|
1. Additional tax
Following the ratio of the
Supreme Court judgment in the case of Deputy Commissioner of Sales Tax vs. M/s
Ayesha Hosiery Factory (P) Ltd., the Punjab & Haryana High Court held that
additional sales tax was not leviable on inter-State sale of goods covered by
a notification under Section 8(5) by the concerned State government specifying
a specific lower rate in exercise of its power thereunder.
M/s Seth Industrial
Corporation, Ludhiana vs. State of Punjab & Another (2009) 33 PHT 439 (P&H).
2. Auction sale
Before the Himachal Pradesh
High Court, the Forest department had announced an auction of standing timber
trees in accordance with the terms and conditions circulated in advance. One
of the conditions provided that the bids offered by the individual persons
would remain open for thirty days for consideration by the competent
authority, during which the bidder also had the liberty to withdraw its offer.
Considering those conditions, the Hon’ble Himachal Pradesh High Court held
that the sale by auction was not complete when the hammer was down, but on
expiry of thirty days from that day.
Divisional Forest Officer vs.
Assessing Authority (2009) 33 PHT 449 (HP).
3. Entries in Schedule
1. Sambharam – Butter milk
The Kerala High Court, while
considering the text of entry 49 in the First Schedule to the Kerala General
Sales Tax Act, held that the said entry would cover sambharam and butter milk
which were one and the same commodity.
In that connection, the court
observed that mere addition of ginger, chilly and a pinch of salt to butter
milk, did not change the commodity as such.
State of Kerala vs. Malabar
Regional Co-op. Milk Producers Union Ltd. (2009) 17 KTR 149 (Ker).
2. Neck tie
The West Bengal Taxation
Tribunal held that neck tie was covered by the entry relating to readymade
garments. The Taxation Tribunal in that regard followed the Full Bench
decision of the Madhya Pradesh High Court in the case of Assistant Sales Tax
Officer & Others vs. Central Stores (123 STC 338).
M/s Janton vs. The State of
West Bengal & Ors (2009) 53 S. T. A. – 225.
3. Electric fans and
electric presses
The Punjab & Haryana High
Court held that electric fans and electric presses were covered by entry 17 of
the Haryana General Sales Tax Act as electrical goods.
M/s Northern India Sales
Corpn., Karnal vs. State of Haryana (2009) 33 PHT 488 (P&H).
4. Chemical
The Gujarat VAT Tribunal held
that a product which was obtained with the use of chemical by process of
mixing, continued to be chemical so obtained by reaction.
M/s Fosroc Chemical (India)
Pvt. Ltd. vs. The State of Gujarat.
Source : Sales Tax Journal,
April 2009, Vol. 48, Part : 1, Page 70.
4. Effective Order
The Himachal Pradesh Tax
Tribunal at Shimla held that an order which was dictated but not announced
cannot be said to be an effective order. Till the order was signed by the
competent authority, the dictated order was only a draft order.
The Associated Cement
Companies Ltd., Barmana Vs Additional Excise & Taxation Commissioner, Shimla &
Others. (2009) 33 PHT 446 (HPTT).
5. ‘F’ Form requirement –
Jobwork
The readers are well aware
about the judgment of the Allahabad High Court in the case of M/s Ambica Steel
Ltd., whereby the High Court held after upholding the circular by the
Commissioner, that a declaration in Form ‘F’ was required to be produced even
when the goods were sent only for job work to a place in other State and the
same were received back after completion of the job work.
The assessee submitted an
appeal before the Apex Court and the same was admitted. However, when the
appeal came up for final disposal, the assessee requested the court that the
wanting Form ‘F’ would be submitted within a specified period before the
concerned authority.
The Supreme Court in its
judgment noted that there was difference of opinion about the true and correct
interpretation and the scope of Section 6A of the Central Sales Tax Act, but
the assessee being ready to file the wanting Form ‘F’, the assessing authority
was directed not to impose penalty / interest while computing the tax
liability as one time waiver.
The Supreme Court noted in
the concluding para of the judgment that certain States within whose
jurisdiction the transferee were having their business were not issuing ‘F’
Form for such transactions and observed that it was open to the assessing
officer to complete the proceedings on its own merit after examining
transactions between the parties, keeping in mind the circumstances that the
assessee was unable to furnish ‘F’ Form for no fault of his.
It may be noted that the
merits of the case or the scope of Section 6A was not decided nor considered
by the Supreme Court .
M/s Ambica Steels Ltd. vs. State of U. P. & Others 2009 NTN (Vol. 39) – 296.
6. Interest
1. The Punjab & Haryana High
Court held that interest cannot be levied before the quantum of amount was
determined in appeal. In other words, pending the appeal challenging the
determination of the tax payable; would necessarily keep the levy of interest
in abeyance.
Food Corporation of India vs.
State of Punjab (2009) 33 PHT 425 (P&H).
2. The West Bengal Commercial
Tax Appellate & Revisional Board held that no interest can be levied on the
assessed dues which was not admitted by the assessee while furnishing the
return.
M/s Nisith Impex Pvt. Ltd.
vs. A.C.C.T., Dharamtolla Circle (2009) 53 S.T.A. – (Board – 84).
7. Interim Stay of Recovery
The Supreme Court held that
where the denial of interim relief led to public mischief, grave irreparable
private injury or shook a citizen’s faith in the impartiality of public
administration, the interim relief can be given, though mere establishment of
a prima facie case should not necessarily lead to an interim order of stay of
recovery.
Shri Ravi Gupta vs.
Commissioner of Sales Tax, Delhi & Another 2009 NTN (Vol. 39) – 284.
8. Inter-State sale
1. The Madras High Court held
that when the local dealer supplied news print to a Kerala dealer, who instead
of transporting the goods directly to Kerala, sent it to Sivakasi for printing
and the printed news magazines were transported to Kerala from Sivakasi. Such
steps were taken to avoid multiple transportation from Tamil Nadu to Kerala
and then back to Sivakasi resulting in re-despatch to Kerala. The Kerala buyer
instructed the seller to send the goods directly to Sivakasi and despatch the
same to kerala thereafter. In absence of any material about the local sale,
the Hon’ble High Court held that the stoppage of journey at Sivakasi and
conversion of paper into news magazine did not affect the nature of the
transaction to be that of local sale.
The State of Tamil Nadu vs.
M/s Sun Paper Mill Ltd. & Ors. 2009-10 (15) TNCTJ – 1.
2. Before the Supreme Court,
the assessee from Delhi had sold certain goods to three registered dealers in
Delhi with the contractual obligation that they in their turn will sell those
goods in the assigned territory outside the State of Delhi. They were also
required to submit monthly statement of stocks and the quantum of sale
effected by them. The Supreme Court, after considering the terms of the
contract, held that mere taking of delivery in Delhi by the purchasing dealers
for the purpose of effecting the sale in the assigned territory outside the
State of Delhi per se did not take away the nature of the transaction to be
that of inter-State sale.
M/s DCM Ltd. vs. Commissioner
of Sales Tax, Delhi (2009) 33 PHT 473 (SC).
9. Manufacture
The Supreme Court approved
the confirmation by the Andhra Pradesh High Court of the decision of the
Tribunal, holding that even after processing, the granules continued to remain
LDPE granules and no new product emerged. The assessee in that case had
purchased LDPE granules for obtaining cable sheathing compound.
State of Andhra Pradesh vs.
Repute Plastic Colours Ltd. & Another (2009) 17 KTR 187 (SC).
10. Natural justice
The West Bengal Taxation
Tribunal disapproved the cancellation of Registration Certificate on the basis
of reports which was not intimated to the assessee. The cancellation was held
to be a glaring case of violation of principles of natural justice.
Shri Shridhari Sharma vs. S.
T. O., Bowbazar Charge & Others. (2009) 53 S. T. A. – 231.
11. Plant & Machinery –
Construction materials
The full Bench of the Gujarat
VAT Tribunal held that the building and construction materials used for
constructing a foundation for installation of plant and machinery, was part
and parcel thereof, because without foundation no plant and machinery can be
installed. The Tribunal therefore held that the cost of building material so
sed can be considered as capital goods and therefore the assessee was eligible
to claim input tax credit of taxes paid on the purchase of such construction
material.
M/s Anil Products Ltd. vs.
The State of Gujarat.
Source : Sales Tax Journal,
April 2009, Vol. 48, Part : 1, Page 53.
12. Refund
The Supreme Court held that
if substantive provision provided for refund of excess tax paid, it cannot be
taken away by subordinate legislation. The Supreme Court also observed that
the subordinate legislation have to be interpreted by applying the principles
of purposive construction leading to a reasonable result and not encouraging
defaulters while discouraging the law abiding citizens.
Corporation Bank Ltd. vs.
Saraswati Abharansala & Another. (2009) 17 KTR 154 (SC).
13. Reassessment
The Punjab & Haryana High
Court held that when the original order was passed on the returns furnished as
per the law then prevailing, the subsequent change of law cannot constitute
the basis for framing a reassessment. In other words, new interpretation by a
higher court after finalisation of the assessment in accordance with the law
explained earlier, cannot lead to a valid initiation of reassessment
proceeding.
Shri Bal Chand Pradeep Kumar
vs. State of Punjab & Another. (2009) 33 PHT 410 (P&H).
14. Recovery
The Madras High Court held
that the State cannot supersede the commercial transactions which have already
taken place prior to the assessment of tax dues and therefore the property
which had already been subjected to a charge in favour of the bank, cannot be
adversely affected by the later assessed dues.
Tamil Nadu Mercantile Bank
Ltd. vs. The Commercial Tax Officer, Madurai. 2009-10 (15) TNCTJ – 20.
15. State Development Tax
The Allahabad High Court,
while disposing off several writ petitions, held that the State development
tax was not applicable to dealers who have opted for composition under Section
7-D of the U. P. Trade Tax Act, 1948.
M/s Systematic Conscom Ltd.
vs. State of U. P. & Ors. 2009 NTN (Vol. 39) – 245.
16. Sale
The Himachal Pradesh High
Court held that supply of electric meters by the electricity department to the
consumers on payment of periodical hire charges as provided under the Indian
Electricity Act, did not amount to sale.
M/s S. E. Hydel Circle vs.
Addl. Excise & Taxation Commissioner, (SZ) Shimla (2009) 33 PHT 514 (HP).
17. Words and Phrases –
Industrial raw material – Fuel
Before the Kerala High Court,
the assessee proposed to purchase kerosene oil by issuing Form 18 under the
provisions of the Kerala General Sales Tax Act, 1963 for using the same in the
manufacture and sale of Titanium dioxide. The Kerala High Court referred to
the definition of the expression ‘industrial raw material’ to mean something
which was used for manufacturing or producing the goods. The Court also
referred to the judgment of the Supreme Court in the case of Collector of
Central Excise vs. M/s Ballapur Industries Ltd., wherein the Apex Court while
explaining the meaning of raw material, held the said expression to mean an
input or ingredient getting burnt up or consumed in the chemical process of
work. In other words, for an item to be a raw material, it should go into the
making of the end product without which the end product would not come into
existence. In view of the above position, the Kerala High Court held that the
kerosene oil used as fuel for the purpose of calcinations cannot be considered
as a raw material in the production of finished product – titanium dioxide –
for sale.
M/s Travancore Titanium
Products Ltd. vs. The Commissioner of Commercial Taxes. (2009) 17 KTR 177 (Ker).
|