1976 (12) TMI 169 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of reopening assessment under section 16 of the Act for technical grade urea turnover.
2. Entitlement to exemption for canteen sales under a government notification.
3. Liability of turnover relating to the sale of scrap materials.
4. Validity of reopening assessment under section 16 of the Act for various turnovers.

Analysis:
1. Technical Grade Urea Turnover:
The petitioner contended that technical grade urea should be excluded from taxable turnover under entry 21(3) of the Act. However, the Court found that both the petitioner and the supplier did not treat the goods as chemical fertilizers but as chemical products. Therefore, the exclusion of turnover was deemed erroneous, and subsequent inclusion was upheld.

2. Canteen Sales Exemption:
The cases involved canteen sales exemption under a government notification requiring a subsidy of at least twenty-five percent of total expenses. The Court held that depreciation allowance should not be considered as actual expenditure for subsidy calculation. Thus, the conclusion that depreciation should not be included in the subsidy calculation was deemed correct.

3. Sale of Scrap Materials:
The judgment referred to a Supreme Court decision stating that turnover from the sale of scrap materials is liable to be included in the taxable turnover. The Court held that the turnover from scrap sales should be included in the taxable turnover based on the Supreme Court precedent.

4. Validity of Reopening Assessments:
The validity of reopening assessments under section 16 of the Act was challenged. The petitioners argued that turnover previously considered by the assessing authority should not be deemed as escaped turnover. The Court rejected this argument, citing a previous judgment that section 16 applies even if the turnover was previously considered. Additionally, the Court clarified that the best judgment assessment under section 12(2) differs from the determination of turnover under section 16(1). The Court dismissed the petitions, upholding the validity of the reopening assessments.

In conclusion, the Court upheld the inclusion of turnover in taxable turnover for technical grade urea, canteen sales, sale of scrap materials, and rejected challenges to the validity of reopening assessments under section 16 of the Act. The petitions were dismissed with no order as to costs.