TaxTMI 
TaxTMI 
2010 (2) TMI 1103
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....l Tax Officer, the abovementioned first respondent. The assessment years involved are 2003-04, 2004-05 and 2005-06. The assessee has effected inter-State sales on information technology products and were charged only two per cent of the Central sales tax in accordance with the notification issued under section 8(5) of the CST Act. The returns were also filed in accordance with the rate charged to the buyers. The said returns filed were duly accepted resulting in an assessment under section 13(1) of the Pondicherry General Sales Tax Act. For the assessment year 2003-04, the assessing officer issued a notice dated August 28, 2008 alleging that there were defects and therefore the accounts and returns could not be accepted as correct and complete. Hence, the assessing officer proposed to reject the same as incorrect and incomplete and also proposed to determine the total taxable turnover of Rs. 7,26,61,770 to the best judgment for the year 2003-04 under the CST Act, 1956. Then on September 17, 2008, the assessing officer/first respondent issued revised pre-assessment notice in CST No. 9012/2003-04 dated August 28, 2008 directing the petitioner to file a return to the proposal. The pet....
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....tate sale of computer, information technology products, their spares and accessories. The above notification states that the information technology product should be taxable only at two per cent without form C. Hence, the present writ petitions. The learned counsel appearing for the petitioner submitted that the order passed by the first respondent is wrong, illegal, without basis and also against the provisions of section 8(5) of the CST Act. Further, he has submitted that section 8(5) of the CST Act does not take away the power of the State to exempt or reduce the Central sales tax rate in respect of sales to non-dealers or Government Departments and accordingly, the notified rate of two per cent continued to operate in respect of sales to non-dealers like banks. He further submitted that the non obstante clause in section 8(5) is categorical that the power is available even in certain categories of transactions falling under section 8(2) (non-dealers), while fettering the power in respect of the sales under section 8(1) being sales to dealers. He further submitted that the assessing officer misconstrued the Finance Act (20 of 2002), which has not made a change in respect of the....
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....TD/ B1/2005 dated February 8, 2006, (e) No. 6973/CTD/B1/2005 dated February 8, 2006, (f) No. 3315/CTD/B1/2006, dated March 26, 2007, (g) No. 2655/ CTD/B1/2007 dated June 28, 2007 in support his proposition and a decision of the learned single judge of this court in W. P. Nos. 16154, 16155 and 16512 of 2008 dated January 7, 2009 (Technomed Electronics v. Commercial Tax Officer, Thiruvanmiyur Assessment Circle, Chennai [2010] 28 VST 306 (Mad)). It is further submitted that the assessing officer was wrong in levying penalty under section 13(3) of the Pondicherry General Sales Tax Act, 1967 read with section 9(2) of the Central Sales Tax Act. The penalty can be levied only when there is non-disclosure of turnover. In the present case, the assessee filed a return and the same was adopted by the assessing officer. So there is no non-disclosure of the turnover by the assessee. Therefore, levying of penalty by the first respondent is wrong and hence, the order passed by the first respondent has to be quashed. The learned counsel appearing for the Revenue submitted that the writ petitions filed by the petitioner are pre-matured one. Against the orders, there is efficacious alternative reme....
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.... respondents and perused the materials available on record. In the present case, there is no dispute regarding the nature of the product involved, i. e., information technology product. The assessing officer himself held that the goods involved is information technology product. The issues for our consideration are as follows: (1) Whether the assessing officer is correct in levying tax on I.T. product at ten per cent on software, ATM and UPS without form C? (2) Whether the penalty is leviable under section 13(3) of the Pondicherry General Sales Tax Act, 1967 read with section 9(2) of the Central Sales Tax Act? (3) Whether under section 8(5)(b) of the Central Sales Tax Act, 1956 the Government still has power to issue notification without the requirement of form C in respect of sales "to any persons or class of persons, who are non-dealers". In respect of the first issue, the dispute relates to levying of tax at ten per cent of Central sales tax. The present writ petitions are filed challenging the order of the impugned assessment orders. There is an effective efficacious remedy of appeal provided under section 34 of the Pondicherry General Sales Tax Act. If the petitio....
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.... disclosed by the dealer in his return or, in the case of failure to submit a return, one and a half times the tax assessed, as the case may be. In the present case, the assessee has filed a return and there is no dispute regarding the same. The issue here is whether there is any nondisclosure of the turnover in the return. Unless there is non-disclosure of the same, no penalty can be levied. It is factually seen from the orders of the assessments that whatever the turnover was shown by the assessee, the same was accepted by the assessing officer. For the assessment year 2003-04, the petitioner/assessee reported the total and taxable turnover at Rs. 7,86,12,824 and the assessing officer has also accepted the same and levied tax. For the assessment year 2004-05, the petitioner/assessee reported the total and taxable turnover at Rs. 57,36,05,138.94 and the assessing officer has also accepted the same and completed the assessment. For the assessment year 2005-06, the petitioner/assessee reported the total and taxable turnover at Rs. 41,60,50,716 and the assessing officer has also accepted the same and completed the assessment. From the above, it is clear that there is no dispute regar....
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....n be levied. It seems to us that the High Court came to the correct conclusion because subsections (2) and (3) have to be read together. Sub-section (2) empowers the assessing authority to assess the dealer to the best of its judgment in two events: (i) if no return has been submitted by the dealer under sub-section (1) within the prescribed period, and (ii) if the return submitted by him appears to be incomplete or incorrect. Sub-section (3) empowers the assessing authority to levy the penalty only when it makes an assessment under sub-section (2). In other words, when the assessing authority has made the assessment to the best of its judgment, it can levy a penalty. It is well-known that the best judgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess-work is bound to be present in best judgment assessment but it must have a reasonable nexus to the available material and the circumstances of each case: (see State of Kerala v. C. Velukutty [1966] 17 STC 465 (SC). Where account books are accepted along with other records there can be no ground for making a best j....
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...., Pondicherry, being satisfied that it is necessary so to do in the public interest is pleased to reduce the rate of tax to two per cent without form C in respect of inter-State sale of computers, information technology products, their spares and accessories. 2.. This notification shall come into force with immediate effect." From a reading of the above, it is clear that any inter-State sale made relating to information technology product is subjected to two per cent tax without form C. The petitioner/assessee has availed of the benefit as per the notification and there is no dispute regarding the same. Later the Parliament amended the provision of section 8(5) of the CST Act. The said provision was introduced by the Finance Act, 2002 with effect from May 11, 2002. The said amended provision reads as follows: "Notwithstanding anything contained in this section, the State Government may, on the fulfilment of the requirements laid down in sub-section (4) by the dealer, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct,- (a) that no tax under this Act sh....
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....ents as prescribed under the section. Therefore, insertion of the word as mentioned is applicable only to the inter-State sale made by dealer to the registered dealer or Government. Therefore, unless and until there is fulfilment of the requirement, they are not entitled to concessional rate of tax without producing form C. The conditions or requirements are confined to its applicability only to such person as capable of fulfilling it. It is relevant to consider section 8(5)(b) of the Act. It contemplates two categories of dealers or persons-(i) registered dealer or Government; (ii) by "any person" or "to such class of persons" as may be specified in the notification. Therefore, the latter category to any person or any such class of person cannot be "registered dealer" or "the Government". Certainly, they are different and distinct persons and we have to give different meaning to the same. We are conscious of the principle that in construing a provision or rule, every word occurring therein must be given its proper meaning and weight. When the dealer makes sale in the course of inter-State trade to a person other than a registered dealer or the Government, viz., to educational in....
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....the Central Sales Tax Act, 1956, the Rules framed and the notifications issued thereunder; and (ii) utilise the goods so purchased for the purpose of which the same have been purchased'." The Government of Uttaranchal Shasan Vitta Vibhag also issued notification dated January 9, 2006 after amendment of section 8(5) of the Central Sales Tax Act, 1956, which reads as follows: "In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956), read with section 21 of the General Clauses Act, 1897 (Act No. 10 of 1897), the Governor is pleased to direct in the public interest that with effect from the date of publication of this notification, the tax payable under sub-section (2) of section 8 of the said Act by any manufacturer having his place of business in Uttaranchal, in respect of the sales by him from any such place of business in the course of inter-State trade or commerce, of information technology goods as specified in annexure A, to non-dealer institutions specified in annexure B, shall, subject to the conditions and restrictions referred to in sub-section (5) of section 8 of the said Act and also the conditions s....