1997 (1) TMI 514 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of a notification exempting certain sales from tax under the U.P. Sales Tax Act.
2. Determination of whether the conversion of whole peas into split peas changes the nature of the goods for taxation purposes.
3. Assessment of turnover related to alleged inter-State sales of peas to ex-U.P. dealers.
4. Compliance with the provisions of section 6-A of the Central Sales Tax Act regarding declarations for inter-State sales.

Analysis:
1. The revision petition under section 11 of the U.P. Sales Tax Act challenged an order by the Sales Tax Tribunal regarding the turnover treated as inter-State sales. The assessing officer contended that the sales were not exempt based on a notification, as the goods sold were peas dal, not peas. However, the Tribunal upheld the dealer's claim that the split peas were covered by the notification, citing a previous court decision and relevant statutory provisions. The court found that the split dal resulted from processing and treating the goods, making it a different commodity not exempt from tax.

2. The second issue involved the alleged supply of peas to ex-U.P. dealers, with the dealer claiming these were inter-State purchases for principals. The assessing officer disputed this, citing post-purchase activities on the peas. The Tribunal agreed with the dealer, emphasizing that the goods were purchased on behalf of ex-U.P. principals and not considered inter-State sales. The Commissioner raised concerns about compliance with section 6-A of the Central Sales Tax Act regarding declarations for such transactions. However, as no evidence or findings were presented regarding the filing of declarations, the court rejected this argument.

3. The court partially allowed the revision petition, setting aside the Tribunal's decision on the turnover subject to tax under the Central Sales Tax Act. The turnover related to the sale of split peas was deemed taxable, overturning the Tribunal's decision. The orders of the Deputy Commissioner and the Tribunal on this matter were set aside, and the Commissioner's appeal was allowed, with directions for further proceedings by the Tribunal.