2014 (5) TMI 30 - HC - VAT and Sales Tax

Tax Board's decision upheld over Revenue's revision petition. Commissioner's reasoning valid, no costs awarded.

Assistant Commercial Taxes Officer, Jodhpur Versus Jodhpur Arts & Crafts House

The Court upheld the Dy. Commissioner's decision, dismissing the Revenue's revision petition. It concluded that the reasoning provided by the Dy. ... Procurement of goods in the course of export against Form-H - Purchase from unregistered dealers - Exemption from payment of purchase tax – Whether the assessee was entitled to exemption under the Notifications as held by the DC (A) u/s 3 or u/s 5(3) of the CST Act – Held that:- The assessee was entitled to benefit of Notification S.O.181 dated 07.03.1994 as amended by S.O.430 dated 27.03.1995, whereby, purchase of all goods made upto 31.03.1995 by a registered dealer liable to pay tax under Section 5A of the Act was exempted from tax - Since sale made by the assessee was in the course of inter-State trade or commerce u/s 3 of the CST Act, the assessee in terms of the Notification was entitled to exemption from payment of purchase tax u/s 5A of the Act - The reason given by the Board cannot be upheld, the reasoning given by the DC (A) is justified and the revision petition dismissed - Decided in favour of assessee. Issues:1. Assessment of purchase tax under Section 5A of the Rajasthan Sales Tax Act, 1954.2. Applicability of exemption notifications for goods purchased from unregistered dealers.3. Interpretation of Section 5(3) of the Central Sales Tax Act, 1956 regarding sales in the course of export.4. Justification of the orders passed by the Dy. Commissioner (Appeals) and the Tax Board.---Analysis:1. The Assessing Authority (AA) assessed the respondent-assessee for purchasing goods from unregistered dealers and supplying them against Form-H to an exporter for export. The AA imposed purchase tax under Section 5A of the Act. The Dy. Commissioner (Appeals) set aside this assessment order, allowing the appeal based on a notification exempting purchases made by registered dealers until a specified date. The Revenue challenged this decision before the Tax Board, which upheld the Dy. Commissioner's decision.2. The Tax Board considered the transaction under Section 5(3) of the CST Act, deeming it exempt from tax under the Act. The Revenue contended that the Tax Board's decision was incorrect as the assessee purchased goods from unregistered dealers, making them liable for purchase tax under the Act. The assessee's counsel agreed that the CST Act's provision was not applicable but argued that the Dy. Commissioner's reasoning for exemption was correct.3. The Court analyzed the provisions of the CST Act and the exemption notification. It noted that while the sale to the exporter was covered under Section 5(3) of the CST Act, the purchases from unregistered dealers were not. However, the exemption notification required the goods to be sold in the course of inter-State trade or commerce, which the assessee's sale met the criteria for, entitling them to exemption from purchase tax under Section 5A of the Act.4. Ultimately, the Court upheld the Dy. Commissioner's decision, dismissing the Revenue's revision petition. It concluded that the reasoning provided by the Dy. Commissioner was valid, and the Tax Board's decision, though flawed in reasoning, did not warrant interference. Therefore, the revision petition was dismissed with no costs.This detailed analysis addresses the issues involved in the legal judgment, covering the assessment of purchase tax, the application of exemption notifications, the interpretation of relevant statutory provisions, and the justification for the decisions made by the lower authorities and the Court.