1991 (8) TMI 299 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of Notification dated 20th May, 1976 for taxation of station wagons under U.P. Sales Tax Act.

The judgment of the Allahabad High Court dealt with a writ petition seeking to quash assessment orders for the assessment years 1976-77 and 1977-78, imposing tax on station wagons at 12% under the U.P. Sales Tax Act. The petitioner argued that station wagons should be taxed at 7% as "motor cars" under entry 62(a) of the Notification dated 20th May, 1976. The petitioner contended that station wagons were akin to motor cars and should not be taxed at the higher rate of 12%. The court analyzed definitions from the Motor Vehicles Act, 1939, but concluded that these definitions did not specifically include station wagons. The court also examined dictionary definitions of "bus," "motor bus," "motor car," and "station wagon" to determine the correct classification for tax purposes. The court found that station wagons did not fall under the definition of "motor bus" but rather were described as automobiles with folding seats behind the driver. The court referred to a previous judgment where it was held that station wagons did not qualify as motor cars in common parlance and were rightly taxed at 12%. However, the court noted that the assessing authority had not determined whether station wagons should be classified as "motor buses" under entry 62(b) of the notification. Therefore, the court set aside the assessment orders and remanded the case to the authority to decide afresh after considering evidence on whether station wagons could be treated as "motor buses" under the notification. The court emphasized the importance of determining the common parlance understanding of the term "station wagon" for proper classification under the tax notification. The writ petition was allowed, and the case was remanded for fresh consideration.