TaxTMI 
TaxTMI 
2015 (10) TMI 2406
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....dents treating it as such can be said to be exfacie illegal. Since the point involved and summed up above is common to all the Petitions, for the purpose of the present Judgment, we take the facts from Writ Petition No. 4552 of 2015. It is undisputed that since the controversy involved in these Writ Petitions is similar, common arguments have been canvassed. Hence, we dispose of all the Writ Petitions by this common Judgment. 3) The facts in Writ Petition No. 4552 of 2015 are as under:The Petitioner is registered dealer under the provisions of the MVAT Act and the Central Sales Tax Act, 1956 (for short "the CST Act") for the purpose of discharging its VAT liability and is holding valid TIN 27420008932V/C. The Petitioner has regularly filed its VAT returns for the Financial years 200708 till date. The Petitioner has duly discharged its tax liability under the MVAT Act and CST Act as per the original returns filed by the Petitioner. 4) The Petitioner submits that it has already filed Writ Petition No. 4057 of 2015 in this Court challenging the legality and validity of recovery notices issued by Respondent No. 4 to the bankers and debtors of the petitioner on account of alleged tax ....
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....king from 40 thousand liters (40KL) to 200 thousand liters (200KL). The barges have pumps fitted on it with a flow meter in order to pump out the HSD to the vessel. These barges are similar to petrol pumps where petrol is sold to the regular customers. 11) At the Mallet Bunder, the HSD supplied by the Oil Marketing Company is decanted into the cargo tanks of the barges owned by the Petitioner. The entire activity of decanting is done under the supervision of a Customs Officer. 12) After taking delivery of the HSD from the Oil Marketing Company, the barges sail to the anchorage point of the nominated vessel. 13) After reaching the anchorage point of the nominated vessel, the HSD is pumped out of the barge into the fuel tank or bunker of the nominated vessel. Once the supply is complete, master or the authorised officer of the vessel acknowledges the receipt of the ordered quantity of HSD on the Bunker Delivery Note (BDN) and the shipping bill. 14) The barges go beyond 1.5 nautical miles from the base line to deliver the HSD to the vessels anchored therein. 15) After the delivery of the HSD to the nominated vessel is complete, the Petitioner raises an invoice on the shipping lin....
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....rest u/s 30(2) and u/s 30(4) of the MVAT Act, 2002. The investigating officers had alleged that under the MVAT Act, 2002 the sale of HSD made by the Petitioner shall not be covered under the exemption Notification No. VAT.1506/ CR135B/ Taxation1 dated 30.11.2006. 22) Due to immense coercion by the officers acting under the authority of Respondent Nos. 13 and particularly, by Respondent No. 4, Petitioner further revised their returns on 24th, 25th and 30th December 2014 for the following periods listed below. Sr. No. Period Date of Revision Revised Under Section Remarks 1 20072008 24/12/2014 20 (4) (c) Under Protest 2 20082009 30/12/2014 20 (4) (b) Under Protest 3 20092010 24/12/2014 20 (4) (b) Under Protest 4 20102011 24/12/2014 20 (4) (b) Under Protest 5 20112012 25/12/2014 20 (4) (b) Under Protest 6 20122013 30/12/2014 20 (4) (c) Under Protest 7 20132014 30/12/2014 20 (4) (a) Under Protest 8 April 2014 - September 2014 30/12/2014 20 (4) (a) Under Protest 23) It is to be noted that even in the remarks column of the revised returns filed by the petitioner, the petitioner has categorically mentioned that the said re....
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....50,00,000 and requested the department to release the bank accounts vide their letter dated 11th February 2015. The Department then subsequently released one of the Bank Account of the Petitioner. 29) On receipt of the above submission of the Petitioner dated 11th February 2015, the Petitioner received an installment order dated 4th March 2015 to pay the balance, alleged tax dues. Again the Petitioner received the Form 318 for Kotak Mahindra Bank Account for the period April - September 2014. 30) Again the petitioner paid a sum of Rs. 2,00,00,000 on 10th March 2015 to show its good conduct and cooperation. They also requested to lift the above attachment for Kotak Mahindra Bank Account. The investigating officers then revoked their notice of recovery in respect of Kotak Mahindra Bank Account on 18th March 2015. 31) Aggrieved by the attachment of bank accounts, the Petitioner thereafter wrote letters dated 30th March 2015 and 4th April 2015 addressed to Respondent No. 4 and Respondent No. 3, respectively stating that the moneys collected from the Petitioner were under protest and were to be lawfully refunded to the Petitioner. The Petitioner further demanded that the impugned rec....
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....nt Order also imposed interest under section 30(3) of the MVAT Act and penalty u/s 29(3) of the MVAT Act, 2002 which has resulted in the tax dues to the tune of Rs. 1,27,50,383. The said order has been claimed to be passed by the Respondent No. 4 on 30th March 2015. The same order was served on the petitioner on 30th April 2015. 36) In view of the above, the Petitioner is forced and constrained to file the present Writ Petition against the said assessment order dated 30th March 2015 as being arbitrary, unreasonable and in violation of Articles 14 and 19(1)(g) of the Constitution of India. 37) Mr. Sridharan, learned Senior Counsel appearing for the Petitioner has divided his submissions into three parts. 38) Firstly, our attention is invited to the grounds in the Writ Petition, particularly under the head that the assessment order which is claimed to have been made is illegal, arbitrary and without jurisdiction. It is submitted that the subject order has been claimed to be passed by the fourth Respondent on 30th March, 2015, but the same was served on the Petitioner on 30th April, 2015. Mr. Sridharan submits that there is undue haste in passing ....
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....us and without any legal basis. Section 41(4) granting exemption to sales of motor spirits at retail outlets was introduced by Maharashtra Act No. 32 of 2006 with retrospective effect from 1st April, 2005 with an intention to levy VAT on sale of motor spirit at a single stage. Reliance is placed on the statement of objects and reasons for the amendment of section 41. Therefore, read with the substantive provision, the statement of objects and reasons so also the Notification in question, it is apparent that there is an exemption with regard to sales at retail outlets of motor spirit. This exemption is subject to the conditions set out in this Notification all of which have been fulfilled by the Petitioner. For this reason as well, it is submitted that sales of high speed diesel were always taxed as a single point levy under the erstwhile Bombay Sales of Motor Spirit Taxation Act, 1958. If the Petitioner is retail trader within the meaning of that Act and there is nothing contrary thereto in the MVAT Act, then, it would be apparent that the Petitioners are not liable to pay tax. 42) The third part of Mr. Sridharan's submissions concern the legality of the levy. 43) Elaborati....
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....(Emphasis Supplied) 43.5) Thus, Section 8 further clarifies that no sale taking place outside the State of Maharashtra (as per definition given in Section 4 of CST Act, 1956) would be liable to tax under the MVAT Act. 43.6) Assuming, without admitting that the State of Maharashtra has the necessary competence to tax sale transactions taking place outside its territory, Sections 2(24) and 2(28) of the MVAT Act, 2002 clearly do not provide for any such artificial extension. Therefore the MVAT Act only applies to the ordinary territorial limits of the State of Maharashtra. 44) Under common law, realm of a country does not extend to the territorial waters. 44.1) Under Common Law, the realm of a State (to be understood as 'Country' or a 'NationState') extends only upto the low water mark. This is so clarified in the commentary 'Law relating to waters' by Coulson and Forbes, chapter titled 'Of the Sea and Rights Therein' vide the 6th Edition of the book. The relevant portions of the commentary are extracted and reproduced hereinbelow: "The high seas include the whole of the seas beyond the low water mark and outside the body of a country. The realm of England only extends to l....
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....of great potential importance at the beginning of this century when oil was discovered there. As a consequence of this discovery, California passed an Act in 1921 authorizing the granting of permits to California residents to prospect for oil and gas on blocks of land off its coast under the ocean. This state statute and others which followed it, together with the leasing practices under them, have precipitated this extremely important controversy, and more pointedly raised this statefederal conflict for the first time. Now that the question is here, we decide for the reasons we have stated that California is not the owner of the threemile marginal belt along its coast, and that the federal government rather than the state has paramount rights in and power over that belt, an incident to which is full dominion over the resources of the soil under that water area, including oil." (Emphasis Supplied) 46) Decision of the Canadian Supreme Court reported as 1967 SCR 792: 46.1) The decision of the Supreme Court of Canada 'In the matter of a Reference by the Governor General in Council concerning the ownership of and Jurisdiction over offshore mineral rights as set o....
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....sea adjacent to the Province of British Columbia. ... The sovereign state which has the property in the bed of the territorial sea adjacent to British Columbia is Canada. At no time has British Columbia, either as a colony or a province has property in these lands. It is the sovereign state of Canada that has the rights, as between Canada and British Columbia to explore and exploit these lands and Canada has the exclusive legislative jurisdiction in respect of them either under s. 91 (1) (a) of the British North America Act or under the residual power in S. 91. British Columbia has no legislative jurisdiction since the lands in question are outside its boundaries. ... We answer Questions ... and 1(c) in favor of Canada." 46.2) The Supreme Court of Canada thus held that the territorial waters (referred to as 'lands including seabed, seaward from the low water mark') were not within the legislative competence of the province of British Columbia for the following reasons: i. The Parliament of Canada had not altered or extended the boundaries of British Columbia under its statutory powers. ii. The territorial waters were an extension of sovereignty ....
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....entatives of the international law on the subject of statehood. 48.2) Article 1 and 2 of the convention clearly provides that it is the nationstate or country (referred in that context as 'state') which is a sole person in the eyes of international law. 48.3) The relevant extract of the same is as follows: " ARTICLE 1 The state as a person of international law should possess the following qualifications: a ) a permanent population; b ) a defined territory; c ) government; and d) capacity to enter into relations with the other states. ARTICLE 2 The federal state shall constitute a sole person in the eyes of international law." (Emphasis Supplied) 48.4) Most learned authorities on international law such as in 1 Lassa Oppenheim, International Law: A Treatise (Hersch Lauterpacht 8th ed. 1955) consider the principles enumerated in this Convention as form of codification of the customary international law on this issue. 48.5) The term "State" as used by authorities in and authors on international law refer to the country or nation or state as whole and not to that of its constituent units. 49) Constituent assembly debates with respect to territorial waters and Article 297: ....
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....ision in article 271A..." (Emphasis supplied) 49.2) Thus, it cannot be disputed that the territorial waters vest with the Union alone and no State can assert its right or ownership over the same. This question has been elaborately answered by Dr. B. R Ambedkar in the constituent assembly debates referred to above. Therefore, the Petitioners submits that the territorial waters abutting the State of Maharashtra cannot be said to be a part of the territory of the State of Maharashtra. 50) Under the Constitution of India and in particular in view of Article 366(30) the 'territorial waters' belong to the Union of India and cannot be construed to be part of the territory of any State - They will be part of unspecified union territory: 50.1) Article 1 of the Constitution of India provides for the Name and territory of the Union. Article 1 of the Constitution is extracted and reproduced below: "1. Name and territory of the Union (1) India, that is Bharat, shall be a Union of States (2) The States and the territories thereof shall be as specified in the First Schedule (3) The territory of India shall comprise (a) The territories of the States (b) The Union Territories specifie....
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....ed to territorial waters, sea bed and subsoil underlying air space over such waters. The section is extracted and reproduced below: "3. Sovereignty over, and limits of, territorial waters (1) The sovereignty of India extends and has always extended to the territorial waters of India (hereinafter referred to as territorial waters) and to be seabed and subsoil underlying, and the air space over, such waters. (2) The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline..." 51) Definition of General Clauses Act, 1897 and Bombay General Clause Act also establish the same position vide Section 3(62A): 51.1) In the General Clauses Act, 1897 the term 'State has been defined under Section 3(58) as follows: "State - As respects any period before the commencement of the Constitution (Seventh Amendment) Act, 1956 shall mean a Part A State, a Part B State pr a Part C State, and as respects any period after such commencement, shall mean a State specified in the First Schedule to the Constitution and shall include a Union Territory." 51.2) Further, the term 'Union Territory' has bee....
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....Act, 1956 and submitted that: 53.1) Section 4(2(b)) of the CST Act, 1956 makes certain deviations from the exact terms of Section 23 of the Sale of Goods Act, 1930. 53.2) Section 23 of the Act provides as follows: "23. Sale of unascertained goods and appropriation.- (1)Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made." (Emphasis Supplied) 53.3) The requirements of 'unconditionally appropriated', and 'deliverable state' are done away with in Section 4 of CST Act, 1956. The rest of Section 4(2(b)) of the CST Act, 1956 is in pari materia with Section 23 of the Sale of Goods Act, 1930. 53.4) Section 19(3) of Sale of goods Act, 1930 is to effect that Rules contained in Section 20 to Section 24 relating to passing of property are subject to intention of the parties to the contr....
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....ertained goods can be said to have taken place when all of the following aspects are satisfied: 5. The goods are first ascertained by the seller. This will constitute mere setting apart of the goods and not an act of appropriation. 6. The goods are appropriated to effect a passing in property. 7. Where the last important obligation of the seller like self transportation by seller to customer's premises. (as in Carlos (supra)), is performed. 8. Where the seller is bound to measure/weigh the goods in question, when such obligation is performed. 56) Both Atiyah and Benjamin, refer to Section 18(2) of English Sale Of Goods Act, 1893, being delivery of specific or ascertained goods, to a common courier, as a statutory illustration of appropriation. Similar provision is contained in Section 23(2) of Indian Sale of Goods Act, 1930. 57) Delivery to common courier has to be distinguished from a case like the present case. In the present case, it is part of sellers obligation to transport the goods to place in the sea where the vessel is waiting/anchored pump/unload the fuel into customers vessel, and weighment all under customer supervision 58) This constitutes the most i....
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....time, in the Official Gazette." 61.3) In exercise of this power contained in Section 41(4) above, Respondent No. 1 issued Notification No. VAT1505/ C.R. 135/Taxation1 dated 30th November 2006. The relevant portion of the notification has been extracted below: In exercise of the powers conferred by the Explanation to subsection (4) of Section 41 of the Maharashtra Value Added Tax Act 2002 (Mah. IX of 2005) and in supersession of the Government Notification Finance Department No. VAT 1505/CR124/ Taxation 1 dated the 1st April 2005, the Government of Maharashtra hereby with effect from 1st December 2006 notifies the following products to be the motor spirit and petroleum products for the purposes of the subsection : Product (Central Excise Tariff Code No. 1. High Speed Diesel Oil 2710 2. Aviation Turbine Fuel 2710 3. [....] 61.4) The Respondents No. 1 further issued the following notification titled as Notification No. VAT1506/ CR135B/ Taxation 1 dated 30th November 2006 as extracted below: In exercise of the powers conferred by the Explanation to subsection (4) of Section 41 of the Maharashtra Value Added Tax Act 2002 (Mah. IX of 2005), Government of Maharashtra h....
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....ct or before such commencement from a trader who was liable to pay tax in respect of the sale of such motor spirit to the first mentioned trader under the Bombay Sales of Motor Spirit Taxation Act 1946, or the Bombay Sales of Motor Spirit Taxation Act 1946 as extended to the Kutch Area of the State of Bombay and (iii) which has not been processed or altered by him in any manner whether by admixture or otherwise after such purchase. 61.8) It is submitted, that the Respondent No.1 has also treated the tax on sale of motor spirits to be a single point tax at the hands of the oil companies and not liable to be taxed twice particularly, at the hands of a retailer. In fact, the Budget Speech of Hon'ble Finance Minister of the Government of Maharashtra Shri Jayant Patil dated 22.03.2002 reported in (2002) 25 MTJ (Amendments, Notifications & Circulars) 177, 183 clarifies this in the following terms: "34. Motor Spirits Motor Spirits are presently taxed under a different Act and all the tax is paid by Oil Companies. [......]" 61.9) The scheme of taxation of motor spirits consciously kept the same during the introduction of the multipoint value added tax regime as is evident from the....
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....ry and dairy farming is exempt from Income tax. This exemption is prone to abuse by showing income which would otherwise be chargeable to tax as exempt income. I accordingly propose to restrict the exemption to Rs. 10,000 in a year."' 61.12) Clearly as can be seen, the Hon'ble Court placed reliance on the speeches of the Finance Minister in Parliament to interpret the scope of the various provisions in the Income Tax Act 1961. 61.13) Therefore, based on all the above mentioned authorities it is submitted that Respondent No. 1 has always treated and intended to treat taxation on motor spirits as a single stage tax taxable at the hands of the oil companies and not the retailers. 61.14) This system has continued even after the enactment and adoption of the multipoint tax VAT regime and hence the appropriate exemption on retail sale of motor spirit under the Maharashtra VAT Act 2002 has been provided. 62) Reliance placed on the meaning of Retail Sale in the Petroleum Control Order 1999 by the Respondents is unjustified and illegal: 62.1) It is submitted that the in the impugned order the Respondent have sought to deny the benefit of the Notification No. VAT1505/ C.R. 135/Taxation....
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....nstitute retail sales, and the Petitioners barge would therefore constitute retail outlets for the purpose of the notifications. The impugned orders in denying the benefit of the notifications are therefore bad in law and run contrary to the decisions and settled principles of interpretation applied by the Hon'ble Supreme Court. The impugned assessment orders must therefore be set aside. 63) Mr. Sridharan has relied upon the following Judgments: (i) The Great Eastern Shipping Company Ltd. vs. State of Karnataka, ILR 2004 KAR 3750. (ii) Pride Foramer vs. Union of India, 2002 (148) ELT 19 (Bom.) (iii) Deputy Commissioner of Commercial Taxes, Madras Division vs. Davar and Co., (1963) 14 STC 904 (Mad). (iv)United States of America vs. California 332 U. S. 19 (1947) (US Supreme Court) (v) In the matter of a reference by the Governor General in Council Concerning Ownership and Jurisdiction over Reference to Offshore Mineral Rights (1967) S. C. R. 792 (Supreme Court of Canada) 64) In addition, Mr. Sridharan has also given his comments on the decisions that were likely to be relied upon by the Respondents. We would advert to his comments a little later. 65) Turning now to the a....
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....p; delivered to buyer in territorial waters, the chargeability is independent of location of delivery and not based on the location of delivery. 68) Firstly, the Karnataka High Court in case of Great Eastern Shipping Company (supra) based on sales tax laws only has decided the issue that the territorial water is part of abutting State of Karnataka and therefore the issue is no more res integra. Moreover, the said judgment is before the Hon'ble Supreme Court by way of SLP which is now converted to Civil Appeal and is pending consideration of the Apex Court. In view of that there is no propriety in taking a different view till the Apex Court decides the issue. 69) Secondly, the Article 1 of Constitution of India states that the India shall be Union of States. It is not in dispute that State also includes Union Territories (General Clauses Act). Thus, there is no existence of any territory apart from the States. Hence, what belongs to Union essentially belongs to the States. Hence, territorial waters are part of the States. The principles of mutuality applies with full force. Constituents of Union are nothing but Union in that sense. As in the Fisheries Laws, the State h....
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.... provisions of statute and in the present case by the provisions of section 4 of the CST Act. In the present case, while placing order to the oil company, the goods are in bulk with oil companies and from where required quantity is to be separated and delivered. So the goods at the time of entering into contract that is to say placing order by the Petitioner and acceptance of the said order by the oil company, to execute the contract or placing indent to the storage tank to deliver the HSD from stock may be by way of written delivery order, constitutes acceptance of the order and thus concluded contract comes in existence at the time when the oil company acts upon order to execute the same. Now section 4(1) and (2)(a) provides for the principles of determining when a sale is said to be taken inside a State. Sub section 2 of section 4 is in two parts. First part deals with ascertained goods and in case of such goods it will be within the State if the goods were within the State at the time when contract is made. We are really not concerned with it. The present goods, it is argued by the Petitioner, are unascertained goods. Be that as it may, the goods when ar....
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....o say is that the Notification is not at all applicable to the transactions of the Petitioner. The Notification is issued for exemption of sale from taxation when high speed diesel is sold from retail outlet. To say that high speed diesel is sold from retail outlet cannot be said to be same as saying sold in retail. The argument that Notification should mean to apply to the sale in retail in any manner is misplaced. High speed diesel is not only used in filling as fuel but having multiple industrial, commercial and domestic uses, such as in house generators of electricity, in boilers, humidifiers, etc. It is only when sold from retail outlet that is to say filling stations, that sale is exempted. Retail outlet is not defined in MVAT Act but defined in two statutory texts as annexed in the compilation separately filed. Looking at the definition in those statutory texts and applying common parlance test which is applicable in context of taxing statue it is clear what is meant by retail outlet is nothing but filling stations. The photographs of the filling station in the compilation titled common parlance materials, the position is more than clear what is meant....
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....er has paid tax at Rs. 13707390/setoff is allowed at Rs. 169617594/. Interest u/s 30(3) for late payment is levied at Rs. 8635243/. I am of the opinion that, returns filed by the dealer are not correct complete and selfconsistent as, dealer has erred in calculating taxable turnover. Thus, this act of the dealer is resulted in evasion of tax due to him. Hence, said act of the dealer is squarely covered under the ambit of provisions u/s 29(3) of MVAT Act, 2002, as the dealer has concealed the particulars and has knowingly furnished inaccurate particulars of above said transaction liable to tax. I have reason to believe that; dealer has knowingly furnished inaccurate particulars of above said transaction liable to tax and thereby evaded the tax. Hence the dealer is liable to impose penalty as per the provisions of section 29(3) of MVAT Act, 2002. Therefore, penalty u/s. 29(3) of MVAT Act, 2002 is imposed at Rs. 8807655/. (equal to excess amount payable found after visit) after giving opportunity of being heard. Finally assessment order resulted in demand of Rs. 12750383/on account of tax, interest and penalty. Issue demand notice of Rs. 12750383/along with certified copy of as....
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....r to your proposal dated April 18, 2008 sent via email and subsequent discussions and clarifications you had with Mr. Albert Jacob (Sr. Manager Operation & Logistics) and Mr. Ajay Goenka (General Manager - Contract). We Leighton Contractors (India) Pvt. Ltd. (hereinafter called Leighton) are pleased to award the Bunkering Service - Supply of Fuel Oil contract for the Pipelines Replacement Project II, for Oil and Natural Gas Corporation Limited to Raj Shipping Agencies (hereinafter referred to as Raj Shipping). The Pipelines Replacement ProjectII (hereinafter referred to as the Project) is for Oil and natural Gas Corporation Limited (hereinafter referred to as ONGC). The Contract between Leighton and ONGC is referred to as the Main Contract ref. No. MR/OW/MM/PRP2/ 15/2007, signed by Leighton and ONGC on 14th April, 2008. The Main Contract covers 208km of pipelines in 39 segments over 3 seasons/years, (From 2009 till 2011) and this award relates to that full scope of work. Whereas a Contract between Leighton and Raj Shipping is being prepared to formalise the final details, the broad basis of our Notice of Award to you are as follows: SCOPE OF SERVICES: The scope of....
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.... its sole discretion cancel this NOA and all or any portion of the intended contract agreement with or without cause at any time by giving written Notice of Cancellation to Raj Shipping. Termination by Leighton shall not constitute a breach of this NOA nor entitle Raj Shipping to any damage or claims except as expressly provided under this Article. Raj Shipping shall receive as compensation that portion of the amount due on the work performed up to the date of termination subject to prior approval. The amount due for the work performed shall be the amount which Raj Shipping can demonstrate to Leighton that Raj Shipping has spent for the work performed to date, but in no event shall Leighton pay for any anticipated profits or loss of earnings or opportunities. Raj Shipping shall pay to Leighton the difference of any payments made to Raj Shipping which exceeds the amount due prior to termination. Raj Shipping shall allow Leighton to audit and or review sufficient records, accounts, receipts, invoices and other related documents so that Leighton may satisfy itself that the amount due to Raj Shipping is accurate and reasonable. BINDING PROVISIONS This notice of Award "NOA" is inten....
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....KL). The barges have pumps fitted on them with a flow meter in order to pump out the HSD to the vessel. These are similar to petrol pumps where petrol is sold to the regular customers. At the Mallet Bunder, the HSD supplied by the oil marketing company is decanted into the cargo tanks of the barges owned by the Petitioner. The entire activity of decanting is done under the supervision of a Customs Officer. After taking delivery of the HSD from the oil marketing company, the barges sail to the anchorage point of the nominated vessel. 83) Paras 12 to 15 at pages 82 and 83 of the paper book read as under:- "12. After reaching the anchorage point of the nominated vessel, the HSD is pumped out of the barge into the fuel tank or bunker of the nominated vessel. Once the supply is complete, the Master or the Authorized Officer of the vessel acknowledges the receipt of the ordered quantity of HSD on the Bunker Delivery Note (BDN) and the Shipping Bill. An illustrative copy of the Bunker Deliver Note (BDN) duly acknowledged by the officer of the vessel is marked and annexed as Exhibit "7". 13. The barges go beyond 1.54 Nautical Miles from the base line of the coast of Mumbai to deliver t....
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....is clause (i) the activity of raising of manmade forest or rearing of seedlings or plants shall be deemed to be business; (ii) any transaction of sale or purchase of capital assets pertaining to such service, trade, commerce, manufacture, adventure of concern shall be deemed to be a transaction comprised in business; (iii) sale or purchase of any goods, the price of which would be credited or, as the case may be, debited to the profit and loss account of the business under the double entry system of accounting shall be deemed to be transactions comprised in business; (iv) any transaction in connection with the commencement or closure of business shall be deemed to be a transaction comprised in business; 2(8) "dealer" means any person who, for the purposes of or consequential to his engagement in or, in connection with or incidental to or in the course of, his business buys or sells, goods in the State whether for commission, remuneration or otherwise and includes, (a) a factor, broker, commission agent, delcredere agent or any other mercantile agent, by whatever name called, who for the purposes of or consequential to his engagement in or in connection with or incidenta....
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....xclusively agricultural produce grown on land cultivated by him personally, shall not be deemed to be a dealer within the meaning of this clause. Exception II. an educational institution carrying on the activity of manufacturing, buying or selling goods, in the performance of its functions for achieving its objects, shall not be deemed to be a dealer within the meaning of this clause. Exception III. A transporter holding permit for transport vehicles (including cranes) granted under the Motor Vehicles Act, 1988 (59 of 1988), which are used or adopted to be used for hire or reward shall not be deemed to be a dealer within the meaning of this clause in respect of sale or purchase of such transport vehicles or parts, components or accessories thereof. 2(16) "nonresident dealer" means a dealer who effects purchases or sales of any goods in the State, but who has no fixed place of business in the State; 2(17A) "petroleum products" means, (a) Superior Kerosene Oil (SKO); (b) Liquefied Petroleum Gas (LPG); (c) Furnace Oil (FO); (d) Light Diesel Oil (LDO); (e) Raw Naptha or Naptha; (f) Low Sulpher Heavy Stock, and any other product as the State Government m....
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....8) Therefore, it would not be proper to proceed on any assumptions straightaway. One cannot presume that merely because the tax in this case is sought to be levied, assessed and collected from the Petitioner that it is out of the purview of the MVAT Act. All the sections noted above will have to be read together and harmoniously with other provisions of the MVAT Act to find out as to whether the sale in this case could be said to be within the State of Maharashtra. For the purpose of a decision on this aspect, we would have to also consider as to whether the sale has necessarily taken place within territorial waters as claimed. The assumption on the part of the Petitioner is that the sale has taken place outside the State of Maharashtra and in territorial waters which are international in character. 89) Every act in a transaction of the present nature and referred extensively by us hereinabove would have to be viewed so as to determine when and from where the sale has taken place. A combined reading of the above definitions together with the charging sections in Chapter II would demonstrate as to how the levy is attracted and imposed. A splitting up or pick....
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....he vessel, unload the same, obtains a certificate from the Master of the vessel, that there is no sale and in any event all this takes place in the high seas, therefore, it is not a sale within the State of Maharashtra. The further contention is that MVAT Act cannot apply to territorial waters for they are international boundaries and controlled by the Union. This and the earlier submission proceeds on the footing that the sale in this case has no connection or nexus with the State of Maharashtrra, we would understand it that way. 91) In this case we find that the high speed diesel, a petroleum product, is the subject matter of the transaction. The petitioner placed an order on the oil companies within the State to supply a fixed quantity of this petroleum product to the petitioner so as to enable the petitioner to fulfill its contractual obligation. That contractual obligation is of bunker supplies undertaken and in this case with the party M/s. Leighton Contractors (India) Private Limited, an illustrative copy of the agreement and the contents of which we have reproduced hereinabove would show that these orders are placed from a business address at Kalina....
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.... of constitutional restrictions on its legislative power in that behalf, it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by Art. 286. The power is conferred by Art. 246(3) read with Entry 54 of List II of sch7 to the Constitution. The Legislature of any State has, under these provisions, the exclusive power to make laws "for such State or any part thereof" with respect to "taxes on the sale or purchase of goods other than newspapers". The expression "for such State or any part thereof" cannot, in our view, be taken to import into Entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State. All that it means is that the laws which a State is empowered to make must be for the purposes of that State. As pointed out by the Privy Council in the Wallace Brothers and Co. Ltd. v. Commr. Of IncomeTax Bombay, A. I. R. 1948 P. C. 118(B) in dealing with the competency of the Indian Legislature to impose tax on the income arising abroad to a nonresident foreign company, the constitutional validity of the relevant statutory provisions did not turn on the posse....
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....n The Tata Iron and Steel Co. Ltd. v. The State of Bihar, 1958 SCR 1355= (AIR 1958 SC 452). It was held in that case that the provisions of Section 4(1) read with Section 2(g) second proviso, of the Bihar Sales Tax Act, 1947 as amended by the Bihar Sales Tax Amendment Act,1949 were within the legislative competence of the Provincial Legislature of Bihar. The second proviso added by the amending Act did not extend the meaning of the expression "sale" so as to include a contract of sale: what it actually did was to lay down certain circumstances in which a sale, although completed elsewhere, was to be deemed to have taken place in Bihar. The circumstances mentioned in the proviso to Section 2 (g) of the Bihar State Sales Tax Act, namely, the presence of the goods in Bihar at the date of the agreement of sale or their production or manufacture there must be held to constitute a sufficient nexus between the taxing Province and the sale wherever that might take place. It is manifest that a transaction of sale is a composite transaction and consists of legal ingredients like agreement of sale, passing of title and delivery of goods but it is not necessary for the purpose of legislative j....
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.... "The intending purchaser has to apply for a permit to the Iron and Steel Controller at Calcutta, who forwards the requisition to the Chief Sales Officer of the assessee working in Calcutta. The Chief Sales Officer thereafter makes a 'works order' and forward it to Jamshedpur. The 'works order' mentions the complete specification of the goods required. After the receipt of the 'works order' the Jamshedpur factory initiates a 'rolling' or 'manufacturing' programme. After the goods are manufactured, the Jamshedpur factory sends the invoice to the Controller of Accounts who prepares the forwarding notes, and on the basis of these forwarding notes, railway receipts are prepared. The goods are loaded in the wagons at Jamshedpur and despatched to various stations, but the consignee in the railway receipt is the assessee itself and the freight also is paid by the assessee. The railway receipts are sent either to the branch offices or the assessee or to its bankers, and after the purchaser pays the amount of consideration, the railway receipt is delivered to him. These facts are admitted and the correctness of these facts are not disputed by the State of Bihar" In our opinion, the ....
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....ts applicability has to be tested by applying the above principles and particularly the nexus theory. After having found sufficient territorial connection, namely, between the back to back transaction and the taxing authority that we are not in a position to agree with Mr. Sridharan that MVAT Act is inapplicable. 96) Mr. Sridharan has relied upon the principles relating to extension of the State's boundaries to the territorial waters. Prior thereto, he has also relied upon section 8 of the MVAT Act but that in our opinion refers to certain transactions to which MVAT Act will not apply and which may fall within the purview of the Central Sales Tax Act 1956. It is clear that it refers to section 4 of the Central Sales Tax Act,1956. 97) As far as the State boundaries are concerned, our attention has been invited to several works and commentaries extensively dealing with this aspect. We would not be required to refer to these commentaries, particularly relating to territorial waters by Coulson & Forbes, in the view that we have taken. Once we have made a reference to the theory of nexus and which is applicable to Sales Tax legislation as held by the Hon'ble Su....
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.... Constitution of India or Article 366(30) of the Indian Constitution. 101) For the very same reasons the definition of the term "State" as appearing in General Clauses Act, 1897 and the Bombay General Clauses Act,1904 also need not be referred. 102) As far as the Division Bench judgment in the case of Commissioner of Customs (Preventive) Mumbai vs. Noble Asset Company Limited (supra) our Court was required to decide whether a Commissioner vested with territorial jurisdiction over the Districts of Raigad, Navi Mumbai and Colaba would be in a position to deal with the violations of the Customs Act committed by a drilling rig in the exclusive economic zone in the continental shelf. It is in that context and finding that the States within India would not able to reach these zones and it is only the Sovereign, namely, the Central Government which would be in a position to deal with it. We do not think that we are required to decide any such controversy. Once we have held that the Assessing Officer could have taken note of the Petitioners transaction and probed and investigated it further so as to bring it to tax also by applying the nexus theory, then, this decision need not detain us.....
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....jacent to the landmass to the State of Karnataka and, therefore, the appellant is not liable to get itself registered under section 10 of the KST Act and also not liable to tax on the hire charges received from the NMPT. The learned single Judge took the view that the tug in question was in the State of Karnataka, though in territorial waters which forms the territory of the State, the question as to whether there was transfer of right to use the tug being one of fact the same has to be decided on the basis of the evidence produced by the parties before the second respondent and the same cannot be considered in the Writ Petition. That is how the Writ Petition was dismissed and the appeal was filed. 106) The rival contentions have been noted extensively and thereafter, in paragraph 5 question No.1 was framed and which is whether the use of tug on the territorial waters would amount to use of the tug within the State of Karnataka. From paragraph 6 onwards the Court considered these contentions and relying on the Madras High Court judgment and several works of eminent authors and judgments of other courts outside India, concluded that the sweep of the power of....
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....ords "Subject to the provisions contained in Section 3". Section 4 deals with a situation and when is a sale or purchase of goods said to take place outside a State. Therefore, it is subject to section 3 and when a sale or purchase of goods is determined in accordance with subsection (2) of section 4 to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. By subsection (2) a sale or purchase of goods shall be deemed to take place inside a State if the goods are within the Sate in the case of specific or ascertained goods, at the time the contract of sale is made and in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. Here also there is an explanation. 111) If we were to determine the applicability of the provisions referred above we would have to go into the factual aspects and in great details. Concededly, in proceedings under the Bombay Sales Tax Act, 1959 (for short "BST Act") particularly of the nature of appeal, the issue of BST Act not being applicable to s....