Tata Motors Ltd. vs Central Sales Tax Appellate Authority.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6450 OF 2012

Tata Motors Limited …Appellant Versus

Central Sales Tax Appellate Authority & Others …Respondents

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned order dated

29.06.2009 passed by the Central Sales Tax Appellate Authority, New Delhi

(hereinafter referred to as the ‘Appellate Authority’) in Appeal No.

330/CST/2008, by which, though the transaction/sales of buses effected

through RSO, Vijayawada sold to Andhra Pradesh State Road Transport

Corporation (for short, ‘APSRTC’) were found to be in the nature of inter-state,

no further consequential order has been passed by the Appellate Authority

directing to adjust the amount of tax paid on the aforesaid transaction against

the tax to be paid to the State of Jharkhand, the original appellant – Tata

Motors Limited has preferred the present appeal.

2. We have heard Shri Amar Dave, learned counsel appearing on behalf of

the appellant, Shri Mahfooz A. Nazki, learned counsel appearing on behalf of Signature Not Verified Digitally signed by

the State of Andhra Pradesh, Shri Arunabh Chowdhary, learned Senior DEEPAK SINGH Date: 2022.09.22 10:45:43 IST Reason:

Advocate appearing on behalf of the State of Jharkhand and Shri N. 2

Venkataraman, learned Additional Solicitor General of India along with Shri

Arijit Prasad, learned Senior Advocate appearing on behalf of the Union of

India.

3. At the outset, it is required to be noted and it is not in dispute that with

respect to transaction in question, namely, sales effected through RSO,

Vijayawada with respect to vehicles/buses sold to APSRTC, the sale/s is/are

found to be in the nature of inter-state sale/s. In that view of the matter, the

appellant – Tata Motors Limited was liable to pay central sales tax to the State

of Jharkhand. However, treating the sale as stock transfer, the appellant/its

representative had paid the tax on the aforesaid transaction to the State of

Andhra Pradesh which is not leviable by the State of Andhra Pradesh.

Therefore, the amount of central sales tax recovered by the State of Andhra

Pradesh is required to be transferred to the State of Jharkhand and the same

is required to be adjusted towards the amount of tax to be paid to the State of

Jharkhand.

4. At this stage, it is required to be noted that prior to insertion of Section

22(1B) to the Central Sales Tax Act, 1956 (hereinafter referred to as the ‘Act

1956’), there was no provision by which the Appellate Authority could have

issued directions for refund of the tax collected by the State which has been

held by the Appellate Authority to be not due to that State, or alternatively,

direct that State to transfer the refundable amount to the State to which central

sales tax is due on the same transaction. However, by the Finance Act, 2010, 3 Section 22(1B) has been inserted to Act 1956, which reads as under:

“Section 22(1B) – The Authority may issue direction for refund of tax collected by a State which has been held by the Authority to be not due to that State, or alternatively, direct that State to transfer the refundable amount to the State to which central sales tax is due on the same transaction.

Provided that the amount of tax directed to be refunded by a State shall not exceed the amount of central sales tax payable by the appellant on the same transaction.”

4.1 It is required to be noted that in the present case the transaction is for

the period prior to insertion of Section 22(1B) to the Act 1956 and the

impugned order has been passed by the Appellate Authority pre-insertion of

Section 22(1B) to the Act 1956. Therefore, as such, it cannot be said that the

Appellate Authority has committed any error in not issuing any direction which

now is permissible under Section 22(1B) of the Act 1956.

5. However, at the same time, the State of Andhra Pradesh cannot retain

the amount of central sales tax paid by the appellant on the transaction of sale

effected through RSO, Vijayawada with respect to vehicles/buses sold to

APSRTC. Therefore, in line with Section 22(1B) of the Act 1956, the State of

Andhra Pradesh is directed to transfer to the State of Jharkhand the amount of

central sales tax deposited by the appellant with the State of Andhra Pradesh

with respect to transaction in question, however, subject to the appellant

submitting the proof of the amount of central sales tax already paid on the

transaction in question, namely, sales effected through RSO, Vijayawada with

respect to vehicles/buses sold to APSRTC treating the same as stock transfer

sale. After due verification, the amount of central sales tax so paid by the 4

appellant with respect to the aforesaid transaction be transferred to the State

of Jharkhand immediately on such verification and the State of Jharkhand is

directed to adjust the same towards the central sales tax liability of the

appellant on such transaction, namely, sales effected through RSO,

Vijayawada with respect to vehicles/buses sold to APSRTC which are found to

be in the nature of inter-state sale. The aforesaid exercise shall be completed

within a period of three months from today.

6. The present appeal is disposed of in the aforesaid terms.

…………………………………..J. [M.R. SHAH]

…………………………………...J. [KRISHNA MURARI]

NEW DELHI;

SEPTEMBER 21, 2022.

5

ITEM NO.1501 COURT NO.8 SECTION XVII (FOR JUDGMENT) S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Civil Appeal No(s). 6450/2012

TATA MOTORS LTD. Appellant(s)

VERSUS

CENTRAL SALES TAX APPELLATE AUTHORITY. & ORS. Respondent(s)

Date : 21-09-2022 This appeal was called on for pronouncement of judgment today.

For Appellant(s) Mr. Amar Dave, Adv. Ms. Nandini Gore, Adv. Ms. Neha Khandelwal, Adv. Ms. Manvi Rastogi, Adv. M/S. Karanjawala & Co., AOR

For Respondent(s) Mr. Nishe Rajan Shonker, Adv. Mrs. Anu K. Joy, Adv. Mr. Alim Anvar, Adv. Mr. Abraham C. Mathews, Adv. Mrs. Anil Katiyar, AOR

Ms. Pragya Baghel, Adv. Mr. Jayant Mohan, AOR

Mr. Abhay Pratap Singh, AOR

Mr. K.S. Kulkarni, Sr. Adv. Mr. S. Dhanjay Reddy, Adv. Mr. Hitesh Kumar Sharma, Adv. Mr. T.Veera Reddy, Adv. Mr. T.N. Rama Rao, Adv. M/s. S. Sandhya Rao, Adv.

Ms. C. K. Sucharita, AOR

Mr. Milind Kumar, AOR

Ms. Deepanwita Priyanka, AOR

Mr. Nishe Rajen Shonker, AOR

M/S. Corporate Law Group, AOR 6

Mr. V. N. Raghupathy, AOR

Mr. Kamal Mohan Gupta, AOR

Mr. M. Yogesh Kanna, AOR

Mr. T. S. Sabarish, AOR

Mr. Aaditya Aniruddha Pande, AOR

Mr. B. K. Satija, AOR

Mr. Pukhramban Ramesh Kumar, AOR Mr. Karun Sharma, Adv. Ms. Anupam Ngangom, Adv. Mr. Wahengbam Immanuel Meitie, Adv.

Mr. Bhakti Vardhan Singh, AOR

Mr. Gopal Singh, AOR

Mr. Ashok Kumar Singh, AOR

Mr. Aravindh S., AOR Mr. Abbas. B, Adv.

Mr. G.S. Makker, AOR

Mr. Mahfooz A. Nazki, AOR Mr. Polanki Gowtham, Adv. Mr. Shaik Mohamad Haneef, Adv. Mr. T. Vijaya Bhaskar Reddy, Adv. Mr. K.V. Girish Chowdary, Adv. Ms. Rajeswari Mukherjee, Adv.

Hon’ble Mr. Justice M.R. Shah pronounced the reportable

judgment of the Bench comprising His Lordship and Hon’ble Mr.

Justice Krishna Murari.

The appeal is disposed of in terms of the signed reportable

judgment. Pending application(s), if any, shall stand disposed of.

(NISHA KHULBEY) (NISHA TRIPATHI) SENIOR PERSONAL ASSISTANT ASSISTANT REGISTRAR

(signed reportable judgment is placed on the file)