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Dear Students and Members,


Please find below some latest case laws of 2009 compiled specially for CA and CS Students. This article covers 2009 series decided cases on VAT and Sales Tax Law. For ready reference you may bookmark this page. Hope this compilation would be off some help in your Exam preparation:


You may also download the below case laws in the form of a handout from the link mentioned below:


Tax Case Laws Digest 2009   



Whether inter-State sale or local sale : -


Southern Petro Chemical Corporation vs. Addl. CCT (2009)


The petitioner, a company owned by the Government of Tamil Nadu having its head office at Chennai and branch at Bhopal, was engaged in the manufacture and sale of medicines. Orders were directly made to the head office of the company at Chennai and the medicines were sold from the head office and bulk-transferred to the purchaser in various parts of the State of M.P. For the purpose of facilitating smooth transfer of the sold items, Form-75 (Entry Form) was issued by the Bhopal branch to the head office at Chennai. It was held that merely because Form-75 was issued from the Bhopal office that, by itself, did not cast a liability on the petitioner to pay tax as if it is local sale: a further finding had to be recorded by the Authorities to the effect that the sales transaction had taken place within the State of M.P. and, therefore, liable to be taxed.


Whether inter-State sale or local sale : -


DCM Limited vs. CST (2009)


The assessee sold exworks in Delhi (i.e. goods delivered in Delhi) chemicals to registered dealers who were under a contractual obligation to sell them in their assigned territory outside Delhi. Under the contract with the registered dealers, each dealer was assigned an exclusive territory and was obliged to take the chemicals outside Delhi where they were to be sold. The dealers were required to submit monthly stock of sales and a market report to the assessee. The question was whether the sales to the dealers were inter-State sales. It was held, on the facts, that the obligation of the purchasing dealers under the contract with the assessee, to take the chemicals to their respective territories outside Delhi, to sell them in those territories only at the price fixed by the assessee, and to submit monthly reports to the assessee, indicated the control of the assessee over the movement of the goods. The sales were inter-State sales.



First Charge on Recovery proceedings – Validity of Provisions : -


Central Bank of India vs. State of Kerala (2009)


Since the Parliament has not made any provisions in Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Recovery of Debts due to Bank and financial Institutions Act, 1993 creating the first charge in favour of Bank and financial Institutions, there is no inconsistency in the provisions under the State Sales Tax Act, creating the first charge, subject to any Central Act. The state Legislations giving first charge in favour of State operate in respect of charges that are in force on the date of introduction of the provisions creating the Charge.


 Hiring of Cranes - Whether taxable as transfer of right to use goods: –


R.P. Kakoti vs. Oil & Natural Gas Comm. (2009)


The assessee gave the cranes on hire. Custody and control of cranes remained with the assessee and the entire expenses, namely, diesel charges, salary of driver, repair, etc. were born by him. It was held that the assessee never transferred the effective control of the cranes. Therefore, the activity was not subject to sales tax.



Misuse of From C - Penalty: -


CTT vs. Tiger Steel Tubes (P) Ltd (2009)


Purchasing dealer issued Form C for such items which are not listed in his central registration certificate. It was held that the dealer was liable for penalty u/s 10A of the CST Act.


Deduction of tax at source in works contract : -


Freedom Info Systems vs. Bharat Sanchar Nigam Ltd (2009)


No tax can be deducted on the job contracts, involving no material, even if the contract between the parties requires for deduction of tax at source.



Deduction of tax at source in works contract on advance payments : -


[CTT vs. New Holland Traders India (P) Ltd (2009)


Tax cannot be deducted by the contractee on the advance payments made to the contractor.


Appeal not to be entertained unless there is proof of payment of tax : -


[Ravi Gupta vs. CST (2009)


Where denial of interim relief may lead to public mischief, great irreparable private injury or shake a citizen’s faith in the impartiality of the public administration, interim relief can be given.



Thanks and Regards

Published by

Ankur Garg
(Company Secretary and Compliance Officer)
Category Students   Report

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