2004 (5) TMI 542 - HC - VAT and Sales Tax

Summary

Issues:
1. Reduction of taxable turnover by Trade Tax Tribunal despite incriminating evidence.
2. Tax imposition on purchase of old broken glass pieces under section 3-AAAA of the Act.

Analysis:

Issue 1:
The revision was filed by the Commissioner of Trade Tax against the Tribunal's order reducing the taxable turnover of the dealer. The Tribunal's decision was challenged based on the legality of reducing the turnover despite incriminating evidence. The High Court, after hearing the arguments, found that the question of reducing the turnover was essentially a question of fact. The Court noted that the standing counsel for the department failed to identify any error in the Tribunal's decision on this issue. Consequently, the Court held that no interference was warranted on this factual matter, thereby upholding the Tribunal's decision on the reduction of taxable turnover.

Issue 2:
Regarding the second issue, the department contended that the dealer should be liable to pay tax on the purchases of old broken glass pieces under section 3-AAAA of the Act, categorizing them as "old discarded unserviceable obsolete machinery stores." However, the Court observed that in this case, the dealer purchased the old broken glass pieces not as waste but as raw material for manufacturing hand-made glass phials/bottles. The Court emphasized that while the broken glass may be considered waste for the seller, it serves as a raw material for the dealer. Referring to a previous judgment, the Court clarified that the dealer cannot be classified as a manufacturer or importer of old broken glass pieces. The Tribunal's decision to treat old broken glass as raw material and not subject to tax under section 3-AAAA was upheld by the High Court. Consequently, the Court found no merit in the revision and dismissed it, affirming the Tribunal's ruling on the taxability of old broken glass pieces.

In conclusion, the High Court dismissed the revision filed by the Commissioner of Trade Tax, upholding the Tribunal's decisions on both issues raised in the case.