Refund Cannot Be Adjusted Against Settled Dues Under 2023 Settlement Act: Bombay High Court

The Bombay High Court on Thursday, 12 March, held that once a taxpayer opts for settlement under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2023 (Settlement Act), the State cannot adjust a refund from another assessment year against the settled dues. A Division Bench of Justice G. S. Kulkarni and Justice Aarti Sathe, while allowing a petition filed by President Trade and Exim Corporation, observed that the Settlement Act is a self-contained code, and its...

Rajasthan High Court Refuses to Quash VAT Proceedings Against JK Lakshmi Cement Over Diesel Supplied To Contractors

The Rajasthan High Court has recently refused to quash proceedings initiated against JK Lakshmi Cement Limited over alleged VAT liability arising from diesel supplied to transport and mining contractors, holding that the company must respond to the tax authorities and raise its objections during the ongoing assessment inquiry.The dispute arose after the Commercial Taxes Department conducted a survey and investigation into the operations of the cement manufacturer.According to the department, the...

Additional VAT Surcharge Valid Over Concessional Tax: Punjab & Haryana High Court

The Punjab and Haryana High Court, on 27 February, held that an additional VAT surcharge under Section 7A can be levied over and above the concessional tax payable under Section 7 on sales of declared goods made to registered dealers.A Division Bench comprising Justice Lisa Gill and Justice Parmod Goyal was dealing with a batch of appeals filed by Jyoti Strips Pvt. Ltd. challenging assessment and appellate orders passed under the Haryana Value Added Tax Act, 2003.The Bench held: "The...

Jharkhand High Court Quashes Time-Barred VAT Reassessments In Batch Including Tata Chemicals, Hindalco, L&T

The Jharkhand High Court has recently quashed reassessment proceedings initiated against Tata Chemicals Limited, Hindalco Industries Limited, Larsen and Toubro Ltd., Tata Steel Limited and several other taxpayers, holding that reopening of completed VAT assessments beyond the statutory period is barred by limitation. A Division Bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan observed that the issue was already settled and that “the law is set at rest.” Referring to its earlier...

Subsidised Sales Don't Bar ITC, Milling By-Products Not Taxable Under AP VAT: Andhra Pradesh High Court

The Andhra Pradesh High Court on 2 February held that input tax credit (ITC) cannot be disallowed merely because essential commodities are sold at subsidised prices fixed by the State Government. It further held that by-products such as broken rice, bran and husk retained by millers during the milling of paddy do not constitute a taxable disposal or transfer attracting levy under the Andhra Pradesh Value Added Tax Act, 2005. A Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar was...

Punjab and Haryana High Court Bars Coercive Recovery Action Against Firm After VAT Records 'Burnt In Fire'

The Punjab and Haryana High Court has restrained the Punjab tax department from taking coercive recovery action against a proprietorship firm over a legacy VAT demand, after the state told the court that the assessment record had been destroyed in a fire. A Division Bench of Justice Lisa Gill and Justice Ramesh Chander Dimri recorded the State's submission that the assessment order against Swastika Insulation was not available with the department, as the record was “stated to have been burnt.” ...

Joint Commissioner's VAT Revision Cannot Be Revisited By Senior Officer: Calcutta High Court

The Calcutta High Court on 2 February held that once an order is revised by a Joint Commissioner under Section 86 of the West Bengal Value Added Tax Act, 2003, it cannot be subjected to a further suo motu revision under Section 85 by a Senior Joint Commissioner, as both officers act as delegates of the Commissioner and exercise the same revisional authority. A Bench of Justice Kausik Chanda, while dismissing a review petition filed by the West Bengal Tax Department, wrote: "Once an order has...

Contractors Can't Be Made To Pay Past TDS Shortfall By Contracting Authority: Punjab & Haryana High Court

The Punjab and Haryana High Court recently held that Rail Coach Factory (RCF) cannot recover differential tax deducted at source (TDS) from contractors for past periods once the contractors' VAT liability has already been assessed and paid. A Bench of Justice Jagmohan Bansal and Justice Amarinder Singh Grewal was hearing writ petitions filed by G.S. Builders, Inderjit Bajaj and R. Tech Builders. The contractors had challenged recovery notices issued by RCF seeking to deduct additional amounts...

Tax Authorities Must Return Title Deed Given As Security Or Certify Its Loss: Kerala High Court

The Kerala High Court has clarified that where an assessee furnishes an original title deed to the tax Department as security, the authorities are duty-bound either to trace and return the document or to formally certify that it has been irretrievably lost. Justice Ziyad Rahman A.A., by a judgment delivered on 16 January, was deciding a writ petition filed by M/s Bash-P-International, a partnership firm earlier registered under the Kerala Value Added Tax Act, 2003 (KVAT Act). The Court...

Department Cannot Deny Interest On Delayed VAT Refund After Blaming Assessee: Delhi High Court

The Delhi High Court has held that the tax department can't deny statutory interest on delayed Value Added Tax (VAT) refund by shifting the blame onto the taxpayer (assessee). A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul was dealing with a writ petition filed by an assessee seeking interest on VAT refund that had remained unpaid for 15 years despite the refund claim having attained finality through appeal proceedings. The Department had opposed the claim,...

Andhra Pradesh High Court Upholds 200% VAT Penalty On Trader For Bogus Bill Trading

The Andhra Pradesh High Court has upheld a penalty equal to 200% of the tax imposed on an iron and steel trader for issuing false tax invoices without actual movement of goods to facilitate wrongful availment of input tax credit. A Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar dismissed a writ petition challenging a penalty of Rs 50.52 lakh levied under Section 55(2) of the Andhra Pradesh Value Added Tax Act, 2005, for the period from June 2014 to June 2016. The...

Differential GST On Pre-GST Works Contracts To Be Reimbursed By State Agencies: Karnataka High Court

The Karnataka High Court ruled that the additional GST liability arising out of the shift from the pre-GST VAT (Value Added Tax) regime to the GST regime in ongoing works contracts cannot be imposed on contractors.The bench consists of Justice M Nagaprasanna, who directed the State Departments and government agencies to reimburse the differential GST to contractors.All the contracts were awarded prior to July 2017 under the KVAT regime, where the contract rates factored in VAT and...