Sony India Pvt. Ltd v. The Commissioner of Trade & Taxes

S.MURALIDHAR, J

VIBHU BAKHRU, J AUGUST 4, 2015 mg

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 16th July 2015 Decided on: 4th August 2015 + ST.APPL 29/2013 SONY INDIA PVT. LTD ..... Petitioner Through:Mr. Tarun Gulati, Advocate with Mr. Tushal Gupta, Mr. Kishore Kunal, Mr. Shashi Mathews,Advocates. versus THE COMMISSIONER OF TRADE & TAXES ..... Respondent Through: Mr. Gautam Narayan, Addl. Standing counsel. WITH ST.APPL 31/2013 SONY INDIA PVT LTD ..... Petitioner Through:Mr. Tarun Gulati, Advocate with Mr. Tushal Gupta, Mr. Kishore Kunal, Mr. Shashi Mathews, Advocates. versus THE COMMISSIONER OF TRADE & TAXES ..... Respondent Through: Mr. Gautam Narayan, Addl. Standing Counsel. CORAM: HON'BLE DR. JUSTICE S.MURALIDHAR HON'BLE MR. JUSTICE VIBHU BAKHRU Dr. S. Muralidhar, J. 1. These two appeals are directed against a common order dated 9th April 2013 passed by the Appellate Tribunal ("AT"), Value Added Tax ("VAT"). ST Appeal No. 31 of 2103 pertains to the period 1st April 2005 to 7th August 2005 and ST Appeal No. 29 of 2103 pertains to the period 30th November 2005 to 31st December 2007. 2. At the hearing of these appeals on 30th July 2013 (along with ST Appeal No.30 of 2013 which pertained to the period 8th August 2005 to 9th November 2005) the Court framed the following questions of law: i) Whether the Tribunal was right in holding that Digital Still Image Video camera is not classified and covered by Entry No.41 or 41A (Description 15)? ii) Whether the Tribunal was right in holding that there was deemed waiver of the application for pre-determination and if the Tribunal was wrong, effect thereof? iii) Whether the Tribunal was justified in upholding levy of penalty and interest? 3. The Court by the said order observed that it was not inclined to stay the demand raised as it would examine whether digital still image video cameras ("DSCs") could be regarded as information technology products. Background Facts 4. The Appellant is a registered dealer under the Delhi Value Added Tax Act, 2004 ("DVAT Act') and is engaged in the sale of wide range of electronic items and information technology ("IT") products across India including Delhi. The appeals concerns the sale by the Appellant of DSCs which according to the Appellant operate on a software system and the pictures of which are processed by a computer system to which the DSCs can be attached through USB cable. 5. At the outset it requires to be noted that the dispute concerning the rate of VAT payable by the Appellant Assessee on the DSCs sold by it pertain to three distinct periods. The first is the period from 1st April 2005 to 7th August 2005. The second is the period from 8th August 2005 to 29th November 2005 and the third from 30th November 2005 to 31st December 2007. 6. As regards the period the period 8th August 2005 to 29th November 2005, the Appellant had filed ST Appeal No.30 of 2013. The said appeal was not pressed by the Appellant at the hearing since the Appellant adopted for the "Delhi Tax Compliance Achievement Scheme 2013" and one of the contentions were availing of the benefit under the said scheme so that any appeal filed by the Assessee would have to be withdrawn. Accordingly, by order dated 9th July 2015, this Court dismissed ST Appeal No. 30 of 2013 as withdrawn. Consequently, the present judgment is in respect of ST Appeals 29 and 31 of 2013 pertaining to the periods 30th November 2005 to 31st December 2007 and 1st April 2005 to 7th August 2005 respectively. The period 1st April to 7th August 2005 7. The facts relevant for the period between 1st April 2005 and 7th August 2005 (ST Appeal No. 31 /2013) are that the Appellant paid tax for the sale of DSCs @ 4%. The goods were covered under Entry 41 of Schedule III of DVAT Act. During the relevant period, Entries 41 and 41-A read as under: Entry No. Description IT Products including computers, telephone and parts thereof, tele printer and wireless equipment and parts thereof. 41A IT Products notified by the Ministry of IT as specified below: Sr. No. D