Marg, Civil Lines, Jaipur v. Assistant Commissioner, Commercial Taxes, Anti Evasion-Zone-I

302018 Through Its Authorized Signatory Shri Anil Sharma S/o Shri Milap Chand Sharma Aged About 48 Years, Working As Branch Accounts Manager R/o House No. 11, Roop Nagar, Hari Marg, Civil Lines, Jaipur ----Petitioner [2025:RJ-JP:21907] (2 of 11) [STR-230/2024] Versus Assistant Commissioner, Commercial Taxes, Commercial Taxes, Anti Evasion-Zone-I, Jaipur ----Respondent S.B. Sales Tax Revision / Reference No. 231/2024 LG Electronics India Private Limited, B-71, Sahkar Marg, Lal Kothi, Jaipur (Presently At Ss Square, 1St Floor, Plot No. 7,8,10G And 11, Kailashpuri, Opposite Sanghi Farm, Tonk Road, Jaipur 302018 Through Its Authorized Signatory Shri Anil Sharma S/o Shri Milap Chand Sharma Aged About 48 Years, Working As Branch Accounts Manager R/o House No. 11, Roop Nagar, Hari Marg, Civil Lines, Jaipur Versus ----Petitioner Assistant Commissioner, Commercial Taxes, Anti Evasion-Zone-I, Jaipur ----Respondent For Petitioner(s) : Mr Narendra Singhvi with Ms. Srishti Agarwal. For Respondent(s) : HON'BLE MR. JUSTICE ASHOK KUMAR JAIN 21/05/2025 Order

1. These S.B. Sales Tax Revision Petitions were preferred by petitioner aggrieved from order dated 05.07.2024 in Appeals No.2019/795/Jaipur, 2019/815/Jaipur, 2019/792/ Jaipur and 2019/793/Jaipur, whereby the appeals preferred under Section 83 of the Rajasthan Value Added Tax Act, 2003 (hereinafter referred as ‘the RVAT Act, 2003’) against order dated 30.03.2019 passed by the Appellate Authority-II, Commercial Taxes, Jaipur (hereinafter referred as ‘the [2025:RJ-JP:21907] (3 of 11) [STR-230/2024] Appellate Authority’), wherein the Appellate Authority has allowed partial appeals, but rejected partially against the order passed by Assistant Commissioner, Anti Evasion, Zone-I, Jaipur.

2. Learned counsel for the petitioner while replying upon grounds of revision petitions, submitted that the issue pertains to whether any goods brought into State of Rajasthan by the petitioner are liable to entry taxes when such goods are subsequently transferred to outside the State of Rajasthan without use, sale or consumption even after six months from the entry of such goods in the State. Learned counsel further submitted that an exemption is provided under the law from non-payment of entry tax, in case of stock transfer from State to another State as the liability of entry tax and VAT is payable when the goods are consumed, used and sold within State. He submitted that the issue arises due to a restriction placed by Rule 12(3) of the Rajasthan Tax on Entry of Goods into Local Areas Rules, 1999 (hereinafter referred as ‘the RET Rules, 1999’), contrary to the law. He further submitted that under Section 3 of the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 (hereinafter referred as ‘the RET Act, 1999’) provided that entry tax is leviable only when the goods are brought into a local area for consumption, use or sale, but Rule 12(3) of the RET Rules, 1999 provides that in determining the value of goods liable to tax, the value of goods purchased or received from outside the local area, but subsequently sent out of the local area otherwise than by [2025:RJ-JP:21907] (4 of 11) [STR-230/2024] way of sale shall be deducted, provided that the goods are sent out of the local area within a period of six months form the date of entry of such goods into the local area and entries are made in the stock register in the manner specified in Sub-rule (5) of Rule 14. He submits that the Rule 12(3) of the RET Rules, 1999, prescribes a limit of six months and same is contrary to Section 3 of the RET Act,

3. Learned counsel has further referred judgments in the case of Gypsy Pegasus - A Partnership Firm vs. State Of Gujarat : 2018 (15) GSTL 305 (SC); Peekay Re-Rolling Mills (P) Limited vs. Assistant Commissioner : (2007) 4 SCC 30 and Balaji Steel Re-Rolling Mils vs. Commissioner of Central Excise & Customs : 2014 (310) ELT 209 (SC) and submitted that when there is no levy of tax, the question of looking at exemption or deduction, does not arise. He also submitted that the provision of fact has primacy and prevail upon the Rules.

4. Heard learned counsel for the petitioner and perused the judgments as referred by learned counsel and also the material placed on record.

5. The issue in all four revision petitions are common and it indicate that at the time of survey of petitioner by Anti Evasion of the Commercial Tax Department, it has come to notice that the petitioner has imported goods from other States to local area (Rajasthan) and after six months, same were exported to other State by way of Stock Transfer. The petitioner (Tax Assessee) has maintained that these goods [2025:RJ-JP:21907] (5 of 11) [STR-230/2024] were neither consumed nor use or sold in the State of Rajasthan, but admittedly, these goods were transferred by way of stock transfer after six months to any other State or Area.

6. The Tax Officer has issued a notice and after opportunity of hearing, has passed an order of Tax Assessment and directed the petitioner to deposit the entry tax with interest and penalty.

7. Aggrieved, the petitioner has filed an appeal before Dy. Commissioner (Appeal-II), Commercial Taxes, Jaipur and same was partially allowed and partially rejected. Aggrieved, the petitioner has approached the Rajasthan Tax Board by way of Appeal, and the same was also dismissed by the Board.

8. Now, the petitioner is aggrieved of Rule 12(3) of the RET Rules, 1999 and termed same to be contrary to Section 3 of the RET Act, 1999. For ready reference, we are reproducing Section 3 of the RET Act, 1999 and Rule 12(3) of the RET Rules, 1999 as under:- Section 3 of the RET Act, 1999 3) (1) Levy of Tax.— There shall be levied, collected and paid to the State Government a tax on entry of any goods brought into a local area, for consumption, use or sale therein, '[with effect from such date] and [at such rates], not exceeding [65]' percent of the value of the goods, as may be specified by the State Government, by notification in the Official Gazette, and different dates and different rates may be specified in respect of different goods or different class of goods or different local areas. The entry tax shall be levied on taxable purchase value of the goods, so however that in case where it is not possible to determine the taxable purchase value of goods, the entry tax shall be levied on taxable market value of goods. (2) [2025:RJ-JP:21907] (6 of 11) [STR-230/2024] (3) The tax levied under sub-section (1) shall be paid by every registered dealer or dealer liable to get himself registered under this Act [or by a person or class of persons liable to pay tax under the Act] who brings or causes to be brought into a local area, the goods whether on his own account or on account of his principal or any other person or who takes delivery or is entitled to take delivery of such goods on its entry into a local area. ******* Rule 12(3) of the RET Rules, 1999 Exemption and deduction.— 12. ……………………………………………………. (1) ……………………………………………………. (2) In determining the value of goods liable to tax, the (3) value of goods purchased or received from outside the local area but subsequently sent out of the local area otherwise than by way of sale shall be deducted, provided that the goods are sent out of the local area within a period of six months from the date of entry of such goods into the local area and entries are made in the stock register in the manner specified in sub-rule (5) of rule 14. *******

9. In the case of Gypsy Pegasus - A Partnership Firm vs. State Of Gujarat (supra), Hon’ble Supreme Court while considering Section 3 and 3-A of Gujarat Entertainment Act, 1977 (hereinafter referred ‘the Act of 1977’), has considered different provision, wherein Section of the Act of 1977 was charging Section, whereas 3A of the Act of 1977 was brought in by an amendment to exempt certain entertainments. It was held that when a form of entertainment is non-taxable, then all kind of musical programmes without any qualification were taken out of the purview of charging section.

10. In the case of Peekay Re-Rolling Mills (P) Limited vs. Assistant Commissioner (supra), Hon’ble Supreme Court has held that the liability to take or taxability under one [2025:RJ-JP:21907] (7 of 11) [STR-230/2024] provision remains unaffected by an exemption under any another provision.

11. In the case of Balaji Steel Re-Rolling Mills vs. Commissioner of Central Excise & Customs (supra), Hon’ble Supreme Court has held that the provision of Act to have primacy and prevail upon the provision of Rules.

12. Section 3 of the RET Act, 1999 provides that entry tax is leviable on entry of any goods brought into a local area for consumption, use or sale therein, however, Rule 12(3) of the RET Rules, 1999 provides that after the goods brought into local are, if same is not sent out of local area within a period of six months from the date of entry of such goods into the local area and if entries are made in the Stock Register in the matter specified in the Rules, then the tax is leviable as if the goods are consumed, use or sold. It indicate that Section 3 of the RET Act, 1999 provides for levy of tax, which is a charging Section but Rule 12(3) of the RET Rules, 1999 only provides a limitation on export of goods from local area so as to determine a cut-off date to give teeth to chargeable Section.

13. A three Judge Bench in the case of M/s. Modi Naturals Ltd. vs. The Commissioner Of Commercial Tax, UP : 2023 INSC 974, while considering an issue about interpretation of Rule, has observed that a statute must be construed in accordance with intention of the legislature and the Court should act upon the true intention of the legislation while applying law and while interpreting law. [2025:RJ-JP:21907] (8 of 11) [STR-230/2024]

14. While referring to Justice G.P. Singh in his treatise, “principle of statutory interpretation” as under:- Justice G P Singh’s Principles of Statutory Interpretation is the most comprehensive and authoritative work on the subject. Widely quoted in judgments of the Supreme Court as well as various High Courts, this scholarly work illustrates and explains rules of interpretation in a lucid, comprehensive and systematic manner. A leading commentary on the subject, this fifteenth edition captures and analyses the shift in the Supreme Court decisions from the earlier tradition of literal interpretation to purposive interpretation of statues. The present edition will be helpful in understanding the complexities and the nuances of the subject, and its practical application. Key Features: • This classic work on the interpretation of statutes has been referred to and quoted in numerous judgments. • Rules of interpretation have been illustrated and explained in a lucid, comprehensive and systematic manner. • Sets out the rules of statutory interpretation in both Indian and Foreign historical backgrounds and outlines the views of great jurists. • Contains references to authoritative foreign works like Bennion on Statutory Interpretation and other major international texts. • Includes critical analyses of important Indian and English decisions.

15. Further referred a passage of Classic Lord Cans, which is stated as under:- “The words of a statute are to be read in their ordinary, natural and grammatical meaning, unless such a reading leads to some absurdity, repugnance or inconsistency with the rest of the statute. In such a case, the words may be modified 8000 to avoid that absurdity or inconsistency, but no further.”

16. A Sales Tax Revision under Section 26 of the RET Act, 1999 read with Section 84 of the RVAT Act, 2003, is entertainable and admitted only on substantial question of law, therefore, it is necessary for this Court to formulate a substantial question of law. In case, any substantial question is not made out, then the revision petition is not maintainable. [2025:RJ-JP:21907] (9 of 11) [STR-230/2024]

17. In case of Chandrabhan (Deceased) Through LRs and others vs. Saraswati and Others : 2022 SCC Online SC 1273, while considering the provision of Section 100 of CPC, Hon’ble Supreme Court has explained substantial question of law as debatable and not previously settled by law of land or not a mere question of law. A question of law having a material bearing on the decision of a case will be a substantial question of law, if it is not covered by any specific provision of law or settled legal principles emerging from binding precedents. A substantial question of law will also arise in a contrary situation, where the legal position is clear either on account of provision of law or binding precedents but the court below has decided the matter, either ignoring or acting contrary to such principle. The substantial question of law arises because the decision of court below was rendered on a material question, violated the settled position of law.

18. The definition of substantial question of law was also considered by Hon’ble Supreme Court in case of M. Janardhana Rao vs. Joint Commissioner of Income Tax (Appeal (Civil) No.4232/2003 order dated

28.01.2005) reported as AIR 2005 SC 1309, wherein a reliance has been placed in case of Sir Chunilal V. Mehta & Sons. Ltd. vs. Century Spinning and Manufacturing Co. Ltd.: AIR 1962 SC 1314 and Hon’ble Supreme Court laid down the following test to determine whether substantial question of law is involved. The test are: [2025:RJ-JP:21907] (10 of 11) [STR-230/2024] (i) Whether directly or indirectly it affects substantial rights of the parties, or; (ii) The question is or general public importance, or; (iii) Whether it is an open question in the sense that issue is not settled by pronouncement of this court or Privy Council or by the federal court or; (iv) The issue is not free from difficulty, and (v) It calls for a discussion for alternative view.

19. The facts of the case in all of petitions clearly indicate that the goods were brought in Rajasthan and they remained here till expiry of six months from the date of entry in State of Rajasthan. As per chargeable Section 3 of the RET Act, 1999 read with Section 12(3) of the RET Rules, 1999, the entry tax is chargeable.

20. There is no doubt about the fact that the only question before us is – whether Rule 12(3) of the RET Rules, 1999 is in contravention of provision of Section 3 of the RET Act, 1999 and the Rule cannot override the chargeable provision, so ultra virus. Herein this case, the petitioner has not challenged the virus of Rule 12(3) of the RET Rules, 1999 and when the virus has not been challenged, then on facts of the case, while applying the chargeable section with Rules, does not give rise to any substantial question of law.

21. In view of discussion made hereinabove, the judgments as referred by learned counsel, are not applicable in the instant case. The Rajasthan Tax Board has not committed any error while deciding the appeals on the basis of admitted facts of [2025:RJ-JP:21907] (11 of 11) [STR-230/2024] the case as the tax is leviable under the chargeable Section 3 of the RET Act, 1999 read with Section 12(3) of the RET Rules, 1999, therefore, there is grounds does not give rise to any substantial question of law. Hence, these revision petitions are liable to be dismissed.

22. Consequently, S.B. Sales Tax Revision/Reference Nos. 230/2024, 228/2024, 229/2024 and 231/2024, are hereby dismissed with all pending application(s), if any. PKS/77-80 (ASHOK KUMAR JAIN),J