2004 (7) TMI 632 - HC - VAT and Sales Tax

Summary

Issues:
Rate of tax on turnover of tin trays.

Analysis:
The present revision under section 11 of the U.P. Trade Tax Act, 1948 challenges the Sales Tax Tribunal, Agra's order regarding the rate of tax on tin trays for the assessment year 1981-82. The assessing authority accepted the dealer's account books but noted that while the dealer declared a tax liability of six per cent on tin trays, they charged purchasers at eight per cent. The first appellate authority upheld this decision, rejecting the dealer's argument that tin trays fell under the category of "iron made kitchen utensils and appliances." The Tribunal, in the second appeal, concluded that tin trays are covered under "kitchen utensils made of iron," leading to the current revision.

The High Court analyzed previous notifications and judgments, emphasizing that the Tribunal erred in its interpretation. Referring to Notification No. ST-II-332/X-1012-1971 and subsequent notifications, the Court highlighted the specific language used in the entries regarding taxable items. The Court differentiated between tin, iron, and steel products, noting that the phrase "iron made kitchen utensils and appliances" excluded items made of materials other than iron. The Court found that the Tribunal failed to establish that tin trays fell under this specific category, leading to an unjustified reversal of the assessment order.

The Court referenced a previous case involving tin trays and emphasized that while tin trays were considered "wares" under a specific notification, they were not classified as "iron-made kitchen utensils and appliances." The Court concluded that the Tribunal's decision was unwarranted and unsupported, as it lacked a definitive finding that tin trays fit within the specified category. Additionally, the Court noted that the dealer treated tin trays as unclassified items, further supporting the decision to set aside the Tribunal's order regarding the taxability of tin trays.

In conclusion, the High Court allowed the revision, setting aside the Tribunal's decision on the taxability of tin trays and reinstating the first appellate authority's order. The Court clarified that the rest of the Tribunal's order was not under consideration in the current revision, focusing solely on the issue of tin tray taxability.