VAT AND SERVICE TAX CASES (VST)

ONLINE EDITION

VOL. 4 : ISSUE DATED 27-3-2015

HIGH COURTS


Appeal--Service tax--Appeal to Appellate Tribunal--Pre-deposit--Assessee a sub-contractor--Claim that service tax liability discharged by principal contractor--Question to be decided in appeal--Plea of undue hardship--High Court--Sum to be deposited reduced to fifty per cent. of sum directed by Tribunal--Central Excise Act (1 of 1944), s. 35F--Finance Act (32 of 1994), s. 65(105)(zzv).--Mohabir Enterprises v. Commissioner of Service Tax (Mad) . . . 293

Assessment--See Commissioner (Karn) . . . 311

Check-post--Sales tax--Penalty--Evasion of tax--All documents found with driver at time of checking--Number of vehicle different and weight of goods less than shown in documents--Explanation that vehicle on which goods originally loaded broke down and another vehicle with lower capacity was engaged to transport goods--Finding that explanation reasonable and plausible--Cancellation of penalty proper--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5).--Assistant Commercial Taxes Officer v. Capital Ispat Ltd. (Raj) . . . 302

Commissioner--Value added tax--Returns--Power of Commissioner to notify class of dealers by whom specified details to be furnished--Administrative act--Not piece of delegated legislation or a rule--Not an unreasonable restriction on dealer's right to do business--Requirement of engaging operators for uploading details not hardship--Identification of specified class of dealers in discretion of Commissioner not to be adjudicated by court--Notification not an amendment to rule 38 nor exercise of power under section 88 of Act--Definition of "dealer" cannot restrict power of Commissioner to specify class of dealers in respect of whom particulars to be furnished--Details to be made use of exclusively by Department for purpose of assessment--Notification that dealers whose total turnover was Rs. 50 lakhs and above during tax periods of year ending March 31, 2014 or whose cumulative total turnover was Rs. 50 lakhs and above in tax periods of any subsequent year, to furnish certain details electronically through internet on or before 20th of succeeding month--Valid--Karnataka Value Added Tax Act, 2003 (32 of 2004), ss. 2(12), 35(1), 88--Karnataka Value Added Tax Rules, 2005, r. 38.--Harsha Enterprises v. State of Karnataka (Karn) . . . 311

Delegated legislation--Value added tax--Commissioner--Returns--Power of Commissioner to notify class of dealers by whom specified details to be furnished--Administrative act--Not piece of delegated legislation or a rule--Not an unreasonable restriction on dealer's right to do business--Requirement of engaging operators for uploading details not hardship--Identification of specified class of dealers in discretion of Commissioner not to be adjudicated by court--Notification not an amendment to rule 38 nor exercise of power under section 88 of Act--Definition of "dealer" cannot restrict power of Commissioner to specify class of dealers in respect of whom particulars to be furnished--Details to be made use of exclusively by Department for purpose of assessment--Notification that dealers whose total turnover was Rs. 50 lakhs and above during tax periods of year ending March 31, 2014 or whose cumulative total turnover was Rs. 50 lakhs and above in tax periods of any subsequent year, to furnish certain details electronically through internet on or before 20th of succeeding month--Valid--Karnataka Value Added Tax Act, 2003 (32 of 2004), ss. 2(12), 35(1), 88--Karnataka Value Added Tax Rules, 2005, r. 38.--Harsha Enterprises v. State of Karnataka (Karn) . . . 311

Escaped assessment--Value added tax--Natural justice--Materials intended to be utilized by assessing authority against assessee to be disclosed to dealer and his explanation to be considered during assessment--Orissa Value Added Tax Act, 2004 (4 of 2005), s. 43.--Deo Ispat Alloys Limited v. Commissioner of Commercial Taxes (Orissa) . . . 325

Evasion of tax--See Penalty (Raj) . . . 302

----See Survey (Raj) . . . 308

Goods--Sales tax--Penalty--Sale--REP licences--Assessment year 1993-94--Sales turnover of REP licence available in account books of assessee but not reported in monthly returns --Penalty levied by assessing authority deleted by first appellate authority--Tribunal confirming order of first appellate authority pointing out that question as to assessability of REP licences decided by Supreme Court much after order of first appellate authority--Justified--Levy of penalty not sustainable where bona fides of assessee not considered--Tamil Nadu General Sales Tax Act (1 of 1959), s. 12(3)(b).--State of Tamil Nadu v. Haseena Traders (Mad) . . . 306

Jurisdiction--See Commissioner (Karn) . . . 311

Mens rea--See Penalty (Mad) . . . 306

Natural justice--Value added tax--Escaped assessment--Materials intended to be utilized by assessing authority against assessee to be disclosed to dealer and his explanation to be considered during assessment--Orissa Value Added Tax Act, 2004 (4 of 2005), s. 43.--Deo Ispat Alloys Limited v. Commissioner of Commercial Taxes (Orissa) . . . 325

Penalty--Sales tax--Evasion of tax--Check-post--All documents found with driver at time of checking--Number of vehicle different and weight of goods less than shown in documents--Explanation that vehicle on which goods originally loaded broke down and another vehicle with lower capacity was engaged to transport goods--Finding that explanation reasonable and plausible--Cancellation of penalty proper--Rajasthan Sales Tax Act, 1994 (22 of 1995), s. 78(5).--Assistant Commercial Taxes Officer v. Capital Ispat Ltd. (Raj) . . . 302

----Sales tax--Sale--Goods--REP licences--Assessment year 1993-94--Sales turnover of REP licence available in account books of assessee but not reported in monthly returns --Penalty levied by assessing authority deleted by first appellate authority--Tribunal confirming order of first appellate authority pointing out that question as to assessability of REP licences decided by Supreme Court much after order of first appellate authority--Justified--Levy of penalty not sustainable where bona fides of assessee not considered--Tamil Nadu General Sales Tax Act (1 of 1959), s. 12(3)(b).--State of Tamil Nadu v. Haseena Traders (Mad) . . . 306

----Sales tax--Evasion of tax--Survey--Unaccounted stocks found at survey--Stock not actually weighed and no indication that two independent witnesses called during survey operations--All purchases made through form ST-17--Levy of penalty on basis of survey cancelled on facts--No interference--Rajasthan Value Added Tax Act (4 of 2003), s. 77(8).--Commercial Taxes Officer v. Akshay Marble and Granites (Raj) . . . 308

Pre-deposit--See Service tax (Mad). . . 293

Return--See Commissioner (Karn). . . 311

Sale--Sales tax--Works contract--Printer--Assessment year 1988-89--Labels printed and supplied by dealer as per requirements of customers--Not a sale--Is works contract--Tamil Nadu General Sales Tax Act (1 of 1959).--State of Tamil Nadu v. Pandian Offset Printers (Mad) . . . 300

----See also Penalty (Mad) . . . 306

Service tax--Appeal--Appeal to Appellate Tribunal--Pre-deposit--Assessee a sub-contractor--Claim that service tax liability discharged by principal contractor--Question to be decided in appeal--Plea of undue hardship--High Court--Sum to be deposited reduced to fifty per cent. of sum directed by Tribunal--Central Excise Act (1 of 1944), s. 35F--Finance Act (32 of 1994), s. 65(105)(zzv).--Mohabir Enterprises v. Commissioner of Service Tax (Mad) . . . 293

Survey--Sales tax--Penalty--Evasion of tax--Unaccounted stocks found at survey--Stock not actually weighed and no indication that two independent witnesses called during survey operations--All purchases made through form ST-17--Levy of penalty on basis of survey cancelled on facts--No interference--Rajasthan Value Added Tax Act (4 of 2003), s. 77(8).--Commercial Taxes Officer v. Akshay Marble and Granites (Raj) . . . 308

Value added tax--See Natural justice (Orissa) . . . 325

Words and phrases--Definition of "dealer" cannot restrict power of Commissioner to specify class of dealers in respect of whom particulars to be furnished.--Harsha Enterprises v. State of Karnataka (Karn) . . . 311

Works contract--Sales tax--Sale--Printer--Assessment year 1988-89--Labels printed and supplied by dealer as per requirements of customers--Not a sale--Is works contract--Tamil Nadu General Sales Tax Act (1 of 1959).--State of Tamil Nadu v. Pandian Offset Printers (Mad) . . . 300


PRINT EDITION

VOLUME 79 : PART 2 : ISSUE DATED 27-3-2015


HIGH COURTS


Accessories--Entries in Schedule--Accessories of mobile phones--Not "information technology products"--Fall under entry dealing with mobile phones--Tamil Nadu Value Added Tax Act (32 of 2006), s. 3(2) ; Sch. I, Part B, entry 68, Part C, entry 13A(f).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV(Mad) . . . 137

Assessment--Best judgment assessment--Revision of assessment--Not a best judgment assessment--Tamil Nadu Value Added Tax Act (32 of 2006), ss. 22(4), 27(1)(a).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

Best judgment assessment--Revision of assessment--Not a best judgment assessment--Tamil Nadu Value Added Tax Act (32 of 2006), ss. 22(4), 27(1)(a).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

----Suppression of sales--Claim of dealer that sales effected were export sales not taxable--Failure by assessing officer to advert to effect of export documents produced by dealer--That dealer did not disclose details to audit team during inspection not reason to confirm proposal in pre-assessment notice--Tamil Nadu Value Added Tax Act (32 of 2006), s. 27(1)(a).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

----Suppression of turnover--Estimate--Equal addition--Failure by dealer to disclose sale of scrap in returns--Dealer detecting mistake and paying tax and interest prior to conclusion of audit--No justification for equal addition.--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

Business--See Turnover (Delhi) . . . 119

Capital asset--See Turnover (Delhi) . . . 119

Capital goods--See Turnover (Delhi) . . . 119

Central sales tax--Inter-State sale--Sale occasioning movement of goods from one State to another--General principles--Central Sales Tax Act (74 of 1956), s. 3(a).--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT)(T and AP) . . . 179

----Jurisdiction--Arrangement enabling rice millers in Yanam in Pondicherry to procure paddy from agriculturists in Andhra Pradesh, transport it to Yanam for milling in Yanam and transport prescribed percentage of levy rice from Yanam for sale and delivery to Food Corporation of India at Kakinada--Intention of parties for property to pass at time of delivery at Kakinada--That appropriation took place at Kakinada after weight and quality checked of no consequence--Sale in course of inter-State trade--Pondicherry alone having jurisdiction to assess dealers to Central sales tax not Andhra Pradesh--That rice millers collected value added tax component from Food Corporation of India with procurement price and retained it not to confer jurisdiction on authority in Andhra Pradesh to levy tax--Food Corporation of India not precluded from instituting appropriate proceedings to recover excess payment--Central Sales Tax Act (74 of 1956), s. 3(a)--Andhra Pradesh Value Added Tax Act (5 of 2005)--Constitution of India, arts. 226, 265, 269, 286.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

Entries in Schedule--Accessories of mobile phones--Not "information technology products"--Fall under entry dealing with mobile phones--Tamil Nadu Value Added Tax Act (32 of 2006), s. 3(2) ; Sch. I, Part B, entry 68, Part C, entry 13A(f).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

Input-tax credit--See Turnover (Delhi) . . . 119

Inter-State sale--Central sales tax--Jurisdiction--Arrangement enabling rice millers in Yanam in Pondicherry to procure paddy from agriculturists in Andhra Pradesh, transport it to Yanam for milling in Yanam and transport prescribed percentage of levy rice from Yanam for sale and delivery to Food Corporation of India at Kakinada--Intention of parties for property to pass at time of delivery at Kakinada--That appropriation took place at Kakinada after weight and quality checked of no consequence--Sale in course of inter-State trade--Pondicherry alone having jurisdiction to assess dealers to Central sales tax not Andhra Pradesh--That rice millers collected value added tax component from Food Corporation of India with procurement price and retained it not to confer jurisdiction on authority in Andhra Pradesh to levy tax--Food Corporation of India not precluded from instituting appropriate proceedings to recover excess payment--Central Sales Tax Act (74 of 1956), s. 3(a)--Andhra Pradesh Value Added Tax Act (5 of 2005)--Constitution of India, arts. 226, 265, 269, 286.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

----Sale occasioning movement of goods from one State to another--General principles--Central Sales Tax Act (74 of 1956), s. 3(a).--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

Jurisdiction--See Central sales tax (T and AP) . . . 179

--See Writs under Constitution (Mad) . . . 137

Legislative powers--State Legislature--Power to make Orders for territory of State--Orders cannot apply to territories outside State--Essential Commodities Act (10 of 1955), s. 3--Andhra Pradesh Paddy (Restriction on Movement) Order, 1987--Andhra Pradesh Rice Procurement (Levy) Order, 1984.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

Natural justice--See Writs under Constitution (Mad) . . . 137

Penalty--Wilful non-disclosure of assessable turnover--Condition precedent for levy of penalty--Finding that dealer wilfully negligent or deliberately acted with mala fide intention not to comply with statutory provisions--No independent reasons assigned for imposition of penalty on entire demand--Explanation of dealer that non-disclosure an inadvertent clerical mistake and sales disclosed and full tax and interest paid prior to completion of audit inspection--No justification to impose penalty--Tamil Nadu Value Added Tax Act (32 of 2006), s. 27(3).--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

Sale--Value added tax--Taxable turnover--Exclusions--Conditions precedent for claiming--Sale of capital goods used by dealer for making sale of taxable goods for which dealer has not taken input-tax credit--Business--Capital goods--Capital asset--Sale price--Definitions--Dealer in various commodities purchasing motor vehicles for use in business and not taking input-tax credit--Sale price of motor vehicles not includible in taxable turnover--Delhi Value Added Tax Act, 2004 (3 of 2005), ss. 2(d), (f), (t), (zc), (zd), 5, 6(3), 9.--Anand Decors v. Commissioner of Trade and Taxes (Delhi) . . . 119

Sale price--See Turnover (Delhi) . . . 119

Sales return--Disallowance without assigning reasons--Order set aside and matter remanded for decision afresh.--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

State Legislature--Legislative powers--Power to make Orders for territory of State--Orders cannot apply to territories outside State--Essential Commodities Act (10 of 1955), s. 3--Andhra Pradesh Paddy (Restriction on Movement) Order, 1987--Andhra Pradesh Rice Procurement (Levy) Order, 1984.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

Transfer of business--Turnover--Inclusions--Exception--Amount realised by dealer by way of sale of business as a whole--No material with assessing officer to state that only part of plant and machinery and stock inventory sold--Whether network division was separate business, distinct entity and was transferred lock stock and barrel to be addressed and a fact-finding to be recorded--Effect of assessment under Income-tax Act with respect to "slump sale" relevant--Matter remanded--Tamil Nadu Value Added Tax Act (32 of 2006), s. 2(41), Expln. III.--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

Turnover--Inclusions--Exception--Amount realised by dealer by way of sale of business as a whole--No material with assessing officer to state that only part of plant and machinery and stock inventory sold--Whether network division was separate business, distinct entity and was transferred lock stock and barrel to be addressed and a fact-finding to be recorded--Effect of assessment under Income-tax Act with respect to "slump sale" relevant--Matter remanded--Tamil Nadu Value Added Tax Act (32 of 2006), s. 2(41), Expln. III.--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137

----Value added tax--Taxable turnover--Exclusions--Conditions precedent for claiming--Sale of capital goods used by dealer for making sale of taxable goods for which dealer has not taken input-tax credit--Business--Capital goods--Capital asset--Sale price--Sale--Definitions--Dealer in various commodities purchasing motor vehicles for use in business and not taking input-tax credit--Sale price of motor vehicles not includible in taxable turnover--Delhi Value Added Tax Act, 2004 (3 of 2005), ss. 2(d), (f), (t), (zc), (zd), 5, 6(3), 9.--Anand Decors v. Commissioner of Trade and Taxes (Delhi) . . . 119

Value added tax--See Turnover (Delhi) . . . 119

Words and phrases--Business--Capital goods--Capital asset--Sale price--Sale--Definitions.--Anand Decors v. Commissioner of Trade and Taxes (Delhi) . . . 119

----"Material fact"--Definition.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

Writs under Constitution--Existence of alternative remedy--Not a bar on entertainment of writ petition--Petition pending for two years--Questions raised on basis of undisputed facts on record--Petition not to be dismissed for failure by dealer to avail of statutory remedy--Discretion of court--Suppression of material fact--What is material fact--Constitution of India, art. 226--Andhra Pradesh Value Added Tax Act (5 of 2005), s. 31.--Sri Bhargavi Agro Tech v. Assistant Commissioner (CT) (T and AP) . . . 179

----Existence of alternative remedy--Not bar where question to be decided relates to jurisdiction and manner of exercise of power by assessing officer, correctness and propriety of decision-making process and whether principles of natural justice were followed--Constitution of India, art. 226.--Nokia India Private Ltd. v. Deputy Commissioner (CT)-IV (Mad) . . . 137
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