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2019 Supreme(Gau) 595
IN THE HIGH COURT OF GAUHATI
A.S. Bopanna, Arup Kumar Goswami, JJ.
Numaligarh Refinery Ltd. - Appellants
Vs.
State of Assam and Ors. - Respondent
Rev. Pet. Nos. 1 and 2 of 2017
Decided On : 28-02-2019
For the Appellant :V. Lakshmikumaran, Sr. Advocate, Y. Aldak and B. Sharma, Advs.
For the Respondents:D. Saikia, Sr. Advocate and B. Gogoi, Adv.
Headnote:
Entry Tax Act – Section 2(f) –Issue on Crude oil, VAT, import – Contention on behalf of the petitioner is that though VAT at the rate of 5 % is included in the invoice, the same is attracted only at the sale point after the petitioner received the crude oil and the other process with regard to the actual quantity and quality is decided and the imported crude oil is ready for further process by the petitioner – In that view, it is contended that as per the understanding between the petitioner which is an importer and its supplier, the crude oil is sent through pipeline and at the entry point to the local areas, the VAT is not attracted and, as such, the value of the imported crude oil at the point of entry into local area less the VAT amount indicated in the invoice is to be taken for the purpose of levying the entry tax –Held, Court has already taken note that an entry point to be created only because it is the periphery of the local area would not be justified when the delivery of the crude oil is through pipeline –Hence, the point of delivery in the local area will have to be considered as the entry of goods to the local area – The value of the VAT also would, therefore, get included in the import value for the purpose of processing the entry tax as it would fall under "other charges incidentally levied on the purchase of such goods" which is paid or payable – Though with reference to the invoice it was contended that as per the invoice at Annexure-P-I in Revision Petition the billing period and the invoice is drawn subsequently and, in that light, it is contended that the supply is during the period and the same at that point had not attracted the VAT but it became payable only subsequently by which time it has already entered the local area, the said contention would not be acceptable as the payment of VAT is incidental to the purchase of goods and would fall under the "other charges" which has been indicated in the Section and is either paid or payable – Further on these factual distinctions sought to be made based on the quality and quantity of the goods being different at the two different point and in that view the purchase value being different, no documents were laid before the original or appellate authority – Revision Petitions dismissed
JUDGMENT :
A.S. Bopanna, J.
1. Heard Mr. V. Lakshmikumaran, learned senior counsel assisted by Mr. Y. Aldak and Mr. B. Sharma, learned counsel for the petitioner. Also heard Mr. D. Saikia, learned senior counsel assisted by Mr. B. Gogoi, learned Standing Counsel, Finance & Taxation for the respondents.
2. The petitioner in both these petitions is the same and the issue raised is also the same inasmuch as the similar judgments dated 07.12.2015 passed by the Assam Board of Revenue, Guwahati ("Revenue Board" for short) in case Nos. 31 SRA/15 and 59 STA/15 is assailed in these two petitions. Hence, both these petitions are taken up together, heard and disposed of by this common order.
3. The brief factual matrix is that the appellant is a company incorporated under the Companies Act. It is a registered dealer under the Assam Value Added Tax Act, ("VAT Act" in short), Central Sales Tax Act and Assam Entry Tax Act ("Entry Tax Act" for short). The petitioner is engaged in the business of refining crude oil procured from M/s. Oil India Ltd. and M/s. ONGC Ltd. through the installed pipelines.
4. Since, the crude oil purchased by the appellant from the said entities which are located in another local area would enter the local area as defined under the Entry Tax Act, the issue is with regard to the payment of appropriate quantum of entry tax for the assessment years 2011-12 and 2012-13. The fact that the petitioner is an importer as defined under the Entry Tax Act and that it is liable to pay the entry tax on the crude oil procured from Oil India Ltd. and ONGC Ltd. is not in dispute. However, the only issue that has been raised for consideration is as to whether the respondents can collect the entry tax based on the value of invoice which also includes the Value Added Tax ('VAT' for short). In that light, since the assessment order dated 04.04.2015 had included the VAT paid on the purchase of crude oil also as a component to collect the entry tax payable, the petitioner claiming to be aggrieved had filed the appeal before the Revenue Board. The Revenue Board, on considering the rival contentions was of the opinion that the assessment as made by including the VAT amount also for the purpose of calculation of the entry tax, is justified. In that view, the petitioner claiming to be aggrieved by the same is before this Court in these petitions.
5. From the contentions as urged, the fact that the petitioner is purchasing crude oil from Oil India Ltd. in the instant case and the same is supplied through pipeline from Duliajan to the refinery of the petitioner at Numaligarh is the accepted position and the said two places are situated in different local area is the factual position. The position is also that the petitioner is liable to pay the entry tax as the crude oil supplied from one local area will enter another local area though through the pipe-line, thus making the petitioner liable to pay the entry tax. The charging Section under the Entry Tax Act, namely, Section 3 of the Act which provides for levy of tax states that there shall be levy and collection of the entry tax on the entry of the specified goods into any local area for consumption, use or sale therein at the rate respectively specified against each item in the Schedule. The entry tax shall be leviable on the import value of these specified goods and shall be paid by every importer of such goods. The contention on behalf of the petitioner is that the import value as provided for the specified goods ought not to include the VAT paid by the petitioner on the imported crude oil.
6. The term imported value for the purpose of taxation is as contained in Section 2(f) of the Entry Tax Act which reads as herein under:
(f) "Import value" means the value of goods specified in the Schedule as ascertained from the original invoice and includes the charges paid or payable for insurance, excise duty, freight charges and all other charges incidentally levied on the purchase of such goods:
Provided t
