeclaration--Department failing to prove goods were "appetite tonic"--Seizure set aside--Matter remanded for determination of classification of goods--Department to adopt twin tests--Common parlance test and scientific test--Tripura Value Added Tax Act, 2004 (1 of 2005), Sch. II(a), entry 67(i), Sch. II(b), entry 183.--New Medical (Agartala) Pvt. Ltd. v. Superintendent of Taxes (Gauhati) . . . 465

Entry tax--Trade tax--Exemption--State Government--Sugar Industry Promotion Policy, 2004--Notification granting exemption from payment of entry tax on non-levy sugar manufactured in new unit--Revocation of policy by Government in 2007--Writ petition by dealer in sugar purchasing sugar from B granted eligibility certificate under Policy--Interim order that no coercive steps would be taken for realization of entry tax subject to final outcome of writ petition filed by B questioning action of authorities seizing sugar of dealers on pretext of liability for entry tax wherein interim order restraining authorities from taking coercive steps for recovery, inter alia, of entry tax passed--Uttar Pradesh Tax on Entry of Goods Act (12 of 2000), s. 4B--Notification No. KA.NI.-2-923/XI-9(47)/04-U. P. Act-12-2000-Order-(27)-2005 dated May 20, 2005--Constitution of India, art. 226.--Tirupati Enterprises v. State of U. P. (All) . . . 439

Exemption--Trade tax--Entry tax--State Government--Sugar Industry Promotion Policy, 2004--Notification granting exemption from payment of entry tax on non-levy sugar manufactured in new unit--Revocation of policy by Government in 2007--Writ petition by dealer in sugar purchasing sugar from B granted eligibility certificate under Policy--Interim order that no coercive steps would be taken for realization of entry tax subject to final outcome of writ petition filed by B questioning action of authorities seizing sugar of dealers on pretext of liability for entry tax wherein interim order restraining authorities from taking coercive steps for recovery, inter alia, of entry tax passed--Uttar Pradesh Tax on Entry of Goods Act (12 of 2000), s. 4B--Notification No. KA.NI.-2-923/XI-9(47)/04-U. P. Act-12-2000-Order-(27)-2005 dated May 20, 2005--Constitution of India, art. 226.--Tirupati Enterprises v. State of U. P. (All) . . . 439

Government--See Entry tax (All) . . . 439

----See Appeal (Guj) . . . 429

----See Input-tax credit (Raj) . . . 449

----See Sales Tax Tribunal (P&H) . . . 436

Input-tax credit--Value added tax--Revision--High Court--Categorical finding of Tax Board that dealer had not violated provisions and input-tax credit rightly allowed--Trade discount--Finding that appellate authority had not properly considered prevailing law--No interference--Rajasthan Value Added Tax Act (4 of 2003), s. 18 (prior to introduction of sub-section (3A)).--Commercial Taxes Officer v. Hinger Traders (Raj) . . . 449

Inter-State sales--See Writs under Constitution (P&H) . . . 453

Interpretation of taxing statutes--See Search and seizure (Gauhati) . . . 465

Jurisdiction--Central sales tax--Writs under Constitution--Inter-State sales--Denial of exemption for sales covered by E-1 and C forms --Not a case of lack of jurisdiction--Dealer relegated to appeal--Central Sales Tax Act (74 of 1956)--Constitution of India, art. 226.--Larsen & Toubro Limited v. State of Punjab (P&H) . . . 453

----Value added tax--Writs under Constitution--Existence of alternative remedy--Assessment of tax and notice of demand in respect of sale of business as going concern--Not a case of lack of jurisdiction--Dealer relegated to remedy of appeal--Punjab Value Added Tax Act (8 of 2005), s. 62.--Amrit Banaspati Company Limited v. State of Punjab (P&H) . . . 451

----See also Sales Tax Tribunal (P&H) . . . 436

Limitation--Value added tax--Appeal to High Court--Powers of court--Condonation of delay--Appeal by Department--Delay of 1205 days--No proper or sufficient explanation for delay--Delay not condoned--Gujarat Value Added Tax Act, 2003 (1 of 2005).--State of Gujarat v. Swet Zink Ltd. (Guj) . . . 429

----Value added tax--Refund--Application for--Change of law--Amendment reducing time-limit for making application for refund from three years to eighteen months--Prospective--Application made within three-year period--To be treated as made within time--Maharashtra Value Added Tax Act, 2002 (9 of 2005), s. 51.--Vaibhav Steel Corporation v. Additional Commissioner of Sales Tax (VAT) (Bom) . . . 460

Packing materials--See Appeal (Guj) . . . 423

Penalty--No suppression of sales--Claim of dealer rejected only on interpretation of provision--No penalty--Tamil Nadu General Sales Tax Act (1 of 1959), s. 3B.--State of Tamil Nadu v. S. S. M. Processing Mills (Mad) . . . 445

----Sales tax--Check-post--All documents produced at time of checking but seal of check-post not available--Seal not mandatory--Penalty not leviable--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(2)(b).--Bhure Khan v. Assistant Commercial Taxes Officer (Raj) . . . 458

----Trade tax--Failure to pay admitted tax within time prescribed--Whether or not purchaser made payment of price of goods purchased to dealer and whether purchaser was Government company or private buyer--Immaterial--On facts, penalty reduced to 15 per cent.--U. P. Trade Tax Act (15 of 1948), s. 15A(1)(a).--Frontier Springs Limited v. Commissioner of Trade Tax (All) . . . 426

----See also Works contract (Mad). . . 443

Pre-deposit--See Appeal(All) . . . 432

Precedent--Sales tax--Appellate Tribunal--Jurisdiction--Supreme Court--Rulings prevail over all other orders--Cannot be ignored merely because Division Bench of High Court may or may not have taken contrary view--Tribunal cannot refuse to consider judgments of Supreme Court holding that High Court must decide whether its opinion subsists--Haryana General Sales Tax Rules, 1975, r. 28A(11)(a)(i).--J. S. Polymers India (P) Ltd. v. State of Haryana (P&H) . . . 436

Reassessment--Trade tax--Approval for--Dealer filing detailed submissions but approval granted mechanically without recording reasons--Order set aside and matter remanded for disposal afresh--U. P. Trade Tax Act (15 of 1948), s. 21(2).--Laxmi Transmissions Private Limited v. State of U. P. (All) . . . 418

Recovery of tax--See Appeal (All) . . . 432

Refund--Value added tax--Application for--Limitation--Change of law--Amendment reducing time-limit for making application for refund from three years to eighteen months--Prospective--Application made within three-year period--To be treated as made within time--Maharashtra Value Added Tax Act, 2002 (9 of 2005), s. 51.--Vaibhav Steel Corporation v. Additional Commissioner of Sales Tax (VAT) (Bom) . . . 460

Revision--Value added tax--Input-tax credit--High Court--Categorical finding of Tax Board that dealer had not violated provisions and input-tax credit rightly allowed--Trade discount--Finding that appellate authority had not properly considered prevailing law--No interference--Rajasthan Value Added Tax Act (4 of 2003), s. 18 (prior to introduction of sub-section (3A)).--Commercial Taxes Officer v. Hinger Traders (Raj) . . . 449

Sale--Sales tax--Liability to tax--Works contract--Chemicals used in dyeing cloth--Taxable--Chemicals used for bleaching--Taxable--Tamil Nadu General Sales Tax Act (1 of 1959), s. 3B.--State of Tamil Nadu v. S. S. M. Processing Mills (Mad) . . . 445

----Sales tax--Works contract--Dyeing contract--Involves sales of goods--Tamil Nadu General Sales Tax Act (1 of 1959), ss. 2(n)(ii), 3B.--State of Tamil Nadu v. Jansons Textile Processors (Mad) . . . 443

Sales Tax Tribunal--Sales tax--Appellate Tribunal--Jurisdiction--Precedent--Supreme Court--Rulings prevail over all other orders--Cannot be ignored merely because Division Bench of High Court may or may not have taken contrary view--Tribunal cannot refuse to consider judgments of Supreme Court holding that High Court must decide whether its opinion subsists--Haryana General Sales Tax Rules, 1975, r. 28A(11)(a)(i).--J. S. Polymers India (P) Ltd. v. State of Haryana (P&H) . . . 436

Search and seizure--Value added tax--Entries in Schedule--Interpretation of taxing statutes--Tests--Goods declared as "H. L. medicines" by dealer--Onus on Department to prove misdeclaration--Department failing to prove goods were "appetite tonic"--Seizure set aside--Matter remanded for determination of classification of goods--Department to adopt twin tests--Common parlance test and scientific test--Tripura Value Added Tax Act, 2004 (1 of 2005), Sch. II(a), entry 67(i), Sch. II(b), entry 183.--New Medical (Agartala) Pvt. Ltd. v. Superintendent of Taxes (Gauhati) . . . 465

Set-off--See Appeal (Guj) . . . 423

Sick industrial company--Trade tax--Appeal--Pre-deposit--Condition precedent for entertainment of appeal--Satisfactory proof of payment of tax due--Mandatory condition--Deferment of tax only by special order of Government--Mere declaration of company as sick not sufficient--Conditions for protection under 1985 Act not satisfied--Dealer not entitled to entertainment of appeal without compliance with pre-condition--U. P. Trade Tax Act (15 of 1948), ss. 9(1B), 38--Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986), s. 22.--Triveni Structurals Ltd. v. Commissioner of Trade Tax (All) . . . 432

Stay--Value added tax--Value Added Tax Tribunal--Application for stay further operation of Tribunal's order setting aside levy of tax on performance/inspection charges and allowing set-off in respect of packing materials during pendency of main appeal--Rejection of application--Liberty granted for reassessment for subsequent assessment years subject to final outcome of main appeal--Gujarat Value Added Tax Act, 2003 (1 of 2005). --State of Gujarat v. Dresser Rand India Pvt. Ltd. (Guj) . . . 423

Supreme Court--See Sales Tax Tribunal (P&H) . . . 436

Turnover--See Appeal (Guj) . . . 423

Value added tax--See Appeal (Guj) . . . 423

----See Input-tax credit (Raj) . . . 449

----See Refund (Bom) . . . 460

----See Search and seizure(Gauhati). . .465

----See Writs under Constitution (P&H) . . . 451

Value Added Tax Tribunal--See Appeal (Guj) . . . 423

Works contract--Sales tax--Dyeing contract--Involves sales of goods--Tamil Nadu General Sales Tax Act (1 of 1959), ss. 2(n)(ii), 3B.--State of Tamil Nadu v. Jansons Textile Processors (Mad) . . . 443

----Sales tax--Liability to tax--Chemicals used in dyeing cloth--Taxable--Chemicals used for bleaching--Taxable--Tamil Nadu General Sales Tax Act (1 of 1959), s. 3B.--State of Tamil Nadu v. S. S. M. Processing Mills (Mad) . . . 445

Writs under Constitution--Central sales tax--Inter-State sales--Denial of exemption for sales covered by E-1 and C forms --Not a case of lack of jurisdiction--Dealer relegated to appeal--Central Sales Tax Act (74 of 1956)--Constitution of India, art. 226. --Larsen & Toubro Limited v. State of Punjab (P&H) . . . 453

----Value added tax--Existence of alternative remedy--Assessment of tax and notice of demand in respect of sale of business as going concern--Not a case of lack of jurisdiction--Dealer relegated to remedy of appeal--Punjab Value Added Tax Act (8 of 2005), s. 62.--Amrit Banaspati Company Limited v. State of Punjab (P&H) . . . 451

----See also Entry tax(All) . . . 439

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