1982 (8) TMI 203 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether "gur budda" is taxable under the U.P. Sales Tax Act.
2. Whether recovery notices issued by the sales tax authorities are valid.

Detailed Analysis:
1. The petitioner challenged the assessment of purchase tax on "gur budda" under the U.P. Sales Tax Act for the assessment year 1972-73. The firm contended that "gur budda" is not taxable as it is a different commodity, primarily used as cattle fodder or for manufacturing wine. The respondents argued that "gur" and "gur budda" are essentially the same, with the latter being a slightly inferior type of "gur." The Court considered expert opinions and test results, concluding that "gur budda" falls under the category of taxable "gur," as per the provisions of the Act. The Court held that "gur budda" is included in the term "gur" for taxation purposes, despite being of slightly inferior quality.

2. The sales tax authorities initiated recovery proceedings against the firm for assessed taxes. The firm contended that since "gur budda" is not taxable, the recovery notices should be quashed. However, based on the Court's determination that "gur budda" is indeed a taxable commodity, the recovery notices were deemed valid. The Court held that the recovery certificates issued by the sales tax authorities were lawful and did not warrant interference through writ jurisdiction. Consequently, the writ petition was dismissed, and costs were imposed on the petitioner. The stay order was also vacated, affirming the legality of the recovery notices and upholding the taxation of "gur budda" under the U.P. Sales Tax Act.