TMI Blog2008 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the trade tax which was illegally realised and collected by the opposite parties on the purchase of the molasses through Sugar Mills of the State of U.P. subsequent to 10.3.2003. - Writ Petition No.3911 (MB) of 2003. - - - Dated:- 24-10-2008 - U. K. Dhaon And Dr. Satish Chandra, JJ. JUDGMENT (Delivered by Hon'ble U.K. Dhaon, J.) Heard Sri Prashant Chandra, Senior Advocate, assisted by Sri Gaurav Mehrotra, learned counsel for the petitioner and Sri Jaideep Narayan Mathur, learned Additional Advocate General assisted by Sri H.P. Srivastava, learned Additional Chief Standing Counsel for the opposite parties. The brief facts of the case in a nut shell are as under: The petitioner which is a Private Limited Company has alleged that its unit at UPSIDC, Industrial Area, Sandila District Hardoi, is manufacturing yeast from molasses, which is raw material for the manufacture of yeast. The molasses is purchased from various sugar factories situated in the State of U.P. The petitioner has further alleged that the State of U.P. enacted the U.P. Sheera Niyantran Adhiniyam, 1964 (hereinafter referred to as Adhiniyam ). Sub-section 4 of Section 7-A of the Adhiniyam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of the molasses from the Sugar Mills, the opposite parties cannot realise the Trade Tax under the provisions of the U.P. Trade Tax Act, 1948 on the same purchase of molasses. He further submitted that Hon'ble the Supreme Court in the case of Commissioner of Central Excise, Meerut v. Kisan Sahkari Chinni Mills Ltd., reported in (2001) 6 SCC 697 has held that administrative charges levied by the State of U.P. under the provisions of the U.P. Sheera Niyantran Adhiniyam, 1964, on the sale and purchase of molasses is a tax. Learned counsel for the petitioner has also relied upon the decision of Hon'ble the Supreme Court in the case of Commissioner of Central Excise, Lucknow, U.P. v. Chhata Sugar Co. Ltd., reported in (2004) 3 SCC 466. He further submitted that Hon'ble Supreme Court in the case of Gupta Modern Breweries v. State of J K and others, reported in (2007) 6 SCC 317 has held that the imposition of administrative charges is a tax and not a fee. He further submitted that the Special enactment will prevail over general enactment and as the U.P. Trade Tax Act is a General Act relevant to the levy of tax on sale and purchase of goods in the State of U.P. it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution thereof. He fairly conceded that in view of the law declared by Hon'ble the Supreme Court in the cases of Commissioner of Central Excise, Meerut v. Kisan Sahkari Chinni Mills Ltd.,(Supra) and Commissioner of Central Excise, Lucknow, U.P. v. Chhata Sugar Co. Ltd.,(Supra) administrative charges is a tax and not fee. He also fairly conceded that in view of the law declared by Hon'ble the Supreme Court in the cases of Gobind Sugar Mills Ltd. v. State of Bihar and others,(Supra) and Belsund Sugar Co.Ltd., v. State of Bihar and others, Special enactment will prevail over general enactment. He has also conceded that the Special Leave Petition filed against the judgment and order passed in the case of M/s.D.S.M. Group of Industries and another (Supra) has been dismissed by Hon'ble the Supreme Court. He further submitted that the petitioner is not entitled for the refund of the trade tax which he has paid to the Sugar Mills while purchasing molasses for the manufacture of yeast. He further submitted that the petitioner is paying the trade tax without protest and they never raised any grievance before the departmental authorities with respect to the relief claimed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is rejected in whole or in part, he shall record reasons therefor. (4) The occupier of a sugar factory shall be liable to pay to the State Government in the manner prescribed, administrative charges at such rate, not exceeding five rupees per quintal as the State Government from time to time notify, on the molasses sold or supplied by him. (5) The occupier shall be entitled to receive from the person to whom the molasses is sold or supplied an amount equivalent to the amount of such administrative charges, in addition to the price of molasses. The petitioner has alleged that the State of U.P. is levying and collecting administrative charges which is tax on the molasses through the Sugar Factories under the U.P. Sheera Niyantran Adhiniyam, 1964 and also collecting trade tax under the U.P. Trade Tax Act, thus subjecting the same purchase of molasses by the petitioner to tax twice under two different Acts. The petitioner contended that the U.P. Sheera Niyantran Adhiniyam, 1964, being a Special enactment overrides the provisions of the Trade Tax Act with reference to levy of administrative charges on molasses as the latter is a general Act providing for collection of taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable under the U.P. Trade Tax Act, 1948. It was also held that the U.P. Sheera Niyantran Adhiniyam, 1964, is a Special Act, which will prevail over general Act of the State of U.P. which operate in the same field. It is also admitted case of the parties that the Special Leave Petition (C ) No.8845 of 2002 preferred by the State of U.P. against the judgment and order dated 6.2.2002 in the case of M/s.D.S.M. Group of Industries and another v. Chairman, Trade Tax Tribunal, U.P. and others (Supra), was dismissed by Hon'ble the Supreme Court on 10.3.2003. The instant writ petition was filed by the petitioner in July 2003. Once it has been held that molasses is not taxable under the U.P. Trade Tax Act, 1948 as the U.P. Sheera Niyantran Adhiniyam, 1964, which is a Special Act will prevail over U.P. Trade Tax Act, 1948, the trade tax levied and collected by the opposite parties from the petitioner on the purchase of molasses through Sugar Mills was illegal and unjust. The Trade Tax paid by the petitioner on the purchase of molasses during the pendency of the writ petition was under protest as the realisation of the tax was against the law declared by Hon'ble Supreme Court. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Trade Tax Act. The action of the opposite parties in collecting and realising the trade tax from the petitioner on the purchase of molasses from various Sugar Mills in the State of U.P. subsequent to the dismissal of Special Leave Petition (C) No.8845 of 2002, State of U.P. and others v. D.S.M. Group of Industries another on 10.3.2003 by Hon'ble the Supreme Court is arbitrary, illegal and unjust. We are of the view that the petitioner is entitled for the refund of the trade tax which was illegally realised and collected by the opposite parties on the purchase of the molasses through Sugar Mills of the State of U.P. subsequent to 10.3.2003. In the result, the writ petition succeeds and is partly allowed. The opposite parties on the basis of the Notification dated 7.9.1981 issued under the provisions of the U.P. Sales Tax Act, 1948 now U.P. Trade Tax Act read with Section 21 of the U.P. General Clauses Act, 1904 shall not realise any trade tax from the petitioner on the purchase of molasses. The opposite parties shall refund the amount of trade tax which was realised by them through the Sugar Mills subsequent to 10.03.2003. The petitioners shall submit the details o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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