Can MVAT Credit Be Denied To Genuine Buyers For Sellers' Tax Default? Bombay High Court To Examine

The Bombay High Court will examine whether Section 48(5) of the Maharashtra Value Added Tax Act, 2002, permits the denial of input tax credit (ITC) to a bona fide purchaser without any allegation of fraud, collusion, or connivance, particularly when the State has failed to recover the tax from the defaulting seller.A Division Bench of Justices Suman Shyam and Gautam A. Ankhad admitted six appeals filed by IJM (India) Infrastructure Limited against the State of Maharashtra. The court will also...

Rejection Of Correction Plea Cannot Be Challenged In VAT Revision: Himachal Pradesh High Court

The Himachal Pradesh High Court on 12 October held that Section 48 of the Himachal Pradesh VAT Act does not permit a revision petition against an order rejecting a correction application under Section 47(1). A Division Bench of Justices Ajay Mohan Goel and Romesh Verma dismissed a revision petition filed by Super Power Steels against the Tax Tribunal's rejection of its application to correct an earlier order. They held: “No revision is maintainable under Section 48 of the Act against such an...

VAT Payment Doesn't Exempt Fit-Out Charges From Service Tax, CENVAT Credit Allowed: Madras High Court

The Madras High Court on 12 October held that payment of Value Added Tax (VAT) on fit-out charges does not automatically exempt the same transaction from service tax. Further, a portion of the consideration for leased office premises must be attributed to fit-outs provided under the lease agreements. A Division Bench comprising Justices Anita Sumanth and C. Kumarappan upheld CENVAT credit claimed by Ascendas IT Park (Chennai) Ltd. on specified input services, while deciding an appeal filed by...

Dupattas Made Of Woven Fabric Exempt From Tax As Fibres Under TNVAT Act: Madras High Court

The Madras High Court on 7 October held that dupattas made of woven fabric fall under the exemption for textile fabrics under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006, and cannot be classified as fibres for taxation. A Division Bench comprising Justices Anita Sumanth and K. Rajasekar allowed three tax case revisions filed by Vedant Fashions Pvt. Ltd., and set aside the 4% tax levy on dupattas for the assessment years 2009-10, 2010-11 and 2011-12. The judges held: “A dupatta cannot, by...

Allahabad High Court Refuses To Reopen Deemed Dealer Status Of Railway Container Contractors

The Allahabad High Court has refused to reconsider its earlier finding that railway container contractors were deemed dealers under the Uttar Pradesh Value Added Tax Act, 2008. Justice Vikas Budhwar held that the finding had attained finality and could not be challenged before a coordinate bench without being assailed before a higher forum.Section 2(h)(ix) of the Uttar Pradesh Value Added Tax Act, 2008, treats railway container contractors as dealers if they fail to disclose the consignors' or...

Mobile Chargers Remain Independent Accessories, Toner And Cartridges Are Consumables: Patna High Court

The Patna High Court on 9 October held that mobile chargers sold with cellular phones in composite packs attract VAT at the residual rate of 13.5%, as they qualify as independent accessories rather than parts of the phones. A Division Bench of Justices Bibek Chaudhuri and Rana Vikram Singh also held that toner and cartridges do not qualify for lower VAT rates applicable to computer peripherals and their parts and accessories, and dismissed appeals filed by Ingram Micro-India Private Limited...

SARFAESI | Secured Creditor's Prior Charge Over Property Takes Precedence Over State VAT Charge: Gujarat High Court

The Gujarat High Court has reiterated that a secured creditor's charge over a property will take precedence over a subsequent charge created by the State VAT Department. The court applied the principle to a property purchased by auction purchasers in proceedings under the SARFAESI Act.The court relied on its earlier rulings, as well as the Supreme Court's judgment in Punjab National Bank v. Union of India.A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed, “once...

Delhi High Court Upholds VAT Refund To Taxpayer After Return Accepted Under Self-Assessment

The Delhi High Court has held that a taxpayer is entitled to a refund under the Delhi Value Added Tax Act, 2004 (DVAT Act) where the return has been accepted under the self-assessment mechanism and no proceedings for assessment, reassessment or audit have been initiated.The Division Bench of Justices Avneesh Jhingan and Shail Jain made the observation while dismissing an appeal filed by the Commissioner of Trade and Taxes against an order of the Delhi Value Added Tax Appellate Tribunal directing...

Delhi HC Quashes 2005-06 VAT Demand Against Builder Over Lack Of Taxable Turnover Rules

The Delhi High Court has quashed a Value Added Tax (VAT) demand raised against a builder for the assessment year 2005-06, holding that the levy could not be enforced in the absence of machinery provisions prescribing the manner of determining taxable turnover for works contracts.The Division Bench of Justices Avneesh Jhingan and Shail Jain allowed the petition filed by a builder, challenging demand and notice of default assessment.The Court noted that two issues arose for consideration: whether...

UPVAT| Joint Commissioner Can't Revise Order Without Commissioner's Authorisation: Allahabad High Court

The Allahabad High Court on 11 September held that the Joint Commissioner (Executive) cannot exercise revisional powers under Section 56(1) of the U.P. VAT Act, 2008 without an order of authorisation by the Commissioner, Commercial Tax. Proceedings initiated by an unauthorised officer are without jurisdiction and void ab initio. Justice Piyush Agrawal allowed Sai Baba Ent Bhatta's revision against the order of the Commercial Tax Tribunal, Kanpur, holding that there was nothing on record to show...

Delhi High Court Remits VAT Assessment, Directs Fresh Consideration Of Tax Paid On Subsequent Sales

The Delhi High Court has set aside a VAT assessment concerning alleged stock shortage at a jewellery store, directing the VAT Officer to undertake a fresh assessment after taking into consideration the effect of subsequent sales of the goods found short during a survey.The division bench of Justices Avneesh Jhingan and Shail Jain was hearing an appeal under Section 81 of the Delhi Value Added Tax Act, 2004, against an order passed by the Appellate Tribunal Value Added Tax.The appellant was...

Chewing Gum Not Taxable At 4% As 'Sweets And Sweetmeats': Gujarat High Court Holds 12.5% VAT Applies

The Gujarat High Court has recently ruled that chewing gum cannot be classified as “sweets and sweetmeats” under the Gujarat Value Added Tax Act, 2003. It held that the product is taxable at 12.5%, instead of the 4% rate applicable to sweets and sweetmeats.A bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi relied on the Supreme Court's ruling in Commissioner of Trade Tax, U.P. v. Associated Distributors Ltd. The court also held that the tribunal was wrong in deleting the...