2006 (11) TMI 605 - HC - VAT and Sales Tax

Summary

Issues:
- Assessment of interest under section 8(1) of the U.P. Trade Tax Act for the assessment years 1990-91, 1991-92, and 1992-93.
- Dispute regarding exemption under section 4A of the Act for the turnover of manufactured goods.
- Validity of the Tribunal's decision to delete the interest under section 8(1) of the Act.

The judgment involves three revisions under section 11 of the U.P. Trade Tax Act challenging the Tribunal's order deleting the interest under section 8(1) of the Act for the assessment years 1990-91, 1991-92, and 1992-93. The dealer had established a new unit for manufacturing LPG gas stove and pressure regulator and applied for exemption under section 4A of the Act, which was rejected. The Tribunal allowed the appeals and deleted the interest under section 8(1) of the Act, stating that the dealer was genuinely disputing the tax liability as it had applied for exemption under section 4A. The Tribunal noted that the matter of exemption was pending in revision before the Lucknow Bench of the court and found no evidence that the exemption was not claimed in good faith.

The High Court upheld the Tribunal's decision, stating that the finding that the dealer was genuinely contesting its case was a factual finding. Citing a precedent, the court referred to a case where under similar circumstances, it was held that the demand of interest under section 8(1) of the Act was not justified. Consequently, the court dismissed all three revisions, affirming the Tribunal's decision to delete the interest under section 8(1) of the U.P. Trade Tax Act for the relevant assessment years.