New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (5) TMI 911 - ALLAHABAD HIGH COURT

2016 (5) TMI 911 - ALLAHABAD HIGH COURT - TMI - Imposition of VAT on the dyes, chemicals etc. - treating them to be deemed sales - used in the dyeing, colouring and printing of cloth for various traders - Held that:- it was no longer open to the assessing authorities to take a different stand as given by the State Government, which has also been affirmed by this Court. The State Government has clearly given a decision that dyes and chemicals used in the processing of the cloth loose their identi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n of subjecting it to tax under Vat Act does not arise. Consequently, omission of additional excise duty as contended by the learned Special Counsel for the State has no relevance to the issue. - Decided in favour of petitioner - Civil Misc.Writ Petition No. 273 of 2014, Civil Misc. Writ Petition No. 59 of 2015, Civil Misc.Writ Petition No. 60 of 2015, Civil Misc.Writ Petition No. 403 of 2014, Civil Misc.Writ Petition No. 161 of 2016, Civil Misc.Writ Petition No. 162 of 2016 - Dated:- 18-5-2016 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2. The petitioner is a Private Limited Company and is engaged in the process of dyeing, colouring and printing of cloth on job-work basis for various traders within and outside the State of U.P. The controversy regarding the taxability of dyes and chemicals used in colouring, bleaching, dyeing, printing of cloth was engaging the attention of the tax authorities for quite some time. The assessing authority was levying the tax on the dyes and chemicals by treating them to be a deemed sale. Accordi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which are being used in the processing of cloths and which do not loose their identity even after use would be exigible to tax under Section 3-F of the U.P.Trade Tax Act. Based on this circular, a large number of assessing authorities initiated the assessment proceedings against various dealers including the petitioners. 3. In this regard, representations were made by some traders as well as by the Northern India Textile Processors Association, in which the petitioners are members before the Sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ultimate purchaser. 4. In spite of an authoritative pronouncement by the State Government, the assessing authorities ignored the decision of the State Government and continued to impose tax on various traders treating the use of dyes and chemicals on the processing of cloth as a deemed sale. 5. The matter eventually was challenged in various writ petitions. The leading writ petition was Writ Petition No. 1683 of 2007, M/s Superfine Processors Pvt. Ltd. Vs. State of U.P. and others, which was ul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xtile Processors Association and had come to the conclusion that dyes and chemical used in the bleaching, colouring and dyeing etc. on gray cloth are consumed in the process and not transferred. In our considered opinion, the said finding is binding upon the assessing authorities as the representation made by the Northern India Textile Processors Association was also decided by the said order. The stand taken by the respondents that the State Government had not decided any other representation e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessment year 2004-05 had directed the petitioner to pay tax on the dyes and chemicals used by it. The petitioner challenged the assessment order by filing Writ Petition No. 718 of 2011, Chandok Textiles Enterprises Pvt. Ltd. Vs. State of U.P. and others. The said writ petition was decided in a bunch of writ petitions. The leading writ petition being Writ Petition No. 1020 of 2009, M/s Style Dyers Vs. State of U.P. and others, was decided on 15.01.2013. The writ Court following the decision of S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

als when there was no change in the processing of the cloth for the assessment year 2010-11. The assessing authority by an order dated 20.03.2014 for the assessment year 2010-11 under U.P. as well as Central again imposed tax on dyes and chemicals treating it to be a deemed sale. Petitioner, being aggrieved by the aforesaid two orders, has filed the present writ petition. Similar prayer and contention has been made by the other petitioners. 8. We have heard Sri Rahul Agrawal, the learned counsel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le, the Department was justified in distinguishing the decision of this High Court. 9. Sri C.B.Tripathi, the learned Special Counsel for the State has further relied upon a decision of a learned Single Judge of this Court in Commissioner, Trade Tax, U.P.Lucknow Vs. M/s Aristo Printers Pvt. Ltd., 2010 NTN 355, in which it was held that the printing work is a works contract and is exigible to tax. The learned Special Counsel for the State has further submitted that since additional excise duty was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unsel, therefore, contended that since additional excise duty was no longer payable, tax is now payable on cotton fabric under the VAT Act. 10. Having heard the learned counsel for the parties, we are of the opinion that the impugned assessment orders are contrary to the decision of the State Government dated 07.10.2005. The State Government gave a categorical finding that dyes and chemicals, which are consumed in the process of dyeing, colouring, bleaching do not get transferred to the persons, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re binding on the authorities. The Supreme Court held : "Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this court or the High Court. So far as the clarifications/circulars .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

so held that the order of the State Government dated 07.10.2005 was binding upon the assessing authorities. We are, therefore, of the considered opinion that it was no longer open to the assessing authorities to take a different stand as given by the State Government, which has also been affirmed by this Court. The finding given by the State Government in its order dated 07.10.2005 and by the Division Bench of this Court dated 10.01.2013 in the case of Superfine Processors (Supra) and in the cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecision cited by the respondents in the case of M/s Aristo Printers (Supra) of a learned Single Judge is distinguishable. In that case, a specific finding has been given that the assessee of that case did not contend that the chemicals used by him in the process of the cloth were consumables and that it had not passed on to the customers. In view of that finding, the learned Single Judge held that the ink and chemicals used in the process had passed on to the customers and consequently, were exi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version