1. Issue of C Forms – Can be withheld for non-payment of VAT

The entire scheme of the CST Act, including provisions of section 9(2) and section 13 (4)(e) enables State Government to withhold issue of Form C for non-payment of tax under the Local Act based on provisions of Local Act. Therefore when Section 43 of The Puducherry Vat Act, 2007 provides for withholding of issue of forms for non-payment of vat, it is applicable for issue of C forms under the CST Act also and accordingly C forms were rightly denied to purchasing dealers for non-payment of Vat under The Puducherry Vat Act, 2007

[Source: M/s. M. Amurtham Petroleum Agency & Ors v. A.D.C.T.O & Ors, W. P. No. 15804 and 21556 of 2014, pronounced on 7th April, 2016, 2016-17 (22) TNCTJ 45 (Mad)].

2. Classification of Goods” Hexigel” – Is drugs and medicines – Not a toothpaste

The “Hexigel” is an antiseptic mouth gel and used in treatment of certain diseases, such as, gingivitis, oral candidacies, apt nous and other oral ulcers. Although it can be used by brushing on tooth it is not toothpaste but can be comprehended with the popular sense meaning of drugs and medicines as appeared in item 24(iv) of Part A of Schedule IV of The West Bengal Sales Tax Act, 1994.

[Source: M/s. Bhattacharjee Pharmaceuticals & Co. Ltd. v. ACST C. D. & Ors, Case No. RN 206 of 2007, dated 3rd August, 2015, (2016) 67 STA 229 (WBTT)].

3. Compounding tax – At first sale on mrp – Beyond legislative competence

The State legislature not being component to provide for levy of tax on the first point of sale on the basis of MRP or any notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned. The matter goes to the root of the competence of the State legislature under the Constitution to frame any such enactment and it is not competent to enact such a measure then it is equally not competent to do the same by way of providing
option for levy of tax upon the dealer in such manner.

[Source: M/s. Mappra Laboratories Pvt. Ltd. v. CTO and Ors. Civil Writ Jurisdiction Case No. 14919 of 2013 dated 4th May, 2015, (2016) 24 KTR 358 (Patna)].

4. Sale price – Service charges collected for cleaning and testing of cylinder for sale of oxygen – Forms part of turnover

It is obligatory on the part of selling company to clean the cylinders and to subject them to the prescribed tests under the relevant rules for sale for oxygen otherwise it shall amount to breach of rules warranting cancellation of licence. The process of cleaning and testing of cylinder cannot be seen as independent of the sale transaction. Therefore, service charges collected for cleaning and testing cylinders shall form part of sale price and turnover for sale of oxygen for levy of tax.

[Source: M/s. Advance Gases & Consultants Ltd. v. Commissioner of Trade Tax, UP, Civil Appeal No. 1337 of 2010, dated 16th March, 2016, (2016) 54 PHT 177 (SC)].

5. Classification of goods – Roofing tiles will include decorative roofing tiles also

The Entry 8(iii) of Part T of Second Schedule of The Karnataka Sales Tax Act provides 5% rate of tax on sale of Roofing Tiles other than Country Tiles. Decorative Roofing Tiles are also roofing tiles and as such covered by Entry 8(iii) of the Part T of Second Schedule of the Act attracting 5% rate of tax.

[Source: M/s. Raja Bricks and Tiles Industries V. Addl. CCT, Civil Appeal No. 503 – 504 of 2006, dated 4th March, 2016, (2016) 54 PHT 192 (SC)].

6. Classification of goods – Excavators are motor vehicles as per section 2(28) of the Motor Vehicles Act, 1988

Three Judges Bench decision of SC in “Goods Year” in the context of provisions of Central Excise Tariff determining the classification of tyres of a particular size for payment of excise duty would have no application for considered decisions by SC in Nether Parikh & Co. Ltd. (2005) 7 SCC 364 holding “excavators” are “Motor Vehicles” as defined in section 2(28) of The Motor Vehicles Act. Therefore, “Excavators” are motor vehicles for the purpose of Motor Vehicles Act.

[Source: M/s. Western Coalfields Ltd. v. State of Maharashtra and Another, Civil Appeal No. 2708 of 2004, dated 6th May 2016, (2016) 54 PHT 195 (Three Judges Bench of SC)].

7. Sale transfer of right use goods – Display of advertisement of sites situated at airport – Not a transfer of right to use – Not liable to VAT

The petitioner was granted Licence Non-exclusive basis by The Delhi Airport Authority to display for processing, acquiring, installing managing, maintaining and upgrading 318 Nos. MATVS at designated locations at Indira Gandhi International Airport, New Delhi. The sites are located in a restricted area and none of advertisers have an unlimited access to sites. The possession of sites was retained by DIAL. The revenue derived by appellant for display of advertisement on designated sites is not a transfer right to use any goods as such does not attract vat.

[Source: M/s. Tim Delhi Airport Advertising Pvt. Ltd. v. Special Commissioner II, W. P. (C) No. 1625 / 2014 & CM No. 3374 / 2014, dated 2nd May, 2016, (2016) 54 PHT 199 (Del.)].

8. Cancellation of C forms / Registration – With retrospective effect – No power

There is no provision in CST Act for cancellation of C form. However, registration granted u/s. 7 (4) of The CST Act only can be cancelled by authority from prospective effect. If the selling dealer has after making a diligent enquiry confirmed that on the date of the sale purchasing dealer held a valid CST registration and is also issued valid C form then such selling dealer cannot be later be told that the C form is invalid since the registration of the purchasing dealer is cancelled retrospectively.

[Source: M/s. Jain Manufacturing (India) Pvt. Ltd. v. Commissioner of VA, WP ( C) No. 1358 / 2016, dated 1st June, 2016, (2016) 54 PHT 213 (Del.)].

9. Amendment to Act by explanation from retrospective effect – To nullify effect of high court judgment – Not valid – It can apply prospectively

The MP VAT Act was amended retrospectively in 2014 obviously introduced for the purpose of rectifying the obvious error in section 14 of the Act which cannot be introduced by Explanation since an Explanation cannot be read as charging or as interfering with the incidence of the levy. Explanation to section 14 of The M. P. VAT Act, as introduced by Amendment Act of 2014 and in 2015, would apply prospectively. However, the legislature has power to validate the judicial invalid levy retrospectively by bringing validation Act.

[Source: M/s. Jindal Agro Oils & Others v. State of M. P. & Ors., W. P. No. 8118 of 2015, dated 12th August, 2016, (2016) 29 STJ 373 (M. P.)].

10. Fresh Assessment in terms of remand – Cannot travel beyond scope of remand

The assessing authority while passing assessment order in terms of remand with specific direction, the assessing officer not kept in mind the directions the Assessing Officer not kept in mind the directions contained in the order of remand. Therefore, the assessing orders were quashed and remanded further to pass afresh in the light of directions given in order of remand.

[Source: M/s. Supreme Industries Ltd. v. State of M. P. W. P. No 990 of 2008, dated 12th August, 2016, (2016) 29 STJ 385(MP))

11. Recovery of tax arrears of defaulter company – Under liquidation – From purchaser of property under auction – Not valid

Section 49 of The M. P. Commercial Tax Act, 1994 provides liability of transferee to pay tax due of the transferred. When the property is purchased under an auction conducted by MPFC under section 29 of the State Financial Corporation Act, then the charge will fasten itself on the sale proceed of sale as substituted property and the holder of charge to satisfy his claim out of the said sale proceed. The auction/purchaser cannot be held liable to clear the arrears of commercial tax of the previous owner in absence of specific statutory provision in this regard.

[Source: State of M. P. v. M/s Bhagwan Motors, W. A. Nos. 351 of 2011 and 411 of 2009, dated 25th July, 2016, (2016) 29 STJ 387 (M. P.)].

12. Central Sales Tax – Refund of cst to 100% eou – Under foreign trade policy – Cannot be restricted to supplies from domestic tariff area (dta) – Is allowable to supplies from other areas

It is settled position that the procedure formulated under any policy is only to operationalise the right and not to prevent same. If a statute is workable even without framing rules, the same has to be given effect to. When the policy gives a substantive right, the Appendix cannot restrict the substantive right provided in the policy and the Appendix is meant for effectuating the rights contained in the policy and cannot be a tool for narrowing or frustrating the objection and operation of the substantive right. Under the Foreign Trade Policy CST paid on the purchase made by EOU from another EOU qualifies for reimbursement in terms of paragraph 6.11(C) (ii) of the new policy. The Appendix cannot prevent or dilute it. Accordingly the reimbursement of CST paid on purchase by EOU from another EOU is allowable.

[Source: M/s. Hospira Health Care v. Devp. Comm, W. P. No. 15646 & 26004 of 2014, dated 30th March, 2016, (2016) 29STJ 396 (Mad.)].

13. Power of check post officer – Detention of goods only – Not to determine whether transaction is sale or inter-state sale

The nature of transaction cannot be gone into by the officer at check post. It is the job of the regular assessing authority.

[Source: M/s. HCL Infosystems Ltd. v. State of Punjab, Vat AP No. 19 of 2016, dated 28th July, 2016 (2016) 55 PHT 40 (P & H )].

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