1. Reversal of Input Tax Credit

A In a writ petition before the Madras HC, the court was concerned in respect of reversal of input tax credit on the ground that the selling dealer has not filed monthly returns. The reversal was done u/s 19. The question was whether the Order of the Assessing Officer reversing ITC was in violation of principles of natural justice. The liability had to be fastened on the selling dealer and not on the writ-dealer which had shown proof of payment of tax on purchases made from the selling dealer. In the circumstances, High Court held in the affirmative and the matter was remitted back to the AO for fresh consideration.

Sri Andal Co. v. A.C.C.T. 2015-16 (21) P 67 TNCTJ (Mad.)

B. In this case too, the Madras HC was concerned of the reversal of input tax credit u/s 19 and the ground was that the Registration Certificate of the selling dealers were cancelled with retrospective effect could not be a ground to deny the benefit of input tax credit to the petitioner and others.

M/s Bhairav Trading Co. And Ors. v. A.C.C.T. 2015-16 (21) P 73 TNCTJ (Mad.)

2. Tax Exemption on Sale of Solar PV Panels And Solar Inverters

Under Notification No. FD-71 CSL 2015 dated 1-8-2015, the Karnataka Govt. exempted with immediate effect, the tax payable by a dealer under the KVAT Act, 2003 on the sale of the goods viz. (1) Solar PV Panels and (2) Solar Inverters.

2015-16 (20) KCTJ P.P 170-171

3. Whether the Authority is Bound to take into Consideration of Belated Production of Statutory Declaration Forms ?

The Karnataka HC was concerned in writ petitions about the construction of section 9(2) r/w Rule 12(7) of the CST Act, 1956 about the powers of the authorities to assess, reassess, collect and enforce payment of any tax. In this case, Assessing Authority levied higher rate of tax on the turnover for which the statutory forms were not produced in time but produced belatedly. The question was whether the authority was bound to take into consideration of belated production of statutory forms and give the benefit of reduction of tax. High Court held in the affirmative, by referring to four cases i.e. (2005) 142 STC 01 (Guj.), (2001) 121 STC 273, (1970) 78 ITR 26 and (AIR 1996 SC 142)

M/s Weir Bdk Valves v. A.C.C.T. And Ors. 2015-16 (20) KCTJ (Kar.)

4. Appeal to The Appellate Authority barred by limitation – Whether delay can be condoned ?

The Karnataka High Court was concerned with the legal provision that u/s. 62(3) of the KVAT Act, 2003 where the Act expressly provided for filing of an appeal within 30 days and empowered the Appellate Authority to condone the delay up to 180 days and the appeal was filed beyond 210 days was indeed beyond the period prescribed for filing of the appeal. Further, section 5 of the Limitation Act, which provided for condonation of delay was not attracted in view of the specific provision under the Act. Hence, the writ petition was dismissed.

BMS Mines And Metals Pvt. Ltd. v. Jt. C.C.T., Bengaluru 2015-16 (20) P 78 KCTJ (KHC)

5. Luxury Tax – Tax liability

In a resort hotel amount collected by way of entry ticket charges to access park and beach, video / camera permit charges from non-residents at the hotel, was a “luxury” as defined u/s 2(ee) ? The HC held that it would fall within the term “luxury” provided in a hotel as defined in section 2(f). It was therefore liable to luxury tax at the appropriate rate under the Kerala Tax Luxuries Act, 1976.

N.C. Gardens & Beach Resort v. State of Kerala And Ors. (2015) 23 KTR 429 (Ker)

6. Compounding of Tax liability option

In this case, the petitioner was a dealer in cooked food who had, in earlier years opted for payment of tax at compounded rates, and did not exercise such an option for the year 2012-13. When an offence was made out by the Dept. with regard to suppression of turnover during the year in question viz. 2012-13, the petitioner chose to get the offence compounded u/s. 74 of the KVAT Act, on payment of compounding fee of ` 4,00,000 over and in addition to the tax amount. The tax amount was quantified at ` 14,43,885 applying the tax rate at 5%. According to the dealer, the rate of tax that has to be applied ought to be 0.5% and not regular rate of 5%. Petitioner-dealer relied on the circular of the Commissioner that in the case of cooked food dealers, who had opted for compounding facility, even in respect of suppressed turnover, the tax need to be paid only at 0.5%. It was therefore the case of the petitioner that, even in his case, looking to the Commissioner’s circular, the tax liability pursuant to the compounding of the offence, should be computed by adopting the rate of tax at 0.5%. However, the writ court held that the scheme of payment of compounded rate was one that was available, as an option to a dealer who chose to pay tax on that basis, in lieu of the regular method of paying tax u/s 6. Inasmuch as, the petitioner had not opted for payment of tax at the compounded rates during the year 2012-13, the *
circular of the Commissioner, could not have any application to the case of the petitioner. Resultantly, the writ petition against the demand notice failed and dismissed.

* In this case, it is seen from the judgment that the Apex Court’s judgment in Commissioner of ST, U.P. v. Indra Industries (2001) 122 STC 100 (SC).

George Mathew v. State of Kerala And Ors. (2015) 23 KTR 444 (Ker.)

7. Deduction of Discount from The Sale Price

In this case, dealer allowed discount subsequent to the sale through ‘credit notes’. Exact quantification of discount was not worked out at the time of sale, as a result dealer paid tax in excess to the extent of discount amount. The assessing authority duly verified the payment of discount and finalised the assessment for the year 1999-2000. However, Addl. Commissioner u/s 21(2) of the U.P. Trade Tax Act, 1948 directed reassessment and recovery of the tax refunded on the discount amount. The petitioner challenged this action by filing writ petition in the HC. While deciding the writ petition, the HC came to the conclusion that there was no application of mind and non-recording of reasons in the Order of reassessment made by the Dy. Commissioner. As a result, the writ petition was allowed setting aside the demand of ` 29,04,735 as a result of reassessment order.

Ceat Ltd. v. State of U.P. And Ors. (2015) 23 KTR 451 (All)

8. Refund in Respect of two tax deposits made

Here in this case, the question was appropriation of payments made during pendency of provision assessment. Entire demand set-aside in provisional assessment, but upheld in the revision proceedings. Meantime, “Amnesty Scheme” was declared by the Govt. and the tax liability settled under the scheme. In the circumstances, writ was filed praying that amounts of pre-deposit be adjusted towards “Principal Tax Liability” under the Amnesty Scheme and liability to be adjusted accordingly. High Court held it was not proper that pre-deposits to be appropriated first as per section 55C of the Act. In the circumstances, the petitioner filed S.L.P. in the SC. The HC held that S.L.P. is not a continuation of revisional proceedings u/s. 55C of the Act and the appellant-assessee would have no right and it cannot be considered in the scope of writ petition. Accordingly, the writ petition was rejected.

A.C.C., Special Circle, Kannur And Ors. v. ACC Ltd. (2015) 23 KTR 397 (Ker.)

9. Amnesty – Settlement of tax arrears

In the case of the applicant, settlement of arrears found to be incorrect, which was prejudicial to the interest of revenue. Hence, Dy. Commr. invoked suo motu powers of revision and he corrected the amnesty order. This was challenged in the revision petition. The HC held that the authority to correct an order passed by any officer subordinate to the Dy. Commr. except Appellate Authority, was well within the power of Dy. Commr. to interfere and prevent prejudice being caused to the revenue, as per section 23(B) and 35 of the Kerala GST Act, 1963. Accordingly, the revision petition was rejected.

United Distilleries v. State of Kerala (2015) 23 KTR 415 (Ker.)

10. Denial of input tax credit

In this case, the dealer was denied input tax credit as the selling dealer did not deposit the tax collected by him. Therefore, the question in appeal before the HC was whether purchasing dealer was again liable to pay the tax? The HC held in the negative on the ground that the sale was complete by transfer of goods on the payment of the price of goods. The movement of goods in case of transfer of goods which was taxable under the VAT Act was not essential but the sale invoice and the tax payment as well as passing of consideration could constitute the sale of such goods. The claim of ITC on the purchases could not be denied on the ground that the selling dealers did not deposit the tax charged from the purchasing dealer unless fraud, collusion and connivance with the Registered dealers selling the goods was established. The rules did not provide that there must be some movement of goods or if there was no movement of goods, then, input tax credit was not admissible. So long as VAT invoice shall contain the particulars of goods sold as per Rule 54(4), ITC could not be denied and, thus, the appeal was decided in favour of the appellant.

Malwa Rice Company, Sangrur v. State of Punjab (2015) 52 PHT 105 (PVT)


In AIFTP Journal Vol. 18 Part 6 at Sl. No. 10 in the case citation, namely, Saral Wirecraft Pvt. Ltd., please read STJ Vol. 54 Part V P 634 instead of P 652 (Guj.) inadvertently mentioned.

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