2015 (12) TMI 309 - HC - VAT and Sales Tax

High Court upholds Tribunal decision on Haryana VAT Act appeals, addresses key issues

M/s Relaxo Footwear Ltd. Versus State of Haryana

The High Court dismissed the appeals under the Haryana Value Added Tax Act, 2003, upholding the Tribunal's decision on the issues raised in VATAP Nos. 183 ... Benefit under Rule 28B of the Haryana General Sales Tax Rules, 1975 - Disallowance of adjustment of purchase tax against notional tax liability - Entitlement to produce STDIV declaration and ST-14B Forms, even before the appellate authority - Held that:- Petitioner is entitled to produce the STD-IV declaration and ST-14B Forms before the Assessing Authority who shall thereafter examine the tax liability and decide the matter by passing a fresh order, in accordance with law. Exemption from purchase tax - Held that:- beneficiary unit is entitled to exemption from payment of sales tax on the sale of finished products and not exemption from the payment of purchase tax. In other words, the unit is entitled to exemption from the payment of sales tax only on the sale of goods manufactured by it and any purchase tax leviable was recoverable from the said unit. Thus, the Tribunal was right in holding that the notional tax liability calculated for the purposes of setting off against the tax exemption limit shall be the amount of tax payable on the sale of furnished products under the Local Sales Tax Law and the Central Sales Tax Act, 1956 which does not include purchase tax and, therefore, the amount of purchase tax levied was recoverable from the appellant. - No illegality or perversity could be demonstrated in the aforesaid findings recorded by the Tribunal which may call for interference by this Court on this question. - Decided against the assessee. Issues:1. Delay in filing the appeal.2. Identical issues in two appeals under Haryana Value Added Tax Act, 2003.Analysis:1. The judgment addresses the condonation of a 492-day delay in filing the appeal. The court allowed the delay for reasons stated in the application, thus moving on to address the substantive issues in two appeals bearing VATAP Nos. 183 and 184 of 2014, as both appeals involve identical issues.2. The main issue in VATAP No. 183 of 2014 revolves around substantial questions of law related to the possession and admissibility of declaration forms, the liability for purchase tax, and the benefit under Rule 28B. The appellant, engaged in the manufacture and sale of rubber footwears, was granted a tax benefit but faced challenges regarding the adjustment of purchase tax against notional tax liability. The Tribunal partly allowed the appeal, leading to the current appeal before the High Court.3. The High Court delves into the specific issues raised in the appeals, focusing on whether the appellant can produce certain declaration forms before the appellate authority and the demand for purchase tax under Rule 28B(3)(j) of the Rules. The court references a previous decision to support the appellant's right to produce necessary forms before the Assessing Authority for a fresh determination of tax liability.4. Regarding the demand for purchase tax, the court analyzes Rule 28B(3)(j) to establish that the exemption granted pertains to sales tax on finished products and not purchase tax. The Tribunal's decision to uphold the recovery of purchase tax from the appellant aligns with the legal interpretation provided, emphasizing that the exemption is limited to sales tax on goods manufactured by the unit. The court supports the Tribunal's findings, concluding that no illegality or perversity exists to warrant interference.5. Ultimately, the High Court dismisses the appeals, upholding the Tribunal's decision on the issues raised. The judgment provides a detailed analysis of the legal provisions and previous decisions to support the conclusions reached, ensuring clarity and adherence to the applicable laws and rules.