2018 (9) TMI 448 - HC - VAT and Sales Tax

High Court upholds Tribunal decision on tax rate for LPG by GAIL India Limited

The High Court upheld the Tribunal's decision regarding the tax rate for LPG sold by GAIL India Limited, affirming the reliance on certifications by Oil ... Rate of tax - sale of LPG - Whether under the facts and circumstances the learned Tribunal has not erred in deciding that the LPG sold by the respondent is taxable at the rate of 4% instead of 12.5%? - Held that:- In absence of any primafacie basis for the Assessing Authority to doubt such certification, it would not be possible to shift the burden on the assessee to establish that such certificates bore correct facts. Needless to state that if the Assessing Authority had any material at its command, primafacie, suggesting that the facts stated in the certificates were not quite correct, the issue would require entirely different treatment. No question of law therefore arises in this respect. Input Tax Credit - Whether under the facts and circumstances the learned Tribunal has not erred in allowing the claim of ITC on the purchase of gas used in transportation of the gas? - Held that:- The period of limitation prescribed under the Gujarat Value Added Tax Act for seeking rectification of an order of Tribunal is two years. Such period is of course lapsed. There is no specific provision for condonation of delay or extension of such period in the Act. However, since the Government was in appeal before the High Court, and thus bonafide spent time in pursuing remedy before this Court, with the aid of section 14 of the Limitation Act, 1963, we permit the Government to file such a rectification application before the Tribunal. If so done, latest by 31.10.2018, the same shall be examined on merits. Deduction of discount - Whether under the facts and circumstances the learned Tribunal has not erred in considering the claim of respondent for deduction of discount granted to OMC on turnover sales? - Held that:- The question is covered by the judgment of this Court in case of ONGC Ltd v. State of Gujarat [2014 (12) TMI 1073 - GUJARAT HIGH COURT] and was decided in favor of the assessee. Tax appeal disposed off. Issues:1. Whether the Tribunal erred in deciding the tax rate for LPG sold by the respondentRs.2. Whether the Tribunal erred in allowing the claim of Input Tax Credit on the purchase of gas used in transportationRs.3. Whether the Tribunal erred in considering the deduction claim for discount granted to Oil Marketing Companies (OMCs)Rs.Issue 1: Tax Rate for LPG SoldThe Government of Gujarat filed an appeal challenging the Value Added Tax Tribunal's judgment regarding the tax rate for LPG sold by the respondent, GAIL India Limited. The dispute revolved around whether the LPG sold should be taxable at 4% or 12.5%. The Tribunal based its decision on certifications by OMCs stating the gas was used for domestic purposes. The Assessing Authority, however, was not satisfied with this proof and levied duty at the higher rate. The Appellate Authority later allowed the appeal, emphasizing the absence of excise duty for LPG used domestically and the price differences for domestic and commercial uses. The High Court upheld the Tribunal's decision, stating that the GAIL had to rely on OMCs' certifications and that the Assessing Authority lacked a basis to doubt the certifications.Issue 2: Input Tax Credit ClaimThe second issue involved the claim of Input Tax Credit (ITC) on the purchase of gas used in transportation. The Tribunal did not decide on this matter, suggesting the Government seek rectification from the Tribunal. The High Court permitted the Government to file a rectification application within a specified deadline, considering the time spent pursuing remedies before the court. The decision on the ITC claim was left pending for the Tribunal to address in cross-appeals.Issue 3: Deduction Claim for DiscountThe third issue pertained to the deduction claim for discounts granted to OMCs. This matter was resolved by referencing a previous judgment in the case of ONGC Ltd v. State of Gujarat, where the decision favored the assessee. The High Court disposed of the Tax Appeal and Civil Application, providing directions for further actions as per the judgments and legal provisions cited during the proceedings.