1. Best Judgment Assessment

During the course of survey, assessee’s place of business was visited and no books of account were found. Assessing Authority passed Best Judgment Order and enhanced the turnover liable to tax. First Appellate Authority partly allowed the appeal by making a reduction in the tax imposed. In second appeal, the Tribunal upheld the Order of the First Appellate Authority. On revision to the HC against the Tribunal Order, the Court by placing reliance on the judgment in the case of
New Plaza Restaurant v. ITO 309 ITR 259 (HP); Sanjay Oil Cake v. CIT 316 ITR 274 (Guj.); Vijay K. Talwar v. CIT (2011) 1 SCC 673 and Commissioner, Customs v. Stoneman Marbles (2011) 2 SCC 758 held that estimation of turnover was a question of fact. As no question of law is involved, Revision Petition stands dismissed.

Jai Ambe Traders v. Commissioner, Trade Tax (U.P.) (2015) NTN (Vol. 57) 149 (All.)

2. Check-Post Penalty vis-a-vis “Material Particulars”

In this case, the goods were carried by assessee and was intercepted by authorised officer of the Department. The relevant documents were produced. All the columns of Form ST-18C were filled in except the column of invoice no. and date. As per Assessing Officer, there was violation of provision of Rule 54 of Rajasthan Sales Tax Rules, and accordingly, he imposed penalty holding that there was intention to evade the tax. The Rajasthan HC held that where quality, weight, description and value of goods were clearly filled in and stated, then it cannot be said that “material particulars” have not been filled in. Though all other particulars may be important but would not be relevant for imposition of penalty. So far as the present case was concerned, the decision of the Supreme Court in the case of
Guljag Industries (2007) 11 STJ 361 (SC) was distinguishable. Merely not filling in the invoice no. and date would not fall in the category of “material particulars”. When all “material particulars” namely quality, weight, description and value of goods, and names of transporters, consigners and consignee were duly filled in, then apprehension of the Dept. that the form could be reused was not sustainable. The Tax Board and Dy. Commr. (Appeals), were justified in arriving at the conclusion of deleting the penalty.

Asstt. Commercial Taxes Officer, Anti Evasion v. Rathi Bars Ltd. And Anr. (2015) 26 STJ 384 (Raj.)

3. Condonation of delay For Reference/Rectification

In the present case, delay of 52 days in filing the Reference Application was noticed without mentioning the cause of delay and there was no request for condonation of delay. Yet, the application was registered by the Registry. In these peculiar facts, the Appellate Board rejected the Reference Application as barred by Limitation.

2. Thereupon, the applicant prayed for conversion of Reference Application into Rectification Application which prayer was in time. However, the Appellate Board rejected the said request as Reference Application was filed late and was rejected as time barred, therefore, the same could not be converted into a Rectification Appln. Accordingly, both the prayers were rejected.

Hawkins Cookers Ltd., Bhopal v. Commissioner C.T. (2015) 26 STJ 401 (M.P.-Bd.)

4. Contract – Actual Contract, whether a compact deal

In the present case, the assessee entered into an agreement with M/s. Daewoo Motors India Ltd. for running a canteen and after the process of tender the assessee was authorized to charge
Rs. 22 per meal. In the meal, the curd and salad were also included. The assessee contended that both the items are exempted from the net of trade tax. The assessee also submitted that for the said purpose, separate bills were issued in favour of Daewoo Motors India Ltd., and, hence, the items like Curd and Salad may be removed from the tax net. As against this, the Dept. submitted that the meal was supplied against
Rs. 22 per head, it included the price of curd and salad. Therefore, it was a compact deal and it cannot be bifurcated as per the contention of the assessee. So, revenue justified the Order by the Tribunal.

2. The HC, after hearing both the parties at length and on perusal of the material available on record, held that the actual contract with the assessee was to supply the meal which included various items including curd and salad. Therefore, there was no separate sale to the individual pertaining to these items. When it has to come integral part of the meal, then, the tax was leviable on the meal. Bifurcation of the independent items was not possible when the same could not be sold separately. Hence, individual tax cannot be charged on each items, because the price was fixed on the entire meal being a composite deal, then, there was no question to give separate treatment to any item. Accordingly, the revision filed by the assessee was dismissed.

Aakash Catering Services Pvt. Ltd. v. Commissioner of Trade Tax (U.P.) (2015) NTN (57) 154 (All.)

5. Enhancement in turnover

Though normally merely on the basis of admission of undisclosed money by the assessee for the purpose of income tax, addition cannot be made in the turnover for the purpose of levy sales tax, it would be necessary not only to show that the source of money has not been explained but also to show the existence of some material to indicate that the said undisclosed money has resulted from transactions liable to sales tax and not from other sources. In the present case, the assessee had no other income except from her business of selling of good and drinks. Moreover, before the Income Tax Authorities, the assessee herself admitted the profit from unaccounted sales and she had income. Therefore, the sales tax authorities were justified to enhance the turnover on the basis of the said declaration by the assessee.

U.D. Rotighar, Bangalore v. Jt. Commr. C.T. (2015) 26 STJ 334 (Kar.)

6. Input Tax Rebate

In this case, the main issue was regarding eligibility for input tax rebate in respect of cotton seed consumed for producing cotton seed oil and tax free oil cake. Applying the decisions of M.P. High Court in the case of
Ruchi Soya Industries (2014) 24 STJ 235 (M.P.) and Shreeram Agro Industries (2014) 24 STJ 498 (M.P.), the Appellate Board allowed the appeal and held that ITR could not be made in proportion of production of oil and oil cake. With this reasoning, the appeal was allowed.

Shri Krishna Oil Industries v. Commr. C.T. (M.P.) (2015) 26 STJ 416 (M.P.-Bd.)

B. In this case, there was no dispute that the assessee was in the business of manufacture and sale of sunflower oil from Sunflower oil cake by solvent extraction process. But, in the process, after sunflower oil is extracted, there remained DOC which was exempt from tax. But, merely because the said DOC also has a value and the assessee sold the same, there was no justification to deny benefit of input tax credit to the assessee, because there is no direct nexus between sunflower oil cake and the DOC. Sunflower oil cake was purchased for the purpose of extracting oil, and assessee had not put up the unit for manufacture of DOC. The entire raw material i.e., sunflower oil cake was purchased for manufacture of sunflower oil. The authorities had not properly appreciated statutory provisions. The Legislative intent was defeated in denying benefit of input tax credit to the assessee relying on Section 11(a)(1) r/w. section 17 of the Act. Therefore, the impugned order was unsustainable. Accordingly, the revision petition was allowed.

M. K. Agrotech (P) Ltd. v. State of Karnataka (2015) 26 STJ 328 (Kar.)

7. Interpretation of Entries

‘Keo Karpin Baby Oil’ was manufactured under a drug licence and has prophylactic qualities, protecting children from rickets and checking vitamin A and E deficiency in them, entitling it to be classified as a drug and medicine.

2. “Drugs and Medicine”, according to Supreme Court in the case of
Ponds India Ltd. (2008) 13 STJ 355 (SC), held that the meaning of it under the Drug and Cosmetics Act, 1940 was very wide. It included therapeutic and prophylactic products even without very significant quantities of medicine which however defined the character of the product.

3. According to Supreme Court, the burden of proof as per the case of Ranbaxy Laboratories Ltd. (2006) 8 SCC 637 was on the revenue to prove certain items are exigible to tax and fall under a given taxable entry is always on the revenue. Accordingly, the petition of the revenue was dismissed.

CTO, Special Circle-I, Jaipur v. Dej Medical Stores Ltd. (2015) 26 STJ 379 (Raj.)

B. Assessee sought determination of tax rate on “voltage stabiliser” under the U.P. Trade Tax Act. Following the Apex Court judgment in the case of
Commissioner of Trade Tax v. Parikh Gram Udyog reported in (2010) 43 NTN DX 367 JT 2010 (8) 337
holding that ‘voltage stabiliser’ were electronic goods and chargeable to tax at 8%. Hence, revision petition filed by the Dept. was dismissed.

Commissioner of Commercial Tax v. Sai Computer Pvt. Ltd. (2015) NTN (57) 146

8. Opportunity of Hearing

Section 94 of Kerala VAT Act provided that the authority shall decide the question after giving the parties to the dispute a reasonable opportunity to put forward their case and produce evidence. Kerala HC held that when consideration of evidence and hearing of parties were contemplated, the exercise of such power should be coupled with expression of reasons, dependent upon the facts and materials available. But, the impugned order passed by the Commissioner did not disclose the reasoning by which the Commissioner had concluded that the goods fall under SRO No. 82 of 2006. Therefore, the said Order was set aside by the Court.

India Motor Parts & Accessories Ltd. v. State of Kerala & Ors. (2015) 26 STJ 376 (Ker.)

9. Payment of Tax

The assessing authority did not give credit of challan of Rs. 1 lakh deposited in the Treasury. But this point was not raised by the appellant in the First Appeal. However, before the Appellate Board, appellant submitted a photo copy of the said challan. On consideration of the same, the Appellate Board held that in the interest of justice, the appellant should get credit for the amount so deposited by him, and for that purpose the case was remanded to the assessing authority to verify the said challan and pass the order accordingly.

Madhyanchal Steels Pvt. Ltd., Indore v. Commissioner C.T. M.P. (2015) 26 STJ 339 (M.P.-Bd.)

10. Submission of Form ‘C’

The appeal pertained to 1996-97. The appellant went in revision against the assessment order. Revisional Authority remanded the case with specific direction for verification of ‘C’ forms of
Rs. 30,00,000. In the re-assessment made in terms of revision order, appellant submitted additional ‘C’ forms of
Rs. 36,19,509, but the same were not accepted by the Assessing Authority due to non-submission of requisite information along with the ‘C’ form. In the appeal filed against the said re-assessment order, the Appellate Authority also did not accept the said ‘C’ forms of
Rs. 36,19,509 due to non-submission of requisite information. However, the Appellate Authority accepted ‘C’ form of
Rs. 8,39,984 submitted at the time of appeal and gave relief of Rs. 48,461. Against the said First Appeal Order, the present appeal was filed on the point of non-acceptance of ‘C’ forms of
Rs. 36,19,509. On behalf of the Dept. it was contended that as the case was remanded by the Revisional Authority only for verification of ‘C’ forms of
Rs. 30,00,000, therefore, the appellant’s objection about non-acceptance of ‘C’ forms of
Rs. 36,19,509 was not justified. Also, in the Second Appeal, a request was made by the Dept., for enhancement of tax to the extent of relief of
Rs. 48,461 given by the First Appellate Authority as the same was against the Revision Order which had become final. The appellant did accept that by Revision Order the case was remanded only for verification of ‘C’ forms for
Rs. 30,00,000 and the whole case was not remanded. But the appellant prayed for relief on the ground of natural justice.

2. The Appellate Board observed that ‘C’ Forms of Rs. 36,19,509 were not verified as well as certain ‘C’ forms were not backed by purchase orders and there were deficiencies in it. Also, no time was given for production of ‘C’ forms of
Rs. 14,61,671. Therefore, considering these points, the board felt that reasonable opportunity of hearing was not given to the appellant and, therefore, natural justice was denied to them. In the circumstances, the board felt that one more opportunity should be given to the appellant and, hence, the matter was remanded to the Assessing Authority to decide in accordance with law.

Raymond Wollen Mills Ltd. v. Commr. C.T. M.P. (2015) 26 STJ 404 (M.P.-Bd.)

D. H. Joshi

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