TaxTMI 
TaxTMI 
2022 (5) TMI 73
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....ondent no.4. Mr.Dighe, learned counsel waives service for the respondent no.5. Mr. Sriniwas Balasaheb Bharati, Deputy Commissioner of Sales Tax present in Court. Rule is returnable forthwith. By consent of the parties, both the writ petitions were heard together and are being disposed of together. 2. In Writ Petition (Lodging) No.10092 of 2020, the petitioner has prayed for a writ of certiorari for quashing and setting aside the impugned order dated 31st March, 2020 to the extent that it imposes the tax and interest in respect the sales made by the petitioner to M/s. ASK Agencies and Investments Private Limited (for short "ASK Agencies") from its customs bonded warehouse during the financial year 2015-16. 3. The petitioner also prays for a declaration that the impugned order dated 31st March, 2020 passed by the respondent no.2 to the extent that it imposes tax of Rs.8,11,36,789/- and interest thereon in respect of the sales made by the petitioner to Damania Enterprises during the financial year 2015-16 is arbitrary, illegal and ultra vires and for quashing and setting aside the same. The petitioner also prays for a writ of mandamus to direct the respondent no.2 to confirm tha....
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.... Damania Enterprise for the period June, 2015 to January, 2017 were resold by Damania Enterprises and to confirm that Damania Enterprises had paid applicable tax on the resold goods to third parties. It is the case of the petitioner that the respondent no.3 however, refused to accept the said letter from the representative of the petitioner after perusing the said letter. The petitioner accordingly issued the said letter by post. 10. On 18th July, 2019, the petitioner received a notice from the respondent no.2, the Assessing Officer for both Central Sales Tax and VAT in Maharashtra in the year 2015-16. The petitioner appeared before the respondent no.2 on various dates and filed various documents. On 31st March, 2020, the respondent no.2 passed the impugned assessment order, served on the petitioner on 30th June, 2020. By the said assessment order, the respondent no.2 disallowed the exemption sought by the petitioner under section 5(2) of the Central Sales Tax Act in respect of the sales made by the petitioner from its customers bonded warehouse to the said M/s ASK Agencies in Mumbai, Maharashtra and imposed tax in respect of the said sales transactions. 11. By the said asses....
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....e Honh'ble Supreme Court applicable at that stage, in case of (Hotel Ashoka) Indian Tourism Development Corporation vs. Assistant Commissioner of Commercial Taxes and another reported in 2012-TIOL SC-VAT, since the transaction was bond to bond sale to the effect from the bonded warehouse, the sale was treated as a "sale in the course of import" and no tax was paid by the petitioner on the said transaction. 14. It is submitted by the learned counsel that when the said goods were subsequently sold by M/s ASK Agencies in terms of the Notification Vat- 1511- C.R.-57/Taxation-1 dated 30th April, 2011, VAT was discharged at the applicable rate, on the full value, as the "first point of sale". He relied upon the Chartered Accountants certificate at Exhibit "D" to the petition and would submit that they confirmed the fact that VAT had been paid by M/s ASK Agencies in respect to the goods in question. He also invited our attention to an undertaking executed by the said M/s ASK Agencies confirming payment of VAT. 15. Learned counsel for the petitioner placed reliance on the affidavit in reply filed by the respondent no.4 i.e. M/s ASK Agencies in this petition on 14th October, 2020 conf....
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.... ASK Agencies. He submits that since the respondents have already levied the tax in question on the goods in question and has recovered the same from the M/s ASK Agencies, fresh levy that is now proposed in the hands of the petitioner is ultra vires section 3 of the MVAT read with the Notification dated 30th April, 2011 and is beyond the scope and jurisdiction of the charging section and other provisions of the MVAT Act. 20. It is submitted by the learned counsel that the said M/s ASK Agencies has rightly discharged the tax as "first point of sale" as per the law laid down at the relevant time decided in case of Indian Tourism Development Corporation (supra). He submits that all the legal proceedings particularly the tax matters on the date when they are being decided by any Court or statutory authority, would be governed by law on the line as laid down by the Hon'ble Supreme Court which prevails on such date. In support of this submission, learned counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Ram Bai vs. Commissioner of Income Tax, (1999) 3 SCC 30, in case of Tripura Ispat vs. Union of India 2021(1) TMI 753. 21. It is submitted by the learne....
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....judice to the rights and contentions of the petitioner, the entire situation would be revenue neutral. If the tax duty is to be recovered from the petitioner on sale, the corresponding obligation would be to refund the tax collected to M/s ASK Agencies for the very same transaction. In relation to other indirect taxes, the Hon'ble Supreme Court has recognized that where the situation is revenue neutral, there is no jurisdiction for seeking to recover a tax or impose interest or penalty. In support of this submission, learned counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Commissioner of Central Excise vs. Angadpal Industrial Pvt. Ltd., 2015 (325) E.L.T. 228 (S.C.) and Commissioner of Central Excise, Pune vs. Coca-Cola India Pvt. Ltd. 2007 (213) E.L.T. 490 (S.C.). 25. It is submitted that in the said judgment of the Hon'ble Supreme Court, it is held that the transaction in question was liable to VAT under the State VAT law as the sale occurred within the State. Under the constitutional scheme of taxation, pre-GST, VAT was leviable for intra-State sale and CST was leviable for inter-State sale. In this case, the petitioner had sold the imported goo....
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....eclaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority. (5) Notwithstanding anything contained in sub-section (1) if any designated Indian carrier purchases Aviation Turbine Fuel for the purposes of its international flight, such purchase shall be deemed to take place in the course of the export of goods out of the territory of India. Explanation. For the purposes of this sub-section, "designated Indian carrier" means any carrier which the Central Government may, by notification in the Official Gazette, specify in this behalf. Section 3 of MVAT Act The dealers, holding a valid registration certificate under the earlier laws, whose turnover of either of sales or purchases exceeds the specified limits during the financial year 2004-05, shall be deemed to be registered dealer under MVAT Act and shall, therefore be liable to pay tax w.e.f. 1st April, 2005. 1. The dealers, holding a valid registration certificate under the earlier laws, whose turnover of either of sales or purchases has not exceeded the specified limits during the financial year 2004-05, but who have opt....
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.... 2008-09 is extended from 31st March 2013 to 30th June 2013. Definition of Custom Area under Section 2(11) of the Customs Act "customs area" means the area of a customs station [or a warehouse] and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. Definition of Warehouse Section 2(43) of the Customs Act "warehouse" means a public warehouse appointed under Section 57 or a private warehouse licensed under Section 58. Definition of Warehouse Goods - Under Section 2(44) of the Customs Act "warehoused goods" means goods deposited in a warehouse; Section 67 and 68 of the Customs Act Section 67 - Removal of goods from one warehouse to another. The owner of any warehoused goods may, with the permission of the proper officer, remove them from one warehouse to another, subject to such conditions as may be prescribed for the due arrival of the warehoused goods at the warehouse to which removal is permitted. Section 68 - Clearance of warehoused goods for home consumption. - The importer of any warehoused goods may clear them for home consumption ....
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....ions of MVAT Act. In support of this submissions, the learned A. G. P. placed reliance on the judgment of this Court delivered on 16th February, 2022 in Writ Petition No. 12297 of 2021 in case of M/s Mestra A. G. Switzerland Vs. The State of Maharashtra and others and more particularly paragraph No. 17, 19, 24, 25, 26 and 27. 29. It is submitted that petitioner is admittedly a registered dealer under the provisions of the MVAT Act along with Central Sales Tax Act, 1956. Prior to 01st April, 2005, system for levy of tax in Maharashtra in general was Single Point Tax collection system. As a consequence to National consensus for introduction of Value Added Tax, the earlier Bombay Sales Tax Act, 1959 was replaced by the Maharashtra Value Added Tax 2002, which envisages levy of tax on the sale at each stage and contemplates allowing of set off tax paid on purchase. It is submitted that, vide notification dated 30th April, 2011, exemption was granted to specified classes of dealers in respect of sale of liquor to the specified extent subject to fulfilment of specific condition prescribed in the said notification. However, under the provision of MVAT Act, the concept of First Point Sal....
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....f this Court in case of the Commissioner of Sales Tax, Mharashtra State Vs. M/s Radhasons International applies to the facts of this case. 33. It is submitted that, in view of the latest judgment in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra), the judgment of the Hon'ble Supreme Court in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) relied by the petitioner would not come to the aid of the case of the petitioner. She submits that, the Assessing Officer has rightly relied upon the latest judgment in a case of M/ s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) and has rightly levied the tax after considering the said judgment and also the provisions of the MVAT Act against the petitioner. She submits that, the said levy of tax in the assessment order against the petitioner is not in violation of any of the provisions of the Constitution of India or the MVAT Act. 34. The learned A. G. P. placed reliance on Section 8(1) to 8(4) of the Central Sales Tax Act, 1956 in support of the submission that the petitioner not having sub....
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....submitted by the learned counsel for the petitioner that, since assessing officer has exceeded its jurisdiction, the petitioner is entitled to challenge the said order passed by the Assessing Officer. In support of this submission, the learned counsel placed reliance on the judgment of the Supreme Court in a case of Assistant Commissioner of Sales Tax Vs. Commercial Steel Limited reported in 2021 SCC Online SC 884 and in particular para No. 11. 40. It is submitted by the learned counsel for the petitioner that, the respondents have to collect appropriate levy as per the provisions of law and not according to whims of the respondents. The learned counsel placed reliance on Form 8-B issued by the assessing officer thereby calling upon the petitioner to pay Central Sales Tax in the sum of Rs. 1,95,80,782/-. If according to respondents transaction between the petitioner and said M/s ASK Agency did not come under Sec. 5(2) of the Central Sales Tax, then levy under Central Sales Tax upon the petitioner in the said assessment is ex-facie illegal and ultra vires the provisions of the Central Sales Tax Act and the MVAT Act. 41. In so far as the reliance placed by the learned A. G. P. ....
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..../s ASK Agencies has been already accepted by the Assessing Officer in the assessment order of the said Agencies for the relevant period. 45. The learned counsel placed reliance on Section 15(1)(b) of the Customs Act, 1952 and would submit that rate of duty would be applicable when the goods are cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented by the assessee for clearance U/Sec. 68(1)(5) of the Customs Act. M/s ASK Agencies had cleared the goods for home consumption. The Hon'ble Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) did not consider provisions of Sec. 15 and 58 of the Customs Act in the said judgment. 46. The learned counsel for the petitioner placed reliance on the judgment of the Hon'ble Supreme Court in a case of LML Limited Vs. Collector of Central Excise Kanpur reported in 2002 (3) TMI 49 SC and more particularly paragraph Nos. 3 and 5 in support of the submission that for the purpose of customs duty, the taxable events occurs on the date on which the goods are cleared from a bonded warehouse for home consumption. It i....
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....x Maharashtra Vs. M/s Radhasons International [(2019) 64 GSTL 404 (Bom)] ? (iii) Whether the levy of tax sought to be recovered from the petitioner amounts to double taxation in view of the respondent Nos. 1 and 2 already having collected at the first point of sale from M/s ASK Agencies or not ? (iv) Whether entire situation in the impugned transactions would be revenue neutral and thus respondent Nos. 1 to 3 could not have demanded separate tax from the petitioner, in view of the said M/s ASK Agencies already having paid the tax "at the first point sale"? (v) Whether levy of Central Sales Tax is contrary to the constitutional scheme of taxation and contrary to the principles laid down by the Supreme Court in a case of M/s Nirmalkumar Parsan Vs. Commissioner Commercial Taxes and others (supra) or not ? (vi) Whether levy of tax is contrary to Article 265 and 300A of the Constitution of India ? 49. A perusal of the record indicates that, the impugned levy under the assessment year 2016-2017 is in respect of point to point sales. The petitioner has been also levied highest rate of tax despite having been paid on the resale by the purchasing deale....
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.... has further clarified that the tax paid by the said M/s ASK Agencies be treated as due discharge of the tax liability of United Spirits Limited on the subject products (if any). 52. The said M/s ASK Agencies (respondent No. 4) has filed affidavit on 22nd October, 2020 in this writ petition and confirmed that during the financial year 2015-2016, the petitioner from its customs bonded warehouse sold goods (liquor) to the aid M/s ASK Agencies and delivered the goods (liquor) to the customs bonded warehouse of the said M/s ASK Agencies. Both the warehouses i.e. warehouse of the petitioner and the respondent No. 4 are situated in Maharashtra. For all the purchases made by the said M/s ASK Agencies from the petitioner during the financial year 2015-2016 for the total value of Rs. 15,45,23,314/- under VAT/CST was discharged by the said Agencies on the basis that the sale between bond to bond at the relevant time was considered as a 'sale in the course of the import' is exempted from payment of CST.VAT under Section 5(2) of the CST Act. 53. In the said affidavit, it is further stated that, the goods that were purchased by the said M/s ASK Agencies from the petitioner were subsequent....
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....of C Forms to the petitioner in respect of sales made by the petitioner to the respondent No. 5 during the relevant period. The respondent No. 5 confirmed the VAT Return filed by the respondent No. 5. 57. The Hon'ble Supreme Court in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) has held that, no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the territory of India. If any transaction of sale or purchase takes place when the goods are imported in India or they are exported from India, no State can impose any tax thereon. The Supreme Court considered the situation whether the goods brought from foreign countries by the assessee had been kept in bonded warehouses and they were transferred to duty free shops situated at International Airport of Bengaluru as and when the stock of goods lying at the duty free shops was exhausted. 58. It is held by the Supreme Court that, when the goods are kept in bonded warehouses, it cannot be said that the said goods ha....
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....o impediment for levy of sales tax by the state concerned in whose territory the goods had already landed/unloaded and kept in the bonded warehouse. For seeking exemption, it is necessary that the goods must be in the process of being imported when the sale occurs or the sale must occasion the import thereof within the territory of India. 61. The Supreme Court considered the judgment in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) and held that for a sale or purchase to qualify as a sale or purchase in course of import, the essential conditions are that such sale shall occur before the goods had crossed the customs frontiers of India and the import of the goods must be effected or the import is occasioned due to such sale or purchase. For sale or purchase of goods to be regarded as sale or purchase in course of export, Section 5(1) of the CST Act provides for the following conditions: (i) the sale or purchase shall occasion such export or (ii) the sale or purchase shall be effected by a transfer of documents of title to the goods after the goods have crossed the customs f....
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....ance on the trade circular dated 26.06.2013 issued by the Commissioner of Tax, Maharashtra under the provisions of the MVAT and also trade circular dated 04th May, 2011. The levy in this case was already crystallized when the judgment of the Hon'ble Supreme Court in a case of Hotel Ashoka (Indian Tourism Development Corporation Ltd.) Vs. Assistant Commissioner of Commercial Taxes and another (supra) was in force. The levy had been already extinguished on account of the payment of VAT made by M/s ASK Agencies. 65. In view of Section 3 and 41 of the MVAT Act read with Notification No. VAT/1511/C.R.-57/Taxation-1 dated 30th April, 2011, which are applicable to the facts of this case, the tax was required to be paid only in relation to sales of liquor which were purchased from the registered dealer on or after 01st May, 2011. This position is also reflected in the trade circular dated 4T of 2013 dated 26th June, 2013. In our view, since the goods in question were transferred from the petitioner to M/s ASK Agencies suffer a single levy at the point of first sale, the tax in question already having been levied on the goods in question a fresh levy proposed to be made by the assessing ....
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....upreme Court prevails on such date. As it often happens, a decision of the Supreme Court is reviewed, reconsidered or overruled by larger Bench, such subsequent decision would undoubtedly clarify the position in law and such declaration would undisputedly apply to all pending proceedings, the proceedings which are closed in the mean time, cannot be reopened on the basis of subsequent declaration of law by the Supreme Court. 69. It is held that, any other view would lead to total anarchy. Based on the judgment of the Supreme Court several proceedings would have been decided. If years later such view is reversed, the parties who had not carried the proceedings in higher forum and thus not kept the proceedings alive, cannot trigger fresh look at the decision already rendered by the competent court on the basis of the previous judgment of the Supreme Court which was correctly applied at the relevant time. The principles laid down by the Tripura High Court in a case of Tripura Ispat Vs. Union of India, Commissioner, Central Goods and Service Tax (supra) applies to the facts of present case. We are in respectful agreement with the view expressed by the Tripura High Court in a case of ....
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....already collected the tax from M/s ASK Agencies for the same transaction and if according to respondent Nos. 1 to 3, the petitioner was liable to pay tax in respect of same transaction and not said M/s ASK Agencies, it will be a clear case of revenue neutral. 72. The assessing officer, in this case will have to recover the tax from the petitioner and will have to refund the tax to the said M/s ASK Agencies. M/s ASK Agencies has already filed an undertaking to the effect that, the adjustment in respect of said tax can be granted to the petitioner and has not made any claim for refund separately. The principles laid down by the Hon'ble Supreme Court in a case of Commissioner Central Excise Vs. Angadpal Indl. P. Ltd. (supra), in a case of Commissioner of Customs and C. Ex. Vs. Textile Corporation Marathwada Ltd. (supra) and in a case of Commissioner of C. Ex. Pune Vs. Coca-Cola India Pvt. Ltd. (supra) would apply to the facts of the case. We are respectfully bound by the principles laid down by the Hon'ble Supreme Court. 73. A perusal of the assessment order passed by the assessing officer clearly indicates that the assessing officer has levied Central Sales Tax against the peti....
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....d the petitioner under the provisions of the MVAT Act, the two assessment orders levying tax under two different provisions for similar transaction is ex-facie illegal. The petitioner has already filed separate writ petitions impugning the said assessment orders passed by the assessing officer against the petitioner for the year 2016-2017. 76. A perusal of the Section 3 of the MVACT Act clearly indicates that, the levy under the said provision qua goods is in the hands of the dealer. Under Section 41(5) of the MVAT Act levy is only on the licensor. The levy of tax on the transaction has been already extinguished in view of the payment thereof already made by M/s ASK Agencies. 77. In the facts of this case, the rate of customs duty would be applicable when the goods were cleared from the warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of said goods was presented by the assessee for clearance U/Sec. 68(1)(5) of the Customs Act. The said M/s ASK Agencies had cleared the goods for home consumption. 78. The Hon'ble Supreme Court in a case of LML Limited Vs. Collector of Central Excise Kanpur (supra) has held that, for the purpose....