2007 (3) TMI 716 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of tax liability on hand pump under the U.P. Trade Tax Act, 1948 for the assessment year 1996-97.

Detailed Analysis:
The case involved a revision under section 11 of the U.P. Trade Tax Act, 1948, challenging the Tribunal's order related to the assessment year 1996-97. The dealer, engaged in the business of hand pumps, initially admitted liability at four percent under the entry "Water pump and pumping sets." However, the assessing authority later imposed tax at five percent inclusive of surcharge, considering hand pumps as machinery. Subsequently, the authority held hand pumps taxable as machinery at 7.5 percent under the same notification. The dealer's first appeal was dismissed, leading to a second appeal before the Tribunal, which set aside the order under section 22 of the Act.

The main contention was whether hand pumps should be taxed as machinery or water pumps under the relevant notification. The learned Standing Counsel argued that hand pumps qualify as machinery and should be taxed accordingly. However, the court disagreed, emphasizing the specific entry for water pumps and pumping sets at four percent tax rate, which excluded hand pumps from being taxed as machinery. The court highlighted that the specific entry prevails over the general entry, and since water pumps were specifically notified, hand pumps should be considered as water pumps for tax purposes. Consequently, the Tribunal's decision was upheld, and the revision was dismissed.