1. Adjustment of Tax Paid in Wrong Head

Clerk of petitioner paid CST under the head of State Sales Tax. Authorities levied interest and penalty for short payment under CST law. Calcutta HC held that adjustment is to be made only when taxes paid in excess or short paid are credited into a known account and can be easily adjusted. This ratio will not apply in case of inter Departmental adjustment or completely different types of taxes.

Hindustan Unilever Ltd. v. D.C.C.T. (2015) 50 PHT 150 (Cal)

2. Advance Tax / Exemption

Contractors executing works contract in Punjab and whose TDS was being deducted cannot be called upon to pay advance tax in lieu of liability with respect to VAT.

Ayappa Infra Projects Pvt. Ltd. v. State of Punjab (2015) 50 PHT 97 (P&H)

3. Delay in Filing Appeal

Delay of 15 days in filing appeal was requested to be condoned. ‘Sufficient cause’ was to be interpreted to mean was an elastic provision and liberal approach in condoning delay of short duration was approved. If the appellant was able to show sufficient cause for delay and justifies the same, the court shall condone the delay.

Bombino Agro Ind. Ltd. v. State of Haryana (2015) 15 PHT 479 (HTT)

4. Entries in Schedule – “Ujala Supreme” and “Ujala Stiff And Shine”

In the present case before the Apex Court, classification of the above goods was involved under the Kerala VAT Act, 2003 r/w section 6(1)(d) and Notification No. SRO 82 / 06 Entry No. 27, Entry No. 103 and Entry No. 155 of List A of the Third Schedule to the 2003 Act. Also, Customs Tariff Act, 1975 pertaining to HSN Courts.

2. The assessee contended on facts Acid Violet Paste (AVP) diluted in water and sold under the brand name as “Ujala”- Entry 155(8)(d) has classified AVP as equivalent to HSN Code No. 3204.12.94 – “Ujala Stiff and Shine” was a diluted polymers of vinyl acetate (PVA). CCT upon classification application about the tax on above goods held it was liable to tax @ 12.5%. Aggrieved dealer filed an appeal to the HC from where the inter alia observations were made and the matter was remanded back to the Commissioner for a fresh consideration. Again the Commissioner determined the rate of tax on the above goods @12.5%. Again appeal was filed by the dealer before the HC which dismissed the appeal by repealing the contention that the common parlance or commercial parlance test could not be applied and identification of the products should be in accord with HSN Code number. Appellant submitted that no new product came into existence upon the mixture of water and AVP and the product remained as AVP only, and, hence, no manufacturing process was involved.

3. The Apex Court held that the HC, we were disposed to think, has missed the issue in entirety and, therefore, we were obliged to dislodge the impugned and orders. Accordingly, the Apex Court allowed the appeals.

M. P. Agencies v. State of Kerala 2015 NTN 229 (SC)

5. Ex parte Assessment Order

In the present writ case, arising out of Jharkhand VAT Act, 2005 the assessee contended as under:

(i) Notice was never served on the assessee.

(ii) Demand of Rs. 90 Lakh was created.

(iii) There was a violation of Article 14 of the Constitution.

2. The High Court held that always ex parte orders had inbuilt difficulties because correct facts along with correct documents were not available with the Assessing Officer. It further held in the context of the huge demand that more care should have been taken by the State to serve the notice upon the petitioner-assessee. Not only orthodox methods of service of notice should have been followed, but, over and above the same, the State should have served upon assessee by sending any employee of the State. When there is huge amount of tax liability, more care should have been taken by the State, at least in following the procedure. As against this, the State argued that there was a period of limitation for passing the order of assessment as per the provisions of the Act. Thereupon, the HC held that provision of Section 42(2) was also applicable whenever any order was passed in Writ Petition under Article 226 of the Constitution of India, mainly for the reason that there was an ex parte assessment order without giving any opportunity of being heard to the assessee and once there was a violation of principles of natural justice, the impugned order would be arbitrary and once there is arbitrariness in passing the order, the said order was always violative of right of equality vested in the petitioner under Article 14 of the Constitution of India. Accordingly, writ petition was allowed and ex parte assessment order was quashed and set aside with a direction to the Assessing Authority to pass a fresh order.

Hindustan Construction Co. Ltd. v. State of Jharkhand And Ors. 2015 NTN 262 (Jhar)

6. Liability to tax – Inverter – Electronic goods

In this case, the Tribunal after elaborate discussion had decided inverter covered by Entry No. 75(2) of Notification dated 29-1-2010 related to electronic component and UPS work on the same principle. State filed revision petition against the Tribunal Order. HC dismissed the Revision Application on the ground that the Court did not see any reason to interfere in the Order of the Tribunal. Accordingly, State Revision Application was dismissed.

Sidos Electronics v. C.C.T. U.P. 2015 NTN 259 (All)

7. Rejection of appeal

Order rejecting appeal as infructuous without touching upon the merits of the case held as unsustainable and the appeal order therefore liable to be set aside.

Ircon International Ltd. v. D.C.C.T (2015) 50 PHT 372 (J&K STAT)

8. Schedule Entries – Agricultural implements

Self-propelled multifunctional power weeder-rate of tax ? Self-propelled multifunctional power weeder being an agricultural implement falls under Entry 01-A of Schedule A of J&K VAT Act, 2005. Hence, not liable to any VAT thereon.

Vishav Janini S. Enterprises v. C.C.T. (2015) 50 PHT 454 (H.P.)

D. H. Joshi

Posted in May.

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