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Whether Sale-Development of Software

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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

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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 within the meaning of utensils taxable @ 5% and that the remaining items are taxable @ 13%.

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

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 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.

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 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).

Sale in the course of import

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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 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.

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 attachment issued u/s 27 of the Revenue Recovery Act could not be faulted.

Recovery

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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

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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 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.

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 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.

Declarations

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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.

Manufacture

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 entry 83 of List I of the Seventh Schedule and article 246 of the Constitution of India ?"



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, 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.

Entry tax on steel

84

58 VST 43 (Ker)

HDFC Bank Ltd. V. Intelligence Officer (IB), Dept. of Commercial Tax, Edapally, Kochi and Another.

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 that 10 grams of rectangular gold bars, being semi-manufactured 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,

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 "semi-manufactured" form of gold falling within entre 4(4) of the Kerala Act coming within HSN Code 7108.13.00.(ii)

Schedule entry

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 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.

Assessment

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

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