Punjab & Haryana High Court Disposes Sony India Plea Against 2006 VAT Entry Substitution

The Punjab & Haryana High Court has disposed of a plea filed by Sony India Private Limited concerning its claim for a concessional VAT rate of 4% on Digital Still Image Cameras, holding that the company was not prejudiced by the notification it had challenged.A bench of Acting Chief Justice Ashwani Kumar Mishra and Justice Yashvir Singh Rathor observed that the expression “IT Products”, which formed the basis of Sony's claim for the concessional rate, continued to remain part of Entry No. 60...

Madras High Court Says Appeal Against Fresh Assessment Order Statutorily Barred, Remands BHEL Matter

The Madras High Court on 10 August remanded Bharat Heavy Electricals Limited's (BHEL) tax matter to the Assessing Officer for fresh assessment. A Division Bench comprising Justices Dr. G. Jayachandran and N. Mala passed the order while disposing of a Tax Case Revision filed by BHEL against the order of the Sales Tax Appellate Tribunal. The judges held: “The assessment orders in the instant case and the orders of the Appellate Authority are verbose and detailed. However, the fact remains that...

Telangana High Court Quashes ₹52.39 Crore VAT Demand On TCS's Customised Software Services

The Telangana High Court has set aside a ₹52.39 crore Value Added Tax (VAT) demand imposed on Tata Consultancy Services (TCS).It held that transactions involving the development of custom-made or customised software did not constitute a sale where TCS did not acquire ownership or title over the software. The Court found that there was no transfer of property in goods.A Division Bench comprising Justice P. Sam Koshy and Justice Narsing Rao Nandikonda passed the common order. It allowed the lead...

VAT Penalty Refund Cannot Be Denied Over Filing Before Re-Designated Authority: Patna High Court

The Patna High Court on 21 August held that the State Tax Department cannot deny a dealer's refund of a penalty under the Bihar Value Added Tax Act, 2005 merely because the refund application was filed before the Joint Commissioner of State Tax instead of the re-designated Additional Commissioner of State Tax. A Division Bench of Justices Anil Kumar Sinha and Vikash Kumar observed that such a technical objection cannot defeat a legitimate refund claim, and allowed a writ petition filed by S and...

Kerala High Court Denies AVT McCormick's ₹49.54 Lakh Refund Claim Over Transitional ITC

The Kerala High Court on 20 August held that a claim for refund of transitional input tax credit can be allowed only if the taxpayer establishes that the disputed credit stood in its Electronic Credit Ledger as on 1 July 2017. Justice Johnson John dismissed AVT McCormick Ingredients Pvt. Ltd.'s writ petition challenging the assessment order passed by the Assistant Commissioner of Central Tax and Central Excise, which had rejected its claim for refund of Rs. 49.54 lakh. He observed: "...As per...

Karnataka High Court Upholds VAT On Swiping Machine Rentals By Axis Bank To Merchants

The Karnataka High Court has recently upheld the levy of VAT on rental charges collected by Axis Bank for card-swiping machines installed at merchant establishments.A Division Bench comprising Justice S.G. Pandit and Justice K. Manmadha Rao dismissed a Sales Tax Revision Petition filed by Axis Bank. “the rental charges collected by the petitioner in respect of EDCT machines constitute consideration for transfer of the right to use goods and are liable to tax under the KVAT Act.”, the court...

Gujarat High Court Rejects Plea Against Tribunal Order Granting VAT Exemption For Seeds Used For Sowing

The Gujarat High Court has dismissed the State's plea against Western Agri Seeds Ltd., ruling that the state failed to prove the company's seeds were not used for sowing and were therefore outside the scope of the Value Added Tax exemption notification. "The petitioner Department has miserably failed to prove before us that the seeds which are procured by the respondents are not used for sowing purposes," the court observed while upholding the Gujarat VAT tribunal's decision to quash...

Works Contractors Liable To Pay Purchase Tax On Unregistered Dealer Purchases: Madras High Court

The Madras High Court on 9 July held that works contractors are liable to pay purchase tax on materials purchased from unregistered dealers, even when such materials are used in the execution of works contracts involving deemed sales. A Division Bench of Justices N. Anand Venkatesh and K.K. Ramakrishnan allowed the revision petitions filed by the State of Tamil Nadu, set aside the orders passed by the appellate authority and the Tamil Nadu Sales Tax Appellate Tribunal, and restored the...

IOCL Can't Retain Security Deposit For Alleged VAT Loss Without Contractual Basis: Karnataka High Court

The Karnataka High Court on 8 July held that a contractee cannot retain a contractor's security deposit indefinitely to recover an alleged VAT-related loss unless it proves a contractual breach, actual loss suffered, and its right under the contract to recover the amount. A Division Bench comprising Chief Justice Vibhu Bakhru and Justice K.S. Hemalekha allowed the appeal filed by BSR Infratech India, set aside the Commercial Court's judgment upholding Indian Oil Corporation's deduction, and...

Madras High Court Rules Omission Of 'Wilful Suppression' In Order Not Fatal, Upholds TNVAT Penalty

The Madras High Court on 27 July held that a penalty under the Tamil Nadu Value Added Tax (TNVAT) Act cannot be invalidated merely because the assessment order does not use the expression “wilful suppression” if the material on record establishes deliberate suppression of turnover. A Division Bench of Justices G. Jayachandran and N. Mala dismissed the tax case filed by Paharpur Cooling Towers Ltd. and upheld the Tamil Nadu Sales Tax Appellate Tribunal's order restoring the penalty imposed by...

DEPB Licences Not Eligible For ITC Under TNVAT Act Even If Classified As Goods: Madras High Court

The Madras High Court on 24 July held that dealers cannot claim Input Tax Credit (ITC) on purchase of Duty Entitlement Pass Book (DEPB) licences under the Tamil Nadu Value Added Tax (TNVAT) Act, as such licences, despite being classified as “goods”, do not meet the statutory conditions for availing credit. A Division Bench of Justices G. Jayachandran and N. Mala dismissed the writ appeals filed by P.I. Polymers and upheld the Single Judge's order denying ITC on DEPB licences, while reaffirming...

Bona Fide Classification Dispute Cannot Establish Tax Evasion Intent For Penalty: Punjab & Haryana HC

The Punjab and Haryana High Court on 20 July held that a bona fide classification dispute cannot, by itself, establish an intention to evade tax for imposing penalty under the Punjab Value Added Tax (PVAT) Act. A Division Bench comprising Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor allowed the appeal filed by Intex Technologies (India) Ltd. and set aside the penalty of Rs. 94,500 imposed under the PVAT Act for allegedly attempting to evade tax on mobile phone accessories....