1987 (1) TMI 467 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of sales tax authorities in U.P. regarding inter-unit transfers, Assessment of inter-unit transfers as inter-State sales, Challenge to assessment orders by petitioner, Applicability of Central sales tax paid in other states, Invocation of article 226 of the Constitution.

Jurisdiction of Sales Tax Authorities in U.P.:
The petitioner, a Government company under the Companies Act, engaged in supplying component parts to its different manufacturing units in various states, challenged the jurisdiction of sales tax authorities in U.P. The petitioner argued that as Central sales tax was paid in Tamil Nadu and Andhra Pradesh, no sale technically occurred in U.P. The petitioner contended that since invoices were raised by Trichy and Hyderabad units, U.P. sales tax authorities lacked jurisdiction. The court examined the provisions of the U.P. Sales Tax Act but declined to interfere under article 226 of the Constitution due to pending appeals and the need to consider facts of each assessment year separately.

Assessment of Inter-Unit Transfers as Inter-State Sales:
Sales tax authorities in U.P. did not accept the petitioner's claim of exemption for inter-unit transfers in various assessment years, treating them as inter-State sales from U.P. The petitioner challenged these assessment orders before the Deputy Commissioner (Appeals), Meerut. The court noted the ongoing challenges and appeals against these orders, emphasizing the need to consider facts and pending appeals before interfering under article 226 of the Constitution.

Challenge to Assessment Orders by Petitioner:
The petitioner filed a writ petition challenging the assessment orders by U.P. sales tax authorities. Despite arguments regarding Central sales tax payments in other states and lack of sales in U.P., the court dismissed the petition summarily. The court highlighted that the petitioner had already pursued appeals, which were pending, and suggested approaching the Commissioner of Sales Tax, Lucknow, for early disposal of appeals and administrative orders.

Applicability of Central Sales Tax Paid in Other States:
The petitioner contended that since Central sales tax was paid in Tamil Nadu and Andhra Pradesh for supplies made by its manufacturing units in compliance with orders, U.P. sales tax should not apply. However, the court did not delve into this argument in detail due to the pending appeals and the need to consider facts of each assessment year separately.

Invocation of Article 226 of the Constitution:
The court declined to intervene under article 226 of the Constitution, citing pending appeals, the necessity to consider facts of each assessment year, and the petitioner's option to seek early disposal of appeals and administrative orders from the Commissioner of Sales Tax, Lucknow. The court dismissed the writ petition summarily, with a copy of the order to be provided to the petitioner upon payment of charges.