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2015 (10) TMI 1923 - HC - VAT and Sales TaxDemand of interest - Samadhan Yojna - Composition Fee / Scheme under UPTT - Held that:- Initially, the composition fee consisted of one per cent of the total contract amount; the only restriction was that the contractor could not avail of the composition fee of one per cent and had to pay the tax as provided under the Act, if the inter-state purchase of raw material exceeded five per cent of the contract amount. There is no dispute that it exceeded five per cent. If things stood so and there were no further development, the revisionist would become liable under the original Circular to be taxed in terms of the said provision; but, there is a subsequent development in the form of an amendment, which is sought to be traced under Section 7D of the Act, which provided for composition fee being paid and, as per the said provision, which came out on 28.10.2003, with retrospective effect and, as far as these cases are concerned, covering the assessment years in question, if three per cent is paid in place of one per cent, the regular provision of the assessment would not be applicable, if the inter-state purchase exceeded more than five per cent of the contract amount. Therefore, even if the inter-state purchase of the raw material made by the revisionist exceeded five per cent, if the revisionist exercised the option to pay three per cent composition fee, then, that would put an end his tax liability for the period. - Therefore, in place of the tax, which he would have had to pay under the earlier scheme, in view of his inter-state purchase having exceeded five per cent, as he had opted to pay three per cent and which he could possibly do only after 28.10.2003, it cannot be mulcted with interest for the period prior to 28.10.2003. Tribunal has not correctly appreciated the effect of the order dated 28.10.2003. The Tribunal, in fact, found that the order dated 28.10.2003 is retrospective and, therefore, the terms of the order dated 28.10.2003 must be given full effect. We would think that the first appellate authority has correctly understood the legal position. It is also relevant to mention here that the Circular dated 28.10.2003 does not provide for payment of interest for the period prior to its date. - Decided in favour of assessee.
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