AI Drafter 
TaxTMI 
TaxTMI 
2025 (11) TMI 2
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....s duly registered under Haryana General Sales Tax Act, 1973 (for short 'HGST'). The petitioner during aforesaid period purchased cells only from aforesaid manufacturer and further sold as such within the State of Haryana. The petitioner made sale to registered dealers which is known as RD Sales. Sale was made against Form ST-15. The petitioner filed its returns along with Form ST-15. No tax was charged from buyers because sale was made against Form ST-15. The assessing authority vide order dated 23.03.1999 and 11.08.1999 framed assessment of 1997-98 and 1998-99 respectively. The assessing authority made assessment of solar cells as tax free goods. 3. The Deputy Excise and Taxation Commissioner, Faridabad while exercising suo motu powers under Section 40 of HGST revised aforesaid assessment orders. The revisionary authority formed an opinion that solar cells were taxable at first stage being covered under Entry 19 of notification dated 30.12.1987 issued under Section 18 of HGST. 4. The petitioner preferred three appeals before Appellate Tribunal assailing orders passed by revisionary authority. During the pendency of appeals, dispute arose with respect to pre-deposit which was....
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....cells are used to generate electricity. Dry cells are available in the open market whereas solar cells are sold by enterprises having technical expertise. Solar cell is not substitute of a dry cell. It is a settled proposition of law that while interpreting any entry of a taxing statute, resort should not be to the scientific or technical meaning of such terms but popular meaning or meaning attached to them by those dealing in them should be preferred. In the common and business parlance, solar cells are treated as distinct commodity to dry cells. 10. Learned Tribunal has rejected contentions of the petitioner holding that only difference between conventional dry cells/batteries and solar cells is the medium which is used for generating electrical energy. Solar cells use sunlight for converting it into electric energy whereas dry cells use chemicals or mercury or lithium as medium of converting it into electric energy. There are more similarities in two cells and hardly any distinction. Both kinds of cells are voltaic cells. Thus, the basic object of both the cells is to generate electric energy. Solar cells have a variety of applications like dry cells. It is not that solar ene....
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....s thereof including zinc calots and carbon rods. First sale 12. From the perusal of above quoted entry, it is evident that State of Tamil Nadu has brought dry cells and solar cells in one entry. Both types of cells are subjected to sales tax at first stage. The legislature has used expression 'solar cells of all kinds' besides 'dry cells and dry cell batteries'. This makes it clear that State of Tamil Nadu has accepted that dry cells and solar cells are two different commodities. The Tribunal in instant case has also returned finding to the effect that solar cells and dry cells are two different commodities, however, both are used for the same purpose i.e. generation of electric energy. Dry cells use different medium than solar cells. In case of dry cells, chemicals, lithium and mercury etc. are used as medium whereas in solar cells, sunlight is used as medium. Learned Tribunal, despite noticing contentions of the petitioner as well as use of the product, has recorded finding to the effect that both kinds of cells are used to generate electric energy. It is factually incorrect because dry cells are not used to generate electric energy whereas these cells are used to store ele....
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....tax despite being second stage dealer? 15. Section 18 of HGST provides that State Government may by notification specify goods on which tax shall be levied at first stage. It further provides that sale of such goods at subsequent stage shall be exempted provided dealer effecting sale furnishes certificate duly filled in and signed by registered dealer from whom the goods were purchased to the effect that tax on such goods has been paid at the first stage. Section 18 of HGST reads as:- "Section 18 Tax at first stage on sale The State Government may, by notification, direct that in respect of such goods, other than the goods specified in Schedules C and D, and with effect from such date as may be specified in the notification, the tax under Section 15 shall be levied at the first sale thereof, subject to the conditions and restrictions as the State Government may specify in this behalf, and on the issue of such notification the tax on such goods shall be levied accordingly. Provided that no sale of such goods at a subsequent stage shall be exempt from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to t....
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....s Act, the expression, "taxable turnover" means that part of a dealer's gross turnover during any period which remains after deducting therefrom his turnover during that period- (a) on account of- (i) sale and purchase of goods specified in Schedule B; (ii) sales to registered dealers of goods other than the sale of goods specified in Schedule C and of goods liable to tax at the first stage of sale under sections 17 and 18; Provided that no dealer shall be entitled to make any deduction from his turnover in respect of a sale made by him to a registered dealer with whom composition under Section 26 has been made and is in force; Provided further that in case of such sales, the selling dealer, furnishes, in the prescribed manner, a declaration duly filled and signed by the purchasing dealer, containing such particulars on such form and in such manner as may be prescribed. Provided further that for the purposes of allowing deduction under this clause, the assessing authority or any other person appointed to assist the Commissioner under sub-section (1) of section 3 may examine the genuineness or otherwise of any such sale or declar....
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....uted that petitioner submitted ST-15 form received from customers along with returns and Assessing Authority accepted those forms. Till the initiation of proceedings under Section 40 by revisionary authority, opinion of all the stakeholders was that goods are not liable to tax at first stage. 22. The revisionary authority as well as Appellate Tribunal has held the petitioner was liable to pay tax because manufacturer i.e. first stage dealer did not pay tax on goods in question. The authorities have categorically held that goods in question fall under Entry 19 of notification issued under Section 18 of HGST. As per Section 18 read with notification issued hereunder, first stage dealer is liable to pay tax. Second stage dealer is liable to pay tax on subsequent sale if buyer has not furnished declaration to the effect that goods are tax paid. In the case in hand, the first stage dealer did not pay tax. The authorities issued ST-15 Form to buyers of petitioners and petitioners furnished those forms along with returns. The respondent authorities, at a later stage, formed an opinion that goods are covered by notification under Section 18, thus, are liable to tax at first stage. The r....
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.... High Court in Govindan & Co. v. The State of Tamil Nadu, 1974 SCC OnLine Mad 353 has held that to claim benefit of tax exemption on the ground that sales are second sales, the assessee does not need to prove that seller in fact has paid tax and it is enough to show that earlier sales are taxable and tax is really payable by the seller. Relevant extracts of the judgment read as:- "Though the order of the Tribunal is one upholding the remit order passed by the Appellate Assistant Commissioner, the learned counsel for the petitioners contends that the direction of the Tribunal that the petitioners are to prove that the twelve dealers from whom they purchased the goods were real persons and that they had in fact paid the tax on the iron and steel is not correct and that it is not the duty of the petitioners to prove that their sellers have in fact paid the tax on their sales. The learned counsel appears to be right in his submission that the petitioners who claimed exemption from tax on the ground that their sales are second sales are bound to show that there has been an anterior taxable sale and that they need not prove that tax had in fact been paid on those anterior sales.....