TMI Blog2022 (8) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... area. Only then they may be brought into a different local area which would lead to levy of entry tax. Therefore, goods consumed, used and sold within the local area of their origin or manufacture would not attract levy of entry tax. This necessary exclusion is incorporated in the statute itself, under Section 4(1) of the Act. The second exclusion that must always exist is with respect to goods that may be taken out of the local area where they are produced, to a local area outside the State of U.P. whether by way of export to another place within the country or in the course of export sale outside the country. That exclusion must exist as it is inherent in the Constitutional scheme - By using the phrase intends to bring into the local area , the legislature had made it plain that the provision of Section 12 of the Act would apply only if the intention of the purchaser is to take the goods to a local area as defined under Section 2(d) of the Act. Those areas would be such as may fall within the territory of State of U.P. only and not outside it. In the facts of the present case, the assessee relied on documents such as invoice, transportation documents and payments receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27.1.2022 in Second Appeal No. 753 of 2017 for A.Y. 2012-13 (Entry Tax). By that order, the Tribunal has dismissed the revenue's appeal and confirmed the first appeal order deleting the demand of entry tax created under Section 12 of Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as the Act), on sale of sugar manufactured by the assessee. 5. The revision has been pressed on the following questions of law: 1. Whether on the facts and circumstances of the case when it is found that delivery of sugar has been given at the factory gate and thereafter the purchaser was at liberty to transport the goods at his own choice, it is local sale made by the opposite party/dealer on which the entry tax was chargeable? 2. Whether on the facts and circumstances of the case the delivery of sugar outside the State of U.P. or the export of the same outside the State not established then also the tribunal as well as Ist. Appellate Authority were justified in deleting the amount of entry tax levied by the assessing authority? 6. Having heard learned counsel for the parties and having perused the record, in the first place, it may be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such refund shall be entertained after the expiry of six months from the date of the loss or destruction of the goods. (5) Provisions regarding imposition of penalty in respect of amount of tax deducted under section 34 of the Uttar Pradesh Value Added Tax Act, 2008 and provision regarding payablity of interest 'under sub-section (2) of section 33 of the said Act shall mutatis mutandis apply to amounts collected by manufacturers from purchasers under this section. (6) The amount of tax deposited under this section shall be deemed to have been deposited for and on behalf of the dealer from whom such tax has been received. The manufacturer shall mention the amount of such tax in the tax invoice or sale invoice, as the case may be, issued to the purchasing dealer. It shall be deemed to be the proof for deposit of tax unless the tax invoice or sale invoice, as the case may be, is found forged or bogus or fake or not validly issued or obtained fraudulently. 8. The First Appeal Authority and the Tribunal have sustained the challenge raised by the assessee to applicability of Section 12 of the Act on the reasoning, though the sale may have been completed at the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the State of U.P. whether by way of export to another place within the country or in the course of export sale outside the country. That exclusion must exist as it is inherent in the Constitutional scheme. A State legislature may impose tax only within its territory. This intention is also reflected from the language of Section 12(1) of the Act itself. It only provides for pre-deposit of Entry Tax by the purchaser with the manufacturer, if he intends to take the purchased goods to another local area inside the State. By using the phrase intends to bring into the local area , the legislature had made it plain that the provision of Section 12 of the Act would apply only if the intention of the purchaser is to take the goods to a local area as defined under Section 2(d) of the Act. Those areas would be such as may fall within the territory of State of U.P. only and not outside it. 13. Second, that exclusion has to be applied on the 'intention' and not on satisfaction of the test required to be satisfied to establish export or inter-state sale. Therefore, even if a local (inter-state) sale is completed within a local area as may not satisfy the test of Section 3 or Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods from the domestic tariff area, to a foreign country i.e Nepal. The test required to be satisfied before Section 5 of the Central Act would apply, is (as discussed above) much higher and different. In that case, no evidence was led to establish existence of a prior contract of sale that may have occasioned the movement of goods from the State to Nepal. 18. Thus, it has to be observed, for the purpose of applicability of Section 5 of the Central Act, it was necessary to establish existence of prior contract of sale occasioning the movement of goods, to outside the country. That issue is not before this Court, in the present case. It would arise and would have to be tested on its own merit, in the central assesment, if that issue arose. However, for the purposes of the Act, the lesser test would allow the assessee to successfully contend that no occasion arose as may have created the obligation on the assessee to charge and receive payment on entry tax act while making sale of goods that were intended to be carried outside the State of U.P. 19. Assuming, for the purposes of answering the questions of law raised that the sale was complete at the factory gate, yet it survived ..... 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