1994 (1) TMI 267 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the revisionist's appeal against the order of the Sales Tax Tribunal for the assessment year 1977-78 should be dismissed.
2. Whether the revisionist was engaged in manufacturing activity or merely trading in goods.
3. Whether the sales made by the revisionist should be deemed as sales to the consumer due to the lack of necessary certificates.

Detailed Analysis:
Issue 1:
The revision petition under section 11 of the U.P. Sales Tax Act, 1948, challenged the order of the Sales Tax Tribunal dismissing the revisionist's appeal for the assessment year 1977-78. The Tribunal upheld the assessing officer's determination of the taxable turnover of the dealer at Rs. 21,00,000. The revisionist contended that the Tribunal erred in deeming the sales to be taxable without considering certain aspects of the case. The High Court, after considering the arguments, found no error of law in the Tribunal's decision and dismissed the revision petition.

Issue 2:
The main contention raised by the revisionist was whether they were engaged in manufacturing activity or simply trading goods. The revisionist argued that they were only purchasing goods from local dealers and reselling them without engaging in manufacturing. However, the court noted that the revisionist had registered with the Industries Department and had shown a larger consumption of raw materials to procure a larger quota of goods, indicating manufacturing activity. Although the assessment order did not explicitly mention manufacturing, various details pointed towards such activity. The court agreed with the Tribunal's finding that the revisionist was engaged in manufacturing activity based on the available evidence.

Issue 3:
The crucial issue was whether the sales made by the revisionist should be considered as sales to the consumer due to the absence of necessary certificates. Rule 12-A required a registered dealer to furnish a certificate in form III-A to the selling dealer to avoid tax liability at the point of sale to the consumer. Since the revisionist did not obtain such certificates, the sales were deemed to be sales to the consumer. The court rejected the revisionist's argument that the liability should be on the sellers who did not receive the certificates, emphasizing that the revisionist was engaged in manufacturing and the sales were to be considered as sales to the consumer. Citing relevant case law, the court upheld the Tribunal's decision and dismissed the revision petition.

In conclusion, the High Court upheld the Sales Tax Tribunal's decision, ruling that the revisionist was engaged in manufacturing activity and the sales made without the necessary certificates were to be treated as sales to the consumer. The court found no error of law in the Tribunal's assessment and dismissed the revision petition accordingly.