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2015 (11) TMI 160 - HC - VAT and Sales TaxLevy of Entry Tax under the provisions of the U.P. Act of 2007 - Demand of interest - Held that:- From a perusal of the assessment order that the department has imposed the tax liability on the goods imported by the Company treating it to be a "machinery". The petitioner has disputed the liability of tax under the Act from the very outset and has contended that the goods imported by the petitioner are "electrical equipments" and not a "machinery" and was, therefore, not liable to pay any tax. On the other hand the department contends that the petitioner had challenged the vires of the Act of 2007. The validity of the entry tax was upheld by the High Court and consequently, the petitioner was required to deposit the entry tax along with returns which was legally due and payable. Since the same was not deposited, the tax would be deemed to be the admitted tax in view of Section 8(1) of the Act read with Section 33 of the U.P. VAT Act. Even though the vires of the Act of 2007 had been upheld, the petitioner nonetheless disputed the liability of payment of tax under the Act of 2007 on the ground that the petitioner was importing "electrical equipments" and that the petitioner was not liable to pay any tax as it was not a "machinery". This fact, that the petitioner has disputed its liability under the Act is not disputed by the respondents. The fixation of the liability under the Act of 2007 in the assessment orders are being contested by the petitioner in the appeal. We are consequently of the opinion that since the petitioner has disputed its liability from the very inception, the same cannot be treated to be the admitted tax for the purpose of Section 8(1) of the Act read with Section 33(2) of the U.P.VAT Act. Thus, for the purpose of imposition of interest, the provisions of Section 8(1B)of the U.P.Act read with Section 33(4) of the U.P. VAT Act would be applicable for the purpose of determining the interest liability. - Decided in favour of assessee.
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