2007 (3) TMI 719 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of eligibility for tax exemption on turnover of toner and developer sold along with photocopier machine under section 4A of the U.P. Trade Tax Act, 1948 and the Central Sales Tax Act, 1956.

Summary:

The High Court of Allahabad heard two revisions under section 11 of the U.P. Trade Tax Act, 1948, challenging the Tribunal's order related to the assessment year 1989-90. The dealer, engaged in manufacturing and selling photocopier machines, held an eligibility certificate under section 4A of the Act. The turnover of the manufactured photocopier machines was not liable to tax, and the dealer also sold toner and developer claiming exemption on their turnover as part of the photocopier machine.

The assessing authority rejected the dealer's claim, stating that toner and developer were not part of the photocopier machine. However, the first appellate authority and the Tribunal allowed the claim. Both parties agreed that the issue was covered by a previous decision of the court in the case of Commissioner, Trade Tax, U.P., Lucknow v. Modi Xerox Ltd., Rampur.

The court, following the precedent, held that toner and developer are not parts of the photocopier machine and are not eligible for exemption. Consequently, both revisions were allowed, the Tribunal's order was set aside, and the Tribunal was directed to pass appropriate orders under section 11(8) of the Act.