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Milk Supply to Northern Command is not liable to levy VAT: DB to Govt 5/9/2015 11:16:03 PM Early Times Report JAMMU, May 9: In a petition filed by National Cooperative Dairy Federation of India Ltd and ors seeking direction to State from not restraining the trucks/vehicles carrying UHT/Tetra Pack Milk for collection of VAT being supplied by petitioners to the Army Units under Northern Command in J&K, a Division Bench (DB) of State High Court comprising Justice Bansi Lal Bhat and Justice Janak Raj Kotwal restrained the respondents from detaining trucks/vehicles carrying Tetra Pack Milk being supplied to the Northern Command. After hearing Adv Pranav Kohli for the petitioners whereas Adv MA Bhat appearing for the finance department, the Division Bench observed that lay emphasis to point out that not to levy and collect tax on sale or purchase when such sale or purchase has taken place in the course of inter-state trade or commerce and not to take steps in this regard and not to create hurdles on that score is a constitutional obligation of a State Government and not a discretion or mere concession. "The Authorities of a State Government have to show due caution and sensitivity while dealing with the matter and not to act arbitrarily. Stand taken by the respondents that the petitioners are making the supplies on FOR basis has no substance in relation to their liability to pay VAT, court said adding, "the supply on FOR (Free on Rail/Road) basis rather would show that the transportation/movement of the sold goods is a covenant of and pursuant to the contracts of the sale between the Army and petitioner Nos. 2 and 3 and the contracts shall not be said to have been executed until supply of goods at specified delivery points in the State of Jammu and Kashmir is made by the petitioners. While rejecting the stand taken by the respondents, Division Bench said the stand taken by the respondents, we may say, is without any basis and repugnant to constitutional scheme. With these observations, Division Bench allowed the petition restrained the respodents from detaining trucks/vehicles carrying Tetra Pack Milk being transported by petitioners pursuant to aforementioned supply orders for delivery at the specified delivery points of the Northern Command of the Army in the State of Jammu and Kashmir for enforcing payment of VAT under the Act and by a writ of mandamus respondents are directed to undo all the steps taken by them in this behalf and to release the Bank Guarantee(s) furnished by the petitioners.   Share This News with Your Friends on Social Network     Comment on this Story

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