2015 (12) TMI 1038 - HC - VAT and Sales Tax

Court rules dealers not liable for additional tax on exempted sales. Tribunal overstepped jurisdiction. Commissioner's revisional powers time-barred.

ATUL AUTO LTD Versus STATE OF GUJARAT

ATUL AUTO LTD Versus STATE OF GUJARAT - TMI Issues Involved:1. Liability of dealers to pay additional tax under Section 4A of the Gujarat Sales Tax Act, 1969 on sales exempted under Section 49(2).2. Jurisdiction of the Gujarat Value Added Tax Tribunal in deciding the mode of payment of additional tax.3. Limitation period for exercising revisional powers under Section 67 of the Act.Detailed Analysis:1. Liability of Dealers to Pay Additional Tax:The primary issue is whether dealers are liable to pay additional tax under Section 4A on sales that are exempt under Section 49(2) of the Gujarat Sales Tax Act, 1969. The court noted that Section 4A levies additional tax on every dealer liable to pay tax under Sections 3, 3A, or 4 of the Act. The term 'payable' was crucial in determining liability. The court held that the additional tax is computed at the rate of ten paise in the rupee on the sales tax, general sales tax, or purchase tax payable by a dealer. If no tax is payable due to exemption, the additional tax would also be nil. Thus, for sales wholly exempt under Section 49(2), no additional tax is payable.2. Jurisdiction of the Tribunal:The Tribunal had exceeded its jurisdiction by holding that the appellant was required to deposit additional tax in cash when this was not the controversy before it. The court observed that the issue before the Tribunal was the adjustment of additional tax against the exemption limit, not the mode of payment. Therefore, the Tribunal's decision on the mode of payment was beyond its jurisdiction.3. Limitation Period for Revisional Powers:The court addressed the issue of whether the exercise of revisional powers under Section 67 of the Act was barred by limitation. It was noted that the revisional powers must be exercised within three years from the date of the order passed by the assessing authority. In the cases examined, notices for revision were issued beyond this three-year period, rendering the exercise of revisional powers time-barred and invalid.Conclusion:The court concluded that dealers are not liable to pay additional tax under Section 4A on sales exempted under Section 49(2) of the Act. The Tribunal had exceeded its jurisdiction in deciding the mode of payment of additional tax, and the exercise of revisional powers by the Commissioner was barred by limitation in the cases examined. The impugned orders were quashed, and the appeals were allowed in favor of the dealers.