Law: Sales Tax Act, 1990

Section: 2(20),3,7,11,46

Law: Sales Tax Special Procedure Rules, 2007

Section: 88

Sales Tax Act (VII of 1990)-- -Ss. 2(20), 3, 7, 11 & 46-Sales Tax Special Procedure Rules, 2007, R. 88-H-SRO No,678(I)/2007, dated 6-7-2007-SRO No.480(I)/2007, dated 9-6-2007-Short payment of sales tax-Adjustment of input tax- Assessing Officer, observed that company /registered person had paid short sales tax for the period under reference-Assessing Officer raised demand of tax along with penalty and default charges-Validity- Department contended that the company charged and collected sales tax from Steel Melters under R.58-H of Sales Tax Special Procedure Rules, 2007, but failed to deposit the same into the Government Treasury which was clear violation of law; as that levy was the final discharge of Sales Tax liability of the Steel Melters-Ordinarily sales tax was levied at the rate of 17% of the value of taxable supplies made by a registered person in the course of any taxable activity carried on by him under S.3(l) of the Sales Tax Act, 1990-Such amount was termed as "output tax"-Section 7 of Sales Tax Act, 1990, had provided that the tax liability of a registered person, would be determined after deducting the input tax paid by the registered person from output tax collected by such person on the taxable supplies made by him-Claim of said output tax was statutory right of a registered person under S. 7 of Sales Tax Act, 1990-Such was a value added tax, which was levied at every stage, the value addition took place at the same supply-Such was, no more a one point levy; and the ultimate burden was passed on to the consumer-Company was entitled to claim adjustment of input tax to the extent of sales tax collected from all consumers, including the Steel Melters and Re-roller; however, it was not entitled to claim any input tax adjustment in respect of sales tax collected from said class of taxpayer under R.58-H of Sales Tax Special Procedure Rules, 2007-Assertion of company that it had collected only the fixed sales tax from Steel melters, was not understandable, because company was obliged to collect both the taxes-While fact could be ascertained by obtaining data from the company, and the steel melters and re-rollers-Tribunal observed that it was…

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