2007 (1) TMI 517 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax liability on bio-gas plant in a works contract under the U.P. Trade Tax Act.

The High Court of Allahabad heard a revision u/s 11 of the U.P. Trade Tax Act, 1948, against an order of the Tribunal for the assessment year 1989-90. The applicant, a co-operative society, had a distillery and entered into a contract for an effluent treatment plant. The assessing authority levied a penalty for failure to deposit the required tax amount under section 8D(1) of the Act. The applicant claimed exemption for the bio-gas plant under a notification, arguing it should not be subject to tax. The Court examined the contract and found that the bio-gas plant was to be fabricated as part of the effluent treatment plant, not supplied as an independent unit. Therefore, the tax liability was on the various parts and components used in the works contract, not on the bio-gas plant itself. The Court dismissed the revision, upholding the penalty imposed by the assessing authority and affirmed by the Tribunal.