TaxTMI 
TaxTMI 
2018 (7) TMI 146
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.... 2003 ["the VAT Act" for short] authorizes the Commissioner to permit a dealer of specified classes to pay a lump sum tax in lieu of tax payable under the Act; at the option of the dealer. We would take note of the relevant provisions contained in Section 14 latter when we refer to all other statutory provisions applicable. Suffice it to record at this stage that the manufacturing of bakery items was notified by the Government under a Notification dated 31st March 2006 for which permission for payment of lump sum tax could be granted. The petitioner applied to the Commissioner for such purpose and was granted permission. However, the dispute arose with respect to the turnover on which such tax would be collected at the prescribed rate of 2%. The assessee contended that the same should be computed as a percentage of its taxable turnover. The Departmental authorities, however, held a belief that it should be on the assessee's total turnover. The issue eventually reached the Tribunal. The Tribunal, by the impugned judgment, ruled in favour of the Government. The Tribunal was of the opinion that the notification issued by the Government refers to term "turnover of sales" which has been....
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....ax is optional and is not thrust on the assessee by the Legislature. [c] The notification in question uses the term "turnover of sales" which carries a definite connotation under Section 2 [33] of the Act. [d] Collecting tax on the total turnover at a prescribed percentage is only a mode of computation of lump sum in lieu of normal tax liability. It cannot be seen as taxing the exempt products. In order to resolve this controversy, we may refer to the relevant statutory provisions. Section 2 [27] of the Act defines the term "tax" as to mean the tax leviable and payable under the Act on the sale and purchase of goods and would include lump sum tax leviable or payable under Sections 14, 14A, 14B, 14C and 14D of the Act. Term "taxable goods" is defined in Section 2 [29] of the Act to mean goods other than those on the sale or purchase of which no tax is payable under Section 5. Term "taxable turnover" is been defined in Section 2 [30] as under :- "2 [30] "taxable turnover" means the turnover of all sales or purchases of a dealer during the prescribed period in any year, which remains after deducting therefrom : (a) all the turnover of sales not subject to tax under this Act; ....
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....levied a tax on the turnover of sales of goods specified in Schedule II or Schedule III at the rate set out against each of them in the said Schedule II or, as the case may be, Schedule III." Section 14 which is at the center of the controversy reads as under : "14. Option for Payment of lumpsum Tax in lieu of tax on Sales : (1) (a) Notwithstanding anything contained in this Act, the Commissioner may, in such circumstances and subject to such conditions as may be prescribed, permit any dealer, whose total taxable turnover has not exceeded Seventy Five lakhs rupees in the previous year, to pay lump sum tax in lieu of the amount of tax payable under section 7 of this Act. Provided that the Commissioner shall not grant permission to pay lump sum tax under sub-section [1] to a dealer who - [i] sells the goods in the course of inter-state trade and commerce or exports goods out of the territory of India; [ii] has purchased in the previous year or in the course of inter-State trade and commerce or has imported in the previous year or imports goods from a place out of the territory of India; [iii] dispatches the goods to his branch or his consigning agent outside the St....
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.... Schedule. SCHEDULE Sr. No. Description of activity of manufacture Rate of lump sum tax 1 2 3 1 Bakery Two per cent of the turn over of sales 2 Bricks Two per cent of the turn over of sales 3 Hotels and restaurants Four per cent of the turn over of sales As per this notification, the manufacturing activity of bakery would be brought within the fold of composition of tax scheme and the rate of lump sum tax prescribed is "two per cent of the turnover of sales ". We may take note of certain other parallel developments in the context of Section 14 of the Act. On the same day ie., 31st March 2006, the Government had also issued a notification fixing one-half per cent as the rate of lump sum tax in case of dealers who had been permitted to pay lump sum tax under sub-section [1] of Section 14 of the Act. The said notification reads as under : "In exercise of the powers conferred by sub-section (2) of Section 14 of the Gujarat Value Added Tax Act, 2003 [Gujarat 1 of 2005], the Government of Gujarat hereby fixes one-half per cent as the rate of lump sum tax in lieu of the amount of the tax payable by the dealer on the total turnover of his sales, who has been per....