The Bhogpur Co-Operative Sugar Mill LTD vs. State Of Punjab Through Financial Commissioner Excise And Others

Held

The Court addressed the issues raised by the appellant. Regarding questions (ii) and (iv), the Court held that these issues did not arise for consideration as they were already settled by this Court's judgment in M/s AB Sugar Limited vs. State of Punjab and another dated 15.7.2015. For question (iii), the Court found no merit in the appellant's contention that ITC could be granted on purchase tax that was payable but not paid. The Court reasoned that if the purchase tax was not paid, there was no basis for granting the benefit of ITC. This issue was covered against the assessee by a previous order of this Court in The Morinda Cooperative Sugar Mill Limited vs. State of Punjab and others dated 21.09.2016. With respect to questions (v) and (vi) concerning penalty and interest, the Court held that these were concluded against the assessee by this Court's judgment dated 15.5.2017 in The Morinda Cooperative Sugar Mill Limited vs. state of Punjab and others. Consequently, the Court found no merit in the appeals.

Facts

The appellant, The Bhogpur Cooperative Sugar Mill Limited, filed VAT Appeal No. 35 of 2017 against an order dated 23.12.2016 by the VAT Tribunal, Punjab. The appeal concerned the assessment year 2009-10. The Excise and Taxation Officer determined the purchase price of sugarcane at ₹4,75,60,337, adding ₹8,83,509 to the appellant's declared price of ₹4,66,76,828. Purchase tax was levied at 4% on this enhanced value. The appellant declared gross purchases of ₹5,62,95,589, with specific amounts for inter-state, tax-free, and purchases from non-taxable persons. The appellant claimed Input Tax Credit (ITC) on ₹45,90,728 of purchases, but the Assessing Officer allowed only ₹29,964. The Assessing Officer created an additional demand of ₹38,85,333, including a penalty of ₹16,10,307 under Section 53 and interest of ₹4,02,576 under Section 32 of the Punjab VAT Act, 2005. Appeals to the Deputy Excise and Taxation Commissioner (Appeals) and the VAT Tribunal were unsuccessful.

Key Issues

1. Whether the orders passed by the authorities below are legally sustainable in law, in light of the facts and circumstances of the case? (Question (i)) 2. Whether the VAT Tribunal erred in upholding the orders by following the judgment in A.B. Sugars Limited, which was under challenge before the Supreme Court? (Question (ii)) 3. Whether the levy of purchase tax under Section 19 of the Punjab VAT Act, 2005, and the denial of ITC on this purchase tax, was legally correct, considering the Act's provisions and pronouncements? (Question (iii)) 4. Whether the VAT Tribunal erred in upholding the levy of purchase tax on the State Advised Price instead of the SMP paid by the appellant? (Question (iv)) 5. Whether the VAT Tribunal erred in upholding the imposition of penalty under Section 53 of the Punjab VAT Act, 2005, despite a previous Division Bench order? (Question (v)) 6. Whether the VAT Tribunal erred in upholding the imposition of interest under Section 32 of the Punjab VAT Act, 2005, despite a previous Division Bench order? (Question (vi)) Contentions of the Appellant: The appellant argued that the orders were not legally sustainable. They contended that the Tribunal erred in relying on A.B. Sugars Limited, as that case was under challenge in the Supreme Court. They also argued that ITC should have been allowed on purchase tax and that purchase tax should have been levied on the SMP paid, not the State Advised Price. Furthermore, they argued that penalty and interest were wrongly imposed, citing a previous Division Bench order. Contentions of the Revenue: The judgment does not record specific contentions for the revenue or state.