Discover the impact of a recent legal ruling on the adjustment of inter-state sales tax liabilities. The court’s thorough legal analysis provides insights into the complexities surrounding tax payments and refunds. Stay informed about the implications of this ruling in the realm of taxation and legal proceedings.
Facts
- The appellant, Tata Motors Limited, was found liable to pay central sales tax to the State of Jharkhand based on the judgment.
- The decision was made considering the relevant laws and regulations.
- The State of Jharkhand was entitled to receive the central sales tax from the appellant.
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Analysis
- Before the insertion of Section 22(1B) to the Act 1956, the Appellate Authority had no power to issue directions for refund of tax collected by a State if it was found to be not due to that State.
- The appellant paid central sales tax to Andhra Pradesh on a transaction that was not leviable by that state, but instead to Jharkhand.
- The State of Andhra Pradesh is directed to transfer the central sales tax amount to Jharkhand, subject to proof of payment by the appellant.
- The Central Sales Tax Appellate Authority did not pass consequential orders to adjust tax paid against the tax due to Jharkhand, leading to the appeal by Tata Motors Limited.
- Counsel for appellant, State of Andhra Pradesh, State of Jharkhand, and Union of India appeared before the court for the appeal hearing.
- The sales of vehicles/buses through RSO, Vijayawada to APSRTC were deemed as inter-state sales by the Appellate Authority.
- The Appellate Authority’s lack of direction on tax adjustment led to the appeal by Tata Motors Limited.
- Inter-state nature of the sales has been established for the transactions in question.
- Section 22(1B) of the Finance Act, 2010 has been inserted to Act 1956.
- The Authority is given the power to issue directions for refund of tax collected by a State if it is held to be not due to that State.
- Alternatively, the Authority can direct the State to transfer the refundable amount to the State to which central sales tax is due on the same transaction.
- The amount of tax directed to be refunded by a State cannot exceed the amount of central sales tax payable by the appellant on the same transaction.
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Decision
- Present appeal disposed off.
- Exercise to be completed within three months.
- Adjustment of central sales tax liability on inter-state sales through RSO, Vijayawada to be done.
- Sales to APSRTC found to be inter-state sales.
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Case Title: TATA MOTORS LTD. Vs. CENTRAL SALES TAX APPELLATE AUTHORITY. (2022 INSC 992)
Case Number: C.A. No.-006450-006450 / 2012
