2015 (7) TMI 1003 - HC - VAT and Sales Tax

Stay granted on tax recovery pending Appeal. Tribunal to assess independently. Petitioners' tax payments in other states considered.

Thyssenkrupp Electrical Steel India Pvt. Ltd. Versus The State of Maharashtra And Another

The High Court of Bombay granted a stay on the recovery of assessed tax amount pending an Appeal before the Tribunal. The court emphasized that the ... Stay application - Interstate sale - Validity of Tribunal's order - Held that:- All that has influenced the Tribunal in this case is the fact that though the Petitioner/Appellant has filed 'C' and 'F' Forms but looking at the detailed order of the Assessing Officer it is prima facie clear that the transfer is not branch transfer but outside Maharashtra sale. The other fact that has influenced the Tribunal is the huge outstanding tax liability. However, we do not find the Tribunal having adverted to section 18A(5) of the CST Act. Pertinently, this is not a Appeal which the Petitioner Appellant preferred after having exhausted the remedy of Appeal before the Joint commissioner of Sales Tax, which is the first appellate authority. All records of assessment are before the Tribunal. The Tribunal will have to apply its independent mind and come to a conclusion as to whether as held by the Assessing Officer placing of orders in advance and dispatching goods in order to meet the same will not qualify for the transaction being termed as an intrastate sale but an interstate sale attracting the tax liability under the CST Act. That will have to be determined. One cannot proceed on the footing that the Assessing Officer's conclusion is the only one which can be ultimately reached. Merely because a detailed order of assessment has been passed on the basis of a purchase transaction directly by the customers with all specifications and details to the Head Office would not, to our mind, be enough. The Tribunal should not have expressed any opinion on this disputed issues. - there will be a stay of recovery of the amount assessed to tax under the assessment order and which is challenged in the Appeal before the Tribunal. Meaning thereby, the amount as directed need not be deposited. However, this order and direction does not mean that the Tribunal is precluded from passing appropriate orders and in accordance with law at the hearing of the Appeals. - matter remanded back - Decided in favour of assessee. Issues:Challenge against orders passed by Maharashtra Sales Tax Tribunal under section 18A of the CST Act, 1956.Analysis:The High Court of Bombay heard petitions challenging orders by the Maharashtra Sales Tax Tribunal under section 18A of the Central Sales Tax Act, 1956. The petitioners claimed that their sales, treated as interstate sales by the Assessing Officer, were actually intrastate sales as they had discharged VAT liabilities in other states. The Tribunal directed a deposit for granting stay, which was contested. The court noted that section 18A(5) requires consideration of relevant facts, including tax payments in other states. The petitioners argued that the deposit was unnecessary as they had paid taxes in the transferee states, citing the CST Act's provisions and relevant case laws. The Respondents defended the Assessing Officer's order, stating that the stock transfers did not qualify for exemption under section 6A of the CST Act. The Tribunal's decision was based on the lack of correlation between the transfers and ultimate sales. The court emphasized the Tribunal's obligation to consider all relevant facts, including tax payments in other states, and not to disturb interim conclusions unless patently illegal.The court found that the Tribunal did not consider section 18A(5) in the context of the case, where the petitioners had paid substantial taxes in other states. It directed a stay on recovery of the assessed tax amount pending the Appeal before the Tribunal, emphasizing that the Tribunal should independently assess the matter. The court clarified that its order did not preclude the Tribunal from making appropriate decisions during the Appeal hearing. It refrained from expressing an opinion on the merits of the contentions, ensuring the Tribunal's timely disposal of the Appeals. The court's decision was specific to the case and not intended as a precedent for future cases.