2026-VIL-1158-TRI
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VAT High Court Cases

Tripura Value Added Tax Act, 2004 - Levy of tax on retail sale of petrol and diesel kept outside VAT – Petitioner contended that the goods listed in Schedule II (d) of the of the Tripura VAT Act, 2004 were kept outside VAT and that tax collected on retail sales through notifications specifying rates for petrol and diesel was without authority - Respondents contended that the goods were kept outside VAT but not outside the Act, and that the Petitioner, whose supplier has no depot in the State, brought the products from outside the State, so that its retail sale of Petrol and Diesel was the first point of sale within the State - Whether the Respondents can collect VAT under Section 3 of the Act on the retail sales of petrol and diesel made by the Petitioner - HELD - The State Government is empowered to keep certain goods outside VAT, and Schedule II (d) lists goods which are kept outside VAT and taxable at the first point of sale within the State at the rates specified. The State Government did not intend to follow the principle of multi stage taxation, which is how a VAT regime normally operates, for goods like petrol and diesel. It wanted to minimise the tax burden on dealers, which would be higher if the VAT regime were applied as in the case of other goods - The imposition of tax on these goods is therefore done through the Act, but by remaining outside the purview of VAT. The interpretation that the words kept outside VAT mean kept outside the purview of the Act cannot be accepted. In other States enactments the wording is different, where petrol and diesel are subjected to levy at the first point of sale at special rates. No error was found in the demand made by the Respondents - The Petitioner is not entitled to refund of the amount collected - The question is answered against the Petitioner and in favour of the Respondents - The Writ Petition is dismissed - Tripura Road Development Cess - Liability to pay cess on turnover of sales of petrol, diesel and natural gas - Section 3 of the Tripura Road Development Cess Act, 2015 levies cess on the turnover of sales of petrol, diesel and natural gas, with turnover of sales defined as sales price including the amount of tax levied under the Tripura VAT Act, 2004 - Petitioner contended that since petroleum products are kept outside the purview of the VAT Act by Schedule II (d), they generate zero turnover, and cess cannot be collected on the basis of VAT when VAT is excluded - Whether the Petitioner is liable to pay cess under Section 3 of the Cess Act on the turnover of sales of petrol, diesel and natural gas - HELD - The Cess Act levies cess on the turnover of sales after deducting turnover on which cess has been paid on earlier sales, and its proviso bars levy of cess at more than one stage. It had already been held that the Respondents can collect VAT under Section 3 of the VAT Act on the retail sales of petrol and diesel by the Petitioner. The same logic applies here, as the products are kept outside VAT but not outside the purview of the VAT Act. Consequently, the levy of cess under the Cess Act on the basis of VAT cannot be held illegal or impermissible.
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