TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1218
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.... Superintendent of Taxes, Jorhat, under Section 36 of the Assam Value Added Tax, 2003, for the assessment years i.e. 2011-2012; 2012-2013; 2013-2014; and 2014-2015, and the subsequent notice of demand, all dated 16-12-2016, whereby, the value added tax (VAT) has been levied upon the petitioner, herein, for handling/logistic charges, charged by it, on the ground that such charge being taxable under the provisions of the Finance Act, 1994, and the service tax payable having been paid, the said charges could not have been brought within the ambit of "sale price" as defined under the provisions of Section 2(44) of the Assam Value Added Tax, 2003. 3. As the above-noted 4(four) writ petitions involve the same facts and the question of law emerging being also the same; they were heard analogously and are disposed of by this common judgment & order. 4. For the sake of convenience, the facts, as set-out by the petitioner in WP(C)1853/2017, is being considered. 5. As projected in the said writ petition, the petitioner, herein, is engaged in the sale and service of vehicles. In the course of its business of selling vehicles to its customers; the petitioner, herein, charged certain amounts ....
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....s further brought on record that the service tax being leviable for the handling/ logistic charges and the same being already paid; no Value Added Tax (VAT) would be permissible to be levied on the same component. The petitioner, herein, further clarified that it had not charged anything for providing services of registration and/or insurance and the handling/logistic charges were charged for providing extra services and accordingly, requested the respondent No. 3, herein, to drop the proceedings sought to be initiated against the petitioner in terms of the show cause notices issued in the matter. 9. The Respondent No. 3, thereafter, vide notice, dated 03-10-2016, issued a further show cause to the petitioner intimating that the petitioner shall now be assessed under the provisions of Section 36 of the Assam Value Added Tax, 2003, for the year 2011-2012 instead of Section 34, thereof, as had been so informed in terms of the earlier show cause notice. The petitioner was also directed to show cause as to why penalty under the provisions of Section 90 of the Assam Value Added Tax, 2003, should not be imposed upon it for evading taxes payable under the said Act of 2003, as intimated b....
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....ature of the services rendered by a dealer during and after the process of a sale of a vehicle, has submitted that the handling/logistic charges charged by the petitioner, herein, from its customers, were so charged separately and the same was so done after the sale of the vehicle, was complete. The learned senior counsel has further submitted that most of the services rendered by the petitioner, herein, for which, handling/logistic charges were so received; were based on the request made by the petitioner for carrying-out certain works after the sale of vehicle was so completed. 14. Dr. Saraf, learned senior counsel, has, at the outset, highlighted that the vehicle, in question, was in a deliverable state and no addition, thereto, was so mandated before completion of the sale involved. The learned senior counsel has further submitted that on receipt of the sale price of the vehicle, the property in the goods, is transferred to the customer under contract of sale. On receiving the price of the goods, the petitioner issues a gate pass under the name of the customer who is the purchaser and also issues a sale certificate in the prescribed statutory form showing delivery of the vehic....
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.... meaning of the expression "sale price" since the same does not contribute a sum charged for anything done by the petitioner in respect of the goods at the time or before delivery, thereof; the same being a post delivery service rendered by the petitioner, herein, the same would only be taxable under the Finance Act, 1994, and the service tax having been paid by the petitioner; the steps taken by the State Respondents in imposing the Value Added Tax (VAT), on such circumstances, would be clearly impermissible and the assessments made and the notices of demand issued in consequence, thereof; would mandate an interference from this Court. 17. Dr. Saraf, learned senior counsel, has further submitted that it is a settled position of law that either a transaction is chargeable to Value Added Tax (VAT), or, it shall be chargeable to service tax. The learned senior counsel has submitted that the same transaction cannot be made chargeable to both the taxes, as both taxes are mutually exclusive. 18. Dr. Saraf, learned senior counsel, in support of his submissions, has placed reliance on the following decisions: (i). The decision of the Hon'ble Supreme Court in the case of Imagic Cre....
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....as a service which, admittedly, in the facts of the matter involved, would not be permissible. The said aspect of the matter coming to the notice of the Department concerned and clarification, thereon, being received from the District Transport Officer, Jorhat, which had brought to the forefront that a car dealer was not permitted to collect any additional charges other than the fees and road tax applicable under the provisions of the Motor Vehicle Act, 1988, and the rules framed thereunder; the charges levied by the petitioner, herein, as handling/logistic charges, are, in fact, considerations so charged towards the sale of the vehicle, in question and accordingly, the petitioner, herein, is liable to pay Value Added Tax (VAT) thereon, also. 22. In the above premises, Mr. Choudhury, learned standing counsel, Finance & Taxation, has further submitted that the assessment orders passed in the matter for the financial years involved as well as the notices of demand made; would not mandate an interference from this Court. 23. I have heard the learned counsels appearing for the parties and also perused the materials available on record. 24. The rival contentions of the parties to the....
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....aggregate of the amount of sale price received or receivable by a dealer whether as principal, agent or in any other capacity in respect of sale of all taxable and tax-free goods, at all places of business in the State, during any prescribed period, including sale price in respect of sales in the course of inter-state trade or commerce or sales outside the State or sales in the course of import into or export out of the territory of India. Explanation.- The amount received by a dealer on account of price variation or price escalation in respect of sale or supply of goods shall be deemed to form part of Gross Turnover of the financial year during which it is actually received; (ii) for the purpose of levy of tax, the aggregate of the amounts of purchase price paid and payable by a dealer in respect of all purchases of goods made by him during any prescribed period." As such, the aggregate amount of sale price received, or, receivable by a dealer, is termed as gross turnover. 26. The term "sale price" has been defined by Section 2(44) of the Assam Value Added Tax, 2003, as under: "(44) "sale price" means the amount of valuable consideration paid or payable to a dealer for any....
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....charges" also has an element of a request being made, in this connection, by the customer concerned, which would be permissible to be so executed only after the transfer of the vehicle to the customer, had occasioned. Accordingly, the handling/logistic charges, charged, in the considered view of this Court; would not come within the ambit of the extended meaning of the expression "sale price" under section 2(44) of the Assam Value Added Tax, 2003. 30. In the case of Imagic Creative(P) Ltd.(supra); the Hon'ble Supreme Court held that payment of service tax as well as Value Added Tax (VAT) are mutually exclusive and they should held to be applicable with regard to the respective parameters of service tax and the sales tax, as envisaged in a composite contract as contra-distinguished from an individual contract. The Hon'ble Supreme Court held that it is difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. Relevant paragraphs of the said judgment, is reproduced, hereinbelow: "27. What, however, did not fall for consideration in any of the aforementioned decisions is t....
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....osed to know law and the legislation enacted is a reasonable one. The court must also bear in mind that where the application of a parliamentary and a legislative Act comes up for consideration; endeavours shall be made to see that provisions of both the Acts are made applicable. 32. Payments of service tax as also VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a as contract composite contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, to us, thus, appears to be correct." 31. The Delhi High Court in the case of International Travel House Ltd. (supra), at paragraph No. 10, held, as under: "10. Where the sale is distinctly discernible in the transaction, i.e., the contracts are by intention of the parties severable so that there are separate values with respe....
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....ded tax. As held by the Delhi High Court in Commissioner, VAT, Trade and Taxes Department Vs. International Travel House Ltd. (supra), if there is a conflict between the Central law and the State Act then the Central law must prevail. The Petitioner or the ONGC cannot be burdened with two different taxes for the same transaction." 33. In the case of Srinivasa Timber Depot (supra), a Division Bench of the Madras High Court was called upon to consider whether an amount recovered by the assessee, who was a dealer in timber as "lot coolly charges", would form part of the sale price under the Tamil Nadu General Sales Tax Act, 1959. These charges were collected for the service rendered for taking out logs of timber from the place of storage in order to place them before the customer for selection and approval. On these facts, the Division Bench held that these charges were not paid exclusively for the services rendered in respect of the goods sold, but for services rendered by the workmen for the purposes of enabling the purchaser to select the goods. Hence, the charges were said to have been recovered de hors the sale. In that context, while interpreting the expression "any sums charge....
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....omer for registration of the motor-cycle, formed a part of the sale price. The Bombay High Court examining the provisions of the Maharashtra Value Added Tax Act, 2002, as well as the Central Motor Vehicle Rules, 1989, held, as under: "In the present case, there is no reason to fault the finding of the Tribunal that the goods which form the subject-matter of the contract between the respondent and its buyer are in a specific and deliverable state. The transfer of property in the goods in pursuance of the sale contract takes place against the payment of the price of the goods. Delivery of the goods is effective by the seller to the buyer. The obligation under the law to obtain registration of the motor vehicle is cast upon the buyer. The service of facilitating the registration of the vehicle which s rendered by the seller-assessee is to the buyer and in rendering that service, the seller acts as an agent of the buyer. The handling charges which are recovered by the respondent cannot therefore be regarded as forming part of the consideration paid or payable to the respondent for the sale. Those charges cannot fall within the extended meaning of the expression, "sale price", since t....