AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 649
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....sis of average rate of neighbouring mines in exercise of the powers under Section 35(7) read with Section 30(4) of the JVAT Act has been upheld. 2. The brief facts of the case as pleaded by the petitioner is that the petitioner is engaged in the business of mining & trading of iron ore, and Iron ore extracted from mines is known as "Run of Mines (ROM)" which requires further processing and screening. Petitioner's premise does not have processing and screening facility and thus, only ROM was being sold by the petitioner. ROM includes Fines & Lumps and the grade of minerals found in petitioner's premises was between 50-65% Fe content, which would be evident from survey report as contained in Annexure-1. The Assessment proceeding of the petitioner was completed wherein, in alleged exercise of power u/s 35(7) r/w Section 30(4) of the JVAT Act, tax and interest has been imposed upon the petitioner on the alleged ground that petitioner has concealed its Gross Turn Over (for short GTO). The assessing officer despite taking actual figure of sale price, has taken the value of goods sold on the basis of average sale price of nearby mines i.e., M/s. Rungta Mines Ltd. 3. Being aggrieved by ....
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....he present case. (c) The State Tax authorities as well as the learned Tribunal has failed to take into consideration the definition of "Sale" and "Sale Price" as enshrined in Section 2 (xlvii) & 2 (xlviii) respectively of the JVAT Act which in substance provides that the VAT would be levied on the sale of goods and on the consideration received for such sale of goods and not on the basis of market value of the goods in question. Thus, they have failed to consider the aforesaid provisions of the JVAT Act at the time of deciding the issue of determination of goods sold by the petitioner. (d) Further finding with respect to "under valuation" of the goods sold by the petitioner recorded by the appellate court is totally misconceived and not tenable in the eye of law. It is really un-understandable that why purchaser of petitioner would purchase minerals at a lesser price just in order to evade payment of tax especially when the said purchaser is entitled to avail ITC under the JVAT Act, 2005. (e) Further, the lower court records itself demonstrates that no such enquiry whatsoever was conducted by the assessing officer to conclude under-pricing done by the petitioner. (f) The qu....
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....ported in (1974) 3 SCC 260 (Para-11) wherein it has been held that a dealer cannot be assessed on the basis of market price of goods sold by the said dealer. 6. Mr. Deepak Kr. Dubey, A.C. to Sr. S.C.-II has argued on behalf of the State. A counter affidavit has been filed in the matter contending that ROM consists of less ferrous content of iron, while Iron Ore consists of higher quantity of Ferrous content. This is the reason that there is no mention of ROM in the rate of IBM. Based on the records showing the sale of iron ore filed by the petitioner, it is argued that the petitioner had been producing/raising iron ore as lumps which are more valuable than ROM and fines. It is also pointed out from these invoices that the rate of iron ore lump (ROM) and fines, ferrous wise mentioned in Tax invoices is lower rate than the ferrous wise, grade wise mentioned rate of IBM. The basis for initiation of the proceedings by the assessing officer was this satisfaction that the petitioner has sold the iron ore at a higher price than shown by him in these invoices. Thus, the ingredients of Section 35 (7) of the JVAT Act were satisfied for proceeding against him in terms of the JVAT Act. Purs....
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....in reply has sought to distinguish these decisions on facts as they relate to a case of best judgment assessment when the Books of Account were either rejected or were not produced. 8. Having gone through the rival contentions of learned counsel for the parties and after going through the impugned order and other relevant documents placed before us it appears that revised assessment proceeding of the petitioner was completed and an order has been passed whereby, in exercise of power u/s 35(7) r/w section 30(4) of the JVAT Act, tax and interest has been imposed upon the petitioner on the ground that petitioner has concealed its GTO. The assessing officer despite taking actual figure of sale price, has taken the average sale price of M/s. Rungta Mines Ltd. Aggrieved by the assessment order, the petitioner assailed the same in appeal before the JCCT (Appeal), Jamshedpur being Appeal Case No. CBVAT-A- 09/ 2011-12. The learned appellate court rejected the appeal without appreciating that GTO of petitioner cannot be enhanced by comparing sale price of neighboring mines and the AO has not found that petitioner has sold its goods lesser than the price shown in sale invoices of the petiti....
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....aler has furnished all the returns and the revised returns, if any, within the prescribed period and in the prescribed manner or within next fifteen days thereafter and- The prescribed authority is satisfied that the returns or the revised returns as the case may be, and self assessment claim are prima-facie correct, consistent and complete, he shall accept the self assessment as filed by the dealer and shall assess the amount of tax and interest due from the dealer on the basis of such returns, after making prima-facie adjustment in the nature of arithmetical errors, if any, in the returns and the self assessment; * In the circumstances, if the self-assessment under sub-section (1), (2), (3), (4) and (5) has not been filed within the prescribed time, the prescribed authority shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a time and place to be specified therein either to attend in person or through an authorised representative or to produce or to cause to be produced any accounts and other evidences on which such dealer may rely in support of such returns and claims thereof and assess the dealer, the amount of tax and interest due f....
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....; however, there is no document to suggest that the assessing officer has recorded his reason before initiating the proceeding. 11. The principles regarding concept of 'Sales Tax' as compared to Income Tax or Excise Duty have been explained in the case of Morriroku U.T. Indians Pvt. Ltd. (supra) at paragraphs 19 and 23 quoted hereunder :- "19. Before analysing Section 3 of the 1948 Act, it is important to keep in mind that in income tax cases, tax is exigible on "real income" which means the actual income received by or which accrues to the assesses. In case of sales tax, tax is exigible on real price received or receivable by the dealer in respect of a sale. A dealer is entitled to frame his price structure in a manner conducive to the type of his business or with a view to withstand the competition. In a given case, cost may be more than the price. The dealer may base his price structure to give an incentive to his clients, agents, distributors, etc., particularly if he is a manufacturer. In such cases, his price structure has to be scrutinized by the Department under the sales tax law to find out the real sale price receivable by him. There may be cases where he is required t....
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.... scheme of levy of excise duty is totally different. For excise duty purposes, transfer of property in goods or ownership is irrelevant. As stated, excise duty is a duty of manufacture. The provisions relating to measure (Section 4 of the 1944 Act read with the Excise Valuation Rules, 2000) aim at taking into consideration all items of costs of manufacture and all expenses which lead to value addition to be taken into account and for that purpose Rule 6 makes a deeming provision by providing for national additions. Such deeming fictions and notional additions in excise law are totally irrelevant for sales tax purposes. Therefore, in any event, these notional additions cannot be read into Clause 5.1 and Clause 5.2 of the General Agreement for Purchase of Parts dated 31.7.1997." In the case of M/s. Girdharilal Nanhelal (supra) cited by the petitioner, the Hon'ble Apex Court has at para-7 held that for the purpose of levy of Sales Tax it would be necessary not only to show that the source of money has not been explained but also to show existence of some material that such acquisition of money has resulted from transactions liable to Sales Tax and not from other sources. 12. The fin....