2008 (8) TMI 837 - HC - VAT and Sales Tax

Summary

Issues:
Tax liability of mefron gas at 10% or 15% under U.P. Trade Tax Act, 1948.

Analysis:
The revision before the Allahabad High Court challenged an order passed by the Trade Tax Tribunal regarding the tax liability of mefron gas for the assessment year 1995-96. The dealer admitted a tax liability at 10%, but the assessing officer later claimed it should be taxed at 15%. The first appellate authority ruled in favor of the dealer, considering mefron gas as chloro-flouro hydrocarbon used in refrigeration and air-conditioners, thus liable to be taxed as a chemical. The Tribunal upheld this decision, stating that mefron gas falls under the category of chemicals and should be taxed at 10%. The Tribunal rejected the appeal, emphasizing that the assessing officer's finding that mefron gas should be taxed at 15% was not legally sound. The High Court endorsed the Tribunal's decision, noting that mefron gas is indeed a chloro-flouro hydrocarbon and should be taxed at 10% as a chemical, not 15% as an accessory of refrigeration and air-conditioners. The Court also highlighted that a disputed question of fact or debatable point of law cannot be raised in a proceeding under section 22 of the Act, citing a previous judgment.

In conclusion, the High Court dismissed the revision, affirming the Tribunal's decision to tax mefron gas at 10% as a chemical under the U.P. Trade Tax Act, 1948. The Court found no illegality or perversity in the Tribunal's ruling and emphasized the legal classification of mefron gas as chloro-flouro hydrocarbon falling under the category of chemicals for taxation purposes.