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2006 (5) TMI 470 - HC - VAT and Sales Tax

Issues:
Assessment order refusal for exclusion of turnover on the ground of manufacturer type, appellate authority's exemption grant, department's challenge, failure to examine manufacturer details, and legal sustainability of the Tribunal's order.

Analysis:
The judgment pertains to an assessment order under the U.P. Trade Tax Act, 1948 for the year 1993-94, where the claim for exclusion of turnover related to footwear trade was refused based on the manufacturer's type. The first appellate authority allowed the appeal, exempting the turnover on the grounds of footwear being covered under commodities manufactured in a khadi industry. Subsequently, the department filed a second appeal, which was dismissed, leading to the present trade tax revision.

The department contended that the assessee, not being a manufacturer of the footwear and failing to prove that the traded footwear was from a small-scale or gramodyog industry, was not entitled to tax exemption solely based on registration with the Khadi Gramodyog Board. The Tribunal's failure to consider this aspect led to the quashing of its order, as the manufacturer details were crucial for determining exemption eligibility.

The counsel for the assessee argued that notifications and certificates supported the exemption claim based on the Khadi Gramodyog Board's certificate. However, the Tribunal's failure to examine whether the traded footwear was manufactured by a relevant industry or the applicability of the exemption certificate raised concerns about the order's legal sustainability.

The court emphasized the Tribunal's duty to thoroughly examine all relevant facts and legal aspects, including the manufacturer's details and the exemption certificate's scope. As the Tribunal failed to address these crucial points, the order was quashed, and the matter was remanded for a detailed reconsideration, ensuring a reasoned decision based on all pertinent issues. The trade tax revision was allowed, subject to the specified observations, for a comprehensive reevaluation by the Tribunal.

 

 

 

 

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