1. Appeal before Tribunal

The Allahabad High Court held that the Trade Tax Tribunal constituted under the provisions of UP Trade Tax Act, 1948 was a last fact finding authority and therefore, while deciding the appeal before it the Tribunal should consider all the grounds raised before it in appeal independent of the observation by the lower authority. In other words the appeal has to be disposed of by a speaking order.

M/s. Shama Traders vs. Commissioner, Trade Tax, U. P., Lucknow 2009 NTN (Vol. 41) 306

2. Manufacture

The Allahabad High Court held that the process of cleaning used or burnt mobile oil into usable mobile oil did not amount to manufacture under the provisions of section 3AAAA of the U.P. Trade Tax Act, 1948.

M/s. Universal Viscose Oil Products, Roshanpur, Daurali, Meerut vs. Commissioner, Trade Tax, U.P., Lucknow 2009 NTN (Vol. 41) 310

3. Reassessment

The Allahabad High Court held that the original order of assessment passed on the basis of the then existing circular cannot be reopened on the basis of revised subsequent circular issued by the Commissioner as a result of reviewing the earlier one.

B. S. Misra, Dy. Chief Accounts Officer vs. State of U.P. & Others 2009 NTN (Vol. 41) 244

4. Recovery of tax

The Allahabad High Court held that merely because the company in which the assessee was the Director he need not make the payment of tax dues, the doctrine of the piercing the veil was not called for. The Directors therefore, cannot be held automati-cally responsible for the dues of the company.

Rajendra Kumar Agarwal & Others vs. The Trade Tax Officer & Another 2009 NTN (Vol. 41) 248

5. Limitation – Reassessment

The Allahabad High Court while interpreting section 21(5) of the U.P. Trade Tax Act, 1948 held that if the assessee or his counsel was present before the Appellate Authority when the order was passed the period of limitation will commence from the date of the order. But, if the order came to be served later on that was passed in absence of the assessee then the date of service of the order would be relevant.

M/s. Gaurav Trading Co. vs. Dy. Commissioner (Assessment)-II & Another 2009 NTN (Vol. 41) 260

6. Refund

The Supreme Court after referring the provisions of section 44(2) of the Haryana General Sales Tax Act held that the claim of interest for the delayed refund made by the assessee or during the period of the refund being withheld by the department, was required to be gone into by the High Court. The Apex Court however, directed the department to refund the principal amount within a period of five weeks, else it will have to pay interest @ 12% p.a. on the said amount.

State of Haryana & Others vs. M/s. Sadhu Overseas (2009) 34 PHT 651 (SC)

7. Sale

The Punjab and Haryana High Court held that erection of body on the chassis amounted to a transaction of sale under the provisions of Punjab VAT Act.

New Model Industries Pvt. Ltd. vs. State of Punjab & Another (2009) 34 PHT 652 (P&H)

8. Law Applicable – Effect of repeal

The Delhi Sales Tax Act 1968, was repealed by the Delhi VAT Act 2004, w.e.f. 1st April, 2005. The Delhi High Court after considering the provisions of section 81 as well as 106 of the VAT Act held that the further proceeding after the decision in the proceedings before the Appellate Authority would be governed by the new Act and therefore, instead of submitting Reference Application before the Tribunal as was the practice under the old Act an appeal lay directly before the High Court for questions of law.

Shiv Shakti Kirana Kendra & Others vs. Commissioner, VAT and Others (2009) 34 PHT 659 (Del.)

9. Doctrine of unjust enrichment

The Supreme Court after considering the provisions of Bombay Entertainment Duty Act, 1923, rules framed thereunder and section 72 of the Indian Contract Act, held that simply because the Act didn’t have the express statutory provisions, the proprietor of multiplex theatre cannot retain the excess amount recovered from the public as admission charges more than its liability. The Supreme Court in that connection observed that the Act was required to be reasonably construed so as to make it workable and sub-serve our constitutional goal. The Supreme Court also directed the State Government to realise the amount collected in excess by the multiplex owner and pay the same to a voluntary or charitable organisation rendering good services to any section of the people particularly children and women. The Supreme Court in that connection requested the Chief Minister to take up the responsibility of proper utilisation of the amount so collected.

State of Maharashtra & Others vs. Swanstone Multiplex Cinema (P) Ltd. (2009) 54 STA 318 (SC)

10. Garnishee proceedings – Recovery

The West Bengal Taxation Tribunal disapproved the initiation of garnishee proceedings during the pendency of revision before the Higher Authority and the Stay Application submitted by the assessee.

Govinda Impex Ltd. vs. A.C.C.T., Central Section & Others (2009) 54 STA 344 (WB)

11. Entries in Schedule

A) Fibre Glass Cloth

The West Bengal Commercial Tax Appellate and Revisional Board held that the product fibre glass cloth, fibre glass step, sleeving and cord were covered by the expression textile fabric and therefore, exempt from tax under entry 81 of Schedule 1 of the West Bengal Sales Tax Act, 1994.

M. S. Industries vs. A.C.C.T., Dharamtolla Circle (2009) 54 STA (Board 164)

B) Tools

The Commissioner of Sales Tax, Gujarat in determination proceedings under section 80 of the Gujarat VAT Act held that various types of tools used for any of the processes required for manufacture of product, would be covered by entry 58A of second Schedule relating to machinery, its parts and accessories.

M/s. Bosch Ltd., Ahmedabad. Order dated 15-10-2009 Sales Tax Journal December, 2009 Vol. 48 P. 817

C) Inverted sugar

The Allahabad High Court held that invert sugar was a sugar product and therefore, was liable to tax as such.

M/s. Vista Invertos Ltd. vs. Commissioner Trade Tax, Lucknow 2009 NTN (Vol. 41) 305

D) IT products

The Madras High Court held that printer, cartridges, ink cartridges and toner cartridges were covered by the category of IT products under item 68 of Part B of the first Schedule to the Tamil Nadu VAT Act 2006.

M/s. P. C. World, Madurai vs. The Commissioner of Commercial Taxes, Chennai 2009 (15) TNCTJ 240 (Mad.)

12. Transfer of Right to Use

Before the Allahabad High Court, the assessee challenged the levy of tax by the State of U.P. where the agreement was executed at Delhi. The High Court confirmed the action on the specific finding of fact by the Tribunal that though the stamp paper was purchased at Delhi, the perusal of the lease deed didn’t show that the same was in fact executed at Delhi. In view of the above position, the judgment of the Apex Court in the case of Twentieth Century Finance Corporation was held to be inapplicable especially when the U.P. Trade Tax Act contained provisions to the contrary under explanation to the definition of the term “Sale”.

M/s. Vysya Bank Ltd. vs. The Commissioner of Trade Tax, U.P. Lucknow 2009 NTN (Vol. 41) 327

Editorial Note: With due respect to Allahabad High Court, the judgment of the Supreme Court in the case of Gannon Dunkerley & Co. (88 STC 204) seems to have not been brought to the notice of the Court. In the said judgment, at Page 231 the similar explanation under the definition of the term “sale’ was read down to be applicable only in case of intra-State transactions. That apart section 4 of the CST Act is expressly made subject to provisions of section 3. That aspects also seems to have been overlooked by the Hon’ble Court.

13. ITC – SEZ

The Madras High Court held that section 18 of the Tamil Nadu VAT Act, 2006 provided for zero rating of the sale of goods to any registered dealer located in Special Economic Zone and therefore, the claim of refund of ITC made within the prescribed period of 180 days have to be granted.

M/s. Sara Leathers vs. The Commercial Tax Officer, Chennai 2009 (15) TNCTJ 201 (Mad.)

14. Stock transfer

The Madras High Court while dismissing the Writ Petition by the State of Tamil Nadu held that the mere fact that the goods dispatched by the assessee and received by the agent was sold on the very same day of arrival, cannot lead to an inference of inter-State sale.
The State of Tamil Nadu vs. Tvl. P.M.P. Iron and Steel India Limited, Chennai 2009 (15) TNCTJ 208 (Mad.)

15. Clarification not binding

The Madras High Court held that any clarification issued by the Commissioner of Commercial Taxes without any legal base was not binding on the authorities or the assessee and therefore, both of them were free to decide the matter independently without being influenced by the circular.

M/s. Lloyd Insulations (India) Limited vs. The Joint Commissioner, Chennai 2009 (15) TNCTJ 235 (Mad.)