Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1993 - s.3(2) - VAT set off against the Entry Tax Entry Tax - Bihar Tax on Entry of Goods into Local Areas for Consumption. Ust or Sale Therein Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Entry Tax - Bihar Tax on Entry of Goods into Local Areas for Consumption. Ust; or Sale Therein Act, 1993 - s.3(2) - VAT set off against the Entry Tax - Claim for - Appellant-Corporation imports crude oil from outside the State of Bihar and converts it into petroleum products, like High Speed Diesel, Petrol etc - Some part of these products are sold by appellants to two other oil marketing companies (OMCs). namely BPCL and HPCL from its Patna branch- Appellant pays Entry Tax when product enters the local area of Patna - Grievance of the Appellant that when a sale is made to the OMCs. after payment of Entry Tax, VAT is not set off against the Entry Tax - High Court agreed with the Advance Rulings Authority, and rejected the case of the appellant u!s.3(2) second proviso of the Entry Tax. stating that the set off would not be allowable under the aforesaid proviso - Held: The following conditions need to be satisfied for claim of set off uls.3(2) - (i) u!s.3(2) the tax leviable by way of Entry Tax can only be paid by every dealer liable to pay under the VAT Act; (ii) The set off can only be granted !f assessee is an importer of scheduled goods, who is liable to pay tax under the VAT Act; (iii) Assessee must incur tax liability at rates specified u/ s.14 of the VAT'Act; (iv) This must only be by virtue of the sale of imported scheduled goods; and (v) "His" tax liability under the VAT Act will then stand reduced to the extent of tax paid under the Act - In instant case. appellant is a registered dealer and is thus liable to pay tax under the VAT Act, condition (i) is fulfilled - Condition (ii) however, is not fulfilled, as notification dated 04.05.2006 under Bihar Value Added Tax Act. 2005 states that the levy is at the point of sale by oil companies to the retailer or direct to the consumer - There is no levy of any VAT, when a sale is effected by the appellant to BPCL and HPCL - The VAT gets levied only at the next point in chain of sales, which is sale from BPCL and HPCL to their retailers - So, though appellant is an importer of scheduled goods. hut is hot liable to pay tax under the VAT - Condition (iii) isalso not fulfilled, as there being no levy on the appellant. theappellant does not incur any tax liability u/s.14 of the VAT Act - Sofar as CondiMon (iv) is concerned, in any case, this must he byvirtue of sale of the very imported scheduled goods. which meansthat the sale must be by the appellant itself and not by the otherOMCs, and thus condition (iv) is also not fa/filled - Condition (v)must he that "'his" i.e. the appellant :v tax liability under the VAT Actwill then stand reduced, and this is only to the extent of tax paidunder the Act - This condition is also not met inasmuch as the setoff is person specific and not goodv specific - Thus. on literalc reading of s. 3(2) second proviso. the appellant would not be entitledto claim set off - Bihar Value Added Tax Act. 2005 - ss. 3. 13. 16 -Bihar Finance Act. 1981.Bihar Tax on Entry of Goods into Local Areas forConsumption. Use or Sale Therein Act, 1993 - Entry Tax -Eligibility - Appellant-Corporation imports crude oil from outsidethe State of Bihar - Crude oil is processed and converted intopetroleum products, like High Speed Diesel, Petrol etc - Some partof these products are sold by appellants to two other oil marketingcompanies (6JMCs). namely BPCL and HPCL from its Patnabranch - Appellant pays Entry Tax when product enters the localarea of Patna - Grievance of the Appellant that when a sale ismade to the OMCs, after payment of Entry Tax, VAT is not set offagainst the Entry Tax - Set off of VAT. as claimed by the appellantwas allowed until 1he year 2014 - However. pursuant to auditobjections. set o.fl that had been allowed, were re-opened and thendisallowed - The Entry Tax demand arising from such dis allowancefor the assessment years 2008-09 Ji// 2014-15 amounted toRs. l,683.03 crores - Appellant contended it was not givenopportunity to demonstrate that a large portion of demanded amountrelates to sales that were made by HPCL and BPCL outside thelocal area of Patna. which would. therefore. not attract Entry Tax atall - Held: After audit objections. when a show cause notice wasissued by the authority. the assessee repeatedly asked for time tomake a detailed objection on the merits of the case - However,without asking for further data and hack up details the AssistantCommissioner' of Commercial Taxes passed an assessment orderimmediately thereafter - Appellant accordingly now given opportunity to approach the Appellate Tribunal with all relevantmaterials in this behalf: and Tribunal to render its finding as to howmuch of the demand of Entry Tax for the assessment years in questionwould have to he struck down.Tax/Taxation:Taxing statutes - On touchstone of Art.14 - Held: When iicomes to taxing statutes. the law laid down hy the Supreme Court isclear that Art.14 of the Constitution can be said to be breachedonly when there is perversity or gross disparity resulting in clearand hostile discrimination practiced by the legislature. without anyrational justification for the same - Constitution of India - Art.14.RightY and Privileges - Set off - Held: No assessee can claimset off as a matter of right and levy of Entry Tax cannot he assailedas unconstitutional only because set off is not given. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2017 INSC 1109 |
Petitioner | Indian Oil Corporation Limited |
Respondent | State Of Bihar & Anr. |
SCR | [2017] 13 S.C.R. 477 |
Judgement Date | 2017-11-14 |
Case Number | 3018 |
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