1990 (2) TMI 296 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "fresh fruit" under the U.P. Sales Tax Act.
Validity of letters issued by the Commissioner, Sales Tax regarding sales tax on coconut.
Applicability of Supreme Court judgment on coconut taxation.
Liability to pay sales tax without a specific notification.
Impact of non-collection of sales tax by the petitioner.

Interpretation of "fresh fruit":
The petitioner argued that coconut, being a fresh fruit, should be exempt from sales tax under the U.P. Sales Tax Act. However, the court held that the popular meaning of terms in statutes should be considered, and since coconut was not defined as a fresh fruit, it did not qualify for exemption. The court also referenced a Supreme Court judgment which determined that coconut was neither a fresh fruit nor a vegetable for tax exemption purposes.

Applicability of Supreme Court judgment:
The petitioner contended that the Supreme Court judgment on coconut taxation was from Tamil Nadu and not applicable to Uttar Pradesh. The court rejected this argument, stating that the exemption of fresh fruits and green vegetables from sales tax applied in both states. Therefore, the decision that coconut was not a fresh fruit was binding in Uttar Pradesh as well.

Validity of Commissioner's letters:
The petitioner challenged the validity of the Commissioner's letters regarding sales tax on coconut, arguing that only the State Government could impose such liabilities through notifications. The court clarified that the Commissioner did not levy or modify the sales tax rate but merely informed officers of the Supreme Court judgment and the government's decision not to collect sales tax on coconut sales before a certain date.

Liability to pay sales tax without notification:
The petitioner claimed that without a specific notification, sales tax could not be imposed on coconut sales. The court explained that under the U.P. Sales Tax Act, sales tax was payable on goods not covered by specific clauses at a standard rate. Since there was no modification of the tax rate through notification, sales tax at the standard rate applied to coconut sales.

Impact of non-collection of sales tax:
The petitioner argued that since sales tax was not collected previously, imposing it now would cause prejudice. The court dismissed this argument, emphasizing that the liability to pay tax did not depend on previous collections, and the government's decision not to collect tax before a certain date was fair.

In conclusion, the court found no merit in the writ petition and dismissed it without costs, upholding the sales tax liability on coconut sales and the validity of the Commissioner's letters based on the Supreme Court judgment and government decision.