2007 (3) TMI 701 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of tax liability on turnover of tin containers purchased within the State of U.P. under the U.P. Trade Tax Act, 1948 for assessment years 1974-1977.

Summary:
The applicant, engaged in the business of manufacturing and selling edible oil in tin containers purchased within U.P., contested tax liability on the turnover of tin containers. The assessing authority initially taxed only the value of the oil, but later included tin containers in the turnover based on a court decision. The revisions challenged this inclusion, citing precedents Commissioner of Trade Tax v. Prag Ice and Oil Mills and others, where separate pricing for containers indicated independent taxability. The court noted tin containers as a distinct commercial commodity taxable at the point of manufacture or importation. Referring to Jamana Flour & Oil Mills case, it affirmed that separate contracts for containers warrant separate tax treatment. Relying on past judgments, including Commissioner of Trade Tax v. Maluk Chand Cotton and Oil Mill, the court held that since tin containers were purchased within U.P., and the applicant was not the manufacturer or importer, the turnover of tin containers was not taxable. Consequently, all revisions were allowed, and the Tribunal's order was set aside.