TaxTMI 
TaxTMI 
2016 (8) TMI 25
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....notices of default assessment of tax, interest and penalty under Sections 32 and 33 of the DVAT Act. 2. The Petitioner states that it is engaged in the business of telephony and undertakes purchase and sale of CDMA handsets as a distributor of M/s. Drive India. It also provides CDMA connection as a service provider of Tata Teleservices Limited ('TTL'). The Petitioner filed monthly returns for May 2007 and July 2007 in which it claimed refund of excess tax credit. The refund claim for May 2007 was Rs. 70,87,097 and for July 2007 it was Rs. 11,02,969. It is stated that in terms of Section 38 of the DVAT Act, the refund was required to be issued within one month from the date of filing of the monthly returns. Accordingly, the last date of refund for the aforementioned periods was 27th July 2007 and 28th September 2007 respectively. 3. The Petitioner states that no notice of audit under Section 58 of the DVAT Act was issued nor any additional information under Section 59 sought as envisaged under Section 38 (4) of the DVAT Act. Further, no security as a condition for issuance of refund was demanded within 15 days from the date of filing of monthly returns as contemplated under Secti....
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....he output tax liability of the seller had not reduced. The subsidy given by TTL was not towards the sale of handsets but the service charges to be received from the customers. As far as the Respondent was concerned, it was entitled to levy and collect value added tax ('VAT') at the price at which the end customer buys the handsets. 7. The OHA held, by referring to the decision in Neyveli Lignite Corporation Limited v. Commercial Tax Officer, Cuddalore [2001] 124 STC 586a (SC); Rashtriya Chemicals and Fertilisers Limited v. State of U.P. (1996) 101 STC 487 (All); Natraj Organics Limited v. Assistant Commissioner (Assessment) Sales Tax, Muzzaffarnagar (1995) 96 STC 261 (All); Bongaigaon Refindery and Petrochemicals Limited v. Commissioner of Taxes, Assam (2003) 131 STC 37 (Gau); TISCO General Office Recreation Club v. State of Bihar (2002) 126 STC 547 (SC), and Andhra Agencies v. State of A.P. (2008) 14 SCC 540 that subsidy cannot form part of the sale consideration. The OHA concluded that "the default assessments were made to defeat the claim of refund of the Objector." The OHA was also surprised "at the action of the VATO who, in order to inflate the demands, added the amount of r....
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.... 2004 read with Section 32 and 33 of the said Act by Objection Hearing Authority/Additional Commissioner-II for the assessment period May 2007, July 2007 and March 2008 in your case, (i) a certain turnover of sales which has not been brought to tax or has been brought to tax at lower rate or has been incorrectly classified, or any claim is incorrectly granted or that the liability to tax is understated, or (ii) the order is erroneous, in so far as it is prejudicial to the interest of revenue; And whereas it has been decided to revise the above stated order under Section 74A of the Delhi Value Added Tax, 2004. Therefore, in view of the above, you are hereby directed to appear, before the undersigned at the above mentioned address on 17th April 2013 at 11 am in person or through authorized representative along with books of accounts, copy of contract with Tata Teleservices Limited (TTSL) and all relevant documents, failing which an order in this regard shall be passed on merits as per law." 12. The Petitioner then filed Writ Petition (Civil) No. 3119 of 2013 challenging the said notice on the ground that it had been arbitrarily issued by the Respondent only to delay the grant of r....
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....the Petitioner as well the revision petition proposed by the Department so that the conflicting views of the OHAs could be reconciled. On merits he urged that the widest possible meaning had to be given to the expression 'sale' in Section 2(1)(zc) of the DVAT Act. Mr. Ghose submitted that the word 'sale' would include anything that would go to enhance the value of the product sold. In this case, according to Mr. Ghose, the subsidy granted by TTL to the Petitioner was to compensate for the reduced price at which the handsets were to be sold and therefore constituted the 'other valuable consideration' which formed part of the sale price. Mr. Ghose referred to a letter issued by another dealer M/s. Shyam Telecom Limited confirming that they were collecting VAT on the subsidy as well. 16. At the outset, the Court notes that the review petition filed by the Petitioner to challenge the order of the OHA dated 16th December 2009 is not under challenge in these petitions. The Court is therefore not called upon to examine that order. Further, the Court is required to examine whether there is any justification in the Respondent seeking to revise the order dated 9th October 2009 of th....
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....h Court reiterated that the subsidy given by the Government of India to the manufacturer of fertilizers is not covered within the definition of turnover under Section 2 (i) of the U.P. Sales Tax Act, 1948. In the context of the amount received by an oil refinery from the pool account, being the difference between the ex-refinery price of petroleum products and retention price fixed by the Oil Co-ordination Committee set up by the Ministry of Petroleum, the Gauhati High Court in Bongaigaon Refinery and Petrochemicals Limited v. Commissioner of Taxes, Assam (supra) held it to be in the nature of a subsidy and not part of the sale price for purposes of taxation under the Assam General Sales Tax Act, 1993. 21. In Tisco General Office Recreation Club v. State of Bihar (supra), a dealer ran a canteen for the benefit of officers and employees of the TISCO. It sold the food items in the canteen at prices fixed by the Managing Committee. The prices were below the cost price. To make good the loss, as a staff welfare measure, TISCO gave lumpsum subsidies to the dealer. The subsidies were not relatable to any particular item of food. It was held by the Supreme Court in that case that "the lu....
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.... rate, or has been incorrectly classified, or any claim is incorrectly granted or that the liability to tax is understated, or (b) in any case, the order is erroneous, in so far as it is prejudicial to the interest of revenue, and after examination, the Commissioner may pass an order to the best of his judgment, where necessary." 26. It is obvious that the notice dated 4th April 2013 issued under Section 74A (1) of the DVAT Act reproduces the mere words of the above provision without indicating the specific ground on which the Respondent proposes to revise the order dated 9th October 2009. As explained in Commissioner of C. Ex, Bangalore v. Brindavan Beverages (P) Limited (supra), unless the grounds in the show cause notice (SCN) are specified it is not possible for the Assessee to answer such SCN. In other words, "if the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the notice was not given proper opportunity to meet the allegations indicated in the show cause notice." 27. Likewise in Amrit Foods v. Commissioner of Central Excise, U.P. (supra) the Supreme Court held that th....