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Showing 201 to 220 of 931 Records
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2008 (8) TMI 847
Addition to the turnover made in the sales tax assessment of the petitioners, confirmed by the Tribunal - Held that:- Unless the estimation is found to be arbitrary and not based on any material, there is no scope for interference by this court. In one case, we find the assessing officer has made the estimation based on the suppressed turnover and in two levels on appeal, the first appellate authority and the Tribunal changed the pattern of addition based on declared turnover. In the other case, the addition to turnover is only a very small amount and that is based on the suppression noticed. So long as the estimation is made on a rational basis, there is no justification for this court in modifying the same in a revision proceedings where the jurisdiction is confined only to questions of law. Since the Tribunal is the final fact finding authority and since it has modified the orders of the first appellate authority reducing the addition, we do not find any ground to interfere with the order of the Tribunal. We therefore dismiss the Tax Revision Cases.
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2008 (8) TMI 846
New unit - Whether the investment made in obtaining the know-how is included in the phrase "fixed capital investment" as defined therein?
Held that:- The proposition as propounded by the learned senior counsel that the expenses incurred for obtaining the "know-how" are included as are necessary for establishment or running the factory under Explanation (4) of section 4A of the Act, is not correct.
The contention of the learned senior counsel for the applicant is that this court should record a finding as to whether more than 250 workers were working on the relevant date or not. He submits that relevant documents have been annexed along with the revision as annexure 7, etc. The said plea is devoid of substance and cannot be accepted. A finding has to be recorded with regard to the number of workers and investments under the various heads as indicated in the Tribunal's order by the authority concerned, first. The said exercise cannot be undertaken by this court in the revision under section 11 of the U. P. Trade Tax Act. It is neither desirable nor possible. Revision dismissed.
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2008 (8) TMI 845
Issues:
1. Interpretation of tax liability on the sale of undersized coal.
2. Legality of accepting account books despite evidence of tax evasion.
3. Determination of whether undersized coal is a waste product exempt from tax.
Analysis:
1. The case involved a controversy regarding the tax liability on the sale of undersized coal by a dealer engaged in the manufacture and sale of S.S.F. coal and tarcoal. The dealer claimed exemption for the undersized coal as a by-product in the manufacturing process of S.S.F. coal under an eligibility certificate granted under section 4A of the U.P. Trade Tax Act, 1948. The assessing officer and the first appellate authority did not accept this claim, but the Trade Tax Tribunal, in the order under revision, ruled in favor of the dealer.
2. The Department raised questions regarding the legality of accepting the dealer's account books, alleging tax evasion based on evidence from surveys. However, the court concluded that this issue was a matter of fact and did not require further arguments, thereby not impacting the final decision.
3. The key issue in question (a) was whether undersized coal should be considered a waste product or by-product exempt from tax. The Tribunal, in its decision, relied on the manufacturing process of S.S.F. coal, which involved different stages, including the separation of under-sized coal and broken coal after screening and processing. The Tribunal found that the under-sized coal was indeed a by-product in the manufacture of S.S.F. coal, based on factual evidence and material presented.
4. The legal counsel for the Department argued that undersized coal was not a waste product or by-product, as it was sorted out before the manufacturing process of S.S.F. coal began. On the other hand, the dealer's counsel contended that undersized coal was indeed a waste product in the manufacturing process. The court upheld the Tribunal's decision, stating that the finding regarding the nature of undersized coal was a factual determination supported by evidence and not disputed in the revision.
5. Ultimately, the court found no error of law in the Tribunal's orders, as they were based on a factual analysis of the manufacturing process and the nature of undersized coal. The revisions filed by the Department were dismissed, with no costs awarded. The judgment highlighted the importance of factual findings and material evidence in determining tax liability on specific products in the manufacturing process.
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2008 (8) TMI 844
Whether the learned Tribunal was legally justified to exempt the purchase of wheat for a flour mill, which was not a roller flour mill, whereas the Notification No. ST-II-4519/x dated August 29, 1987 provides exemption only for the purchase of wheat to roller flour mill?
Whether the learned Tribunal was legally justified in exempting the purchase of wheat made from general sellers other than F.C.I., whereas Notification No. STII-4519/x dated August 29, 1987 provides exemption on the purchase of wheat from F.C.I?
Whether the learned Tribunal was legally justified to hold that the first appellate authority, viz., Deputy Commissioner (Appeal) has no jurisdiction to consider and adjudicate upon the matters not raised before him by the dealer?
Held that:- The order of the Tribunal is undefensible. The Tribunal was not justified in setting aside the order of the first appellate authority and holding that the first appellate authority had no power to travel beyond the subject-matter of the appeal before it. Revision allowed.
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2008 (8) TMI 843
Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to quash the tax without considering the agreement of compounding scheme?
Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to quash the tax which was imposed on the basis of the mutually agreed upon by the State and the assessee as indicated by the order of the first appellate authority?
Held that:- If, the Tribunal was of the view that the assessment order relates to 18 months, it should have been sustained at least for 12 months. The setting aside of the assessment order as a whole cannot be justified. If there was any confusion or doubt, the matter either should have been remanded to the first appellate authority or a remand report should have been called for from the authority concerned.
So far as the second ground taken by the Tribunal is concerned, the Tribunal has overlooked the conditions for allowing the composition application. The benefit of the compounding scheme was extended to the dealer-opposite party on the terms mentioned in the scheme. One of the terms of the scheme provides that the maximum quantity of coal which could be imported by a brick-kiln owner. Obviously if a brick-kiln owner has imported coal over and above the agreed quantity of coal his liability to pay tax is there.
Thus the order of the Tribunal setting aside the assessment order cannot be justified.The Tribunal will re-examine the matter afresh after giving an opportunity to the dealer and Department as a whole.The revision succeeds and is allowed in part. The order of the Tribunal is set aside and the matter is remanded back to the assessing authority.
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2008 (8) TMI 842
Issues:
- Interpretation of Notification No. 2051 dated September 13, 1990 regarding exemption submission of form C under the Central Sales Tax Act.
- Applicability of Notification No. 1735 dated August 1, 1990 for exemption from Central sales tax on inter-State transactions of pulses.
Analysis:
The High Court of Allahabad heard the revision against the Trade Tax Tribunal's order related to the assessment years 1995-96 (Central). The Department questioned the legality of the Trade Tax Tribunal's decision to exempt the sale of pulses under the Central Sales Tax Act without submission of form C or F, as mandated by Notification No. 2051 dated September 13, 1990. The contention was that the dealer-opposite party should pay tax on the sale of pulses due to non-submission of the required forms. However, the dealer argued that the goods sold in inter-State transactions were tax-paid goods, citing Notification No. 1735 dated August 1, 1990 as the basis for exemption from Central sales tax.
Upon review, the High Court examined the relevant extract from Notification No. 1735, specifically concerning pulses, which stated that if the selling dealer proves that tax on such goods has been paid under the U.P. Sales Tax Act or the prescribed declaration form is furnished, then the dealer is exempt from Central sales tax. The Tribunal had already determined that the pulses sold in the inter-State sale were indeed tax-paid goods in the State of U.P. Consequently, the High Court found no illegality in the Tribunal's decision based on the notifications in question.
Ultimately, the High Court concluded that the revision lacked merit and summarily dismissed it. The judgment reaffirmed the validity of the Tribunal's order in light of the notifications and the factual findings regarding the tax-paid status of the goods sold in inter-State transactions.
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2008 (8) TMI 841
Issues:
1. Interpretation of compounding scheme under U.P. Trade Tax Act, 1948 for cane crushers.
2. Whether "rab sayar" is covered under the compounding scheme.
3. Legal justification for setting aside tax on the sale of "rab sayar".
Analysis:
The High Court judgment dealt with the interpretation of the compounding scheme under the U.P. Trade Tax Act, 1948 for cane crushers. The case revolved around the inclusion of "rab sayar" in the compounding scheme. The dealer, engaged in the business of manufacturing and selling khandsari sugar, molasses, rab, etc., had applied for and been granted the compounding scheme to pay a lump sum amount instead of tax on actual turnover. The dispute arose when the assessing authority did not consider "rab sayar" to be covered under the scheme, leading to a demand for tax. However, the first appellate authority and subsequently the Tribunal held that "rab sayar" should be included in the compounding scheme, setting aside the tax assessment.
The key legal issue raised in the revision was whether "rab sayar" was legally justified to be included in the compounding scheme for cane crushers. The Department argued that the compounding scheme functions as an agreement, and no authority can expand its scope beyond what is specified. The High Court agreed with the Department's stance, emphasizing that none of the lower authorities had found "rab sayar" to be part of the compounding scheme. The Court highlighted Explanation I(b) to section 3D(8) of the Act, which categorizes different goods for tax purposes, indicating that "rab sayar" was not intentionally included in the scheme. The Court concluded that the Tribunal's decision to include "rab sayar" exceeded the scheme's scope and was not supported by the legal provisions.
In the judgment, the Court analyzed the statutory provisions and the purpose of the compounding scheme to determine the scope of items covered under it. The Court emphasized that the specific mention of "rab, rab galavat, and rab salawat" in the notification indicated a deliberate exclusion of "rab sayar" from the scheme. Therefore, the Court held that the Tribunal's decision was erroneous and set aside the order, reinstating the assessment order for tax on the turnover of "rab sayar." The revision was allowed, and no costs were awarded in the matter.
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2008 (8) TMI 840
Whether, on the facts and in the circumstances of the case, has not the Appellate Tribunal committed error in estimating the taxable turnover by incorporating the value of imported raw nuts for the purpose of arriving at the alleged suppression?
Has not the appellate Tribunal failed to deal with the specific contention raised by the petitioner in this regard vide paras 4, 5 and 6 of the grounds of appeal?
Is not the addition of two times retained by the Appellate Tribunal excessive and arbitrary in view of the fact that 164 bags of imported raw nuts were taken for quantifying suppression and the period of two inspection covers the whole year?
Held that:- In the instant case, there is a rational basis for the assessing authority to come to the conclusion that there was shortage of the imported raw cashewnuts. This conclusion is based on the shop inspection report made by the Intelligence Officer of the Department, which offence the assessee has compounded departmentally. This shortage should have been properly explained by the assessee. Merely saying that the said imported raw cashewnuts had been processed, roasted and thereafter sold in the market cannot be accepted either by the assessing authority or by any reasonable person unless the same is supported by documentary evidence. Mere assertion will not help the assessee in any manner whatsoever.
However, the first appellate authority as well as the Tribunal, being of the opinion, that the addition made by the assessing authority is on a higher side have come to the aid of the assessee by reducing the addition made by the assessing authority from four times to two times. This is once again on estimation basis. The estimation basis so made by the authorities under the Act can be interfered by this court only if such estimations are either perverse or arbitrary. We do not see any such arbitrariness in the orders passed either by the first appellate authority or by the Tribunal. Sales tax revision rejected - against the assessee.
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2008 (8) TMI 839
Interest on refund of sales tax - Held that:- We hardly find any justification for invoking the high prerogative jurisdiction. As soon as a proper application for refund was made by the petitioner, which was received by the authority on August 20, 2007, the refund has been made to the petitioner on September 6, 2007. If any delay occurred in payment of refund, it was, firstly because, no application for refund was made as soon as amount became refundable and then the application was made in form XX initially was incomplete and suffered from diverse deficiencies. W.P.dismissed.
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2008 (8) TMI 838
Whether the sportswears are taxable as sports goods or as ready-made garments?
Held that:- Even if the wears manufactured by a dealer is used by sportsmen and so far as generally are kept and sold by dealers in sports goods, yet they are garments which possibly cannot be disputed. There being no specific entry of sports wear, the commodities in question have been rightly taxed treating them as garments. The word "garment" is a term of wide sweep and will include all kinds of garments, unless excluded otherwise.
The above view finds further support from the fact that the entry relating to the goods for indoor or outdoor games or sports is exclusive and inclusive as well. It excludes items which are included in any other notification issued under the Act and it includes rubber bladders of various kinds of balls, toys, swing, jhoola, medal, cups, trophies, badges and whistles. Both exclusion and inclusion have been provided in the said entry relating to the goods for indoor games or sports. Nothing can be added or subtracted except the one as provided for. If the interpretation as put by the learned counsel for the dealer is accepted there would have no reason to include rubber bladders of various kinds of balls, toys, swing, jhoola, medal, cups, trophies, badges and whistles. These items are connected with games and sports but they themselves are not goods for indoor and outdoor sports or games and that is the reason they have been included by making express provision for them. Revision dismissed.
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2008 (8) TMI 837
Issues:
Tax liability of mefron gas at 10% or 15% under U.P. Trade Tax Act, 1948.
Analysis:
The revision before the Allahabad High Court challenged an order passed by the Trade Tax Tribunal regarding the tax liability of mefron gas for the assessment year 1995-96. The dealer admitted a tax liability at 10%, but the assessing officer later claimed it should be taxed at 15%. The first appellate authority ruled in favor of the dealer, considering mefron gas as chloro-flouro hydrocarbon used in refrigeration and air-conditioners, thus liable to be taxed as a chemical. The Tribunal upheld this decision, stating that mefron gas falls under the category of chemicals and should be taxed at 10%. The Tribunal rejected the appeal, emphasizing that the assessing officer's finding that mefron gas should be taxed at 15% was not legally sound. The High Court endorsed the Tribunal's decision, noting that mefron gas is indeed a chloro-flouro hydrocarbon and should be taxed at 10% as a chemical, not 15% as an accessory of refrigeration and air-conditioners. The Court also highlighted that a disputed question of fact or debatable point of law cannot be raised in a proceeding under section 22 of the Act, citing a previous judgment.
In conclusion, the High Court dismissed the revision, affirming the Tribunal's decision to tax mefron gas at 10% as a chemical under the U.P. Trade Tax Act, 1948. The Court found no illegality or perversity in the Tribunal's ruling and emphasized the legal classification of mefron gas as chloro-flouro hydrocarbon falling under the category of chemicals for taxation purposes.
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2008 (8) TMI 836
Whether the dealer is entitled to avail of the exemption on the basis of the turnover of sale of goods in an assessment year minus base production or the sale of goods after achieving the base production.
Held that:- The aforestated point is no more res integra and has been set at rest by the apex court in Commissioner of Trade Tax, U.P., Lucknow v. Modipan Fibres Company [2006 (8) TMI 306 - SUPREME COURT OF INDIA].The apex court took the view that under clause 6(b) of the notification, the facility of exemption can be availed of on the turnover of goods in "any assessment year" in excess of the quantity, referred to in sub-clause (a) of clause (6). In the result, the revision succeeds, and is allowed.The issue involved herein stands concluded in favour of the dealerapplicant and against the Department
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2008 (8) TMI 835
Issues: Interpretation of exemption under section 4A of U.P. Trade Tax Act, 1948 for goods manufactured during exemption period but sold after its expiry.
Analysis:
The judgment of the High Court of Allahabad pertains to a case involving the interpretation of exemption under section 4A of the U.P. Trade Tax Act, 1948. The dealer in question was engaged in manufacturing and selling electrical goods and was classified as a "new unit" eligible for exemption on turnover of sale up to March 31, 1990, as per Notification No. 7558 dated December 26, 1985. In the assessment for the year 1990-91, the dealer claimed exemption for goods manufactured before March 31, 1990, but sold after that date, which was disputed by the tax authorities. The Tribunal, however, ruled in favor of the dealer, allowing exemption on goods sold after the expiry of the exemption period.
The primary issue raised in the revision before the High Court was whether goods manufactured during the exemption period but sold after its expiry are still eligible for exemption from tax. Section 4A of the Act provides for exemption on turnover of sales during a specified period, indicating that the exemption applies to goods manufactured and sold within that period. The notification relevant to the case specified a period of exemption based on the turnover of sales, reflecting the legislative intent to grant exemption only to goods manufactured and sold during the exemption period.
The High Court, after considering the arguments presented, held that the Tribunal's decision was legally incorrect. It emphasized that the exemption under section 4A is applicable to goods manufactured and sold within the exemption period, not to those sold after the period's expiry. Consequently, the High Court allowed the revision, set aside the Tribunal's order, and dismissed the Second Appeal filed by the dealer. The judgment concluded with no order as to costs, affirming that goods sold after the exemption period are not entitled to tax exemption, in line with the legislative provisions and the intent behind the exemption notification.
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2008 (8) TMI 834
Whether the sale of packing material can be said to be of goods connected with manufacture of soap?
Held that:- So far as the dealer is concerned, it fulfils the conditions as prescribed in column 3 of the Notification No. 7037. None of the authorities below has found that the dealer has failed to furnish the requisite form in the requisite manner. This being so, the dealer-applicant is entitled to get exemption from tax on the sale of packing paper in question. It was open to the Department to proceed against the purchasing dealer if the purchasing dealer has wrongly utilised the facility which was not otherwise available to it under the aforestated Notification No. 7037, dated January 31, 1985.
In any view of the matter, thus, the levy of tax on the sale of packing paper on the amount of ₹ 2,72,326 is not taxable at the hands of the applicant.
It is held that the Tribunal was not legally justified in sustaining the order of the assessing authority in disallowing the claim of exemption on the amount of ₹ 3,72,326 and in dismissing the second appeal filed by the dealer before it.
In the result the revision succeeds and is allowed. The order under revision dated May 30, 1996 is hereby set aside and the Second Appeal No. 261 of 1994 for the assessment year 1989-90 filed before the Tribunal stands allowed.
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2008 (8) TMI 833
Issues:
Challenging best judgment assessment order for three assessment years due to rejection of account books by authorities.
Analysis:
The revisions were filed against a common order by the Trade Tax Tribunal dismissing three second appeals for the assessment years 1987-88, 1988-89, and 1989-90. The applicant, a registered dealer under the U.P. Trade Tax Act, imported cement taxable at the point of sale in the relevant years. The authorities rejected the dealer's account books and conducted best judgment assessments. The applicant argued that as cement was a controlled commodity, it was not possible to sell it outside the account books. The Department contended that the dealer failed to produce relevant records for verification, justifying the best judgment assessment.
The Court noted that a licensee under the U.P. Cement Control Order must maintain statutory records. Despite opportunities, the dealer failed to produce the required records for verification. In one instance, the dealer promised to submit a verified stock register but failed to do so later, claiming the original was lost and producing a duplicate without explanation. Additionally, other essential documents like purchase vouchers were not provided. As the dealer did not comply with record-keeping requirements, the argument that selling cement outside accounts was not feasible due to control regulations was rejected. The authorities' findings were based on factual analysis of the evidence, and the Tribunal's decision was upheld.
Referring to legal precedents, the Court highlighted its limited jurisdiction under the U.P. Trade Tax Act, restricted to legal questions. Considering the lack of merit in the revision, the Court dismissed it without imposing costs.
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2008 (8) TMI 832
Issues:
1. Validity of setting aside an order under section 10B of the U.P. Trade Tax Act by the Trade Tax Tribunal despite relevant information being available at the time of assessment.
Analysis:
The High Court considered a revision against the Trade Tax Tribunal's order related to the assessment year 1991-92. The dealer, involved in the business of raw hide and skin, disclosed no sales or purchases during the assessment. The assessing authority accepted this and passed the assessment order summarily. However, the Deputy Commissioner revised this order under section 10B of the U.P. Trade Tax Act upon finding evidence that the dealer was transporting raw hide for sale outside the state. The Tribunal set aside the revision order, questioning the consideration of relevant information during the original assessment. The main legal question raised was whether the Tribunal was justified in setting aside the order under section 10B despite the assessing authority possibly neglecting crucial information available at the time of assessment.
The Court noted the absence of any discussion in the summary assessment order and the presence of evidence suggesting the dealer's involvement in raw hide sales. The revising authority highlighted information from January 15, 1992, indicating the dealer's activities outside the state. The Court emphasized that non-consideration of available information amounts to impropriety under section 10B, allowing revision based on illegality or impropriety. The Tribunal's failure to determine if the assessing authority had the information when passing the original order led to the order's invalidation. The Court stressed that the Tribunal should have assessed whether the information was accessible to the assessing authority during the initial assessment, emphasizing the broad scope of section 10B in allowing revisions for impropriety.
Ultimately, the High Court allowed the revision, setting aside the Tribunal's order and remanding the matter for rehearing. The Court directed the Tribunal to reconsider the appeal considering the observations made, ensuring compliance with the law. No costs were awarded in this judgment.
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2008 (8) TMI 831
Whether looking glass is taxable as unclassified item under the U.P. Trade Tax Act?
Held that:- Glass mirror is taxable as toilet requisite. The learned counsel for the dealer could not show anything to the contrary. It may be added here that toilet requisites are also taxable at 15 per cent, the rate which was levied by the assessing officer on the turnover of imported glass mirror.
Thus the authorities below were not justified in taxing the glass-mirror as unclassified item. It is also held that glass mirror is taxable as toilet requisite. The order of the Tribunal is therefore, set aside.
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2008 (8) TMI 830
Whether rice husk and paddy husk are different commodities? - Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to hold paddy husk as an unclassified item despite it has made taxable under Government notification issued in this behalf?
Held that:- The turnover of rice husk and paddy husk as determined by the first appellate authority was justified and the Tribunal was not justified in treating the entire purchase as of rice husk and granting the exemption on the total purchase of ₹ 69,50,000. The dealer is liable to pay purchase tax on the turnover of rice husk amounting to ₹ 29,50,000 as was held by the first appellate authority.
No illegality in the order of the Tribunal holding that no tax is payable under section 3F of the Act.
The revision succeeds and is allowed in part and it is held that the Tribunal was not justified to knock of the tax on the purchase of rice husk amounting to ₹ 29,50,000. The rest of the order of the Tribunal calls for no interference. The revision succeeds and is allowed in part.
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2008 (8) TMI 829
Notice for assessment challenged - Held that:- As after notification dated July 4, 2008 when the jurisdiction of Barabanki Circle was transferred from the Joint Commissioner (Executive), Commercial Taxes, Lucknow Range A, Lucknow to the Joint Commissioner (Executive), Commercial Taxes, Faizabad Range B, Faizabad and thereafter by the notification dated July 7, 2008 the jurisdiction of Range B, Faizabad was given to the Joint Commissioner (Executive) Faizabad Range A, Faizabad, the Joint Commissioner (Executive), Commercial Taxes, Faizabad Range B, Faizabad was having no jurisdiction to issue notice under section 10B of the Act on July 23, 2008. The notices issued on July 23, 2008 for the assessment years 2003-04 and 2004-05 are legally not sustainable.
In the result, the writ petition succeeds and is hereby partly allowed. The impugned notices dated July 23, 2008, the copies of which have been annexed as annexure 4 to the writ petition, are hereby quashed. It will be open for the respondent No. 3 to proceed on the basis of the earlier notices dated June 17, 2008. The petitioner shall be entitled to file objection against the notices dated June 17, 2008 issued by the Joint Commissioner (Executive), Commercial Taxes, Lucknow Range A, Lucknow within two weeks.
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2008 (8) TMI 828
Whether the Trade Tax Tribunal was legally justified to hold that the inward freight paid for the purchase of coal is not part of the turnover?
Whether the Trade Tax Tribunal was legally justified to allow the adjustment and refund of amount deposited at check-post for composition of offence on contravention of the provisions of section 28A of the U.P. Trade Tax Act, 1948 as compounding amount?
Whether the Trade Tax Tribunal was legally justified to determine the selling rate of coal lower than the declared rate by the dealer?
Held that:- The Tribunal was not right in holding that freight will not form part of turnover, as it is case of sale by principal to principal.
So far as question Nos. 1 and 3 are concerned, the order of the Tribunal is indefensible and the same is hereby set aside. The inward freight, on the facts of the present case, shall form part of the turnover. The matter is remanded back to the Tribunal to consider the nature of deposit made by the dealer at the check-post while importing coal in the State of U.P. in the light of the observations made above in connection with question No. 2 only.
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