2007 (3) TMI 699 - HC - VAT and Sales Tax

Summary

Issues: Benefit of concessional rate of tax on purchases of rice bran, applicability of section 4B(1)(a1) of the U.P. Trade Tax Act, 1948.

In this judgment by the Allahabad High Court, the revision under section 11 of the U.P. Trade Tax Act, 1948 was directed against an order of the Tribunal related to the assessment year 1993-94. The dealer had purchased rice bran as a commission agent for the principal against form IIIB, claiming the benefit of concessional tax rate. However, the assessing authority and the first appellate authority disallowed the benefit on the grounds that rice bran was not a declared commodity. The Tribunal, relying on a previous court decision, allowed the concessional rate of tax. The court noted that the issue was covered by a decision in the case of Commissioner of Trade Tax v. Malti Devi, where it was held that since rice bran was not a declared commodity, the provisions of section 4B(1)(a1) did not apply. The court also referred to a Division Bench decision which clarified that the benefit under section 4B(1) was only for dealers holding a recognition certificate. The court highlighted the addition of sub-section (a1) to section 4B(1) providing benefits to dealers without recognition certificates for transactions of declared goods only. As rice bran was not a declared commodity and the dealer did not hold a recognition certificate, the benefit of concessional tax rate was deemed inadmissible. Consequently, the court allowed the revision, set aside the Tribunal's order granting the benefit of the concessional tax rate on rice bran purchases, and directed the Tribunal to take appropriate action under section 11(8) of the Act.