Law: Sales Tax Act, 1990

Section: 2(20),2(35),2(39),2(41),2(44),3,13,47

(a) Sales Tax Act (VII of 1990)--- ----Ss.2(39), 3 & 13---Levy and recovery of sales tax---Scope---Supply---Scope---In order to attract levy and charge of sales tax under Sales Tax Act, 1990, transfer of right to dispose of goods as an owner was essential to constitute taxable supply in the context of S.3 of Sales Tax Act, 1990---Question of entitlement in respect of adjustment of input tax would be relevant only if it was established that disposition or transaction fell within the ambit of supply . (b) Sales Tax Act (VII of 1990)--- ----Ss.2(39), 3, 13 & 47---Taxable supply---Adjustment of input tax from output tax---Scope---Applicant companies were engaged in purchase of Liquefied Petroleum Gas (LPG) from oil exploration and production companies and then sell the Gas in cylinders of various capacities to distributors---Cylinders were supplied to distributors against refundable security deposit---Assessing officer issued notice claiming input tax relating to purchase of cylinders for depositing sales tax in exchequer---Validity---Cylinders used for transportation of supply of LPG were returned by distributors to applicant companies---No transfer in any mode whatsoever of any right to dispose of the cylinders as owner existed nor consideration was involved for such purpose--- Refundable security deposit did not fall within the express consideration ---Use of cylinders was not a disposition for consideration, nor it involved transfer of a right to dispose of as owner---LPG supplied by applicant companies attracted levy and charge of sales tax under S.3 of Sales Tax Act, 1990, while transaction relating to cylinders was of a nature which was excluded from the scope thereof---Applicant companies were not entitled to claim, adjust or deduct input tax from output tax in the relevant tax period---Use of cylinders for supply of LPG by applicant companies did not attract levy of charge of sales tax under Sales Tax Act, 1990 and were not entitled to claim and adjust input tax from output tax in respect of cylinders---Such inadmissible input tax was recoverable along with default surcharge in accordance with S.34 of Sales Tax Act, 1990---Reference was disposed of…

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