2007 (3) TMI 700 - HC - VAT and Sales Tax

Summary

Issues involved:
1. Taxability of tin containers used for sale of vegetable and edible oil.
2. Exclusion of purchase of coal from unregistered dealer from turnover.
3. Taxability of refining mustard oil as an activity of manufacture.
4. Reopening of the issue regarding the use of soyabean oil seeds for oil manufacture in remand proceedings.
5. Levying interest on late payment of admitted tax on purchase of soyabean oil seeds.

Issue 1 - Taxability of tin containers:
The High Court affirmed that tin containers are separately liable to tax based on a previous judgment. The purchase made within the State of U.P. does not attract additional tax liability.

Issue 2 - Exclusion of coal purchase from turnover:
The Supreme Court upheld the validity of section 3AAAA, overturning the previous judgment. The Tribunal is directed to quantify the tax liability on coal purchase from an unregistered dealer in accordance with section 3AAAA.

Issue 3 - Taxability of refining mustard oil:
The Supreme Court has ruled that refining mustard oil constitutes manufacturing, creating a new product. The Tribunal's decision that refining does not amount to manufacture is legally unsustainable.

Issue 4 - Reopening of soyabean oil seeds issue:
The Tribunal failed to address the legal contention that the issue of using soyabean oil seeds for oil manufacture through solvent process was not covered in the remand order. The Tribunal's decision on this issue is quashed.

Issue 5 - Levying interest on late payment:
The Tribunal is directed to reexamine the levy of interest on admitted tax after resolving the above issues. All sales tax revisions are allowed in part, and the matter is remanded to the Tribunal for fresh consideration within six months.