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2016 DIGILAW 32 (TRI)

Voltas Limited v. State of Tripura

2016-02-08

DEEPAK GUPTA, S.TALAPATRA

body2016
JUDGMENT : Deepak Gupta, J. The petitioner company is duly registered under the Indian Companies Act. It has business dealings all over the country. It is also registered as a dealer in the State of Tripura under the Tripura Sales Tax Act. 2. The undisputed facts of the case are that the petitioner company had entered into an agreement with the Airport Authority of India. Under this contract when the modernization of the Agartala airport was taking place, the petitioner company was to provide and install air conditioning, ventilation and humidification. The contract was entered into in the year 2000 and the work was completed in the year 2005-2006. Presently, the company is entrusted with the annual maintenance contract of air conditioning etc. in Tripura Airport. 3. Notices were issued to the petitioner for assessment of returns for the year 1998-1999 to 2004-2005. A common order was passed on 30th June 2007 in respect of all the five years and the Assessing Officer found that the assessee had deposited excess amounts in the years 1998-1999, 1999-2000, 2000-2001, 2001-2002, 2002-2003, 2003-2004 and 2004-2005. This order was challenged by the assessee and the appellate authority vide order dated 10.03.2008 set aside the order of the Assessing Officer and remanded the matter back to the Superintendent of Taxes to complete the assessment. One of the observations of the appellate authority was that in the invoices raised by this very dealer in connection with different contract works the dealer had charged 20% on works contract tax and therefore, the assessing authority should examine and clarify whether the dealer has actually deposited 20% tax charged in the bills relating to works contract or paid lesser amount of tax. Thereafter fresh assessment order was passed and the Assessing Officer held that the assessee had paid excess tax of Rs.10,900/- for the year 1998-1999, Rs.70,000/- for the year 1999-2000, Rs.1,43,012/- for the year 2000-2001, Rs.5,72,214/- for the year 2001-2002, Rs.3,03,410/- for the year 2002-2003, Rs.1,90,143/- for the year 2003-2004 and Rs.1,75,912/- for the year 2004-2005 i.e. a total amount of Rs.14,65,601/- . This assessment order was passed on 21st May, 2008. On 8th July, 2008 the assessee through its counsel demanded refund of Rs.14,65,591/-(instead of Rs.14,65,601/-). A reminder was issued on 8th December, 2008. Another reminder on 4th January, 2011 and finally a notice under Section 80 C.P.C was issued on 29th August, 2011. This assessment order was passed on 21st May, 2008. On 8th July, 2008 the assessee through its counsel demanded refund of Rs.14,65,591/-(instead of Rs.14,65,601/-). A reminder was issued on 8th December, 2008. Another reminder on 4th January, 2011 and finally a notice under Section 80 C.P.C was issued on 29th August, 2011. Thereafter an order was passed by the Commissioner of Taxes, respondent No.2 on 5th April, 2012 i.e. almost after four years issuing notice to the assessee as to why the assessment order dated 21.05.2008 for the years 1998-1999 to 2004-2005 should not be cancelled and the matter remanded to the Superintendent of Taxes for re-assessment. 4. The main ground which weighed with the revenue was that on the total contract of Rs.3,05,11,585.00 the assessee had levied tax of 20% whereas only 4% tax was payable and, therefore, the assessee was liable to deposit this amount in the State treasury. The other ground was that the Assessing Authority had exempted the assessee from paying tax on three imported chiller machines of the value of Rs.86,25,600/-. 5. The petitioner thereafter approach this Court challenge this order on various grounds. This Court noted all the facts and the authorities referred to by the learned counsel for the assessee and disposed of the writ petition in the following terms: “7. We have already made the observation that the Revisional Authority has not finally decided the points mentioned in paragraph 6 of the impugned order dated 26.03.2012 and for which the writ petitioner had been asked to appear before the Revisional Authority. However, in the present case, as the learned senior counsel appearing for the petitioner strenuously contends that the point in the paragraph 6(v) of the impugned order dated 26.03.2012 was decided wrongly, we direct the Revisional Authority to take into consideration of the decisions of the Apex Court in State of Maharashtra V. Embee Corporation : [1997] 107 STC 196 and Gannon Dunkerley & Co. & Others. V. State of Rajasthan & Ors. : [1993] 88 STC 204, while deciding the point/question mentioned in paragraph No.6(v) of the order dated 26.03.2012. 8. It is also made clear that the Revisional Authority i.e. the Commissioner of Taxes, Government of Tripura, shall take into consideration of all the points of fact and the law agitated by the writ petitioner in this writ petition while deciding Revision Case No. 10/CH-IV/2011 by giving reasons. 8. It is also made clear that the Revisional Authority i.e. the Commissioner of Taxes, Government of Tripura, shall take into consideration of all the points of fact and the law agitated by the writ petitioner in this writ petition while deciding Revision Case No. 10/CH-IV/2011 by giving reasons. Since the matter has been pending for consideration period, the Revisional Authority is directed to dispose of the Revision Case No.10/CH-IV/2011 by passing a reasoned order within a period of two months from the date of receipt of the certified copy of the order.” Thereafter, the assessee appeared before the Commissioner of Taxes and had filed detailed written submissions and also copies of a large number of judgments of the Gauhati High Court and the Supreme Court. Admittedly, the arguments in the case were heard on 17th December, 2012 and as per the judgment of the High Court delivered in W. P(C) 232 of 2012, the respondent No.2 was directed to pass a reasoned order within a period of two months from the date of receipt of the certified copy of the order. Thereafter, the assessee appeared before the Commissioner of Taxes and had filed detailed written submissions and also copies of a large number of judgments of the Gauhati High Court and the Supreme Court. Admittedly, the arguments in the case were heard on 17th December, 2012 and as per the judgment of the High Court delivered in W. P(C) 232 of 2012, the respondent No.2 was directed to pass a reasoned order within a period of two months from the date of receipt of the certified copy of the order. According to the record, the order was served upon the respondent No.2 on 6th November, 2012 and therefore, he was duty bound to decide the matter by 6th January, 2013. Even though the arguments had been heard on 17th December, 2012, the appellate authority took more than one year to decide the matter and the order was pronounced only on 31.12.2013. 6. We are constrained to observe that the Commissioner of Taxes has treated the order of this Court with contempt and has totally violated all the directions given in the judgment in W. P(C) No. 232 of 2012 as he has not made reference to any of the judgments relied upon by the assessee and has passed the order mainly on two grounds. These are as follows: “11. These are as follows: “11. As per the registration certificates issued to the dealer by the Superintendent of taxes under the TST Act, 1976 and CST Act, 1956 the dealer was authorized to import goods from outside the State but within the Indian Union for resale and use in the works contract in the State of Tripura Only. But the Goods used in the works contract in question were imported from Malaysia by the dealer company i.e. Voltas Ltd. for which it had not been authorized. Therefore, it is construed that the dealer committed offence by way of importing the goods from Malaysia unauthorisely. 12. Moreover, in the appellate order dated 10.03.2008 in Appeal Case No. 160-166/CHIV/ 2007 the Appellate Authority clearly mentioned that the dealer charged tax on the entire contract value worth of Rs.3,05,11,685/- which relates to executed works in Airport Terminal building of Agartala Airport and the contract value includes the value of 3(three) nos. of water cooled chillers worth of Rs.86,85,600/- inclusive of Sales Tax as per invoice no.31290031 dated 14.11.2000 raised by the dealer. It is also mentioned in the appellate order that the company charged 20% Sales Tax on the Contract Value worth of Rs.3,05,11,685/-(sic) which is clear from the invoice no.31290032 dated 29.03.03 and invoice no.31290009 dated 11.05.01. But in the assessment order dated 21.05.2008 the Superintendent of Taxes, Charge-IV denied the aforesaid observation of the Appellate Authority without going through details of the agreement schedule of work, tender, payment bill, etc. related to the works. Therefore the relevant agreements, tender, works executed, bills payment etc. are needed to be examined again by a fresh assessment. If it is found that the dealer charged tax on entire contract value of Rs.3,05,11,685/- (sic) in that case the equal amount of tax charged on 3(three) nos. of Water colled Chiller machines imported from Malaysia in execution of works contract for construction of new Terminal Building of Agartala Airport should be realised from the dealer and no question of exemption or refund of tax charged by the dealer would arise and for determining the turnover on other materials used in the works, the decision of the Hon’ble Supreme Court in Gannon Dunkerley & Co. Vrs. State of Rajasthan (Second Gannon Dunkerley) [1993] 88 STC 204 (SC) should be followed. Vrs. State of Rajasthan (Second Gannon Dunkerley) [1993] 88 STC 204 (SC) should be followed. If the dealer charged tax @ 20% on the other materials also in that case the excess tax charged should have been realized and forfeited in accordance with the Section 3B of the Tripura Sales Tax Act, 1976.” 7. As far as the first finding of the Commissioner of Taxes is concerned that clearly indicates that even an officer of the rank of Commissioner is totally unaware of the provisions of the Sales Tax laws. The State Government has no legal competence to levy tax on goods which are imported from outside the State. It also has no competence to levy tax on goods imported from outside the country. The learned Commissioner has held that since the goods were imported from Malaysia for which the dealer was not authorized and, therefore, the dealer has committed an offence. we fail to understand this logic of the Commissioner of Taxes. The contract was entered into between the Airport Authority of India and Voltas. In the said contract there was a stipulation that these chillers had to be purchased from Malaysia. Even otherwise any dealer is not duty bound to buy goods from only within the State. He can buy goods from outside the State and bring them within the State or can import them into the country in accordance with law. If he has not smuggled in the goods, he has not committed any offence. 8. As far as the second finding is concerned the main issue was whether the assessee had charged 20% tax over and above the contract value of Rs.3,05,11,585.00. Though the first appellate authority had given some findings in this regard, the Assessing Officer had found that in fact this assertion was not correct. The Commissioner has again remanded the case back for ascertaining this point. On 13.07.2015 we had directed the petitioner to place on record its contract entered into with the Airport Authority of India and had also given three opportunities to the State (Revenue Department) to produce any record to show on what basis it had came to the conclusion that the dealer had charged 20% sales tax over and above Rs.3,05,11,585.00. The State has failed to produce any evidence in this regard. 9. The State has failed to produce any evidence in this regard. 9. On perusal of the contract we find that the following conditions of the work order are very relevant: “(i) Contract value: The total contract value will be Rs.3,05,11,585.00 (Rupees three crores five lakh eleven thousand five hundred eighty five only). (ii) Taxes and duties : The above amount is inclusive of packing, forwarding, freight, insurance, excise duty, works contract tax and all other taxes & duties F.O.R. Agartala Airport Site in Tripura.” This leaves no manner of doubt that the contract value of Rs.3,05,11,585.00 was inclusive of all taxes and duties and the stand of the Revenue in this regard is totally false. 10. We have no doubt in our mind that this entire exercise of reassessment was started only with a view to delay the re-payment of the sum of Rs.14,65,591/-. It is indeed shocking that a State should behave in such a manner. The contract was available with the Revenue and yet it refused to read contract. The Commissioner of Taxes also came up with a fanciful argument that the assessee had committed an offence by importing chillers from Malaysia. We are therefore, clearly of the view that this is a fit case where exemplary costs should be imposed. 11. In view of the above discussion, we allow the writ petition in the following terms: (i) That the order dated 31.12.2013 passed by the Commissioner of Taxes, respondent No.2 is wholly illegal and is accordingly quashed and set aside. (ii) The State shall refund the sum of Rs.14,65,601/-. This amount was ascertained on 21.05.2008. We give three months to the State to pay this amount and, therefore, the State shall be liable to pay statutory interest on this amount of refund from the date when the refund fell due till 31.08.2008. Thereafter on and w.e.f. 01.09.2008 the State shall pay interest at the rate of 15% per annum on this amount of Rs.14,65,591/-. The State is also burdened with costs of Rs.50,000/-. The State is directed to pay the entire amount to the assessee within three months from today. 12. The petition is disposed of in the aforesaid terms. No costs.