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By Vijay Kumar

Service Tax / VAT

In an indivisible contract no VAT if Service Tax is paid – Supreme Court

Payments of service tax as also the VAT are mutually exclusive.

Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract; irrespective of the element of service provided.

Income Tax

Rent and deposits received by intermediary tenant from ultimate user of premises not to be taken for computing net wealth of owner; CIT (A) gives no reasons for rejecting order – Revenue in appeal with new ground – should Govt suffer for officers' mistakes? : Bombay HC

Procedure is not meant to trip justice but to aid the cause of justice. Wrong drafting by the draftsman cannot result in the Court being prevented from looking at the correct issue and having the issue answered.

Law would be much poorer if the Court precluded itself from doing so, merely because the draftsman for some reason has not applied his mind in framing the correct question or grounds.

The order of the Commissioner( appeals) does not disclose any reason as to why the appeal was allowed on the issue of proportionate debts. If the appellate authority seeks to reverse the finding of the authority below, it was bound to give reasons to its conclusion. We find the order does not disclose any reason for coming to the conclusion arrived at.

Central Excise

Use of power in operation of stirrer and electric motor for lifting water and caustic soda would amount to manufacture with aid of power – appellant not eligible for exemption : Supreme Court

THESE two appeals involve identical questions. The appeals filed by the appellants were dismissed by CESTAT holding that they were not entitled to benefit of concerned notifications. In case of appellant M/s Vimal Textile Mills, the concerned Notifications were Notification No.28 /94-CE dated 1.3.1994 the Notification No.8 /96-CE dated 23.7.1996 and its successor Notifications. CESTAT denied the benefit relying on a larger Bench ' s decision in the case of M/s Mathania Fabrics v. Commissioner of Central Excise, Jaipur .

Appellants are engaged in the processing of cotton fabrics falling under Chapter 52. They claimed to be undertaking the processes of bleaching, mercerising, dyeing, printing, washing, drying and finishing before the fabrics were packed and cleared.

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