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Schedule entry

87

58 VST 290 (Mad)

Ajey& Sons Oils (Madras) P. Ltd. V. State of Tamil Nadu.

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 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.

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 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.

Inter-state sales

88

58 VST 341 (Gauhati)

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 A-16 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.

Declarations

93

60 VST 270 (P&H)

RathiUdyog. Ltd. V. State of Haryana and Others.

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 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.

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 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.

Assessment

94

60 VST 289 (Mad)

State of Tamil Nadu. V. V.S.S. and Company.

The assessee, manufacture of groundnut oil and oil-cake. 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 oil-cake 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 & Sons.

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 four per cent and, therefore,

Held, entry No. 41 "all kinds of generating sets" is wide enough to cover the AC generating sets also during the relevant period.

Schedule entry

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 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.

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 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.



Sale price -discount

99

61 VST 23 (Bom)

Commissioner of Sales Tax, Maharashtra State, Mumbai. V. Kolsite Indistries.

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 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.

Whether insurance is a part of sale price

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 much so, the Tribunal did not grant time requested for by the petitioner.

Declarations

102

61 VST 324 (Bom)

Timex Art D├ęcor Pvt. Ltd. V. State of Maharashtra and Others.

The petitioner filed VAT returns for 2008-09 and 2009-10 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 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.

Held dismissing the petition, (i) under Sub-section (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 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.

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