Law: Sales Tax Act, 1990

Section: 2(14),3,6,6(2),7,7(1),9,10,11,33(1),33(5 ),34,36

(a) Sales Tax Act (VII of 1990)- -S.3-"Sales tax"-Concept-Sales tax is levied and charged under Sales Tax Act, 1990, and is in the nature of indirect tax-In case of indirect tax, intermediary collects tax from another person while the latter actually bears burden of tax-After collecting tax it is statutory duty of intermediary to account for and deposit the same in exchequer-Scheme of Sales Tax Act, 1990, is based on self- assessment and therefore, it imposes statutory obligation on registered person collecting tax from other person to declare and account for the tax in monthly returns as provided under the provisions of Sales Tax Act, 1990. (b) Sales Tax Act (VII of 1990)- -S. 11-Default surcharge-Word "shall" as used in S. 11, Sales Tax Act, 1990-Effect-Non-obstante clause in the context of S. 11 of Sales Tax Act, 1990, and use of expression "shall" makes imposition of default surcharge mandatory. (c) Words and phrases- -Levy-Connotation-Imposition, assessment as well as collection of a tax falls within the ambit of expression 'levy Blacks's Law Dictionary 8th Edition rel. (d) Sales Tax Act (VII of 1990)- -Ss.3, 11 & 36-Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005, R.8-Reference-Default surcharge- Input tax adjustment-Taxpayer sought adjustment advice for tax period July, 2006, and Adjudication Officer observed that the adjustment had been made against invoices issued by another registered person-Authorities issued show cause notice and imposed recovery of default surcharge under S. 34 of Sales Tax Act, 1990, and further penalty was imposed-Plea raised by taxpayer was that Adjudicating Officer could not have ignored Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005-Validity-Procedure for claiming benefit envisaged under Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005, was distinct and separate and could be confused with recovery proceedings initiated in case of alleged non-levy or short levy of tax-Adjudication proceedings had no nexus with Sales Tax (Refund of Excess Input Tax to the Manufacturers) Rules, 2005, nor Adjudicating Officer empowered to examine claims under Sales Tax…

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