1. F Form for Dispatch of Goods by Agent who purchased goods on behalf of principal situated outside the State

The purchase of Goods by Commission Agent within the State and dispatch of it to his Principal outside the State, no F form is required for such dispatches as it is a purchase covered by section 3(a) of The CST Act. The judgment of Tribunal cannot be faulted.

CCT UP, v. M/s. Vimal Prasad Mahendra Kumar and others, 2015 NTN (Vol. 59 )– 287 (All.)

2. Luxury Tax – Auditorium within Premises of Temple or not

Under the Kerala Tax on Luxuries Act exemption is given to Halls and Auditorium located within the premises of places of worship owned by such institutions. An auditorium situated opposite side of the Road in a different plot owned by such Institutions is eligible for exemption from payment of tax although it is separated by the road subject to conditions that usage of auditorium for the requirement of Temple also.

Sree Narayana Dharma Samajam v. Comml. Tax Officer & Ors (2015,) 23 KTR 593 (Kar.)

3. Penalty for Non-Registration and filing of Returns – Not valid

The High Court condemned the growing tendency among Intelligence officers under the Kerala Vat Act to invoke penal proceedings against assessee without first having ascertained whether they would come under the coverage of the Act in respect of the activities carried on by them where there is an uncertainty with regards to the real nature of transaction in question. The Intelligence Officer ought, ideally, to refer the matter to the Assessing Officer concerned to arrive at finding regarding liability to tax before taking recourse to the penal provisions of the Act. The Revenue Authority must realise that tax administration is not just about collecting revenue from citizens. They have to bear in mind the fundamental Constitutional precept under Article 265 that no tax shall be levied or collected except by authority of law.

M/s. Flikpart Internet Pvt. Ltd. & Anr v. State of Kerala & Ors, (2016) 24 KTR 46 (Ker).

4. Penalty u/s. 10A of The CST Act

Purchase of ‘hut material’, against form C for use in construction of Bridge, is covered by the meaning of expression ‘stores, material and consumable, etc.” appearing in CST registration certificate as such the dealer has not falsely represented that goods are covered by registration certificate so as to attract penalty u/s. 10A of The CST Act. The levy of penalty was set aside.

M/s. Yundai Engineering v. CTT, UP, (2015) 27 STJ 887 (All.)

5. Input Tax Credit on Purchase of DEPB

The tax paid purchase of DEPB for reducing the incidence of custom duty should be held to constitute as use of such DEPB scrip for the purpose of sale of imported commodity eligible for input tax credit although dealer does not deal in such goods. As long as it is shown that use of the DEPB scrip has impacted the cost of the product that is sold, either directly or indirectly, the credit of input tax paid on DEPB scrip cannot be denied

M/s. Jagriti Plastics Ltd. v. CTT (2015), 27 STJ 891 (Del.)

6. Classification of Goods – Electrical Insulated Press Board Commonly Known as High Density Board – Not All Kinds of Paper

Sale of Electrical Insulated Press Board Commonly Known as High Density Board is not covered by Entry 69 of the Third Schedule of the Act relating to All kinds of paper but covered by residual entry taxable at 12.5%. The goods in question is excessively used in an electrical industry and not used in common persons who are in trade, may be aware that the process undergone, similar to which is used for manufacturing paper, they are clear in their mind that it is not a paper but an electrical insulation press board which is used in the electrical transformers as conductor wrapping and insulation barriers between winding coils. In the trade parlance it is understood as electrical goods. The term paper of all kinds in Entry 69 is comprehensive and an inclusive definition. But it is not possible to treat the goods in question as a paper.

M/s. Raman Board Ltd. v. State of Karnataka, 2015-16(20) KCTJ 185 (Kar.)

7. Sale of Car Co-terminus with Registration

In order to satisfy the requirement of law noticed above, the dealer can deliver possession and owner can take possession and present the vehicle for registration only when it reaches the office of Registering Authority. With the handing over of the possession of a specific motor vehicle just prior to registration, the dealer completes the agreement of sale rendering it a perfect sale. The purchaser as an ‘owner’ under the Motor Vehicles Act is thereafter obliged to obtain certificate of registration which alone entitles him to enjoy the possession of the vehicle in practical terms by enjoying the right to use the vehicle at public places, after meeting the other statutory obligations of Insurance etc. Hence, technically though the registration of a motor vehicle is a post-sale event, the event of sale is closely linked in time with the event of registration. Neither the manufacturer nor the dealer of a motor vehicle can permit the intended purchaser having an agreement of sale to use the motor vehicle even for taking it to the registration office in view of the statutory provisions already noticed. Hence lawful possession with the right of use is permissible to be given to the intended owner only after reaching the vehicle to the office of Registering Authority. Thus seen, in practical terms though sale precedes the event of registration, in normal circumstances and as the law stands, it is co-terminus with registration of a new motor vehicle.

Comments are closed.