AMIT ENTERPRISES Vs. CENTRAL COALFIELDS LIMITED AND ORS.

JUDGEMENT

(1.) THIS writ petition has been preferred mainly on the ground that respondent No. 6 has raised tax invoice levying Central Sales Tax (hereinafter referred to as 'CST' for the sake of brevity) instead of Value Added Tax (hereinafter referred to as 'VAT' for the sake of brevity) which is applicable within the State of Jharkhand. Petitioner is aggrieved by Annexure 4 in which CST is charged at the rate of 5% and the total value of CST mentioned in the invoice at Rs. 7,65,383.07. Instead of CST, this should have been VAT under the Jharkhand Value Added Tax Act, 2005, because the petitioner is e -auction purchaser of coal within the State of Jharkhand. He is a registered dealer within the State of Jharkhand. The seller and purchaser of the goods are within the State of Jharkhand. The whole transaction of sale has been completed within the State of Jharkhand and, therefore, the Annexure 4 as CST Invoice cannot be issued. In fact, it should have been VAT and respondent No. 6 is at no loss at all, because the VAT is also at the rate of 5% and the CST is at the rate of 5%, but it would make a difference for this petitioner for getting input tax credit under Section 18 of the Jharkhand Value Added Tax Act, 2005 to be read with Rule 26 of the Value Added Tax Rules, 2006. Similarly, it also makes a difference to the subsequent purchaser of coal, who is at Uttarakhand, because the petitioner is a registered dealer and, therefore, at Uttarakhand, the purchaser of the coal from this petitioner is in a second sale which is also altogether a different transaction, he will have to pay CST at the rate of 2%. This will make a difference to the petitioner as well as the subsequent purchaser of the coal from the petitioner, but, fact remains that so far as respondent No. 6 is concerned, it makes not difference, because for VAT as well as for CST, the rate of tax is 5%. Thus, even though, there will be no change in the amount of tax which is Rs. 7,65,383.07, the petitioner as well as his subsequent purchaser (at Uttarakhand), it will make a difference if, invoice is changed from CST to VAT. This aspect of the matter has not been properly appreciated by the respondent No. 6 and, therefore, the present petition has been preferred for making necessary corrections through respondent No. 6 in a Tax Cum Excise Invoice (Rail Sale). Counsel for the petitioner submitted that enough averments were made in the memo of petition in paragraphs 7, 10, 11, 13, 15, 16, 17 and 18 and looking to the counter affidavit, it is stated by the respondents -State that the respondent No. 6 has acted or re -acted looking to Section 3(a) of the Central Sales Tax Act, 1956, but, Section 3(a) of the Central Sales Tax Act, 1956 is not applicable to the transaction of the sale of coal through e -auction between the petitioner (registered dealer within the State of Jharkhand) and the respondent No. 6 (coal Company), as both are situated within the State of Jharkhand and the respondent No. 6 is not concerned with the second sale between the petitioner and the purchaser from Uttarakhand. Section 3(a) of the Act of 1956 is talking about one transaction of sale or a purchase and if for one sale or purchase of goods, if the movement of the goods is from one State to another State, then Section 3(a) of Act of 1956 is applicable, but, in the facts of the present case, second sale is altogether another sale, which is between this petitioner and the purchaser from Uttarakhand. There is no privity of contract between the purchaser of Uttarakhand and the respondent No. 6 -Coal Company. Hence, Section 3(a) of the Act of 1956 is not applicable in the facts of the present case and, hence, CST is not leviable from this petitioner as mentioned in Tax Cum Excise Invoice which is at Annexure 4 and, hence, instead of CST, it should have been VAT under the Jharkhand Value Added Tax Act, 2005. Amount of tax and figurative work may remain same as it is as stated herein above.

(2.) COUNSEL for the respondent No. 6 submitted that they have filed a detailed counter affidavit and as the movement of goods from one State to another State, they have mentioned CST at the rate of 5% in their Tax Cum Excise Invoice which is at Annexure 4 to the Memo of Petition. Counsel for the respondent has also taken this Court about the various movement of goods. Having heard both sides and looking the facts and circumstances of the case, it appears that respondent No. 6 has committed gross error in mentioning CST at the rate of 5% in Column 12 of Tax Cum Excise Invoice at Annexure 4, mainly for the following facts and reasons: -

(3.) IN view of the facts, reasons and judicial pronouncements, the CST, levied at the rate of 5% by respondent No. 6 is impermissible in the eyes of law. Instead of that, it should have been VAT under the Jharkhand Value Added Tax Act, 2005. We, therefore, direct the respondents to make necessary suitable changes at Annexure 4 which is Tax Cum Excise Invoice (Rail Sale). There will be no change in the amount of tax whether it is CST or VAT. The rate of tax is the same i.e. 5%. Therefore, instead of CST in Column 12 at Annexure 4, it should be VAT. This change shall be carried out by the respondent No. 6 within a period of four weeks from today. We, therefore, direct the respondents -authorities to issue form JVAT -404 under Jharkhand Value Added Tax Act, 2005 within a period of four weeks from today.