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2022 (2) TMI 951 - ALLAHABAD HIGH COURTLevy of entry tax - tax on quantities of damaged/lost cement which could not have been consumed, used or sold inside the local area - inclusion of cost of packing of loose cement carried out within the local area after receipt of loose cement from outside in the assessable value - HELD THAT:- The liability to pay entry tax arises not on the consumption, use or sale of any goods inside a local area but on the entry of such goods for the purpose of consumption, use or sale therein. Therefore, the levy attracts at the point of goods entering the local area and not at the later stage. In that view, it was never enough for the assessee to allege that the goods that were received by it inside the local area could not be consumed, used or sold because they got damaged or were lost. What the assessee was obligated to establish to avoid the liability of tax was the fact that such goods did not enter the local area in a fit state as may have rendered them capable of consumption, use or sale therein. In the present facts, the assessee only claimed, the goods inside the local area stood lost or were damaged. The point of time when such loss and/or damage was caused was neither pleaded nor proven. Therefore, it cannot be ascertained if the loss and/or damage to the goods (claimed by the assessee) was suffered before the goods entered the local area of Allahabad or thereafter - the liability of Entry Tax is not shown to have ceased. There is no other provision in the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act), as may allow for remission of the liability of tax on goods lost or destroyed after their receipt into the local area. Accordingly, the question is answered in favour of the revenue and against the assessee. Inclusion of cost of packing of loose cement carried out within the local area after receipt of loose cement from outside in the value of goods for the purpose of levy of entry tax - HELD THAT:- It is observed, the assessee had set up the claim of having received 146252.72 tonnes of loose cement inside the local area. It claimed to have packed 146252.72 tonnes of cement the same inside the local area of Allahabad. That claim was disbelieved by the Assessing Officer by a single observation that the assessee could not substantiate the claim. In appeal, the appeal authority rejected the claim on principle of it not being allowable. The Tribunal has not offered any independent reasoning. Under the fourth proviso to Section 2(h) of the Act read with the Explanation thereto, the value of goods to be assumed or estimated (in certain cases) on the basis goods of like kind or like quality. Further, in view of that Explanation, the value addition of the goods may not arise upon things done to those goods after their receipt inside the local area - on principle, the decision of the Tribunal is found to be incorrect. To that extent, the question of law is answered in favour of the assessee and against the revenue. The present revision is partly allowed.
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