This is a compilation of some important judgments taken from 45 VST to 62 VST with a single
judgement from 66 VST. It is hoped that judgements would be useful for all.
Prepared by
The office of OSD (VP)
Department of Sales Tax,
Government of Maharashtra, Mumbai.
Disclaimer:
 This is only a compilation and does not express any views of the author of the document.
 The compilation refers to the gist. Readers may please refer to the original judgement.
 Although due care has been taken in preparing the gist and compiling the same, the compiler shall not be responsible to any
person for any action taken or not taken on the basis of this publication , whether directly or indirectly, on account of any
inadvertent error or omission.
o
Sr.No
Citation
Case Name
1
45 VST
111 (All)
2
45 VST
255
(Karn)
Decision
Swadeshi Udyog
V. Trade Tax
Officer, Kanpur
and another
Assessing authority has passed original assessment
order for 1996-97. On the ground that in the
assessment year 1997-98 it was found that certain
purchases were not verifiable and, therefore, inference
has been drawn that the purchases of mustard oil for
the year under consideration were also not verifiable
and accordingly the notice for reassessment was issued.
On writ petition,
Held, allowing the petition, each year is an
independent year for the purpose of
assessment. Initiation of assessment
proceeding on the basis of material for
another year improper.
Assessment
Dishnet Wireless
Limited V. Asstt.
Commr. Of
Commercial
Taxes, Bangalore
and others
The petitioner, an internet service operator, extends
services of broadband, web hosting, etc, and in order to
access the services, a CD-Rom is provided to its
customers from whom service charges are recovered.
The assessment order was passed. On remand
reassessment order was passed. The assessing
authority rejected the contention of the petitioner that
the internet services did not involve CD-ROM and
services were subjected to service tax and passed the
orders of assessments. On writ petitions,
Held, allowing the petitions, the orders
impugned are not speaking orders. They
showed non-application of mind, as the
assessing officer without adverting to the
contentions advanced by the petitioner in
the objections and recording findings over
the same, held the objections untenable by
placing reliance upon the reported opinion
of this court in Bharti Airtel Limited v.
State of Karnataka [2009] 22 VST 465,
which had been set aside by Hon. Supreme
Court
Assessment
The petitioner had manufacturing unit at Hazira in
Gujarat. He entered into four contracts with ONGC for
indivisible turnkey projects consisting both of supply of
goods and rendition of service including labour. To
execute such turnkey contracts, the petitioners had
arranged for supply of certain goods from its Hazira
plant at Surat to ONGC at Bombay High, which is
situated around 180 kms off the baseline of coast of
Held, allowing the petition, when the sale
of goods took place at Bombay High, for
which the goods moved from Hazira to
Bombay High, such movement does not get
covered within the expression "movement
of goods from one State to another"
contained in clause (a) of section 3 of the
CST Act. It is clear that the goods had not
High seas
sales
.
3
45 VST
361 (Guj)
Classificati
on
Issue
Larsen And
Toubro Ltd. And
Another V. Union
of India and
Others.
4
45 VST
407
(Bom)
Vithal Sugar
Manufacturing
Ltd. V. State of
Maharashtra and
Others.
India and forms part of "exclusive economic zone". Thus
title of goods supplied by the petitioner to ONGC, during
the course of and in furtherance of execution of the
turnkey project, passed at Bombay High. The assessing
authority of the State of Gujarat opined that there was
no export of goods as claimed by petitioner company
and that such sale would be covered under the CST Act
as interstate sale.
been moved from one State to another
since Bombay High does not form part of
any State of Union of India.
The petitioner submitted an application on 29.7.2010
for exemption from the payment of purchase tax under
section 12B of the Maharashtra Purchase Tax on
Sugarcane Act, 1962. It was rejected. The petitioner
called into question an order passed by the State
Government in the Finance Department, rejecting the
application made by the petitioner for exemption under
section 12B of the Maharashtra Purchase Tax on
Sugarcane Act, 1962.
Section 12B is an enabling power. The
State Government is empowered to remit
the whole or any part of the tax payable
under the Act. The State Government is
empowered to do so in order to encourage
the establishment of new factories or units
or for the purpose of overcoming any
difficulties in respect of any factories or
units in the initial period of manufacture or
production of sugar. While remitting the
tax, the State Government may do so for
such period or periods and subject to such
conditions as may be specified. The levy of
tax is a sovereign function. The power to
remit the payment of tax is an incidence of
the sovereign power of the State. No
assessee has a vested right to claim a
remission from the payment of tax. An
assessee may in a given situation, be
aggrieved if a remission has been granted
to one but not to any other assessee
similarly situated. However, in this case a
challenge on the ground of discrimination
has not been set up with any particularity.
In the application for remission that was
submitted by the petitioner on July 28,
Remission
2010, it was only stated that the unit is a
new unit and facing financial difficulties.
No details whatsoever were furnished to
the State Government. The State
Government was in those circumstances
justified in rejecting the request for
remission. The exercise of the power by
State Government cannot hence be faulted.
5
45 VST
544 (Ker)
Bharat Petroleum
Corporation Ltd.
V. State of Kerala.
The assessing authority found that the C form filed by
petitioner to be defective and disallowed the claim of
concessional rate of tax. The first appeal authority
confirmed the disallowance. The Tribunal confirmed
the order. The main grievance of the petitioner is that
all the mistakes and corrections pointed out by the
officer that was confirmed in two level appeals have
been rectified through confirmation letters issued by
the purchasers.
Held, dismissing the petition, that checking
of few C forms showed that advance blank
C form is issued by the buyer which is filled
up by the seller which is a procedure
impermissible under the provisions of the
CST Act because buyer should certify
correctness of the entries in the C form.
Supplementing and substituting entries in
C forms produced by the dealer by
producing confirmation letters from the
buyers were not permissible and therefore
authorities including the Tribunal rightly
rejected the petitioner' claim.
Declaration
s
6
46 VST 1
(Bom)
Addl. CST, VAT III,
Mumbai. V. Ankit
International.
The respondent filed an audit report under section 61
in the prescribed form 704 beyond the period
prescribed. DC levied the penalty. The Tribunal in
second appeal reduced the penalty by holding that the
delay on the part of the respondent was not deliberate.
On a appeal contending that the under section 61(2)
the Commissioner has a discretion whether or not to
impose a penalty in the first place but once he comes to
conclusion that a penalty is liable to be imposed, he has
no further discretion in regard to the extent of the
penalty.
Held, discretion to impose penalty extends
also to quantum of penalty to be imposed.
Penalty
7
46 VST 35
(Karn)
Sky Gourmet
Catering Pvt. Ltd.
V. Asstt. Commr.
Of Commercial
Taxes, Bangalore
and Others.
The applicant was engaged in the business of catering
services which included preparation of food. Under the
agreement entered with airline the assessee has agreed
to render supply services, like loading and unloading
services, transportation services, high lifting services
and allied services under separate heads. The
consideration paid for towards cost of the food and
other services like handling, loading, etc., are separately
charged and the bills are also raised separately as
agreed to between the parties. The assessee is paying
service tax on the gross amounts received by it towards
handling charges, transportation, lifting, loading and
unloading, etc. A notice was issued on the grounds that
the assessee has not included the amounts received
towards handling charges, transportation, etc., in the
returns filed by the assessee. Overruling all the
objections, the authorities have passed a consolidated
order.
Held, allowing the appeals, (i) that a
contract for outdoor catering is a
composite contract which fell under sub
clause (f) of clause (29A) of article 366 of
the Constitution and service tax was
payable on service aspect and sales tax was
payable on deemed sale aspect. It is not an
indivisible contract. Therefore the order of
reassessment passed by the assessing
authority was set aside.
Sale price
8
46 VST 79
(MP)
Cadila Health
Care Ltd. V.
Additional
Commr. of
Commercial
Taxes and Others.
Whether GRD powder and GRD bix would fall within the
expression "non-alcoholic drink and beverage"
From perusal of the language employed by
the Legislature in entry 20(ii) of Part IV of
the 1994 Act, the intention of the
Legislature is clear that an item in order to
fall under the aforesaid entry has to be in
the liquid form which is manifest from the
words "beverages including syrups,
cordials, distilled juice, ark and essences
when sold in sealed or capsuled or cork
bottles or jars". The expression "beverage"
as is commonly understood means any
liquid other than water, which may be
consumed neat or after dilution. Therefore
drugs and medicines and food supplements
carrying brand names GRD powder and
GRD bix which are admittedly not in liquid
form cannot be said to fall within the
relevant entries, namely, entry 20(ii) of
Part IV of Schedule II of the 1994 Act and
entry 14 of Schedule II of the Entry Tax Act
for the period from 1.4.1997 to 31.3.1998.
Schedule
entry
9
46 VST
179 (AP)
Bharat
Electronics
Limited. V. Dy.
Commr. (CT), no.
II Div, Vijaywada
and Another
The petitioner, has several units spread all over the
country. He manufactures night vision devices which
are transferred to the other units of the petitioner
outside the State to be incorporated in the equipment
manufactured at the other units, and are eventually sold
therefrom to the end customers; The Dy. Commr.
rejected stock transferred claim.
Held, the transfer of goods by the
Machilipatnam unit, to other units of the
petitioner - company located outside the
State, fall within the ambit of section 6A(1)
of the CST Act,
Branch
transfer
10
46 VST
289
(Karn)
Desai Brothers
Ltd. V. Additional
Commr. of
Commercial
Taxes Zone I,
Bangalore.
The assessee is a dealer in garlic and ginger paste and
paying tax at four per cent under entry dealing with
"fruits and vegetables". Assessing authority passed
orders levying the tax at 12.5 per cent on the ground
that garlic paste and ginger paste are masala.
Held, allowing the petition that the paste
that is referred to in entry Sch-III-3 is to be
read in conjunction with the other items
including pickles, even though, the said
entry does not deal with ginger or garlic
paste, etc. Item no 27 of the Sch-I-27 deals
with ginger and garlic. However, the paste
is not included. Ginger and garlic paste
come within the definition of "vegetables".
Ginger or garlic paste in view of its nonmentioning in any of the schedules, would
have to be construed into one of the closest
proximate entry No. 3 of the Third
Schedule which includes the words fruits
and vegetables, etc. They are not to be read
as masala product and taxed at 12.5%.
Schedule
entry
11
46 VST
359
(Mad)
Silver Spring
Spinner (India) V.
State of Tamil
Nadu and
Another.
For the year 99-2000 dealer was assessed on 12.11.04.
On 22.4.2005 he was sent notice for reassessment. The
contention of the petitioner is that the reassessment
notice therefore, was barred by limitation, having been
issued on April 22, 2005, whereas the period of five
years for assessment year 1999-2000 expired on March
31, 2005. the section was amended wef 1.7.2002
providing limitation for assessment of five years from
date of assessment as against five years from end of
year to which assessment related, which is not
retrospective.
Held, amendment made before end of the
expiry of unamended provision applies.
Limitation
12
46 VST
417 (HP)
VRV Foods
Limited. V. State
of H.P. and
The petitioner engaged in the manufacture of liquor,
was registered under the benefit of deferment of tax
Scheme. As per this scheme, eligible industrial units
Held, dismissing petition that doctrine of
promissory estoppel does not mean that
the State cannot correct legitimate
Promissory
estoppel
Others.
other than those specified in the negative list were
entitled to the benefit of deferment of payment of the
tax. However in 2009, benefit of such Scheme was
withdrawn. The petitioner filed a writ petition and
contended that once company was given benefit of
deferment scheme, the State was estopped from
withdrawing this benefit from the petitioner. On the
other hand the State submitted that liquor was left out
of the original negative list by inadvertence and that it
was subsequently introduced therein specifically
providing that the amendment would be retrospective
in in operation.
mistakes or even withdraw a promise
which is against the established public
policy.
13
46 VST
453
(Mad)
Venkateswara
Industries. V.
State of Tamil
Nadu.
The petitioner is engaged in the manufacture of spares
and accessories and tools for tractors, in particular as
per the specifications given by the major tractor
manufacturers of the various spares and tools supplied
by the petitioner. "Grease gun" is one such item was
specifically designed by M/s. TAFE (customer), The
"grease gun" manufactured and supplied by the
petitioner to M/s. TAFE, cannot be used by any other
manufacturer of tractors. The petitioner claimed that
the sale of "grease gun" to M/s. TAFE, would attract the
levy of four per cent tax as the said item falls under
tools/accessories. According to the assessing officer,
“grease gun" were not exclusive spare parts for tractors
and can be used for other tractors also, it will fall under
the residuary clause.
Held, allowing the petition by virtue of the
nature of its usage "grease gun" can be
used as a device for application of grease
into the bearings and other parts of the
vehicle, namely, the tractor manufactured
by M/s. TAFE. The further fact that the
manufacture of such "grease gun" by the
petitioner is according to the specifications
of M/s. TAFE, and that it cannot be freely
used by the other brand of tractors is one
other relevant factor to support the stand
of the petitioner that it is a part of an
implement of the tractor manufactured by
M/s. TAFE.
Schedule
entry
14
46 VST
470(Mad)
State of Tamil
Nadu V. Garware
Whether custom duty drawback on export of goods
form part of sale price.
Held, on revision petition, when the receipt
of duty drawback has nothing to do with
the sale between the parties and has no
Sale price
relevance to the sale transaction at the
time of or before the delivery of the goods,
the duty drawback can not be treated as
forming part of turnover.
Wall Ropes
15
46 VST
512
(Mad)
Tools Machinery
And Products V.
State of Tamil
Nadu.
The petitioner is a dealer in motor bus accessories. He
purchased the motor bus accessories such as glass and
resold the goods inside the State at eight per cent under
entry for auto parts and accessories. The assessing
officer has levied tax at 12 per cent. as glassware
Held, allowing the appeal, in this case, the
dealer purchased automobile glass and the
same was sold to only motor buses
operator. Therefore, the automobile
glasses shall be subjected to tax only at
eight per cent under entry 43 of Part D of
the First Schedule.
Schedule
entry
16
46 VST
549
(P&H)
State of Punjab
V. Anapurna
Impex Pvt. Ltd.
For the assessment year 2003-04 the assessment in
respect of the assessee was framed on 15.4.2008.
Though extension of time for framing the assessment
was granted by the Commr in exercise of power u/s
11(10) of the Act,, it was after the expiry of the
statutory period prescribed u/s 11, i.e. three years from
thelast date for filing the return. On appeal the Tribunal
set aside the assessment as time-barred. On appeal :
Held, dismissing the appeal, the power of
Commissioner to extend time for
completing assessment to be exercised
before assessment becomes time barred.
The high Court followed the previous High
Court judgment in Shreyans Industries
Limited (18 VST 493). It was held that,
deferment of assessment has the effect of
enlarging the period of limitation which
did not expire by the time the deferment
order is contemplated to be passed. When
once the period of limitation expires, the
immunity against being subject to
assessment sets in and the right to make
assessment gets extinguished. Resort to
deferment provisions does not retrieve the
situation. There is no question of deferring
assessment which had already become
time-barred.
Therefore
the
order
Limitation
extending time for completing the
assessment for the year 2000-01. passed
on 17.8.2007, i.e. beyond three years from
the last date prescribed for furnishing the
last return in respect of that period as
prescribed under section 11(3) of the Act
was liable to be set aside.
17
47 VST 1
(CSTAA)
Hindustan Zinc
Limited V. State
of Andhra
Pradesh and
Others.
The appellant is having stock points at Jamshedpur and
Kolkota. IISCO and TISCO placed purchased orders on
appellant for monthly requirements. The appellant
supplied zinc to these companies from its Kolkota stock
point. The assessing officer found that the sales
involved were sales in the course of inter-State trade
and assessed the appellant's t/o u/s 3 and 6 of CST Act,
rejecting the contention that it was not aware of the
orders of purchased secured by branch office at Kolkota
and the movement of the goods was not occasioned by
the orders of the purchase on branch by IISCO and
TISCO, but that the goods were transferred to the
branch at Calcutta by way of stock transfer and that the
sales were effected in West Bengal from Calcutta.
Held, transaction on facts held inter-state
sale and not stock transfer as orders were
placed by IISCO and TISCO of specific
quantity of zinc of specified purity in
specified monthly quantity. Although the
order placed and the supplies did not
match it would not favour the case of
appellant. Similarly the fact that in some
month more quantities were delivered
would not change the case.
Branch
Transfer
18
47 VST 66
(All)
Indian Oil
Corporation Ltd.
V. CCT, U.P.,
Lucknow.
The petitioner had its refinery unit at Mathura wherein
it manufactures petroleum products. The assessing
authority found that the dealer had not included the
amount of the excise duty in the sales price of the
petroleum products which had been paid by purchaser.
The assessing authority has rejected the books of
account and the enhanced turnover adding excise duty
paid by the purchaser outside the UP.
Held, that the duty is payable at the point
of removal. No goods can be removed from
the factory or the warehouse without the
payment of duty. Therefore, the initial
liability to pay the Central excise duty was
on the applicant while removing the goods
from its factory or its warehouse. However,
in case if the permission has been granted
to remove the goods from the factory or
Sale price
warehouse to the another licensed
warehouse
belonging to some other
person, without payment of duty, the duty
is payable on the clearance of goods from
such warehouse. In such circumstances the
payment of excise duty has only been
deferred or extended from the stage of
removal of goods from the factory or the
warehouse of the applicant to the
warehouse of the purchaser, but the
liability to pay the excise duty, which is
chargeable and payable under the Act, by
the manufacturer does not cease. The
incidence of excise duty is directly
relatable to manufacture but its collection
can be deferred to later stage as a measure
of convenience or expediency. The position
is not different when under a prior
agreement, the legal liability of the
manufacturer-dealer for payment of excise
duty is satisfied by the purchaser by direct
payment to the excise authorities or to the
State exchequer. The Central excise duty
paid by the purchaser was liable to be
included in the sale price for the purpose of
levy of tax.
19
47 VST
207
(Karn)
O.P. Developers.
V. State of
Karnataka and
Others.
During the pendency of the dealer's before the Tribunal
against the order of JC (Appeal) partly allowing the
appeals filed by the dealer against best judgment
assessment order and levying penalty, the Additional
Held, dismissing the petition, No revisional
jurisdiction is to be exercised in respect of
the matter which is the subject-matter of
appeal. However, there is no prohibition in
Revision
Commissioner in exercise of his revisional power under
section 22A(1) of the Act set aside the portion of the
appellate authority which had granted the benefit to the
dealer directed the assessing authority to re-do the
assessment. On appeal :
law for the revisional authority to exercise
the revisional jurisdiction in respect of the
matter which is not the subject-matter of
appeal. Merely because appeal is pending
his power is not denuded.
20
47 VST
343
(Delhi)
Giesccke &
Debrient I.P. Ltd.
V. Commissioner
of Sales Tax
(Delhi).
The appellant imported bank note processing system
BPS. under bill of entry which described it as an
importer and M/s. Zion Express Cargo Private Ltd., as
the cargo agent. On the basis that this import was back
to back import in view of the order placed by Canara
bank, that after this order was placed on the dealer, it
placed the order on German company, the dealer
claimed that the import and transfer is covered by
section 5(2) of the CST Act". The Tribunal decided the
question against the dealer. On appeal :
Held, dismissing the, appeal, the dealer
has imported machine in its own name.
There was no obligation under contract to
sell machine only to Canara Bank.
Therefore this is not sale in the course of
import.
Sale in the
course of
import
21
47 VST
358
(Mad)
Kongoor Textile
Process. V. Jt.
Commissioner
(CT), Chepauk,
Chennai and
Another.
The petitioner is a dyeing contractor who had effected
inter-State purchases of dyes and chemicals and that
chemicals purchased and used in the execution of the
dyeing contract were exempted from tax under TNGST
Act, it did not pay tax on the cost of consumables like
dyes and chemicals used in execution of dyeing. On
remand it was pointed out that in the case of dyes there
was 50% transfer of property. Based on this dealer has
filed revised return admitting the liability to the extent
of 50 per cent on the dyes used and paid the taxes on
50 per cent of the dyes used in the contract. The
assessment was finalised on this basis and penalty was
levied. On writ
Held, dismissing the petition, that once the
revised return or original return is filed,
admitting the liability, the payment is
treated as made in respect of a liability that
dates back to the date when the payment of
tax ought to have been made. Whenever
the dealer defaults in meeting the admitted
tax liability within the statutory period,
interest is leviable and is an automatic one.
Interest
22
47 VST
363 (Ker)
Jainulavudheen.
V. State of Kerala.
In the course of business the petitioner purchased old
vehicles from various persons, dismantled the same and
sold the items as scrap by weight taxable at four per
cent. During the inspection the intelligence officer
noticed that scrap portion of the dismantled vehicle is
sold in the breaking yard itself and usable automobile
spare parts are recovered by the petitioner from the
dismantled vehicles and the same are brought to shop
and sold as automobile spares. The intelligence officer
found on inspection that the items sold are spare parts
of automobiles usable as such and so much so tax
payable is at the rate shown under the specific entry in
the Act and the petitioner's effort by showing sale as by
weight is only to avoid payment of actual rate of tax.
It is common knowledge that the spares
and components recovered on dismantling
an old automobile would not have suffered
uniform erosion. Scrap is purchased only
for melting and for re-rolling the primary
metal. However, when old spare parts are
sold as such, those are for use as spare
parts in automobiles and so much so tax is
leviable at the rate applicable for the
commodity. The findings of the intelligence
officer that the rate of tax applicable for
sale of old automobile spare parts is the
rate applicable to automobile spare parts is
perfectly correct.
Schedule
entry
23
47 VST
487 (Ker)
Supreme Food
Industries. V.
State of Kerala.
The petitioner engaged in manufacture and sale of ice
cream made bulk purchases of deep freezers and
delivered the same to distributors against security
deposits almost equal to the value of deep freezers, it
was also provided that deposit to be adjusted in 4 equal
instalments for wear and tear. He claimed that supply of
deep freezers against collection of security from them
does not amount to sale. He made an alternate claim for
input tax credit, which is the tax paid on the purchase
thereof. The Tribunal rejected both the claims supply of
deep freezers is sale of capital goods.
Held, partly allowing (i)the petitions, that
the transaction is a pure sale but on credit
basis payable in four instalments.
(ii) Deep freezers not capital goods in the
hands of petitioner, he is entitled for input
tax credit.
Sale price
25
48 VST
231 (AP)
Ramky
Infrastructure
Ltd. V. State of
Andhra Pradesh.
The petitioner is an incorporated entity engaged in
execution of the works contract. a dealer, who obtains
certificate in form L1 exercising option for composition
of tax payable under sec Act cannot withdraw the
option during the currency of L1 certificate. A show-
Held, dismissing the petition, option once
exercised and permission granted for
entire year, dealer not entitled to resile and
seek assessment under regular provision.
Compositio
n
cause notice was issued and the petitioner filed
objections.
26
48 VST
443 (SC)
Hotel Ashoka
(Indian Tour. Dev.
Cor. Ltd.). V. Asst.
Commissioner of
Commercial
Taxes and
Another.
The appellant having its duty free shops at all major
International Airports in India. At the said duty free
shops, the appellant sells several articles including
liquor to foreigners and also to Indians, who are going
abroad or coming to India by air. The AC rejecting the
contention of the dealer that the sale made by it in the
duty-free shops was a sale in the course of import u/s
5(2) of the CST Act as the goods were sold directly to
the passengers and even the delivery of goods at the
duty free shops was made before importing the goods
or before the goods had crossed the customs frontiers
of India. levied the tax on the goods sold by the dealer in
the
duty-free
shop.
On
appeal
:
Held, allowing the appeal, sale of goods at
duty-free shop in airport is sale in the
course of import
Sale in the
course of
import
27
48 VST
496
(Bom)
Whirlpool of
India Ltd. V. State
of Maharashtra
and Others.
The petitioner was entitled to the benefits of packages
scheme of incentives 1993 whereunder he was entitled
to claim refund tax paid on purchases. He submitted
bank guarantee for facilitating grant of refund. The
Dept. contended that the Commissioner was duty bound
to verify as to whether and to what extent a refund was
due.
Held, allowing the petition, while a general
provision has been made in sub-section (2)
prescribing the modalities of refund for
registered dealers, a special provision has
been made in sub-section (3) beginning
with a non obstante clause and governing a
class of registered dealers who fall within
the ambit of that provision. The Petitioner
fell undergone of the categories referred to
in sub-sec 3 relating to holders of the
certificate of entitlement. In such a case,
the Commissioner within one month of the
receipt of the application may require the
dealer to furnish a bank guarantee and call
Refund
for additional information as he may think
necessary. However, under sub-section (5),
which operates notwithstanding anything
contained in the Section. Under sub-section
(5) therefore, the Commissioner is
obligated to grant a refund due within one
month of the furnishing of the bank
guarantee irrespective whether additional
information furnished or not. Having
regard to these provisions, it would be
clear that there would be no justification
for the department to keep the application
of the petitioner pending inordinately
without an explanation. It could not be said
that the Commr. was precluded from
carrying out a due verification. Therefore a
decision must be taken expeditiously to
effectuate the purpose and object of the
statutory provisions.
28
48 VST
502 (AP)
Associate Cement
Co. V. Commercial
Tax Officer,
Secunderabad
and Another.
The assessing authority passed an order forfeiting
certain amount under the Act, towards excess collection
of tax by petitioner. However on second appeal
Tribunal allowed the appeal and set aside the order of
forfeiture both on the ground that it was barred by
limitation as prescribed under section 30C, and as no
separate order of forfeiture was passed by the assessing
authority.
Held, dismissing the petition, that it was
not disputed that the tax burden has been
passed on by the petitioner to their
purchasers. Neither the persons, who paid
the tax to the petitioner, come forward
seeking refund nor have such purchasers
been identified to enable refund of the
amount to them. The petitioner is seeking
to retain the excess tax collected though
they were precluded from collecting such
excess tax under section 30B(2) of the Act.
Granting the relief sought for by the
Forfeiture
petitioner would enable them to unjustly
enrich themselves at the cost of the State.
29
48 VST
550 (MP)
Paras
Pharmaceuticals
Ltd. V. State of
Madhya Pradesh
and Others.
According to the assesse Borosoft Natural and Borosoft
Cream are items which can be used to treat specific
medical conditions and can also be used otherwise by
persons who are not suffering from any such medical
problems, for enhancement of beauty, and therefore
these items would be taxable under entry 41 of Part III
of Schedule II. Dermicool powder which is described as
a prickly heat powder is a medicine.
The assesse accepted that Borosoft Natural
and Borosoft Cream are not medicines.
Prickly heat powder is normally used for
relieving prickly heat problem. Dermicool
powder which is described as a prickly
heat powder is also commonly understood
to be of use in treating prickly problem and
not as an ordinary talcum powder.
Therefore item Dermicool powder must be
held to be a medicine.
Schedule
entry
30
49 VST 1
(SC)
IFB Industries
Ltd. V. State of
Kerala.
It has a scheme of trade discount for its dealers under
which the dealer, on achieving a pre-set sale target gets
certain discount on the price for which it purchased the
articles from the manufacturer.
Hon. Supreme court overruled the high
court judgment, and allowing the appeal,
that the claim of for deduction of the
amounts of trade discount could not be
disallowed solely on the grounds that
discount amounts were not shown in the
sale invoices.
Sale price
(discounts)
31
49 VST14
(Bom)
Commissioner of
Sales Tax,
Maharashtra
State. V. Pure
Helium (India)
Ltd.
The assessee had effected sales of Helium gas to ONGC
which is situated about 150 km from the coast line of
Maharashtra. The area falls within the exclusive
economic zone on the continental shelf. The assessee
claimed that the sales which were effected were sales in
the course of export under Sec 5(1) of the CST Act for
the reason that Mumbai High falls beyond the territorial
waters of India.
Held, (i)That the sale of helium gas by the
dealer to its vendee in the Mumbai High
regime was not sale in the course of export
out of India. Both before and after
15.1.1987, the sale which was occasioned
by the movement of the goods from the
State of Maharashtra to Mumbai High was
not sale in the course of export.
(iii)The State has not sought to levy sales
tax in the on the basis that there was a
Sale to
Bombay
High
local sale but on the basis that there was a
sale in the course of interstate trade and
commerce.
32
49 VST 98
(AP)
State of Andhra
Pradesh. V.
Bharat Sanchar
Nigam Limited.
It is contended on behalf of the petitioners - service
providers that the use/utility of the SIM card remains
the same in both prepaid and postpaid connections; in
the case of a pre-paid SIM card, service charge is
collected mainly for activating the connection; service
tax is paid on this consideration as "telecommunication
service"; a SIM card is incidental to the rendering of
telecommunication service; SIM cards are not sold by
the service provider to the subscribers, and are not
chargeable to tax under the Act; even if it is held that
SIM cards are "goods" and it is sold, the price charged
for the starter kit does not constitute the sale
consideration; sales tax is sought to be imposed even on
the activation charges component of the value of a
starter kit though it does not amount to "sale"; Postpaid SIM card charges, which represent the call charges
collected by the petitioners from their subscribers,
cannot be subjected to tax as there is no sale/deemed
sale of goods; and, in any event, the purchase price of
the SIM card in the hands of the petitioner, and a
reasonable profit thereon, can alone be brought to tax
under the Act.
Revenue contended that, while the
SIM card enables access to the cellular network, it can
also store data of phone calls, contact numbers, games,
music, etc.; it is capable of being bought and sold; it has
utility; it is capable of being transferred, delivered and
stored; SIM cards have all the attributes of "goods", and
can be subjected to "sale"; pre-paid SIM cards are sold
Held: 1. SIM cards, recharge coupon
vouchers, mobile telephone rentals on
post-paid connections, value added
services such as ring tones, music down
loads, wall papers, etc., and proceeds
received on sharing of infrastructure
cannot
be
subjected
to
tax.
2.
Telephone
instruments,
mobile
handsets, modems and Caller ID
instruments
are
"goods"
3. In case these goods are sold or supplied
to the subscribers by the service providers
such "sale" or the "transfer of the right to
use these goods" would be liable to tax.
4. However, if, these goods are procured by
the subscribers from suppliers, the
monthly charges, paid to service provider,
would fall within "telecommunication
service" and cannot be made liable to tax
under
the
Act.
5. If non-refundable deposits are collected,
by the service providers from their
distributors, for supply of SIM cards,
recharge voucher coupons and the like,
cannot be brought to tax under the
provisions
of
the
Act.
6. If the non-refundable deposit is received
against supply of telephone instruments,
Schedule
entry
33
49 VST
134 (Ker)
Cadbury India
Limited. V. State
of Kerala.
to customers, through distributors, for a price; the
charges collected from the subscriber are for the SIM
card; they are not collected for the service of activating
the SIM card; SIM cards are not activated at the time of
their sale to the distributors; and the amounts collected
for issue of prepaid SIM cards, and rentals for postpaid
SIM cards, represent the consideration for "sale" and
"deemed sale", respectively.
batteries, accumulators, etc., these deposits
would form part of the sale consideration
7. Likewise, if refundable deposits are
collected from post-paid subscribers as
security for payment of dues towards STD
or ISD facilities provided by the service
provider, then such deposits, not being
"goods", cannot be brought to tax under
the
Act.
8. If, however, the refundable deposits are
for supply of telephone instrument,
handset, etc., which are "goods” these
refundable deposits may also form part of
the sale consideration under section
2(29)(b) of the Act, and would be
chargeable to tax under section 4 thereof.
The petitioner purchased raw cocoa beans through
agents who purchased from farmers as well as from
small traders and delivered them at the godowns of the
company. There is written agreement between the
company and the agents providing for reimbursement
of price paid to farmers/dealers, all the cost incurred by
the agents and also commission payable to them at the
agreed rate. The assessing officer after examining the
terms of the agreement and the accounts came to the
conclusion that the agency agreement is only a device to
avoid payment of tax on the taxable turnover which is
the cost incurred by the company until goods reach
their stockyard where delivery is given by the agents.
Held, dismissing the petition, the agency
arrangement appears to be only a scheme
for splitting up of price between purchase
cost, transport cost, commission, etc., to
avoid tax on part of the turnover.
Agency
The assessing officer added 15 per cent of other
reimbursements to purchase price reimbursed by the
petitioners to the agent for the payment to farmers and
dealers and passed assessment orders.
34
49 VST
200
(Mad)
State of Tamil
Nadu .
V.
Mahaveer
Chemicals
Industries
The assessee herein is a dealer in chemicals, and carried
on business out of the same premises as Mahaveer
Chemicals which had been appointed as distributor for
the products manufactured by M/s. Cochin Refineries
Limited. At an inspection of the business premises of
the dealer that the dealer was effecting in-transit sales
after taking constructive or notional delivery of the
goods from Kerala. The claim for exemption under
section 6(2) of the CST Act was disallowed rejecting the
dealers contention that after the purchase, even before
taking delivery, they effected further inter-State sales to
their end-users within and outside the State of Tamil
Nadu. The assessing authority in the absence of any
material to show that the journey continued without
any break, the dealer was not entitled to claim
exemption under section 6(2) of the CST Act. The
appellate AC affirmed this, but Tribunal held in favour
of the dealer. On revision petition by the Dept.
Held, allowing the petition, the documents
accompanying the movement of the goods
show that the journey started from Cochin
to Coimbatore. The Appellate Assistant
Commissioner rightly pointed out that
there was no obligation on the part of the
carrier to transport the goods further to
any place beyond Coimbatore. Thus the
subsequent arrangement that the assessee
had with the same transporter to carry the
goods to another place for a different
person however did not make the
movement a continuation of the original
inter-State sale. Further movement done as
per the fresh invoices prepared and trip
sheets and way-bill clearly pointed out to
fresh movement from Coimbatore to other
State and to the local purchaser from the
assessee.
Sale under
section
6(2) of the
CST Act
35
49 VST
252 (All)
Raj Kumar Gaba.
V. State of U.P.
and Others.
Where the society has stopped doing business in 2006
and all its properties had been sold and proceeding for
recovery of sales tax dues were undertaken against
petitioner. On a writ petition,
Held, dismissing the petition, that the dues
relate to the assessment year 2003-04
when the petitioner was the President of
the society and is still a member of the
society and dues could be recovered from
him under the bye laws from the
petitioner. Under the bye laws it is
Recovery
provided that in case of debt all members
of the society will be equally responsible.
36
49 VST
256
(Karn)
Habib Agro
Industries. V.
Commissioner of
commercial
Taxes, Bangalore.
The assessee has a manufacturing unit in Mandya
District, and a branch office at Coimbatore. He claimed
an exemption in respect of stock transfer of de-oiled
rice bran to its branch in Coimbatore. They were duly
supported by form F issued by the said branch office. At
an inspection of the business premises eight freight
letter pads maintained by the assessee for despatch of
de-oiled rice bran directly to the outside consignees
were seized containing name and address of the
purchaser, quantity sent, vehicle number in which
goods were moved from Boothana Hosur. The assessing
authority on the ground that the F forms disclosed that
bills were raised in favour of dealers in Tamil Nadu and
the goods were dispatched from Mandya directly to
them, levied CSTand penalty u/s 9(2).
The real transaction noted in the freight
letter is a sale. This is not disclosed. The
entire stock transfer claimed is similar
inter-State sales disguised as stock
transfer. The assessee has disguised interState sales as stock transferred, though the
goods have moved as a result of sale
directly to the ultimate purchaser. The
material and particularly, the documents
laid on clearly shows the intention on the
part of the assessee to avoid the payment
of Central sales tax and misleading the
authorities. The contents of form F are also
not true. It also discloses the guilty mind.
Under these circumstances, the authorities
were justified in disallowing the exemption
and were justified in imposing penalty.
Branch
transfer
37
49 VST
339
(Bom)
Taurus Auto
Dealers Pvt. Ltd.
V. D.P. Amberao
and Another.
Whether imposing or charging of interest at flat rate
25% u/s 30(4) of MVAT Act retrospectively, which
came into force wef 1.4.2009 in respect of late payment
of tax for the years 2005-06, 2006-07 and 2007-08 is
valid in law
Held, dismissing the petition, that sub
section (4) of section 30 iof the Act did not
provide for charging of interest keeping in
view the delay in paying the taxes. The
interest is being charged at flat rate of 25
per cent of the additional tax payable as
per revised return. In the circumstances no
interest was being charged for the period
prior to 1st July 2009. All the acts leading
to the demand for interest such as audit,
intimation letter u/s 63(7) of the Act, filing
Interest
of revised returns and payment of
differential tax took place after 1st July
2009. Merely because a part of the
requisites for an action was drawn form a
time prior to its passing the action would
not become retrospective. Therefore,
section 30(4) of the Act was not applied
retrospectively. There was non payment of
additional taxes on 1st July 2009 when
section 30(4) was introduced. Thus it could
not be said that the orders were wrong.
38
49 VST
371 (All)
Diamond Cement.
V. State of U.P.
and Others.
The petitioner separately charged freight and claimed
exemption on it. The assessing authority rejected the
claim on the ground that petitioner had not disclosed
the challan/delivery challan. However Tribunal held
that no tax could be imposed on freight. Addl CST
granted the permission for reassessment on the ground
that charging of freight separately was not verified., On
writ,
Held, dismissing the petition, the petitioner
has apart from making arguments, has not
relied on any such material to show that
the petitioner had disclosed the manner
and method of charging freight, before any
of the authorities from the stage of
assessment to the order authorising
reassessment. The petitioner had disclosed
the entire amount of freight in his turnover
and had thereafter claimed exemption. He
did not produce the details as to how the
goods were transported and the freight
was charged. The proof of charging freight
separately was not produced nor could be
verified from the audit report, profit and
loss account, balance sheet or trial balance.
At the appellate stage also only some
photocopies
were
produced
to
demonstrate that the freight has been
Sale price
charged
separately.
The
appellate
authority was thus in doubt about the
manner and method in which freight was
charged and had remanded the matter. The
Tribunal adopted a casual approach and
erred in observing that the assessing
authority had accepted the declared
turnover, and the account books, and that
the account books and bill books produced
before the assessing authority shows that
the freight was charged separately. The
Tribunal also observed that before the first
appellate
authority
the
State
Representative had examined the material
produced by the petitioner and stated that
the freight has been separately charged in
the bills. These observations, are not only
casual but are also against the record. The
material discovered by the Department
from the returns filed by the petitioner in
Central Excise Department for levy of
service tax, the railway receipts, and the
non-production of the document, bill books
and challans, before the assessing
authority, clearly establishes that the
petitioner company did not produce the
relevant material to claim that the entire
freight was charged separately. The
Additional Commissioner did not commit
any error on fact or in law in recording the
turnover on account of freight has escaped
from
assessment.
39
49 VST
418
(Gauhati)
State of
Arunachal
Pradesh and
Others. V. Buishi
YadaMotors.
The dealer is an authorised dealer of Maruti Udyog
Limited , in Arunachal Pradesh. The tax on local sales of
motor vehicles is 12%. The State Government, reduced
the tax rate to 2% on inter-state sale by issuing
notification dt. 2.5.2001 u/s 8(5) of CST Act. However it
was noticed that, in order to avoid payment of local tax,
sold motor vehicles by showing addresses of persons,
who claimed to be the resident of State of Assam. But
after the sale of the vehicle, the same vehicle was
brought back and registered in Arunachal Pradesh. This
gave enough indication that the respondent was
evading payment of sales tax in terms of intra-State
sales tax leviable. Subsequently, in pursuance of letter
issued by Commr, Addl DC directed vide letter dated
February 7, 2002 , to stop selling motor vehicles to the
customers outside the State of Arunachal Pradesh with
immediate effect. The dealer challenged the legality of
the letter dt 7.2.2002, notice dt 27.5.2002.
Held, allowing the petition, that the mere
fact that the vehicles have been
subsequently registered in the State of
Arunachal Pradesh will not make the first
sale intra-State sale in the absence of any
material to show that notwithstanding the
terms of the contract of sale between the
petitioner and the buyers thereof, vehicles,
in question, had not moved at all out of the
State of Arunachal Pradesh. It was held
that the movements of the vehicles to other
States was necessitated by the contracts
themselves and the movements of the
vehicles were inextricably interlinked with
the sale and therefore the sale is an interstate sale.
Inter-State
Sale
40
50 VST
103
(Uttra)
B.T.C. Industries.
V.Commissioner,
Trade
Tax/Commercial
Tax, Dehradun.
When Trucks loaded with coal were intercepted, it was
held out that it was meant for petitioner but there was
no document suggesting that it was tax paid. The
penalty proceeding were initiated. The petitioner filed
revised petition that intercepted coal was being
supplied under F-C issued by it to the supplier.
Held-dismissing petition, the petitioner
issued blank Form C to the supplier at the
time when the same was handed over to
the supplier. The petitioner did not
indicate the particulars of the order placed
upon its supplier, which is a requirement,
as would be evident from the form C. Form
C was purported to be utilized by showing
that the intercepted coals were being
Declaration
s
supplied to the petitioner. This form C was
not with the goods intercepted. This part of
the form C was inserted therefore
subsequent to interception of the goods in
question. By not filling up the form C in the
manner the same was required to be filled
up, i.e., by not mentioning the order
number in the form C, petitioner gave a
blank cheque to its supplier, on the basis
whereof the supplier could supply coal to
the petitioner and in addition to such coal,
if it wanted to, could deal with coal
otherwise in the State of Uttarakhand.
What was the real intention in relation to
the intercepted coal is anybody's guess,
since one truck, it is not disputed, did not
carry any paper. An industrialist would
expose itself with a financial obligation
without any reciprocal advantage is not
acceptable. The fact remains that no tax
was paid thereon. By reason of failure on
the part of the petitioner in protecting
itself while issuing the form C, it failed to
ensure that the goods to be supplied
thereunder would only be supplied to the
petitioner.
41
50 VST
122
(Mad)
State of Tamil
Nadu V. Jayesh
Brothers.
"Whether, the Tribunal is right in holding the masala
powder is not food items taxable under entry 63, Part D
of the First Schedule when there is a specific entry in
item 1(ix) of Part E of the First Schedule ?"
Held-Masala powder not by itself food item
and will not be covered by the entry for
food.
Schedule
entry
42
50 VST
147
(Mad)
Sundaram
Industries Ltd. V.
State of Tamil
Nadu.
The dealer engaged in retreading of tyres on a works
contract basis, quoted consolidated amount in respect
of works undertaken, which it claimed to be inclusive of
tax. Since the dealer had not separately maintained
accounts as regards the amount referable towards
transfer of property in goods, labour charges, the dealer
appropriated 70 percent of the amount as per statue, as
taxable turnover. The assessing officer rejected the
contention of the assessee that there was a clear
mention in the invoice to the effect that the sale price is
inclusive of sales tax, treated the entire turnover
taxable.
Held, dismissing petition, the dealer had
charged consolidated amount for the
execution of the works contract. The
indivisible contract showed no bifurcation
as regards labour and materials. Even in
the accounts, the assessee did not have the
details on the cost of the materials used to
have a deduction of the labour charges
from the consolidated price charged. The
consolidated amount charged is stated to
include the tax element. Even for claiming
deduction on the labour charges, the
assessee adopted the statutory percentage
only. In the above circumstances, on a
consolidated sum thus charged, the claim
of the assessee that the adjustment entries
given in the accounts have to be taken as
tax charged separately was not acceptable.
When the parties to the contract have
agreed on a consolidated price inclusive of
tax, it is clear that irrespective of how they
make up the bill or the accounts, the entire
consideration will be the turnover.
Sale price
(works
contract)
43
50 VST
302
(Mad)
Mangai Agencies.
V. Appellate Dy.
Commissioner
(CT),
Virudhunagar
The appellant filed appeal against assessment order,
however he failed to appear on near 38 occasions. Then
appellate authority dismissed appeal. On writ filed after
delay more than one year and four months, contending
that there had been a violation of principle of natural
Held, dismissing petition, dealer not
utilising opportunity to put forth its cases
in appeal cannot complain of violation of
natural justice.
Appeal
and Another.
justice and order without jurisdiction,
44
50 VST
527 (Ker)
Maggy Sunny. V.
State of Kerala.
One of the departmental officers pretending to be a
consumer made a sample purchase of a gold ornament
from the petitioner's shop for which payment was also
made by the officer based on slip prepared and issued
by the petitioner without raising any invoice and
accounting transaction. A search was conducted which
departmental authorities recovered slip covering
suppressed sales, based on which tax evasion was
determined and penalty was levied.
Held, dismissing petition, trade practice of
sales through slip once established by dept.
Burden on assessee to prove such sales
entered in regular books.
Investigati
on
45
51 VST
168
Maharashtra
Chamber of
Housing Industry
and Others. V.
State of
Maharashtra and
Others.
The challenge of the petitioners is that by amending the
provisions of Section 2(24) the State Legislature has
brought within the ambit and purview of the expression
"sale", an agreement for the building and construction
of immovable property which is not a works contract.
Held:- Inclusion within works contract of
agreement for building construction etc. in
respect of works contract valid.
Builders
46
51 VST
382
(Bom)
Premium Paper
and Board Ind.
Ltd. V.
Jt. Commissioner
of Sales Tax,
(INV-A) and
Others
The petitioner who claimed Set off on purchases
claimed to have been effected from certain vendors
against the tax liability on sales. On the ground that an
investigation revealed that the records of the certain
vendors were found to be engaged in the activity of only
issuing tax invoices without actual delivery of goods
and passing on tax credit without paying it in the
Government Treasury , that there was a mismatch in
the ITC claimed by the dealer and the tax deposited into
the Treasury by the bogus vendors in respect of
purchases claimed to have been made by the dealer
from them, that no one was claiming responsibility for
Held, dismissing petition, writ petition
challenging vires of provision cannot be
entertained where entire claim is based of
set-off found upon assessment to be bogus.
Input tax
credit
the companies from whom the dealers claimed to have
purchased the goods, that in the very first year of
business the turnover of three dealers high, action of
provisional attachment was made. On a writ,
47
51 VST
413
(Uttra)
Shriya
Enterprises. V.
Commissioner of
Commercial
Taxes,
Uttrakhand
The question, which has to be decided in the present
revision is, whether potato chips is a processed
vegetable or not, and consequently liable to be taxed at
four per cent or at 12.5%.
Potato chips
vegetable
taxable
as
processed
48
51 VST
439
(Karn)
State of
Karnataka. V.
Kitchen
Appliances India
Ltd.
Subsequent to issue of tax invoice the dealer had issued
credit notes to the customers on monthly sales
performance basis incentives, in which dealer had
deducted output tax relating to discount and remitted
the balance tax to the Dept. On the ground that rule
3(2)(c) of the Karnataka VAT makes it mandatory on
the dealer to claim the discount separately on the tax
invoice and the tax collected should be on the sale price
less discount and there is no provisions to claim the
discounts, which are allowed in future dates as per the
trade practices followed, the assessing authority levied
tax on the sum representing discount. The JC (Appeal)
dismissed the appeal, however Tribunal directed
deletion of tax demanded alongwith the interest.
Held, allowed the appeal, the dealer had
not shown the discount in the tax invoices.
The discount offered is subsequent to the
raising of the tax invoice. Even though the
dealers may have a right to revise the sale
price of their goods in accordance with
contract or otherwise, in terms of the
proviso to rule 3(2)(c), the same would
have to be shown at the time of raising the
tax invoice. Discount on a product cannot
be offered after a sale has taken place. A
discount is offered at the time of sale. Once
a sale takes place, the question of offering a
discount thereafter does not arise for
consideration. In view of the admitted fact
that the tax invoice did not contain the
discount, subsequent credit notes could
not be treated as discount to claim relief.
Schedule
entry
Sale price
(discount)
49
52 VST 49
( Delhi)
Ricoh India Ltd.
V. Commissioner.
(Delhi)
Whether multi-functional printers/machines and their
spare and consumable, during the period 1.4.2005 to
31.3.2007 are taxable under entry Sch-III-41 @4% of
the Act or taxable under residual entry at 12.5%
The multi function machines may or may
not be computer peripheral, depending
upon the main purpose or function which
the
machine
was
designed
and
manufactured to perform. If the principal
and predominant purpose was to act as a
computer printer or scanner or as an input
or output devise of the computer, the multi
functional machine would qualify and fall
under entry 41A clause XXIII. However, if
the
machine
was
designed
and
manufactured for some other primary
purpose, then it would not be covered by
Entry 41A clause XXIII. Mere description or
the
nomenclature
given
by
the
manufacturer or trader is not relevant and
the assessee should justify and establish
their claim. Therefore for the period prior
to30.11.2005 the relevant determining
factor would be the dominant or main
purpose. For the period after 30.11.2005
the doctrine of dominant purpose of the
multi functional machine will determine
whether it is an input or output unit of
automatic data processing machine. In case
multi functional machine is a duplicator or
a
photocopying
machine,
which
incidentally can be used as a printer or a
scanner etc., the said machine would not
qualify and cannot be treated and regarded
as input or output unit of automatic data
Schedule
entry
processing machine. Said machines would
not qualify under Entry 41A and will be
covered by the residuary tax rate. In the
case the principal or dominant purpose is
to act as input or output unit, then it would
be covered by entry 41A
50
52 VST
120
(Chhat)
Kamesh Traders.
V. State of
Chhattisgarh and
Another.
W.P. involve the question of law as to whether or not
the products of cello company, i.e., serving tray, flask,
stainless steel tiffin with plastic body, water jug and
hotpot (casserole) would fall within the meaning of
"utensils" under entry No. 13 of Part II of Schedule II of
the Act.
Serving tray, flask, stainless steel tiffin with
plastic body, water jug and hotpot
(casserole) fall within the meaning of "all
utensils". No distinction on the basis of
materials used for making utensils.
Schedule
entry
51
52 VST
129
(Karn)
ACC Lt. V. State of
Karnataka.
The assessee is engaged in the manufacture and sale of
cement including ready mix concrete. The assessee had
effected sale of ready mix concrete (RMC) to its
customers and claimed exemption on the charges
collected by it for pumping ready mix concrete at the
customers' site.
Held, dismissing petition, pumping charges
collected from customers being part of pre
sale expenses includible in turnover.
Sale price
52
52 VST
221
(Mad)
State of Tamil
Nadu. V.Kawarlal
and Co.
The assessee herein is a dealer in pharmaceuticals and
chemicals. claimed exemption on the turnover as
representing high sea sales effected. In support of the
claim, the assessee filed bill of lading and high seas
agreement and pointed out that the goods in question
were cleared by the purchaser by paying customs duty
through clearing and forwarding agent and that the
assessee had nothing to do with the clearance of the
said goods.
Held, dismissing petition, the bill of entry
not a document of title and admittedly it
carried the name of the ultimate buyer and
that there was no denial of the fact that the
assessee had transferred the goods before
it crossed the customs station, the only
ground on which the claim was rejected
was the difference in the name found in the
bill of entry available with the assessee and
the one with the customs authorities. With
the title to the goods thus endorsed even
High seas
sales
before it crossed the customs station, the
claim of the assessee could not be denied
just based on the bill of entry which is
admittedly not a document of title. Under
section 46 of the Customs Act - Entry of
goods on importation - the importer has to
file bill of entry before the proper officer,
which may be for home consumption or for
warehousing. Only on filing the bill of entry
for home consumption that the goods are
allowed to be cleared after the payment of
required customs duty. In the absence of
any details as to whether the said entries
relate to the one in the bill of entry for
home consumption or any bill of entry for
warehousing, the dealer's claim could not
be denied.
53
52 VST
306
(Karn)
Essar Telecom
Infrastructure
(P.) Ltd. V.Union
of India and
Others
The petitioner having entered into contract with
various telecom/cellular operators is required to
render service in relation to passive telecom network
including operating and maintenance. The assessing
authority proposed to impose tax on providing of
cellular tower on rent to various service providers
stating that the transaction fell under the definition of
deemed sale.
Providing cellular telephony towers on
rent to various telecom companies
amounts to transfer of right to use.
Transfer of
right to use
54
52 VST
330
(Karn)
State of
Karnataka.
V.Anantha
Refinery Pvt. Ltd.
The assessee sold oiled cake in course of inter-State
trade and produced C forms. In the reassessment order,
the sales tax was levied at four per cent.
Held:- Oil cake and de-oiled cake are
different commodity : concessional rate of
tax on de-oiled cake can not be extended to
oil-cake.
Schedule
entry
55
52 VST
447 ((AP)
Indus Tower Ltd.
V. Commercial
Tax Officer,
Begumpet Circle,
Hyderabad and
Others.
The petitioner is in the business of providing telecom
infrastructure support services to several telecom
operators (such as Airtel, Vodafone, Idea, Reliance,
Aircel, BSNL, etc.). The dealer builds, operates and
maintains passive telecom infrastructure, also owned
and controlled by it. He purchased material on form C
intended for use in telecommunication network. But he
was not having license issued by Dept. of
Telecommunication and hence he was not telecom
service provider and CTO levied the penalty as the
dealer has misused the form.
Held, allowing the petition, 1) the dealer
was registered as infrastructure provider
by the dept. of telecommunication. It
constituted a federal recognition that the
reaction and maintenance of telecom
towers is an activity falling within the
legislative field. The dept. was not entitled
to contend that the dealer was not
comprehended within generic area
"telecommunication
network"
an
expression employed in sec 8(3)(b) of the
CST Act. 2) That the RC under CST Act
described the dealer as telecommunication
network service provider. The goods
purchased by them against issue of C forms
during
the
course
of
inter-State
transactions are goods specified for
purchase for use in telecommunications
network specified in its application for reg.
and the goods in respect of which the
penalty orders were passed under the
provisions of section 10A of the CST Act
were goods specified in the list of goods
stated by the petitioners while applying for
registration under the CST Act and
enumerated in the respective certificates of
registration, They were used for the
erection and maintenance of the passive
telecommunication infrastructure. While
initial RC did state the specified goods as
for use in manufacture or processing, the
Declaration
s
revised RC clearly stated in clause (f) that
the
goods
were
for
use
in
telecommunication network as per the list
attached. Therefore, the purchase of goods
by the petitioners from outside the State,
comprising goods specified in the
certificates of registration under the CST
Act granted to them, against issue of C
forms and where the goods have been
employed in erection and maintenance of
cell phone towers which are integral to
telecommunication network, fall within the
ambit of section 8(1) read with section
8(3)(b) of the CST Act and are entitled to
be taxed accordingly. The fact that the
goods purchased by the petitioners were
neither sold nor used in the manufacture of
goods for re-sale does not constitute
violation of the C forms. Consequently, levy
of penalty, on the factual parameters
apparent on the record of these cases, is
unsustainable.
56
52 VST
484
(Karn)
Assistant
Commissioner of
Commercial
Taxes, Bangalore
and Others. V.
Pink City
The dealer has not filed the return within the time
prescribed nor have they paid the tax. Therefore, a
penalty has been imposed under section 72(1) of the
Act. The dealers have preferred writ petitions
challenging the virus of section 72(1) of the Act on the
ground that it is arbitrary.
Power to impose penalty
competence of State legislature.
within
Penalty
57
53 VST
226
(Karn)
Ali Singhania
Bulk Carriers. V.
State of
Karnataka.
The petitioner own fleet of vehicles and was engaged in
transporting concrete mixture. The agreement to
provide vehicles for transport the produce of company
from its plant to the various customers in the city. The
adequate number of vehicles is made available 24 hours
on all the seven days of the week. The company also
agreed to reimburse the dealer for diesel and
lubricants. On this ground that the transaction
amounted to transfer of right to use.
Held, dismissing the petition, it amounts to
transfer of right to use goods as effective
control of vehicles with company.
Transfer of
right to use
58
53 VST
271
(Uttara)
Gujarat Co-op
Milk Marketing
Fed Ltd. V.
Commissioner of
Commercial
Taxes,
(Uttarakhand)
The assessing officer held that the product sold by the
petitioner 'Amul Masti spiced Buttermilk" was not one
of the item mentioned in entry Sch-I-25 of the Act
which exempt tax in respect of " fresh milk, pasteurized
milk, buttermilk, separated milk, curd and Lussi".
Accordingly assessing authority levied tax on the dealer.
Held, allowing the petition, 'Amul Masti
spiced Buttermilk" is exempt as buttermilk.
Schedule
entry
59
53 VST
355
(Gauhati)
State of Tripura
and Others. V.
Joy Kali Radio
Stores.
The petitioner is dealer dealing in electronic goods. The
assessing authority examined the books of accounts and
was of the opinion that the turnover did not appear to
have been correctly disclosed. it was held that the
assessee had not declared the turnover correctly. This
inference was based on the observation that the dealer
had not correctly declared margin of profit and closing
stock.
Held, allowing the appeal, declaration of
low profit and high closing stock warrants
rejection of books of accounts and
assessment to the best of judgment in
absence of explanation.
Assessment
60
53 VST
382
(Mad)
Sriram
Refrigeration Ind.
Ltd. V.State of
Tamil Nadu.
The petitioner its factory at Hyderabad and supplied
refrigerators to customers in Tamil Nadu. The defective
compressors were brought to the petitioner for repairs
at Chennai. When the defective compressor is handed
over, the dealer replaced the defective compressor by a
Held, dismissing the petition, it
transaction of works contract taxable.
Sale price
works
contract
is
reconditioned compressor of the same model. The
defective compressor received was subsequently
transferred to the factory in Andhra Pradesh for
rectification of the defects. The dealer collected repair
charges for the defective compressors. On finding that
the dealer carried out works contract of repairing the
defective compressors received from their customers at
Chennai and received repair charges, the assessing
authority assessed the replacement of defective
compressor as works contract, he gave relief of
deduction at 30 per cent towards labour charges and
levied tax at 70 per cent of the turnover in respect of
the works contract and levied penalty.
61
53 VST
401
(Gauhati)
Brahmputra Vally
Construction and
Suppliers. V. Oil
and Natural Gas
Corpn. Ltd. And
Others.
ONGC entered into contract with the dealers, under
which the dealers undertook to provide manned cranes
according to technical specifications with the necessary
accessories with valid permits, insurance, for
performing of the duties as advised by ONGC, at
appointed time and place. The question was whether
the transaction involved the transfer of the right to use
goods, taxable under the Act?
Held, hire of manned crane to ONGC
amounts to transfer of right to use goods as
ONGC alone entitled exclusive use.
Transfer of
right to use
62
53 VST
489
(Karn)
Mitsubishi
Corporation. V.
State of
Karnataka.
Under the contract, the consortium, was to supply
certain 60 trains sets manufactured indigenously in
India. It was contract for design, manufacture, supply
and commissioning of trains for metro rail project of
DMRC. The components of car body shells imported
from outside country and finished propulsion system,
materials were imported sent as property of
consortium to BEML Bangalore for assembly, BEML,
the subcontractor, after receiving the propulsion
.Held, dismissing the petitions, 1)that for
the manufacturing train in India, the
members of consortium imported the parts
and not consortium. The contract was
entered in between the Consortium and
DMRC. There was no privity of contract
between the DMRC and the firm at Japan or
Korea to supply those materials. Thus it
could not be said that the sale took place in
Sale in the
course of
import
system, fits them in the car body structure fabricated by
them. After car body structures are ready, the same are
sent for functional tests at BEML's testing shop.
Subsequent to issuance of inspection certificate
arranged for the despatch of the finished car body
structures to Delhi for the remaining work to be done
under the contract. Thereafter, integrated testing and
commissioning of the trains are done and thereafter the
passenger rolling stock is transferred/ supplied to
DMRC under the RSI contract. It is at that stage
consortium raises sales invoice for the train set handed
over to DMRC. A show-cause notice under section 12(3)
of the Karnataka Act was served upon the consortium
leader, i.e., Mitsubishi Corporation. for levy of tax , on
the sales made by the consortium to DMRC as interState sales effected from the State of Karnataka to
DMRC, New Delhi.
the course of import within the meaning of
sec 5(2) of CST Act. 2) After these materials
were procured by the members of the
consortium and not the consortium they
were delivered to BEML. These cars were
assembled/fabricated/manufactured. That
is what is agreed to under the agreement.
The Tribunal had observed that the various
services
like
testing,
interfacing,
commissioning, etc., employed at Delhi
before the delivery of the trains sets to
DMRC are in the nature of post
manufacturing activity and therefore they
are incidental to the main objective of
supply of train sets to the DMRC and
whatever that had been attended to at
Delhi is in the nature of curing the defects
and making the train in the presentable
form. thus it could not be said that the
goods reached the deliverable state only
after the incorporation of electronic and
telecommunication item into these
coaches. Though the sale has taken place at
Delhi, as the agreement of sale occasioned
the movement of goods from Bangalore to
Delhi, it is an inter-State sale as defined
under section 3 of the Act and
consequently section 6 is attracted.
Karnataka state had the authority to levy
tax as per sec 9 of the Act. There was no
question of the very same goods suffering
tax over and over again as the Govt. of
India has granted exemption from payment
of custom duty and excise duty and the
Delhi state subsequently exempted the
assessee from payment of sales tax. 3) for
the very same assessment year the
Tribunal has held that no sales tax is
leviable in respect of the transaction i.e.
goods moved from Faridabad to BEML on
behalf of Rotem Company for the execution
of works contract at BEML work at
Bangalore and that on the fact s there was
no sale either in Karnataka or interstate
sale did not operate as res judicata as the
subject matter of the appeal was different
and the question whether the consortium
was liable under sec 6 of CSTR Act was
neither raised therein nor answered by
Tribunal.
63
53 VST
526 (All)
Rathi Industries
Ltd. V.
Commissioner of
Trade Tax, (UP),
Lucknow.
Whether the appeal against the order levying penalty
under UP Tax Act was dismissed time-barred, an
application u/s 10B of the Act was rejected by Dy.
Commr. On the ground of dismissal of appeal and The
Tribunal on appeal held on merit that the order levying
penalty was not erroneous or improper and on revision
petition contending that the levy of penalty was not
legal in absence of any adverse inference in assessment
proceeding.
Held- Assessment order passed subsequent
to penalty order cannot be looked into for
revising order of penalty.
Revision
64
54 VST
271
(Bom)
National Organic
Chemical
Industries Ltd. V.
State of
Maharashtra.
The petitioner entered into a contract with Assam Gas
for the performance of the work of laying HDPE pipe for
transportation of natural gas. The assessing officer
considered the transaction with Assam Gas as a
divisible transaction which could be divided into two
parts, namely, sale of HDPE pipes and installation of the
same as per the contract with Assam Gas. DC(Appeal) as
well as Tribunal affirmed order.
Held, (1) that the agreement between the
applicants and the Assam Gas was a works
contract and it could not be divided into
two parts, namely, contract to supply the
pipes and a contract to lay down the
pipelines. The use of HDPE pipes was an
integral part of the performance of the
contractual obligation by the applicants. In
order to comply with the contractual
obligation cast on the applicants, the
applicants were required to do various acts
set out in clause 3 "scope of work"
ultimately to see that the HDPE pipes are
laid for transportation of natural gas. The
acts to be committed by the applicants
could not be divided into two parts,
namely, supply of pipes and laying down
the pipes. The use of this term contract
value
clearly
indicates
that
the
consideration payable to the applicants
was to be calculated as a whole and not in
parts. The payment terms set out in the
said agreement speak in favour of the
applicants that the contract was to be read
as an inter-State indivisible works contract.
Clause 21 specifically mention that the
work was awarded to the applicants on a
turnkey basis. The invoices raised at the
time of taking out pipes out of the factory
premises by the dealer for the purposes of
compliance of excise duty provisions
Whether
divisible or
indivisible
specifically mentioned that the articles
were for home consumption and not to be
sold in the market but to be used in
performing contract. Looking to the terms
of the agreement as a whole, the property
in pipes which were to be used for creation
of a pipeline would pass on only after the
applicants completed acts to be performed
by them as per the terms of the agreement.
The transaction to supply and laying down
the pipe being inseparable, it would
constitute works contract and to such a
works contract, the liability to pay Central
sales tax would arise only after May 11,
2002 and since the transaction in the
present case pertains to the period prior to
May 11, 2002, the applicant would not be
liable for Central sales tax.(ii) that the
distinction between a divisible contract
and an indivisible contract came to an end
after the 46th Amendment to the
Constitution of India, however, liability to
pay Central sales tax covered by property
in goods involved in the works contract
could be fastened only after May 11, 2002
when the definition of term "sale" was
amended on account of Act 20 of 2002.
65
54 VST
442 (Ker)
Trivendrum Club.
V. Sales Tax
Officer (Luxury
Whether luxury tax is payable on Club allowing guest
the to stay in cottages and rooms attached to it on rent
and other charges under the provisions of the Kerala
Held- dismissing petition, the expression
"hotel" as defined under Act has a wide
meaning. Explanation thereto covers even
Luxury Act
66
55 VST 1
Tax) and Another.
tax on Luxuries Act.
guest house run by the Government or a
company or a corporation. Renting out of
rooms by the club need not be as business
to attract liability under the Act. Club as a
person liable to luxury tax is recognised by
the charging sections and in fact, specific
provisions stated above are there for
charging luxury tax on clubs on
membership fee at the rate of Rs. 100 per
member per year, and also on rent
collected
for
auditorium,
kalyanamandapam, etc., attached to clubs.
So much so, we feel there is no necessity
for the Department to prove that the
accommodation provided to guests in
cottages and rooms attached to clubs for
residence is a business activity of the club
to levy luxury tax thereon. Further, there
was no prohibition against club making
profit by renting out cottages and rooms to
its members or to members of affiliated
clubs, and what was required to prove was
that the rooms were rented out in excess of
the charges provided in the Act attracting
liability of luxury tax.
ABB Ltd.
V.Commissioner,
Delhi Value added
Tax.
The questions of law which arise for consideration in
this case are :"(i) Whether the sale transactions in the
present case were in the course of the inter-State trade,
so as to attract the provisions of CST Act, 1956 ?
(ii) Whether an inter-State trade is deemed to have
Held, allowing the appeals, express
stipulation of interstate movement of
goods in agreement not necessary to
constitute a sale in course interstate sale.
Interstate
sale
been taken place in the course of movement of goods
into
and
inside
the
country?
and
(iii) Whether the sale made to the Delhi Metro Rail
Corporation is in the course of import and consequently
exempt from the Delhi VAT Act, 2, especially section
7(c) of the DVAT Act, read with section 5(2) of the CST
Act.
67
55 VST 81
(Ker)
MGF Motors Ltd.
V.State of Kerala.
Whether the replacement of parts of automobile during
warranty period without collecting any price for the
same from the vehicle owner amounts to sale that
attracts sales tax.
Held, Free replacement of parts during
warranty period amounts to sale
Sale
68
55 VST 89
(Karn)
Sasken
Communication
Technologies Ltd.
V. Jt.
Commissioner of
commercial Taxes
(Appeals)-3,
Bangalore and
Another.
Whether software development
specification of customer sales?
Held- allowing the appeal, the parties had
entered into an agreement whereby the
assessee renders service to the client for
development of software, i.e., for software
development and other services. The
dealer agreed, that all patentable and
unpatentable, inventions, discoveries and
ideas which are made or conceived as a
direct or indirect result of the
programming or other services performed
under the agreement shall be considered
as works made for hire and shall remain
exclusive property of the client and the
assessee shall have no ownership interest
therein. Therefore, even before rendering
service, the assessee has given up his rights
to the software to be developed by the
assessee. The considerations under the
agreement is not for the cost of the project,
Whether
SaleDevelopme
nt of
Software
according
to
the consideration is for the service
rendered, based on time or man hours. The
Software so developed even before it is
embedded on the material object or after it
is embedded on a material object
exclusively belongs to the customer. In the
entire contract there is nothing to indicate
that the assessee after developing the
software has to embed the same on a
material object and then deliver the same
to the customer so as to have title to the
project which is developed. The title to the
project/software to be developed lies with
the customer even before the assessee
starts rendering service.
69
55 VST
145
(Uttara)
State of
Uttrakhand and
Others. V. Nestle
India Ltd.
Whether tomato sauce is a processed vegetable.
Tomato sauce is taxable as a processed
and preserved vegetable.
Schedule
entry
70
55 VST
208 (Ker)
Sanjos Parish
Hospital. V.
Commercial Tax
Officer, Thrissur
and Others.
In these writ petitions, where hospitals being
established by public ltd co with profit motive.
Therefore, if in hospitals, medicine and other
consumables sold to patient and bills are raised then
such transactions are taxable?
Held:- Hospitals are liable to get
themselves registered and pay tax on sale
of medicine and consumables to patients.
Sale of
medicines
71
55 VST
278 (MP)
P.K. Plastics. V.
Commissioner of
Commercial Tax,
MP and Others.
Petitioner is engaged in the business of purchase and
sale of plastic and steel items. Filed an application for
determining the rate of tax on the items purchased and
sold such as water jug and bottle, lunch box etc. The
Commissioner, held that only the water jug is covered
Held:- Entry "all kinds of utensils and
enamelled utensils" not restricted to
utensils used in kitchen alone but also
extends to items of daily household use.
Schedule
entry
within the meaning of utensils taxable @ 5% and that
the remaining items are taxable @ 13%.
72
55 VST
420
(Bom)
Commissioner of
Sales Tax,
Maharashtra
State, Mumbai. V.
Ramdas Sobhraj.
Whether ink, lacquer and chemicals used in job-work of
plate making with plates supplied by customers are
taxable.
Held- that the lacquer and ink were
materials used in plate making and
property in them passed on in the
execution of the contract of plate making
under the Act. There was transfer of
property in ink and lacquer.
Works
Contract
73
56 VST
129
Gauhati
Excellent Gravure
Industries. V.
State of Assam
and Others.
Whether the articles, polyester film, metallised pet,
metallised BOPP, aluminum foil film and poly film
covered by entry "films of all kinds including X-ray
films".
Held, it does not possess any such
photosensitive chemical or substances
which would qualify them to be treated as
films under entry.
Schedule
entry
74
56 VST
163
Gauhati
Bhola Ram Kanoo
V. State of Assam
and Others.
whether, "raabgur" is to be exempted from payment of
tax under the Assam General Sales Tax Act, 1993 by
treating the same as "gur" which is exempted from tax
under entry 17 of Schedule I of the Act or by treating
the same as a "cattle feed" which is also exempted from
tax under entry 50 of the said Schedule.
Held, rabgur exempt as cattle feed.
Schedule
entry
75
56 VST
441
(Mad)
State of Tamil
Nadu V. Steel
Authority of India
and Another.
The dealer entered into contract with the foreign co for
conversion of S.S. strips in to coin blank. The dealer
thereafter entered into an agreement with the
Government of India for the manufacture and supply of
twenty five and fifty paise stainless steel coin blanks. In
this agreement, the dealer was described as the
supplier whereas the Indian Government mint was
described as the purchaser. The payment to the
supplier for the supply of coin blanks was to be made
through irrevocable letters of credit to be opened by the
Held, that conjunct reading of both the
agreements would make it clear that these
two agreements are independent to one
another and were in no way connected
with one another. The first agreement was
entered by the dealer as a purchaser with
the foreign company for conversion of steel
strips into coin blanks and the second
agreement was entered into by it as a
supplier with the Indian Government Mint
Sale in the
course of
import
purchaser through the SBI in favour of the supplier. The
supplier had to ensure that the coin blanks were
manufactured strictly as per specifications.
The
question as to whether the dealer was eligible for the
claim of exemption u/s 5(2) of CST Act.
for supply of steel strips. In the first
agreement the dealer acted in the capacity
of a supplier for a valid consideration and
in the second agreement it acted as the
purchaser to the Conversion Agent for a
valid consideration. There was no privity of
contract between the local purchaser,
namely, the Government and the foreign
seller. In order to make a transaction
taxable under the CST Act, 1956, the
transaction must be a 'sale' as defined in
Section 2(g). To claim exemption under
Section 5(2) of the Act, the sale or purchase
of goods should be deemed to take place in
the course of the import of the goods into
the territory of India. The dealer hadnot
established that there was any term or
condition prohibiting the diversion of the
goods after the import i.e., the inextricable
link between the transaction of the sale
and the actual import making sale in the
course of import. Moreover, in order to
qualify for the exemption, the goods must
move from the foreign country to India in
pursuance of the conditions in the contract
of sale between the foreign seller and the
local purchaser, but, in the present case,
the goods were imported from the foreign
country to India in pursuance of the
contract entered into between the foreign
seller and the dealer, which was not the
local purchaser. The transaction took place
between the parties had amply made it
clear that the sale contemplated under
Section 5(2) had not taken place and, even
assuming that there was an import of
goods from Italy, such import was not
occasioned as a result of sale by a dealer in
Italy. Therefore, the dealer was not entitled
to the benefit of section 5(2).
76
56 VST
452
(Gauhati)
Reckitt Benckiser
India Pvt. Ltd. V.
State of Assam
and Others.
Whether the product "Harpic", "Lizol" are pesticides
and "Dettol". falls under the category of drugs and
medicine.
Held, allowing the petition, "Harpic",
"Lizol" are pesticides and "Dettol". falls
under the category of drugs and medicine
and not a toilet article.
Schedule
entry
77
57 VST 55
(AP)
Santhosh
Builders. V. Dy.
Commissioner of
Commercial
Taxes (CT),
Nellore and
Others.
The dealer was serviced the order of assessment long
after expiry of prescribed time limit for passing order.
No proper explanation for delay.
Held, allowing the writ petition, in view of
the circumstances, it must be presumed
that the order was not passed on the date it
is purported to have been passed but it
was passed beyond the period of limitation
prescribed. Consequently, the order cannot
be sustained being barred by limitation
and is accordingly quashed.
Assessment
78
57 VST
179 (AP)
Kumar
Metallurgical
Corp Ltd. V. Dy.
Commercial Tax
Officer, Nalgonda
and Another.
The petitioner availed
in loans from banks
hypothecating movable assets and immovable
properties sought a reference under the SICA to the
BIFR in 03-04. The Asset Reconstruction (ARCIL)
obtained security interest and initiated action under the
SARFAESI Act. While the petitioner was busy agitating
against the proceedings under the SARFAESI Act before
the DRT, DRAT and this court, the BIFR passed order on
Held, dismissing the petition, Section 16C
of the APGST Act has non-obstante clause.
It creates first charge on the property of
the dealer in favour of the Government
which can claim priority in recovery of
debts. Section 22 of the SICA does not in
any way bar the proceedings for recovery
of sales tax arrears. Therefore the notice of
Recovery
July 22, 2005 to the effect that the reference pending
before them shall stand abated in terms of the third
proviso to section 15(1) of the SICA. A notice of
attachment was issued for non payment of sales tax.
attachment issued u/s 27 of the Revenue
Recovery Act could not be faulted.
79
57 VST
275 (AP)
Jitender Roller
Flour Mills. V.
Assistant
Commissioner
(CT) LTU,
CharminarDiv,
Hyderabad.
The petitioner disclosed export turnover and
consignment sales claimed to be transfers to its
branches and agents in other States and claimed
exemption on the above The assessing authority passed
an order allowing exemption., Subsequently, on the
ground that the F forms submitted by the petitioner
covered consignment sales periods in excess of one
calendar month, contrary to the stipulation of rule
12(5) of the Rules) and passed the order of revision of
the assessment order withdrawing the exemption
allowed on specific turnover. On writ petitions:
Held, allowing the petitions, since the
petitioner had filed the F forms for periods
in excess of one calendar month and these
F forms were before the assessing
authority when he passed the initial order
were accepted, this cannot be revised as it
is a case of lack of diligence on the part of
the assessing authority, not liable to be
corrected.
F form
80
57 VST
284 (AP)
State of A.P. V.
Hindustan Cables
Ltd.
Whether even in the absence of a provision under the
CST Act for forfeiture of excess tax collected by a
registered dealer, forfeiture could be ordered by
recourse to the provisions under the local Act.
Held-a provision for forfeiture of tax is a
fortiori a substantive provision and not a
mere procedural prescription. Since the
CST Act contained no provision authorizing
forfeiture of excess tax collected but not
remitted to the Revenue, no forfeiture
could be ordered on forfeiture provisions
in the local Act,.
Forfeiture
81
57 VST
373
(Mad)
West Coast
Industries
(Exports) Pvt.
Ltd. V. State of
Tamil Nadu.
The assessee engaged in manufacturing and trading of
hosiery goods purchased furnace oil, distribution pipes,
copper
cable,
transformer,
electrical
goods,
demineralising plant, circular trolley and M.S. trolley
and water storage tank by issuing declaration in form C
which were not mentioned in RC. Considering the fact
The Commissioner had issued instructions
that wherever a dealer had purchased
goods on the basis of C form without,
including them in the certificate under the
CST Act either inadvertently or out of
ignorance, no penalty need be levied under
Declaration
s
that these items were not entered in the registration
certificate, the issuance of form C was a violation
attracting penal action under section 10A of the CST
Act, levied penalty at 150 per cent on the differential
tax.
section 10(b) of the CST Act. Therefore
there could not be levy of penalty on the
purchase these items except aluminum
sheets they had a close link with the
business activity of the assessee. However,
aluminum sheets which were used for
factory roofing purposes could not in any
manner, be brought anywhere near the
enumerated entries, the contention of bona
fide belief could not be accepted and
therefore the levy of penalty at 50 per cent
to purchase of aluminum sheets alone.
82
57 VST
415
(Gauhati)
A.R.N.V.
Chemicals Pvt.
Ltd. V. State of
Assam.
They make bulk purchase of loose detergent powder
packed by the petitioner in unit containers and is
offered for second sale to the customers. On a writ
petition challenging the order of the revisional
authority holding that packing of the detergent powder
amounts to "manufacture".
Held, allowing the petition, the process of
packing/re-packing of detergent powder
does not convert the original product into
anything other than detergent powder.
Manufactur
e
83
57 VST
484
(Orissa)
Tata Steel Ltd and
Others. V. State of
Odisha and
Others.
The questions in writ petitions."(i) Whether the entry
tax can be levied and/or imposed on the value of the
goods imported by the petitioners from outside the
country ? (ii) Whether such entry tax under the
aforesaid Act can be levied and/or imposed on import
of plant and machinery for establishing a plant in the
State of Odisha ? (iii) Whether the entry tax can be
levied on certain raw materials and goods imported
from outside the country and purchased from outside
the State when such materials have not been listed in
the schedule appended to the Orissa Entry Tax Act ?and
(iv) Whether the Orissa Entry Tax Act,, is violative of
i) Restriction under article 286 of the
Constitution could not be applied in entry
5 of List II of the Seventh Schedule to the
Constitution. Thus the levy of entry tax on
goods imported from outside the country
was not hit by article 286(1) of the
Constitution
(ii) that the
taxable event under the Entry Tax Act is
entry of specific goods into a local area.
whereas custom duty on import of goods
into territory of India. When the former is a
subject-matter of legislation by the State,
Entry tax
on steel
84
58 VST 43
(Ker)
HDFC Bank Ltd. V.
Intelligence
Officer (IB), Dept.
of Commercial
Tax, Edapally,
Kochi and
Another.
entry 83 of List I of the Seventh Schedule and article
246
of
the
Constitution
of
India
?"
the latter relates to entry 83 of List I of the
Seventh Schedule. There is no overlapping
in the exercise of legislative power.
(iii) The Act is a tax in lieu of octroi
incident of which are similar to that of
entry tax. A plain reading of the charging
section, it is clear that the Legislature has
no intention that imported goods are
intended to be left out from the charging
section. "Outside the State" means any
place outside the State and includes all
places outside the State as well as outside
the country.
(iv) that the
plant, which is brought in knock down
condition, is a combination of machinery in
a systematic manner so as to produce
goods and, therefore, it is coming within
the definition of machinery and, hence, it is
liable for entry tax.
The petitioner - banks have conceded turnover on the
sale of gold bars during the relevant period and paid tax
at one per cent, on the premise that the commodity sold
will fall within the relevant entry of gold bullions. But
the returns were rejected and the turnover was
assessed at four per cent treating the commodity as one
falling within entry 4(4) of the Third Schedule to the
KVAT Act. In this regard, the Commissioner of
Commercial Taxes had issued a clarification in exercise
of power vested under section 94 of the KVAT Act . In
the said clarification, issued on September 29, 2008, it is
Held, dismissing writ, the gold bar dealt
with by the petitioner - banks cannot be
treated as gold bullion coming within entry
1(2) of the Second Schedule to the KVAT
Act with HSN Code 7108.12.00. But it can
only
be
considered
as
"semimanufactured" form of gold falling within
entre 4(4) of the Kerala Act coming within
HSN Code 7108.13.00.(ii)
Schedule
entry
held that 10 grams of rectangular gold bars, being semimanufactured gold would fall within entry 4(4) of the
Third Schedule with HSN Code 7108.13.00. The
assessing authorities found that the rectangular gold
bars dealt with by the petitioner - banks cannot be
regarded as bullion since they are not raw or
unwrought gold or gold in mass. On writ,
85
58 VST
180(Karn
)
Smt. Geetha D.
Raju. V. State of
Karnataka.
The assessee engaged in the business of civil contract
work had assigned a part of the works contract to
another registered dealer who paid tax under the Act.
For that part of the contract and assessee was also
assessed giving benefit of reduction in respect thereof.
Subsequently, a show-cause notice was issued u/s 12A
for withdrawal of exemption levy of resale tax under
section 6B of the Act. The assessing authority
proceeded to revise the earlier order and imposed
resale tax. The Jt. Commr. on appeal set aside the
imposition of resale tax. The Additional Commissioner
initiated proceedings for revision of the said order. He
had set aside the order passed by the Appellate
Commissioner and restored the order passed by the
assessing authority holding that the assessee is liable to
pay resale tax under section 6B of the Act. Aggrieved by
the same, the assessee filed appeal.
Held, allowing the appeals, that ordinarily
unless there is a contract to the contrary in
the case of a works contract the property
in the goods used in the construction of a
building passes to the owner of the land on
which the building is constructed, when
the goods or materials used are
incorporated in the building. Even if there
is no privity of contract between the
contractee and the sub-contractor, that
would not do away the principle of transfer
of property by the sub-contractor by
employing the same on the property
belonging to the contractee. This reasoning
is based on the principle of accretion of
property in goods. In such a case the work
executed by a subcontractor, results in a
single transaction and not multiple
transactions. Once the turnover was taxed
in the hands of the sub-contractor, a
deemed sale takes place and the very same
turnover cannot be taxed again in the
hands of the contractor under section 6B
on the ground of resale when there is no
Assessment
such resale. Further it was held, if the
argument of the Department is to be
accepted it would result in plurality of
deemed sales which would be contrary to
article 366(29A)(b) of the Constitution.
Therefore order passed by the revisional
authority was not sustainable.
86
58 VST
262
(Gauhati)
Data Plus Info
Chanel. V. V.
State of Assam
and Others.
The petitioner modernized the industrial unit and
limited its manufacturing activities to production of
computer stationery. For production of computer
stationery the raw materials used are paper rolls and
carbon rolls. In order to qualify any product as
computer stationery, the said product must be
perforated on both sides/edges of the paper and must
also be foldable. Such perforation must be of certain
specifications so that such paper can be fed into the
computer printers and if it is a continuous paper, such
paper must be horizontally perforated so that the
continuous paper can be folded and torn off. Therefore,
unless such paper is subjected to such perforation with
certain specifications, the same cannot be used as
computer stationery. While ordinary paper may be also
used for computer printing, computer stationery having
distinct characters as stated above is used only for
computer printing. The computer stationery carries a
distinct identity in the common trade parlance.
Held accordingly, that the activity
undertaken by the petitioner was of
"manufacturing" of computer stationery.
The new form cannot be simply considered
paper or carbon sheet. The new identity is
an amalgamated and integrated new
product consisting of paper and carbon
pasted together and perforated with
certain specifications which can be used
only for the purpose of computer and such
product acquires a distinct character and is
known in the common trade parlance as
computer stationery. The activity of the
petitioner's firm in producing computer
stationery as "manufacture" within the
meaning of section 2(30) of the Assam
Value Added Tax Act, 2003
Schedule
entry
87
58 VST
290
(Mad)
Ajey& Sons Oils
(Madras) P. Ltd.
V. State of Tamil
The petitioner herein is a dealer in Vanaspathi and
Edible oil. The petitioner had effected sales to Andaman
Customers and had shown the turnover as inter-state
sales and charged at four percent against the C form.
The High Court confirmed the findings of
the Tribunal that there was on the record
to show that the dealer had a contract with
the Andamans dealers and towards that
Inter-state
sales
88
58 VST
341
(Gauhati)
Nadu.
The documents seized at the time of inspection revealed
that the goods were delivered to the agent at Madras.
Assessments were made assessing the turnover under
TNGST Act, rejecting the dealer's contention that the
purchasers at Andaman have no office or a branch place
of business at Madras. Most of their requirements of
grocery, edible oils, vanaspathi are to be ordered at
Madras and moved to Andamans from their nearest
port., viz., Madras harbour.
end, effected sales, resulting in movement
of goods from Chennai to Andamans. In the
absence of any material the turnover was
assessable under TNGST Act and the sales
were not inter-state sales.
Hindalco
Industries Ltd.
and Another. V.
State of Assam
and Others.
The petitioner is engaged in the business of
manufacturing and dealing in aluminum and its
products. The petitioners paid tax at the rate of four per
cent on the sale of aluminum rolled products
manufactured by it treating the same to be covered
under entry 26 of the Second Schedule to the Act. The
petitioner a petition under section 105 of the Act before
Commissioner, seeking clarification as to why the
aluminum ingots, wire rods and rolled products and
extrusions should not fall within the ambit of entry 26
of the Second Schedule to the Act. The Commr. clarified
that such product would be taxable at 12.5%.
Held, allowing the petition, that giving of
reason is an indispensable sine qua non in
quasi-judicial
adjudications.
The
clarifications by Commissioner wherein
omnibus observation has been made that
in a number of cases aluminum rolled
products had been held to be different
from aluminum and that it also did not
come under extrusions could not be
treated to be reasoned order. The
contention of the petitioners that in the
context of entries in entry 26 of the Second
Schedule, the words "extrusions of those"
would mean secondary products of
aluminum like sheets, plates, foils, etc. had
also not been gone into.Therefore the
order passed by Commr. was to be
quashed.
Assessment
89
59 VST
237
(P&H)
Prem Enterprises.
V. State of Punjab
and Another.
The appellant has contended that POP is exempted from
tax as it is powdered gypsum falling under entry no A16 for fertilisers. The Commissioner rejected the
contention of the appellant that the gypsum has the
same chemistry as that of POP and thus tax-free. It has
many uses such as in plaster, cement, paints and
ornamental stones. The intention of entry A-16 i.e.
gypsum used only in relation to improvement of quality
of soil. POP is not gypsum and not tax-free.
Held, dismissing petition, though the
chemical properties may be similar, but the
fact remains that the uses of gypsum and
POP are different. Entry A-16 of exempts
fertilizers from tax. Though the definition
of fertilisers is inclusive of gypsum it
cannot include POP as POP cannot even
remotely be used as a fertilizer and
therefore it is not a fertiliser.
Schedule
entry
90
60 VST
163
(Karn)
United Agencies.
V. Assistant
Commissioner of
Commercial
Taxes, II Circle,
Bangalore and
Others.
The appellant is a registered dealer of old newspaper
and waste paper. The appellant claimed exemption
from tax liability on the sale of above items as
exempted. But the assessing authority did not grant
exemption and assessed tax on the ground that the
appellant is liable to pay tax treating the sale of old
newspaper as waste paper.
Held, Sale of newspapers for purpose other
than reading news not exempted.
Schedule
entry
91
60VST
241
(P&H)
Daya Ram And
Company. V. State
of Harayana.
Penalty notice served on friend of assessee.
Held, service of penalty notice on friend of
assessee is not valid notice.
Service of
Notice
92
60 VST
245
(Mad)
A.V.R. Agencies. V.
Assistant
Commissioner
(CT), Tirupur .
The Asst. Commr. refused to issue forms F and C States,
stating that they could be misused.
Held, the Assistant Commr. has no
authority or power to refuse the issuance
of form F or C u/r 10A of the CST on the
basis that they could be misused by the
dealer.
Declaration
s
93
60 VST
270
(P&H)
RathiUdyog. Ltd.
V. State of
Haryana and
Subsequent to the assessment, it was discovered that
the turnover of the assessee has escaped assessment
during the year as the appellant has made unaccounted
sales of iron and steel. Accordingly showcause notice
Held, dismissing the appeal, that after
framing of the assessment, the information
came to the notice of the Assessing
Authority that the appellant has not
Assessment
Others.
stating that the appellant has suppressed sales
amounting to certain sum on an average per day and
proposing addition of sales to the gross turnover. The
assessing officer found that assessee has suppressed
considerable turnover during one month only and
deserves to be assessed to tax to the best of the
judgment. As the GTO was proposed at Rs. 1,39,727 per
day after excluding Sundays during the year, therefore,
the said amount was ordered to be added to the gross
turnover of the assessee.
reflected certain sales in the return
submitted by it. The Assessing Authority
found that not only the appellant has
purchased iron and steel from different
dealers, which are not reflected in the
accounts, but also the sales were also not
reflected.
Therefore, the
Assessing
Authority proceeded to frame the best
judgment assessment. Once the sales are
proved to be outside the said books of
accounts, a fact not disputed by the
appellant, the rejection of the books of
accounts is necessary consequence.
94
60 VST
289
(Mad)
State of Tamil
Nadu. V. V.S.S.
and Company.
The assessee, manufacture of groundnut oil and oilcake. On finding that there had been incorrect
maintenance of accounts and there has been a shortage
of groundnut kernel, which according to the assessing
officer indicates that the dealer crushed kernel without
recording in the accounts and sold resultant oil and oilcake outside the accounts and therefore, the claim of
exemption made by the assessee on account of
consignment sales, was disallowed. He estimated the
turnover on the basis of the electricity consumption
applying statistical data for consumption of electricity
and the conclusion that there has been suppression and
imposed tax and penalty.
Held, dismissing the petition, electricity
consumption cannot be sustained for the
reason that the consumption can be supply
of water for agricultural purposes or any
other purposes and hence cannot be relied.
Assessment
95
60 VST
295 (Raj)
Commercial Tax
Officer, Baran V.
Ganesh Lal Goya
The assessing authority imposed tax on the sale of AC
generator sets in residuary entry at 10 per cent. The
Tax Board by has held that AC generator set is taxable
at four per cent entry "all kinds of generating sets" at
Held, entry No. 41 "all kinds of generating
sets" is wide enough to cover the AC
generating sets also during the relevant
Schedule
entry
& Sons.
four per cent and, therefore,
period.
96
60 VST
350
(P&H)
Eco Auto
Components Ltd.
V. State of
Haryana and
Others.
Where the appeal filed by the petitioner challenging
certain orders by the Tribunal was dismissed as
withdrawn, with liberty to the appellant to take
recourse to the legal remedies availing to it in
accordance
with
law.
WP filed seeking quashing of the same orders.
Held, dismissing the petition, the petitioner
could not be permitted to invoke the writ
jurisdiction of this court after the
petitioner has withdrawn the appeal filed
against the orders now impugned in the
writ petition.
Appeal
97
60 VST
491
(Gauhati)
Sunil Chandra
Dey & Partner. V.
Food Corporation
of India and
Others.
The petitioner is carrying out contract for
transportation of food-grains of the (FCI) in terms of the
work order. The FCI made deduction from the bills of
the petitioner at four per cent as per mandate of the
rules in pursuance of the letter of the Principal
Secretary, drawing attention to provisions in Act and
Rule providing for tax deduction at source. The
petitioner moved this writ petition on the ground, that
the provisions for deduction from the bills of the
petitioner, without reference to the tax liability was
beyond the legislative competence of the State. It has
further been submitted that the provision for deduction
of tax at source had to have nexus with the tax due or
likely to be due.
Held, allowing petition, the perusal of rule
7(1) and 7 (2) of the Rules 2005, would
show that the deduction of four per cent
from the bills is referable to tax liability
and not de hors thereof. Thus, deduction of
four per cent from the bills of the
petitioner cannot be without considering
its tax liability
TDS
98
61 VST 5
(Cal)
Crompton
Greaves Ltd. V.
Assistant
Commissioner of
Commercial
Taxes, Corporate
Div and Others.
The petitioner collected sales tax on the basis of invoice
from purchasers of goods and issued credit notes later
on as trade discount and /or incentive giving them
credit of tax charged on such incentives, filed returns on
the basis of actual collection of tax after the tax was
deposited. The Dept rejected the claim of trade discount
on the ground that factually trade discount was not
Held, dismissing the appeal, that the
petitioner herein had realized the full price
with the sales tax and surcharge without
any mention of discount being allowed in
any manner whatsoever. It was not a
discount, which was known and
understood at the time of removal of the
Sale price discount
99
61 VST 23
(Bom)
Commissioner of
Sales Tax,
Maharashtra
State, Mumbai. V.
Kolsite Indistries.
made known to the purchaser at the time of sale. The
full price has been realised with tax at the time of
issuance of bill.
goods. There was no whisper in the
invoices as to discount being allowed. No
recurring credit scheme was also
introduced to allow the purchasers to get
the discount through the credit notes. It
was not turnover discount through
issuance of credit notes to encourage
turnover
of
sales.
1) Whether, insurance charges will not form part of
sale price, as it was borne by the buyer independently
and separately and also the parties did not intend, as
contained in clause (h) of section 2 of the CST Act, 1956,
?
(2)Whether, the Tribunal was entitled to take different
view from its earlier view, pertaining to same issue, in
respect of the different assessment years in view of the
evidence submitted by the respondent before it :
Held, dismissing the appeal, that the terms
in the documents consisting of agreements,
quotations, invoices, marine cover notes,
pertaining to the transactions between the
respondent and its purchaser clearly
revealed that the delivery of goods was to
be effected by the assessee is ex-works and
assesse had not taken any risk upon
themselves qua the goods upon delivery.
The respondent, in no uncertain terms,
clarified in the agreement that unless
otherwise agreed, the quoted price is
exclusive of the charges payable of packing,
carriage, freight and insurance. There is no
material to show that there was any
agreement to the effect that the quoted
price is inclusive of insurance. It is also
categorically agreed that the delivery of the
equipment/machinery is to be taken at the
works of the company. However, if the
equipment/machinery is desired to be
Whether
insurance
is a part of
sale price
delivered at a particular site, the same can
be arranged at the discretion of the
respondent at the buyers cost and risk,
irrespective of which the delivery shall be
construed as complete at the works of the
company. These clauses clearly establish
that the transactions was/were entered
into by and between the respondent and
the buyers on a clear understanding that
the insurance charges would be charged
separately and therefore it cannot be
construed to be forming part of the "sale
price". Again, the Marine Cover Note
further goes to show that the declaration
for insurance is to be made immediately
after the dispatch of the goods. Since the
delivery is ex-works and the amount
acknowledged in the Marine Cover Note is
only a deposit, the Tribunal was correct in
reaching a conclusion that the insurance
came into force after the dispatch of the
goods. This finding as well as explanation
of the respondent that the amount of
insurance charges was paid by the buyer
subsequently after adjusting the amount of
deposit mentioned in the Marine Cover
Note is also supported by the addendum to
the Cover Note, by which addendum the
sum insured was increased by Rs. 10,000
and thereby the insurance company
collected extra sum for the additional
premium. Therefore the Tribunal was
correct in holding that the insurance
charges were not part of the sales price u/s
2(h) of the CST Act 1956.
100
61 VST 89
(Cal)
Anatech
Instruments Pvt.
Ltd. V.
Commercial Tax
Officer, Sealdah
Charge and
Others.
The smoke meter and gas analyzer are used to examine
whether the engines of the automobiles conform to the
norms of pollution and these instruments and/or
machines are pressed into operation before the
automobiles are put on sale or for use on road.
Machinery as mentioned in item No. 54B, Schedule C of
the VAT Act. are used for something or the other.
Held, allowing the petition, these two
machines having functionality, are not
required for manufacturing automobile in
any sense. They can not be treated as plant
and machinery merely because the
manufacturers used the same. The word
"tools" is of wide import, and the
Legislature has made it clear that
measuring tools of various descriptions
that can be operated manually and power
operated or otherwise are includible
thereunder.
Schedule
entry
101
61 VST
272 (Ker)
Kochi Refineries
Ltd. V. State of
Kerala.
The assessment involved is CST assessment. On account
of non-production of C forms, its turnover of inter-State
sales to the extent not covered by C forms was assessed
at the higher rate. Since it was unable to get the C forms
and, therefore, assessment at higher rate got confirmed.
However, when the Tribunal heard the appeal the
petitioner could produce C forms for Rs. 2.46 crores.
The Tribunal took a very lenient view and allowed the
petitioner's claim by directing the assessing officer to
grant concessional rate in respect of C forms obtained
later. On revision petition seeking further time to obtain
and produce C forms for the balance Turnover.
Held, dismissing the petition, that the C
forms should have been produced at the
assessment stage itself and even for
accepting belated C forms, the assessee has
to furnish explanation. Tribunal took a
lenient view in petitioner's case and
accepted all the C forms produced before
them. This in fact amounts to condonation
of delay by the Tribunal in the production
of C forms without which the same could
not have been ordered to be accepted. In
any case the Tribunal has no powers to
grant further time for the petitioner to try
for C forms for the balance turnover. So
Declaration
s
much so, the Tribunal did not grant time
requested for by the petitioner.
102
61 VST
324
(Bom)
Timex Art Décor
Pvt. Ltd. V. State
of Maharashtra
and Others.
The petitioner filed VAT returns for 2008-09 and 200910 and claimed input-tax credit/set-off on the
purchases claimed to have been effected from certain
vendors against its tax liability of sales. Information was
received by the Department from the Economic
Intelligence Unit to the effect that certain
vendors/suppliers of the petitioner were fictitious and
bogus tax invoices had been issued to the petitioner
without the actual delivery of goods and for passing off
tax credit without payment or deposit in the treasury.
The Assistant Commissioner of Sales Tax, Investigation
Branch, conducted a search on the premises of the
dealer. The director was confronted with 13 purchase
invoices in response to which he stated that these bills
were given to him by agents in the market and were
accounted by the petitioner in the purchase register for
the claim of input-tax credit. The director stated that he
did not know the whereabouts of the dealers; that no
supporting documents for the movement of goods were
available with him; that he had no details of the
transporters and was unable to explain the disposal of
the goods purchased from those parties. The statement
of one vendor, K. V. Shah, was also recorded and he
stated that he had never actually sold or purchased any
goods; that he did not possess sale or purchase
registers and that the entire operation was being
supervised by a hawala operator by the name of
PradipVyas. The affidavit stated that no sale has been
Held dismissing the petition, (i) under Subsection (1) of Section 73, the State
Government is empowered to publish or
disclose the names of any dealers or other
persons if it is of the opinion that it is
necessary or expedient in the public
interest to do so. The State is also
empowered to publish any other
particulars relating to any proceedings
under the Act in respect of such dealers
and persons. The publication by the State
on the website falls within the enabling
provisions of Section 73(1). (ii) That
whether and what stage the State should
carry out the assessment of hawala dealers
was not a matter for determination in
these proceedings. The petitioner could not
possibly assert that its assessment in
accordance with law must be deferred until
an assessment is carried out in the first
instance against hawala dealers. The
Department was justified in taking
necessary steps to complete the
assessment of the petitioner in accordance
with law. A web of complex transactions
has been put into place to defraud the
revenue and we do not in the course of this
judgment intend to circumscribe in any
Input tax
credit
effected to the petitioner and that in his proprietary
business, he issued bogus tax invoices to different
dealers. On the website of the Sales Tax Department, a
list was put up on July 12, 2012 of beneficiary dealers
against whom police complaints were lodged after April
1, 2011. The claim of the petitioner appears as a
beneficiary in that list. On writ petition contending that
a first information report was first filed on October 22,
2012. that the name of the petitioner was uploaded on
the website on July 12, 2012 even prior to the filing of
the F. I. R. that there was no basis to initiate
proceedings under section 73 of the Act, by publication
on the website, when the assessment was pending. And
that it was the duty of the Department to pursue the
hawala dealers who have collected tax.
manner whatsoever the full range of
powers vested in the State Government
through its Sales Tax Department for
ensuring that due steps are taken to curb
or as the case may be deal with hawala
transactions which posed a serious threat
to the revenue of the State.
103
61 VST
445 (Cal)
Cipla Ltd. V. Dy.
Commissioner,
Commercial Tax,
Corporate Div.
and Others.
Disallowance of assessee's claim of stock transfer under
section 6A of the Central Sales Tax Act, 1956 against the
F forms covering transaction of stock transfer for more
than one month in violation of rule 12(5) of the Central
Sales Tax (Registration and Turnover) Rules, 1957.
Held, the proviso to rule 12(5) provides
that a single declaration might cover
transfer of goods, effected during a period
of one calendar month. There is nothing in
the rules which can be construed to vitiate
a declaration form only on the ground that
it covers transactions exceeding a period of
over one month.
Declaration
s
104
61 VST
455
(Bom)
President Trade
and Exim Corp
and Another. V.
State of
Maharashtra and
Others.
The Tribunal has directed the petitioner to pay an
amount of Rs. 50,000 for the assessment year 2005-06,
Rs. 4 lacs for the assessment year 2006-07 and Rs. 4.50
lacs for the assessment year 2007-08 on a writ,
contending that for the assessment year 2007-08 the
petitioner was entitled to a refund of approximately Rs.
27.74 lakhs and therefore, no order of deposit
Held, dismissing the petition, that the
Tribunal had taken the note of the fact that
for the assessment year 2007+08 there
was a refund to extent of Rs. 27.74 lakhs
but having regard to the total tax liability
for the assessment year 2005-06 , 2006-07
and 2007-08 which was about Rs.1.43
Input Tax
credit
warranted :
crores, the direction for deposit of an
amount of Rs. 9 lakhs for the remaining
two years could not be regarded as
arbitrary or contrary to law. The merits of
the submission that the petitioner is
entitled to a set-off and that the provisions
contained in section 48(2) read with
section 48(5)of the MVAT Act would not be
attracted could be considered by the Dy.
Commr (Appeals) when the appeal was
taken up.
105
61 VST
465 (All)
Skyline
Engineering
Contracts (India)
Pvt. Ltd. V.
Commissioner,
Commercial Tax,
Lucknow.
The petitioner had executed a works contract for the
construction of new lecture hall complex, Samtel
Centre, Boy's hostel. The aforesaid contract also
included the electrical works. The contract also
included electrical works, the value of the electrical
works have been separately shown in the contract. The
applicant applied for compounding under the
compounding scheme. The compounding in respect of
the civil work has been accepted excluding the value
determined for electrical works. On writ petitions
contending that the contract was one composite
contract.
Held, allowing the petitions,
merely
because the value of the electrical works
was shown separately in the contracts, the
same cannot be excluded from the
composite value fixed for the entire
contracts. The contracts are admittedly
civil in nature which also includes the
electrical works.
Works
contracts
106
61 VST
478
(Karn)
State of
Karnataka.
V.Modayil
Properties (P)
Ltd.
The assessing authority held that the assessee is liable
to pay any sales tax on the transportation charges
mentioned in the invoice and the Appellate authority
held that the transport charges were part of the postsale expenditure not liable to be included in the taxable
turnover and on revision petition :
Held, allowing the petition, it is clear that
the title of the goods passes to the
consignee at the time of delivery. The
amount was payable within 60 days from
the date of invoice. There is nothing in the
document to show that the transportation
charges are directly paid to the
Sale price
transporters. Moreover, the transportation
charges is fixed to a particular unit. Under
these circumstances, it cannot be said that
the transportation charges collected form
part of the post-sale expenditure and
cannot be included in the total turnover.
107
62 VST
197 (MP)
AAR KAY Agro
Spring Industries.
V. State of
Madhya Pradesh
and Others.
The petitioner had filed C forms, which were found
defective. In the C form, the purchase order was not
mentioned. It is submitted that the petitioner be
permitted to file afresh correct C forms duly issued by
the competent authority. It is submitted that to rectify
the error in C form, the petitioner be allowed an
opportunity to file fresh C form.
Held, that under rule 12(7) of the CST Act,
the declaration form could be filed at a
subsequent point of time and not
necessarily along with returns. That means
that the provisions requiring filing of
declaration forms along with the return is a
directory provision and not a mandatory
provision. The object of the rule is to
ensure that the assessee is not denied a
benefit which is available to it under law
on a technical plea.
Declaration
s
108
62 VST
216
(Mad)
Aspick
Engineering (P.)
Ltd. V. State of
Tamil Nadu.
The assessee effected sale to M/s. VijayashreeColata
,Warora and claimed the sale as an inter-State sale. The
assessing officer, viewed the sale as a local sale, on the
ground that the purchaser had taken delivery inside the
State. On appeal the Appellate authority upheld
assessment order. Further Tribunal rejected the
assessee's case, on the ground that the price was exgodown; that the purchaser had taken delivery and
moved the goods inter-State at its own cost. Thus, the
sale was only a local sale. The Tribunal further pointed
out that the goods were insured by the buyers
themselves and the sellers were relieved of the liability
Held, allowing the petition, that admittedly
that the transactions were not governed by
a written agreement. Thus, the criteria for
considering the transaction as an interState sale or not, is the movement of goods
intimately connected with the sale. The fact
that the purchaser had borne the insurance
charges or the seller had borne the
insurance charges or that the purchaser
had moved the goods at their own cost
would not be a decisive factor for the
purpose of determining the nature of sale
as inter-State sale or not. It was clear that
Inter-state
sales
after the delivery. On a revision petition,
sale and movement were intimately
connected, that the movement of goods
was consequences of sale. The HC held it as
an inter-state sale.
109
62 VST
241 (AP)
Mahabaleswarap
pa& Sons. V.
Assistant
Commissioner
(LTU), Anantapur
and Others.
The petitioner is a firm engaged in the business of
mining and selling of iron ore to an exporter and
claimed exemption as "sales for export" u/s 5(3) of the
CST Act. He produced H form, as required under section
5(4) of the Act for the entire year, was accepted and
assessment was completed granting exemption. The
revisional authority issued notice proposing to
withdraw the exemption under section 5(3), on the
ground that H forms for quarterly periods were not
submitted.
Held, that -rule 12(10)(a) mandated a
dealer to file a declaration signed by the
exporter in form H to the prescribed
authority up to the time of assessment by
the assessing authority. A plain reading of
rule 12(10)(a) does not, in any manner,
support the view that they are required to
be filed for quarterly periods, and not for
entire year.
Declaration
s
110
62 VST
388
(Delhi)
Varun Beverages
Ltd. V.
Commissioner of
Value Added Tax
(Delhi).
The product "Slice" had a composition of 69.52% water,
1.08 Alfonso Mango, 15.56% Totapuri Mango, 13.05%
Sugar, and .79% preservatives. The question whether
fruit based pulp based drink was classifiable as "food
article".
Held that, there was no specific entry in Act
which dealt with beverages or food drinks
or juices. The predominant content was
water 70%, Mango pulp was 17%.
Therefore this was not a 'fruit juice'. The
drink was at best an instant energy giver
and thirst quencher and by no stretch of
imagination could it be called a "food
article".
Schedule
entry
111
65VST
260
(Mad)
Jayam& Co. V.
Assistant
Commissioner
(CT) Main
Amindakarai
Assessment
The section 19(20) of the Tamilnadu VAT Act was
challenged as arbitrary. The section said that
'notwithstanding anything contained in this section,
where any registered dealer has sold goods at a price
lesser than the price of the goods purchased by him. the
amount of the input tax credit over and above the
The selling dealer gave discount after
issuance of the tax invoice and charging
VAT on the selling price, extending
discount to the petitioner which were in
the form of credit notes. On receipt of the
credit notes the purchasing dealer
Sale priceITC on
discount
Circle, Chennai
and Another.
output tax of those goods shall be reversed.
calculated the purchase price taking into
account the discount and fixed the same as
the purchase price. By value addition the
purchasing dealer sold the goods to the
consumer and VAT was calculated on the
sale price fixed by the purchasing dealer by
considering the discount Thus he took
excess tax credit as the VAT paid by him
was less that the VAT paid by him to the
first selling dealer 9 before discount) .High
Court upheld the validity of the
amendment as the above method caused a
dent in State revenue.