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Input tax credit

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.

Declarations

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 warranted :

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 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.

Input Tax credit

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 post-sale 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 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.

Sale price

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.

Declarations

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 ex-godown; 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 after the delivery. On a revision petition,

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 inter-State 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 sale and movement were intimately connected, that the movement of goods was consequences of sale. The HC held it as an inter-state sale.

Inter-state sales

109

62 VST 241 (AP)

Mahabaleswarappa& 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.

Declarations

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 Circle, Chennai and Another.

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 output tax of those goods shall be reversed.

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 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.

 Sale price- ITC on discount

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