1991 (3) TMI 352 - HC - VAT and Sales Tax

Court upholds tax assessment on inter-State sale of hides & skins. Failure to follow reimbursement procedure leads to dismissal.

The Court upheld the tax assessment on the inter-State sale of dressed hides and skins, distinguishing them from raw hides and skins. The petitioner's ... Distinctness of raw hides and skins and dressed/tanned hides and skins as separate goods - reimbursement/refund of tax paid on inter State sale where tax has been levied within the State - procedural requirement to file claim for reimbursement under rules governing refund/reimbursement - finality of assessment subject to appeal and revisionDistinctness of raw hides and skins and dressed/tanned hides and skins as separate goods - Levy of sales tax on inter State sale of dressed hides and skins upheld on the basis that dressed hides and skins are different goods from raw hides and skins. - HELD THAT: - The Court found no merit in the petitioners' contention that tanning and dressing do not alter the character of raw hides and skins so as to preclude a fresh tax levy. The assessing authority, the Appellate Assistant Commissioner and the Tribunal had all rejected the plea, and the Court relied on the settled view, including the Supreme Court decision in Hajee Adbul Shukoor and Company v. State of Madras and earlier decisions of this Court, that raw hides and skins and dressed hides and skins constitute different articles of merchandise. On this basis the challenge to the imposition of tax on the taxable turnover of dressed hides and skins for the assessment years before the Court failed. [Paras 1]The levy of tax on inter State sales of dressed hides and skins was held sustainable; the petitioners' challenge was dismissed.Reimbursement/refund of tax paid on inter State sale where tax has been levied within the State - procedural requirement to file claim for reimbursement under rules governing refund/reimbursement - finality of assessment subject to appeal and revision - Claim for reimbursement under the State provision corresponding to the Central Sales Tax restrictions (and rule prescribing procedure) must be made in the prescribed manner; absence of any such claim precluded relief in these proceedings, and the court declined to decide condonation of delay on the facts before it. - HELD THAT: - The Court observed that section 15 of the Central Sales Tax Act and the corresponding section 4 A of the Tamil Nadu General Sales Tax Act provide for reimbursement where tax has been levied within the State and tax paid under the Central Act for inter State sales. The entitlement to reimbursement depends on compliance with the prescribed procedure under the State rules (rule 23 of the Tamil Nadu General Sales Tax Rules, 1959). The petitioner had not filed the requisite claim in the prescribed form either with the return of turnover or prior to final assessment, having instead contested the imposition of tax. The Court refused to decide a substantive question of condonation based solely on counsel's statement and observed that, if a proper claim is filed, the assessing authority is duty bound to consider it, particularly because a final assessment may be subject to appeal and revision and is not presumed final while such remedies are pending. On the facts, no relief was granted. [Paras 2, 3]No refund/reimbursement was allowed in these proceedings because no claim in the prescribed manner was filed; the Court left open the right to file such claim and directed that any properly filed claim be considered by the assessing authority.Final Conclusion: Petitions dismissed; tax levy on dressed hides and skins sustained for the listed assessment years, and no reimbursement was granted in the absence of a claim filed in the prescribed manner, with the assessing authority directed to consider any proper claim that may be presented. Issues:1. Dispute regarding levy of tax on inter-State sale of dressed hides and skins.2. Interpretation of Section 15 of the Central Sales Tax Act and Section 4-A of the Tamil Nadu General Sales Tax Act.3. Eligibility for reimbursement or refund of tax paid on inter-State sale.4. Failure to file a claim for reimbursement and condonation of delay.Analysis:1. The petitioner, a dealer in hides and skins, contested the imposition of tax on the inter-State sale of dressed hides and skins, arguing that the commodity had already been taxed as raw hides and skins. However, the Court held that raw hides and skins and dressed hides and skins are distinct articles of merchandise, as established in previous judgments. Therefore, the petitioner's argument was not accepted, and the tax assessment was upheld.2. The petitioner's counsel referred to Section 15 of the Central Sales Tax Act and Section 4-A of the Tamil Nadu General Sales Tax Act, which deal with the reimbursement of tax paid in certain cases. These sections impose restrictions and conditions on the tax levied on the sale or purchase of declared goods within a state, as well as provide for reimbursement of tax paid on inter-State sales. The Court analyzed these provisions in detail to determine their applicability to the petitioner's case.3. Section 4-A of the Tamil Nadu General Sales Tax Act allows for reimbursement or refund of tax paid on inter-State sales of declared goods. The petitioner could seek reimbursement based on the argument that tax was levied on their inter-State sale, and thus, the tax paid should be refunded. However, the Court noted that the petitioner failed to file a claim for reimbursement in the prescribed manner as required by rule 23 of the Tamil Nadu General Sales Tax Rules. The Court emphasized that the petitioner's failure to file a claim hindered their eligibility for reimbursement.4. The Court considered the petitioner's argument that they did not file a claim for reimbursement due to contesting the imposition of tax. The petitioner sought condonation of delay in filing the claim based on a provision in rule 23 of the Tamil Nadu General Sales Tax Rules. However, the Court clarified that since there was no formal claim before them, they could not rule on the condonation of delay. The Court advised that if the petitioner files a claim, the assessing authority must consider it, especially since the final assessment is subject to appeal and revision. Ultimately, the Court dismissed the tax cases due to the lack of merit in the petitioner's arguments.In conclusion, the Court dismissed the petition, emphasizing the importance of following prescribed procedures for seeking reimbursement of tax paid on inter-State sales and highlighting the necessity of filing formal claims in a timely manner.