TaxTMI 
TaxTMI 
2018 (8) TMI 70
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....try Tax Act on purchase of Hydraulic Excavator made on 29.09.2016. 2.0. So far as Special Civil Application No.7844 of 2016 is concerned, the petitioner has also prayed to quash and set aside the impugned notices for payment of tax issued in Form 3 dated 13.04.2016 passed by the respondent no.2 herein. The petitioner has also prayed to quash and set aside the impugned notices for assessment issued in Form 2 dated 13.04.2016 by the respondent no.2. The petitioner has also prayed to quash and set aside the impugned notices for demand dated 13.04.2016 issued by the respondent no.3 to the petitioner. Special Civil Application No.5379 of 2016 3.0. The facts leading to the present Special Civil Application No.5379 of 2016 in nutshell are as under: 3.1. That the petitioner is a proprietorship firm and works a contractor engaged in road construction. That the petitioner is registered under VAT Act. That on 29.09.2006 the petitioner purchased a hydraulic excavator for use in execution for works contract. According to the petitioner, the purchase was duly recorded in the books of accounts. According to the petitioner, hydraulic excavator is a machine mounted on chains and not on ....
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....hi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462419 dated 30.03.2012 23.04.2012 1,20,33,756/- Tata - Hitachi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462291 dated 29.02.2012 02.04.2012 1,18,13,130/- Hydraulic Excavator L&T 300D Invoice No. 911402203 dated 30.09.2014 27.11.2014 1,42,88,262/4.2 4.2. That on 06.04.2016, pursuant to instructions received from the Respondent No. 1Joint Commissioner of Tax, the Respondent No. 3Commercial Tax Officer, Amreli conducted a search/survey at the premises of the Petitioner under the provisions of the Gujarat Value Added Tax Act, 2003 and the rules framed thereunder. That on the very same day i.e. on 06.04.2016, a notice in Form401, under Section 67, 70 and 70A of the VAT Act, came to be issued to the Petitioner, seeking an explanation from the Petitioner qua the failure on payment of Entry Tax on the equipment purchased by the Petitioner, in 2011-12 and 2013-14. That on 12.04.2016, the representative of the Petitioner appeared before the Respondent No. 3, and inter alia submitted that the aforesaid equipment not being Motor Vehicles in terms of the Gujarat....
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....Soparkar, learned counsel for the petitioner that in terms of the provisions of Section 8 of the Entry Tax Act, no order of assessment can be made after the expiry of three years from the last date prescribed for furnishing of return - cum - challan of the particular period. It is submitted that further in view of Rule 6 of the Entry Tax, the return - cum - challan is required to be furnished to the concerned authority within a period of one month and fifteen days immediately succeeding the month for which return - cum - challan is required to be furnished. It is submitted that therefore, the respondents could have initiated the proceedings, if any, demanding Entry Tax from the Petitioner, under the provisions of the Entry Tax Act, latest by dates hereunder specified: Invoice Date Entry Date Period under Rule 6 Completion of 3 years 29.02.2012 02.04.2012 17.05.2012 17.05.2015 30.03.2012 23.04.2012 08.06.2012 08.06.2015 30.09.2014 27.11.2014 11.01.2015 11.01.2018 It is submitted that the impugned proceedings/ demand notices are clearly barred by limitation and therefore, liable to be quashed and set aside on this ground alone. 6.....
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..... It is further submitted by Shri Soparkar, learned counsel for the petitioner that Entry Tax Act does not provide a mechanism for a situation where the return - cum - challan is not filed by an entity, more particularly as to how the authority can compel an entity to file such return - cum - challan after the expiry of the prescribed period. It is submitted that in absence of such a provision, the petitioner cannot be compelled to file the return - cum - challan at this stage, when the period prescribed under Rule 6 of the Entry Tax Rules has already lapsed. 6.4. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that the assessee under the provisions of section 11(1)(a)(iii) of the Gujarat Value Added Tax Act, 2003, is entitled to claim tax credit equal to the amount of tax paid under the Entry Tax Act. It is submitted that in view thereof, if the provisions of the Entry Tax Act were to be interpreted in a manner wherein the Respondent authorities are empowered to compel the Petitioner to file return - cum - challan under the Entry Tax Act after the expiry of the prescribed period under Rule 6 of the Entry Tax Rules, it would tantamount to depriv....
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....mitted that a person is liable to file returns under the Entry Tax Act only if he bona-fidely believes that he has imported specified goods from outside the State. It is submitted that Rule 6 of the Entry Tax Rules requires furnishing of "return - cum - challan" in Form 1 by an importer to the assessing authority within whose jurisdiction the specified goods are brought for consumption, use or sale. It is submitted that even in the prescribed format i.e. Form 1, the description of the "specified goods" imported along with value, rate of tax, etc needs to be filled along with a statement that the tax amount as per such return has been deposited by the importer. It is submitted that even return - cum - challan needs to be filed only if a person believes that he has imported "specified goods" into the State of Gujarat. It is submitted that there is no provision requiring persons to file Nil returns in cases where non-specified goods are imported into the State of Gujarat. 7.2. It is further submitted by Shri Sheth, learned advocate for the petitioner that even there is no provision under the Entry Tax Act for assessment if return is not filed by an importer. It is submitted that th....
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.... prescribed for furnishing of returns is time-barred, and therefore, without jurisdiction, bad and illegal. 7.5. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that even there is no provision for filing nil return and hence time-barring of assessment cannot be restricted to persons who have filed returns. It is further submitted by Shri Sheth, learned advocate for the petitioner that there is no provision under the Entry Tax Act requiring or allowing filing of Nil return, in a case where a person imports goods which he bona-fidely believes to be non-specified goods. It is submitted that therefore, as such a person who does not file return under the Entry Tax Act, under a bonafide belief that the goods brought into the State by him are not specified goods, then he does not commit breach of any provision under the Entry Tax Act so as to make the time limit of assessment under Section 8(5) of the Entry Tax Act inapplicable to him. 7.6. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that the requirement of filing nil return consciously absent in the statute since registered dealer would in any case be filing retu....
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....t the petitioner has even been subjected to scrutiny assessment under the Vat Act and thus as such the assessing authority was aware about the entry of goods into the State of Gujarat. It is submitted that thus the time limit of 3 years stipulated under Section 8(5) of the Entry Tax Act would be applicable to the Petitioner and thus the assessment proceedings are time barred by limitation. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that even statutory notice for assessment under Section 8 specifically contains the circumstance where person has not filed returns. It is submitted that statutory notice for assessment in Form 2 which is prescribed for the purpose of Section 8 of the Entry Tax Act by Rule 7(2) of the Entry Tax Rules specifically contains a circumstance where person has not filed returns and the officer wants to make assessment. It is submitted that thus, the legislature also believes that assessment of persons who has not filed returns under the Entry Tax Act is required to be made under Section 8 of the Entry Tax Act. It is submitted that in fact in the case of the Petitioner the very notice for assessment in Form 2 was issued to t....
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....fore, the respondent cannot be allowed to initiate assessment under the Entry Tax Act after expiry of the statutory limitation period of 3 years. 7.9. It is further submitted by Shri Sheth, learned advocate for the petitioner that even otherwise impugned levy of entry tax at the rate of 15% under the Entry Tax Act by treating excavators as specified goods is bad in law and, contrary to the scheme and object and purpose of Entry Tax Act. It is submitted that excavators used in execution of works contract were classifiable as "Earthmoving Equipment" under Entry 98A of the Gujarat Sales Tax Act, 1969 for which the stipulated rate of tax was 8%. It is submitted that after introduction of the Vat Act w.e.f. 1.4.2006 the Excavators used in execution of works contract are covered under Entry 35 of the notification issued under Section 5(2) of the Vat Act at least till the entry was amended on 15.2.2010 and the stipulated rate of tax for Entry 35 was 4% during the year in question i.e. 2006-07. It is submitted that aforesaid has been held by this Court in the case of State of Gujarat v/s Yantraman Automac Pvt. Ltd reported in 93 VST 423 (Guj). 7.10. It is further submitted by Shri Sh....
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.... further submitted that therefore, the assessee cannot take benefit of time limit prescribed in Section 8(5) of the Act as entire Section 8 is regarding assessment to be made and consequence after filing return. It is submitted that if the return is not filed, Section 8 would not be applicable. 8.2. It is further submitted that Entry Tax Officer would not get idea about entry of goods in the State except on the basis of return filed. It is submitted that in the case under consideration also on the basis of information, search/ survey was made and information regarding entry of vehicles was found out. It is submitted that therefore, irrespective of the fact that whether the concerned importer who brings the goods within the State of Gujarat bona fide believes or not whether the goods imported are "specified goods" or not he has to file return as required under Section 8 of the Entry Tax Act. 8.3. It is submitted that on considering Section 3 and Section 10 of the Act, the liability of entry tax arise at the time of entry of the goods and it is the duty of every person who brings such goods into local area to pay tax. It is submitted that accordingly officers are entitled to is....
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....e above decision, it is requested to dismiss the present petitions. 9.0. Heard the learned advocates for the respective parties at length. 10. So far as Special Civil Application No. 5379 of 2016 preferred by the M/s. M.H. Khanusiya is concerned, the petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the impugned notice dated 20.02.2016 by which, the petitioner is called upon to pay entry tax under the provisions of Entry Tax Act. The petitioner also prayed to quash and set aside the assessment order dated 13.06.2016. 10.1. So far as Special Civil Application No. 7844 of 2016 preferred by the petitioner Ultratech Cement Limited, the petitioner has challenged the impugned demand notice dated 13.04.2016, by which, the petitioner is called upon to pay entry tax with interest and penalty on three purchases of Hydraulic Excavator. 11. The impugned notices / orders of assessment (in Special Civil Application No. 5379 of 2016) are challenged by the respective petitioners on the ground stated herein above and mainly on the ground that the impugned notices are barred by limitation provided under Section 8(5) of the Entry Tax Act as w....
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....he expiry of (one month) from the last date prescribed for furnishing the original return. Section 8: Assessment. (1)The amount of tax due from a person liable to pay tax under this Act shall be assessed separately for such period as may be prescribed. (2)If the Assessing Authority is satisfied that the return furnished by a person liable to pay tax under this Act is correct and complete, he shall assess the amount of tax due from the person on the basis of such return (3)If the Assessing Authority is not satisfied that the return furnished by a person liable to pay tax under this Act is correct and complete, and the Assessing Authority thinks it necessary to require the presence of the person or the production of further evidence, the Assessing Authority shall serve on the person in prescribed manner a notice' requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced such evidence as is specified in the notice.. On the date specified in the notice, or as soon as may be thereafter, the Assessing Authority shall, after considering all the evidence which may be produced, assess the amount of tax ....
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....easury by such date as may be specified in the notice. Issued by the Assessing Authority for this purpose, being a date not earlier than thirty days from the date of service of the notice (5)Any tax or penalty which remains unpaid after the date specified in the notice for payment, shall be recoverable as an arrear of land revenue, and for that purpose all the Assessing Authorities shall have and exercise all the powers of a Collector under the provisions of the Bombay Land Revenue Code, 1879. Section 10A : Special mode of recovery (1) Notwithstanding contained anything contained in any law or contract to the contrary, the Assessing Authority may at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the importer at his last known address, require: (a) any person from whom any amount of monies is due or may become due, to an importer on whom notice has been served under sub-section(1) or (b). any person who holds or may subsequently hold monies fro or an account of such importer to pay to the Assessing Authority, either forthwith upon the monies becoming due or being held or within the time specifie....
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....vernment Treasury the tax payable under the Act; (b) who is a registered dealer shall, within a period of one month and three days immediately succeeding the month for which return is required to be furnished, pay into a Government Treasury, the tax due and payable under the Act. (c). Notwithstanding anything contained in this rule, for the goods specified under entry at serial number 12 in the Scheduled appended to the Government Notification, Finance Department No. (GHN20) GEA2008/( S3) (3) TH, Dated THE 1st April, 2008, brought into local area, an electronic operator referred to in clause (d) of rule 2 only shall be liable to pay tax. Such electronic operator shall, within two days of entry of specified goods into local area, pay into a Government Treasury, the tax due and payable under the Act: Rule 4.Method of payment of tax and penalty. (1) Every payment of tax and penalty shall be accompanied by a return - cum - chalan in Form I obtained from a Government Treasury or the Assessing Authority appointed under section 5 of the Act. (2) The payment made into a Government Treasury shall be accompanied by a return - cum - chalan, in quad....
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...." Provided that the electronic operator, who deposits an amount equivalent to intimated amount of tax payable for the period prescribed as under, may furnish the details in Form 1AA for the said month within the time limit as under: Period of Calender Month Time Limit From day 1^st to 7^th 10th day From day 8^th to 15^th 18th day From day 16th to 23rd 25th day From day 24th to end of month 3rd day of next month (3) An importer shall furnish revised return - cum - chalan in Form 1. Rule 7. Assessment. (1)The amount of tax due from an importer, (a) Who is not a registered dealer shall be assessed within three days of entry of specified goods into local area, (b) Who is a registered dealer shall be assessed within a period of three months immediately succeeding the month for which return - cum - chalan is required to be furnished. (2)The notice referred to in sub-section (3) of section 8 shall be in Form 2. (3)Where the tax could not be assessed as per sub-rule (1), the assessment shall be made by the Assessing Authority in whose jurisdiction the specified goods are found or detected ....
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....nbsp; Status of importer FOR USE IN THE TREASURY Received Rs. ________, Rs (in words) _____________ Date of Entry ______ Chalan No. _______ From Mr./ Ms. ____________________________________________ Address. __________________________________________________ Signature of Treasury officer or Bank Officer or Assessing Authority 11.3. Notice for assessment is provided under sub rule (2) of Rule 7 of Rules, 2001, shall be in Form 2, as under: Form - 2 See sub rule (2) of rule 7 Notice for Assessment To, M/s --------------------------------------------------------------------------------------------------------------------------------------- WHEREAS desire to satisfy myself that the returns - cum - chalan furnished by you in respect of the period from to are correct and complete. AND WHEREAS having effected an entry of specified goods into local area' during the period from to in respect of which you are liable to pay ....
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.... (Seal ) 11.4. Notice for payment of tax for penalty as per Rule 8 shall be in Form 3, as under: Form - 3 (see rule 8) Notice for payment of tax or penalty To, You are required to pay the sum of Rs. ____________________as under: 1. Amount of tax unpaid as per return - cum - chalan Rs. _______________ 2. Amount of tax assessed for the period from ______________to______________________ Rs.____________ 3. Amount of Penalty Rs_______________ You are here by directed to pay the outstanding dues of Rs._______________ Rupees (in word) in to the Government Treasury within days from the service of the notice failing which the same will be recovered as an arrear of Land Revenue. Date: &....
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....the Central Sales Tax Act, 1956 on the purchase of the specified goods in the course of inter State trade or commerce. Similar reduction is provided in goods tax under the Gujarat Value Added Tax Act is paid. Section 7 is with respect to the returns. It provides that every person liable to pay tax under this Act shall furnish returns in such from, for such period, by such dates, and to such authority as may be prescribed. At this stage, it is required to be noted that as per the scheme of the Entry Tax Act and Rules, 2001 and as per the Rule 3 every importer is required to first pay the tax due and payable under the Entry Tax Act along with return in the form of return - cum - challan as per the Form No.1. If the importer is not registered dealer, in that case, is required to pay tax within the period of two days of entry of specified goods into local area and if such importer is registered dealer in that case, within a period of 21 days immediately succeeding the month for which return is required to be furnished. That as per the scheme of the Act and Rules after return - cum - challan is filed, thereafter the question with respect to assessment will arise as provided under ....
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...., the aforesaid submission is contrary to the scheme of the Act and Rules as observed herein above. If the submission on behalf of the petitioner is accepted in that case, every importer would not file return and return - cum - challan and would not be pay tax on the ground that it believes that goods are not specified goods. As per the scheme of the Act and the Rules, as soon as goods are imported, the tax shall be paid along with return and the return - cum - challan in form 1, in which amount to be reduced under sub-section( 2) of Section 4 of Entry Tax Act, 2001 is also required to be stated and question whether goods imported is specified goods or not are required to be considered during the assessment, provided return is filed along with tax and the return - cum - challan in form 1 is filed. 12.1. Similarly, the submission on behalf of the petitioner that unless and until assessment order is passed and the amount of tax is determined there is no question of making payment of tax is concerned, the aforesaid submission is also contrary to the scheme of the Act and Rules. 13.0. Now, so far as submission on behalf of the petitioner that under the provisions of Gujarat Value....
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....r assessment. Therefore, it is observed that as and when return cum challan is filed along with payment of tax demanded, the said aspect be considered in accordance with law and on its merits, more particularly, said aspect may be considered during the assessment, provided the petitioner files return cum challan as per the impugned notice. 16.0. Now, so far as challenge to the impugned assessment order in SCA No. 5379 of 2016 is concerned, it is the case on behalf of the petitioner that same is in breach of principle of natural justice. The notice for assessment has been issued on 08.06.2016 and the petitioner was asked to remain present on 09.06.2016. The petitioner submitted brief written reply to the notice and requested for adjournment. However, learned AO has passed the order on 13.06.2016. The noting in the assessment order that one Shri NB Shah was heard for the petitioner is disputed by the petitioner and it is specific case on behalf of the petitioner that the said consultant was not available on that date. Be that as it may, it appears that assessment order dated 13.06.2016 has been passed in haste and therefore, same can be said to be in principles of natural justi....