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Judgments

Shakeel Ahmad Proprietor Esmaily Trading Company vs Commissioner Commercial Taxes Uttar Pradesh, Lucknow  [ALLAHABAD HIGH COURT, 05 Sep 2014]

Sarna Transport Corporation Private Limited, Represented by its Authorised Signatory C. Isakkimuthu vs Commercial Tax Officer, Roving Squad IV, Enforcement (North), Chennai  [MADRAS HIGH COURT, 02 Sep 2014]

Good Year India Limited Lucknow Through Its Manager Sales Tax vs Commissioner, Commercial Taxes Uttar Pradesh Lucknow and another  [ALLAHABAD HIGH COURT, 28 Aug 2014]
VAT - Sales Tax - Uttar Pradesh Value Added Tax Act, 2008, ss. 3-A, 3-A(2), 4 - Central Sales Tax Act, 1956, s. 14 - Declared goods - Additional tax leviable - Quantum - Legality - Petitioner (revisionist/company) was carrying on the business of tyres and tubes of tractor, car etc - S. 4 of the Act prescribed the rate of tax to be levied on the turnover of goods - Entry no. 125 of Sch. II part A of the Act specifically mentions tractors, tractors trolley, harvesters and attachment and parts thereof and provides the tax shall be payable at the rate of 4% - Though under the head 'Description of goods' in Entry no. 5 tyres and tubes excluding tyres and tubes of cycles, cycle-rickshaw and animal driven vehicle the rate of tax was prescribed at 3%, however, in Entry no. 1 for the goods described in Sch. II to the Act 'other than declared goods' the rate of additional tax was fixed at 1% and petitioner submitted that tyres and tubes of Tractor etc. would be liable to additional tax at 1% being goods 'other than declared goods and not at 3% as erroneously determined by Tribunal - Hence, instant revision petition - Petitioner contended that u/s. 3-A of the Act, an additional tax was payable on the taxable turnover of sale or purchase of goods or both at a rate not exceeding 5% as may be specified by State Govt. by notification and that u/s. 3-A(2) of the Act, no additional tax should be levied and paid on the turnover of sale or purchase or both as the case might be, of goods specified in Column 2 of sch. I and III and the turnover of sale or purchase or both as the case might be, of goods declared to be of special importance in the inter-State trade or commerce u/s. 14 of 1956 Act - Whether tractor tyres and tubes could be held to be excluded from goods mentioned in Entry no. 5 of the GO dt.31-3-2011 -

Held, cl. (a) of s. 3-A(2) of the Act, sch. II was specifically omitted there from which means that goods mentioned in Entry 125 of sch. II would also be subject to levy of additional tax as goods 'other than declared goods in view of Entry I to Notification dt.31-3-2011 - The subsequent notification dt.7-9-2012 which brought an amendment into the earlier notification dt.31-3-2011 to specifically exclude 'Tractor tyres and tubes from Entry 5 of the notification dt.31-3-2011 was also an indicator that respondent authorities never intended 'Tractor tyres and tubes' to be read into Entry 5 of Notification dt.31-3-2011 - From a composite analysis of various statutory provisions as well as the Notification dt.31-3-2011 and Notification dt.7-9-2012 it was seen that the only Entry under which Tractor tyres and tubes could be subjected to additional tax was Entry 1 of Notification dt.31-3-2011 and such additional tax would be paid at 1% and not 3% under Entry 5 - Impugned order of Tribunal was illegal and was accordingly set aside - Revision allowed.


Farida Leatherware Private Limited, Represenetd by its Corporate Manager, Accounts and Finance S. Sridhar vs Assistant Commissioner (CT), Vellore District  [MADRAS HIGH COURT, 28 Aug 2014]

Otis Elevators Company (India) Limited, Lucknow vs Commissioner of Commercial Taxes Uttar Pradesh Lucknow  [ALLAHABAD HIGH COURT, 26 Aug 2014]
VAT - Indirect Tax - Uttar Pradesh Value Added Act, 2008, s. 9 - A/y 2010-11 - Work contract - Sale contract - Legality - Petitioner (company) registered under 2008 Act and was engaged in the business of manufacturing of parts and components of lifts and elevators - Petitioner executed work contracts for supply of parts and components of lifts/elevators and to provide services for erection, commissioning and installation of the same - Assessment proceedings were initiated in respect of company for A/y 2010-11 - However, Assessing Authority held the works contract to be a sale contract on ground that all the material utilized in material and parts of a lift were assembled and kept in the godown and were transported to the site after the parties enter into a contract and it was not that the lift or its parts were manufactured after the execution of contract - Assessing Authority imposed a total demand of Rs.5,64,76,626/- - Aggrieved petitioner filed an appeal before Commissioner (Appeals), who stayed the demand to the extent of 50% but directed the petitioner to deposit remaining 50% amount within 30 days - Aggrieved petitioner filed an appeal before Tribunal and Tribunal modified the order of Commissioner (Appeals) and granted stay to the extent of 80% of the total demand on the furnishing of security and remaining 20% was required to be deposited within 30 days - Hence, instant revision petition - Whether works contract entered into between the petitioner and a customer was a sale contract or a works contract -

Held, since assessing authority made the assessment relying exclusively on earlier judgment of SC in State of Andhra Pradesh v. M/S Kone Elevator, 2005 Indlaw SC 113 which was overruled by Constitution Bench of SC in Kone Elevator India Pvt. Ltd. v. State of Tamil Nadu 2014 Indlaw SC 344, petitioner was entitled to complete stay of demand amount - Impugned order passed by Tribunal was modified and a direction was issued to the Appellate Authority to decide the appeal of petitioner expeditiously in accordance with law within a period of 2 months - Till then no recovery shall be made from the revisionist of the remaining amount of 20% of tax for A/y 2010-11 in pursuance of the order of Tribunal - Revision allowed.


P. K. Joseph vs Commercial Tax Officer, Office of Commercial Tax Officer and others  [KERALA HIGH COURT, 25 Aug 2014]

(1) Sadbhav Engineering Limited; (2) Sushee Hi- Tech Constructions Private Limited; (3) Mahalaxmi Engineering Company and others vs State of Uttar Pradesh and others  [ALLAHABAD HIGH COURT, 25 Aug 2014]

Bharath Rock Products, Represented By Its Managing Partner, V. V. Devassykutty vs Commercial Tax Officer, Angamaly and others  [KERALA HIGH COURT, 22 Aug 2014]

Anand Enterprises, Represented by its Managing Partner, R. Anand vs Additional Sales Tax Officer and others  [KERALA HIGH COURT, 21 Aug 2014]

Eureka Forbes Limited vs Assistant Commissioner Special Circle-II, Cochin and others  [KERALA HIGH COURT, 21 Aug 2014]

Hughes Communications India Limited vs Commissioner Commercial Tax  [ALLAHABAD HIGH COURT, 21 Aug 2014]

Satyanarain Keshavram Private Limited, Lucknow vs Commissioner Commercial Tax Uttar Pradesh  [ALLAHABAD HIGH COURT, 20 Aug 2014]

K. V. Johny vs State of Kerala, Represented by Secretary to Government and others  [KERALA HIGH COURT, 08 Aug 2014]

Kuchhal Enterprises vs Commissioner of Trade and Taxes  [DELHI HIGH COURT, 07 Aug 2014]

S. Muthiah and others vs S. K. Prabakar and others  [MADRAS HIGH COURT, 06 Aug 2014]

Asstt. Commercial Taxes Officer vs National Agriculture Co-operative Marketing Federation of India Limited  [RAJASTHAN HIGH COURT, 04 Aug 2014]

Exide Industries Limited vs State of Maharashtra and others  [BOMBAY HIGH COURT, 04 Aug 2014]
Sales Tax - Indirect Tax - Bombay Sales Tax Act, 1959 - Central Sales Tax Act, 1956, s.5(3) - Sale Tax - Applicability - Petition was filed u/art.226 of the Constitution of India challenging the order of revision dt. 25-5-2011 passed by respondent No.3 and the consequent demand notice of the same date, demanding an amount of Rs.2,16,98,270/- under the 1959 Act - Challenge was also laid to the order of Tribunal in appeal confirming the demand of sales tax - Whether the sale of Submarine Navy Batteries by the petitioner to M/s Crown would fall within the purview of section 5(3) of 1956 Act, being the penultimate sale to the one that actually occasioned the export of the Submarine Navy Batteries -

Held, keeping in mind the provisions of ss.5(3) and 2(g) of 1956 Act, HC had to decide whether the purchase order/agreement dt. 5-3-2004 placed by M/s Crown on the petitioner would be a 'sale' as contemplated u/s.5(3) r/w s.2(g) of 1956 Act as contended by the Revenue, or whether selling and supplying the Submarine Navy Batteries to M/s Crown on 14-9-2004 would fall within the word 'sale' as contemplated under the said provisions - It was clear that the purchase order/agreement dt. 5-3-2004 between the petitioner and M/s Crown could never be construed as a 'sale' as contemplated under the provisions of s.5(3) of 1956 Act - S.2(g) of 1956 Act defined the word 'sale' to mean any transfer of property in goods by one person to another for cash or deferred payment or for any other valuable consideration and includes transfers as more particularly set out in s.2(g)(i) to (vi) of 1956 Act - HC did not find that the purchase order / agreement dt. 5-3-2004 could by any stretch of the imagination fall within the definition of the word 'sale' in s.2(g) of 1956 Act - That was for the simple reason that the word 'sale' contemplated inter alia transfer of the goods or a transfer of the right to use any goods for any purpose or delivery or supply of goods by one person to another - In the peculiar facts of the case and after carefully perusing the purchase order/agreement dt. 5-3-2004 between the petitioner and M/s Crown, HC was of the view that there was no 'sale' of the Submarine Navy Batteries by virtue of the said purchase order/agreement - In the facts of the instant case, there was no transfer of goods as contemplated under Section 2(g) of 1956 Act - On a perusal of the said agreement and its various clauses, at the highest, it could be said that the same amounts to an 'agreement to sell', that might be performed at a future date by the petitioner - It was the performance that translated into a 'sale' of the Submarine Navy Batteries - Thus, HC found that in performance of the purchase order / agreement dt. 5-3-2004, the petitioner sold and supplied the Submarine Navy Batteries to M/s Crown on 14-9-2004 - That sale was after the date when the Algerian Navy placed its purchase order on M/s Crown - Purchase order placed by the Algerian Navy on M/s Crown was dt. 22-5-2004 - In that view of the matter, HC found that the sale of the Submarine Navy Batteries by the petitioner to M/s Crown was the 'last sale preceding the sale occasioning the export' as contemplated u/s.5(3) of 1956 Act and the same took place after, and for the purpose of complying with the purchase order dt. 25-5-2004, placed by the Algerian Navy on M/s Crown - In view thereof, the sale of Submarine Navy Batteries by the petitioner to M/s Crown on 14-9-2004 were deemed to be in the course of export as contemplated under section 5(3) of 1956 Act and therefore, could not be taxed as a local sale under the provisions of 1959 Act - Furthermore, in the instant case, the said purchase order/agreement made a reference that the sale of the said Submarine Navy Batteries was for the purpose of export to the Algerian Navy - It was for that reason that the technical conditions of the said purchase order provided that many of the instructions were to be printed not only in English but also in French - Thereafter, the Algerian Navy placed a purchase order on M/s Crown - To fulfill the order placed by the Algerian Navy on M/s Crown, petitioner sold & supplied the Submarine Navy Batteries to M/s Crown on 14-9-2004 - After perusing and construing the purchase orders dt. 5-3-2004 and 22-5-2004 as well as other documents referred to in the petition HC was of the opinion that there was an inextricable link between the contract of sale by the petitioner to M/s Crown on the one hand and the actual export by M/s Crown to the Algerian Navy on the other - In that view of the matter, the inescapable conclusion was that the sale of Submarine Navy Batteries by the petitioner to M/s Crown on 14-9-2004 was in the course of export and covered by the provisions of s.5(3) of 1956 Act - That being the position, HC found that taxing the said sale as a local sale under the provisions of 1959 Act was wholly without jurisdiction and contrary to law - Order accordingly.


Neel Kanth Sweets Vivek Khand Gomti Nagar Lucknow vs Commissioner Commercial Taxes Uttar Pradesh  [ALLAHABAD HIGH COURT, 01 Aug 2014]
VAT - Uttar Pradesh Value Added Tax Act, 2008, s. 57 - Preparation of food - Assessment to tax - Non-supply of inspection report - Tax Liability - Legality - Petitioner filed monthly returns as well as annual returns in form-26 which were verified and accepted by the assessing authority in his order in A/y 2008-09 under the Act - A survey of the business premises of petitioner was conducted but due to non-presence of any authorized persons, books of account could not be produced - However, an estimate of the stock was taken and certain loose papers, which were found on the premises were seized - However, Assessing Authority by its judgment assessment assessed the petitioner to a tax of Rs.37,43,116/- - Aggrieved petitioner filed a first appeal before Commissioner (Appeals), which was partly allowed and estimated turnover was reduced, resulting in tax liability being reduced by Rs.13,43,000/- - Aggrieved petitioner filed second appeal before Tribunal u/s. 57 of the Act - Tribunal by impugned order has remitted the matter again to assessing authority - Hence, instant revision petition - Petitioner contended that he was never confronted with the survey report nor a copy of the same was given to petitioner and thus the petitioner was completely in the dark with regard to the findings recorded by Commissioner in his survey report, the Appellate Authority, however, while passing the appellate order allowed a reduction in turn over resulting in a reduction in the tax liability to extent of 13,43,000/- -

Held, Assessing Authority while passing the order had relied entirely upon the SIB report and it was silent so far as material contained in the books of accounts which were produced by petitioner the material contained therein - Before the Tribunal though that matter was agitated but the same was rejected - On the question as to whether preparation of food amounts to 'manufacture' or not, the Tribunal has held that same amounts to 'manufacture' - However, Court need not go into that question at instant stage - In facts and circumstances of case, providing a copy of report of the SIB to petitioner during the assessment proceedings was absolutely imperative in order to enable the petitioner to prepare his defence - Having not done so the assessment order itself stands vitiated - In instant case since the Tribunal has itself remitted the matter to the assessing authority for consideration on certain questions, order of Tribunal deserves to be set aside - Order of Tribunal and the assessment order and Appellate order were set-aside - Matter was remitted to Assessing Authority with the direction that Assessing Authority should make a fresh assessment after providing a copy of SIB report to petitioner and after giving him an opportunity to submit his explanation to the same - Revision allowed.


BRD Finance Limited, Represented by its Authorized Signatory C. Shibu Job vs (1) District Collector, Thrissur; (2) Tahsildar, Thalappilly, Thrissur District; (3) Village Officer, Thrissur  [KERALA HIGH COURT, 01 Aug 2014]
Corporate - Sales Tax - Companies Act, 1956, ss. 529A and 530 - Kerala General Sales Tax Act, 1963, s. 26A - Issuance of certificates - Petitioner purchased an item of property owned by a company in liquidation - Sale of the property was pursuant tender notice issued by the Official Liquidator and the sale was confirmed by HC - Petitioner proposed to establish an industrial unit in the property, for which clearances were required to be obtained from various authorities - However, respondent No. 3 was not issuing the required certificates and instead, the respondent No. 3 issued communication, stating that revenue recovery proceedings were pending against the company in liquidation when the property was purchased by the petitioner and therefore, the validity of the transaction in favour of the petitioner need to be examined before the certificates sought for by the petitioner were issued - Hence, instant petition - Whether respondents be directed to issue the certificates sought for by them -

Held, sales tax dues were to be recovered by the State from the sale proceeds in accordance with the provisions in s. 529A of the 1956, Act - S. 26A of the 1963, Act could not prevail when it comes into collision with the mandates of s. 529A of the 1963, Act - Petitioner, in the circumstances, was entitled to succeed - Communication of the respondent No. 3 was quashed - Respondent Nos. 1 to 3 directed to issue the certificates sought for by the petitioner - Order accordingly.


(1) Bhagwati Prasad Agarwala, Engineering Works Private Limited, Pakur; (2) Ravi Engineering Works, Partnership Firm, through its Partner Raj Kumar Agarwala; (3) Vishal Industries, Partnership Firm, through its Partner Ravi Kumar Agarwal vs State of Jharkhand and others  [JHARKHAND HIGH COURT, 31 Jul 2014]

Poonam Grah Nirman Private Limited, Represented BY R. Anantha Narayanan, Managing Director vs (1) Commercial Tax Officer (Wc), Alappuzha; (2) Deputy Commissioner (Appeals), Kollam; (3) Inspecting Assistant Commissioner, Alappuzha; (4) Commissioner, Commercial Taxes, Thiruvananthapuram; (5) State of Kerala, Represented By Secretary, Thiruvananthapuram  [KERALA HIGH COURT, 25 Jul 2014]

Linde India Limited (Formerly Known As BOC India Limited), Represented by its Lead-Indirect Taxation N. Girish vs (1) State of Kerala, Represented by its Secretary to Government, Thiruvananthapuram; (2) Commissioner of Commercial Taxes, Thiruvananthapuram; (3) Deputy Commissioner (Appeals), Kochi; (4) Assistant Commissioner (Works Contract), Kochi; (5) Inspecting Assistant Commissioner, Kochi  [KERALA HIGH COURT, 24 Jul 2014]

Vikas Traders vs State of Uttar Pradesh and others  [ALLAHABAD HIGH COURT, 24 Jul 2014]

Triveni Engicons Private Limited vs State of Jharkhand and others  [JHARKHAND HIGH COURT, 23 Jul 2014]

Fort Kochi Hotels Private Limited, Represented by Its Director Praveen Rengaraj, Mumbai vs (1)State of Kerala, Represented by Its Deputy Revenue Secretary Secretariat, Thiruvananthapuram; (2) Special Tahsildar (R.R.), Fort Kochi; (3) Carrit Moran And Company Private Limited (In Liquidation) Represented by The Official Liquidator, Kolkatha; (4) Assistant Commissioner, Special Circle (P), Commercial Taxes, Mattancherry  [KERALA HIGH COURT, 23 Jul 2014]
Sales Tax - Corporate - Kerala Revenue Recovery Act, 1968 - Kerala General Sales Tax Act, 1963 - Revenue recovery proceedings - Petitioner purchased the subject property vide sale deed dtd. 30-11-2007 from respondent No. 3 - Petitioner, after purchase, constructed a building thereon and established a hotel, which was said to have commenced operation from 2009 and was still functioning - Petitioner was issued with revenue recovery notices, attaching the property and threatening sale, for recovery of the sales tax dues, of the respondent No. 3-Company on the basis of assessment orders passed against the respondent No. 3 - Petitioner had challenged the revenue recovery proceedings as provided under the Act - Petitioner's challenge were declined - Hence, instant petition - Whether petitioner was liable to pay -

Held, after 2006 there was no evidence placed on record to evidence any hearing having been conducted or a subsequent notice having been issued; for reason only of passage of time from the proceedings initiated in the year 2006 - Hence, series of assessment orders were passed without affording a reasonable opportunity to the assessee (respondent No. 3) to produce the books of accounts as also the declaration forms - Assessments having been completed without proper notice and without opportunity, series of assessment orders were liable to be set aside - Assessment orders have not been challenged by the assessee and was now assailed by the petitioner, whose concern was with the distress caused on the property, pursuant to the recovery initiated on the basis of the assessment orders - Orders passed by the authorities under the Act, since by the deposit of the amount as directed, the basis of the recovery under the Act, being the assessment orders against the respondent No. 3, stands effaced - Hence, the recovery based on series assessment orders necessary could not be proceeded with - On the assessment being completed after looking into the declaration forms, the liability, if any, would necessarily be a charge on the subject property covered by sale deed - Petition allowed.




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