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Bharti Airtel Ltd. Versus State of U.P. and others

2015 (11) TMI 160 - ALLAHABAD HIGH COURT

Levy 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 .....

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ad 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. W .....

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vil Misc. Writ Petition (Tax) No. 777 of 2015 - Dated:- 27-10-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani, JJ. ORDER ( Per Tarun Agarwala, J. ) 1. The background leading to the filing of the writ petition is that the petitioner is a licensee under provisions of the Indian Telegraph Act and has been licensed by the Government of India for establishing, maintaining and operating telecom services in the State of U.P. For the purposes of establishing the telecom infrast .....

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the Act against which the petitioner preferred a Special Leave Petition in which an interim order was passed by the Supreme Court staying the operation of the judgment of the High Court subject to the condition that the petitioner would deposit 50% of the accrued tax liability/arrears under the U.P. Act of 2007 and furnish bank guarantee for the balance amount within four weeks. The petitioner was also required to deposit 50% of the tax liability/arrears including interest and penalty and furni .....

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02, 2003-04, 2004-05, 2005-06 and 2006-07 were passed in respect of the tax on entry of goods in the years 2007, 2008 and 2009. Reassessment orders were passed on 14.1.2013. These assessment and re-assessment orders were set aside by the Tribunal and the matter was remitted for re-assessment on two occasions in the years 2008 and 2014. Fresh assessment orders were passed on 10.2.2015 determining tax liability on the goods imported by the petitioner treating it as "machinery". Against t .....

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Meerut, respondent No.3, issued a notice dated 4.7.2015 directing the petitioner to pay an amount of ₹ 26,93,90,392/- towards interest. The petitioner moved a representation before the Deputy Commissioner praying that the details of computation of interest be provided. This representation remained pending and, on the other hand, the respondents proceeded to attach the bank account of the petitioner. This action of the respondent led the petitioner to file Writ Tax No.631 of 2015, which wa .....

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rejected the petitioner's representation and further directed the petitioner to deposit a sum of ₹ 49,63,69,454/- towards interest as per the provision of Section 8(1) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the "Act") read with Section 33 (1)(2) of the U.P. Value Added Tax Act (hereinafter referred to as the " U.P. VAT Act"). The petitioner, being aggrieved by the said order, has filed the present writ petition contending that quite apart from .....

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ri C.B. Tripathi, the learned Special Counsel for the State. 8. While entertaining the writ petition, we directed the authority to file a short counter affidavit providing the calculation of interest. A short counter affidavit has been filed enclosing the chart by which calculation has been made, which is extracted here under:- Sl. No. Year Date of order Tax imposed Tax Deposited Balance tax due Balance amount of interest due 1 2001-2002 10-02-2015 16000000-00 11354608-00 4645392-00 33373100-00 .....

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to what would be the amount of interest payable by the petitioner. According to the petitioner, the interest payable, if any, has to be determined under the provisions of Section 8(1B) of the U.P. Trade Tax Act, 1948 read with Section 33(4) of the U.P. VAT Act. According to the Department interest has to be determined under Section 8(1) of the Tax Act read with Section 33(2) of the U.P. VAT Act. For facility, the provision of Section 8(1) and 8(1B) of the Act read with Section 33(1), 33(2) and .....

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h amount whichever is later, and nothing contained in Section 7 shall prevent or have the effect of postponing the liability to pass such interest. Explanation.- For the purpose of this sub-section, the tax admittedly payable means the tax which is payable under this Act on the turnover of sales, or, as the case may be, the turnover of purchases, or of both as disclosed in the accounts maintained by the dealer, or admitted by him in any return or proceeding under this Act, whichever is greater, .....

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on of the period specified in such notice shall become due and be payable." Section 33(1), 33(2) & 33(4) of the UP VAT Act "33. (1) Any amount of tax or fee or penalty or any other amount, which a dealer or other person is liable to pay under this Act, shall be deposited by the dealer or such other person in the prescribed manner. (2) Subject to provisions of section 42, the tax admittedly payable, shall be deposited within the time prescribed, failing which simple interest at the .....

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ions of section 15. (3) ... (4) If the tax {other than the tax admittedly payable to which sub-section (2) applies} assessed, re-assessed or enhanced by any authority or court remains unpaid after expiration of the period specified in the notice of assessment and demand, simple interest at the rate of percent per mensum on the unpaid amount calculated from the date of such expiration shall become due and be payable:" 10. In Pepsico India Holdings Limited. Vs. Commissioner of Trade Tax, Luck .....

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in the definition of the term "tax admittedly payable" as defined in the explanation to Section 8(1) of the Act and, in case, the tax has not been paid, then the same becomes payable along with interest as mentioned in Section 8(1) of the Act. The Supreme Court further held that the provision of Section 8(1B) of the Act would only come into operation if the case was not covered under Section 8(1) of the Act. 11. In Commissioner of Sales Tax vs. Satna Cement Works, Manu/UP/U0683/2005, t .....

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oration., 2002(127)STC 258, the Supreme Court on a plain interpretation of provision of Section 8(1) of the Act held that the assessee was required to deposit the tax that was admittedly payable by it. The Supreme Court held that the words "tax admittedly payable" means the tax payable under the Act on the assessees turnover as disclosed in its accounts or admitted by it in its return or other proceedings under the Act. 13. In the light of the aforesaid, we find from a perusal of the a .....

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