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TMI Blog2010 (11) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Compounding Scheme floated by the State Government under section 7D of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, "the Act") and the meaning thereof though with respect to the different assessment years. In Writ Petition No. 8770 (MB) of 2009, the challenge has been made to the assessment order dated March 18, 2009 for the assessment years 2005-06 and 2006-07 and also the order passed in appeal dated July 16, 2009, whereas in Writ Petition No. 4346 (MB) of 2010, the assessment year is 2007-08 and the order of the assessing authority dated March 29, 2010 has been challenged. At the very outset, the learned counsel for the petitioner submitted that the appeal filed against the assessment orders for the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which U.P. VATAct has come into force, viz., January 1, 2008, the dealers who are engaged in manufacturing atta, maida and sooji, may take the benefit of compounding scheme for the purposes of payment of trade tax in the manner given in the scheme itself, as per chart given below: Length of roller body Pisai/production by roller mills against installed capacity (in %) Compounding tax amount per roller body (in Rs.) Up to 40 inch Up to 100 per cent Rs. 2,92,970 Up to 40 inch More than 100 per cent and up to 120 per cent Rs. 3,90,625 More than 40 inch Up to 100 per cent Rs. 3,51,563 More than 40 inch More than 100 per cent and up to 120 per cent Rs. 4,49,220 The above chart gave the length of roller body, its installed capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid scheme applied for taking the benefit of the compounding scheme and in his application, which was supported by an affidavit, he mentioned that he was running four atta chakkees during the financial year. According to him, the installed capacity of these four atta chakkees is equivalent to one roller body. The assessing officer did not agree with the contention of the petitioner that it was the actual quantity of production as against the installed capacity, which would be relevant for taking the benefit of compounding scheme and held that the petitioner had claimed that he was operating only four atta chakkees, whereas he was having installed capacity of six roller bodies. After recording such a finding the assessing officer observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appropriate decision. In the case of Vora Electric Service, Kanpur v. State of U.P. reported in [2005] UPTC 977, a Division Bench of this court took a view that "section 7D of the Act starts with a non obstante clause, i.e., 'notwithstanding anything contained in the Act'. Thus, it has a overriding effect over the provision of the Act. A perusal of section shows that it contemplates payment by agreement in lumpsum. Once the Department agrees to accept the tax in the name of compounding money in lumpsum, in lieu of tax payable, it displaces the regular assessment proceeding. Clause 15 of the electrical compounding scheme, which has been annexed as CA-4 to the counter-affidavit states that in case if it is found that in the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly returns of the turnover. A dealer has to pay a fixed sum of money as tax as agreed upon by the Department. It is the choice of a dealer to opt for compounded payment of tax. If the said choice is in accordance with the scheme and is ultimately accepted by the authority concerned, it becomes an agreed amount of tax. The Department as well as the dealer both are bound by the said agreement. The necessary corollary of this is that a dealer whose application for compounding has been accepted cannot turn around and urge that he is not liable to pay any tax for any reason, such as closure of business or low turnover, etc." Learned counsel for the petitioner submits that the case of Sri Durga Brick Field [1991] UPTC 510, was a case where it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons aforesaid, we are of the view that the assessment orders passed in both the writ petitions as well as the appellate order cannot be sustained, which are hereby set aside.
The matter is remitted to the assessing officer, who shall forward it to the Joint Commissioner (Executive), who will make an enquiry in the matter and shall submit his report to the Commissioner within a maximum period of one month from the date of receipt of a certified of this order. The Commissioner shall pass appropriate orders, after giving adequate opportunity to the parties concerned within next one month.
This direction is issued only for the financial years of 2005-06, 2006-07 and 2007-2008.
The writ petitions stand allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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