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2010 (7) TMI 887 - HC - VAT and Sales TaxRate of tax on whip topping which was sold by the revisionist in Uttarakhand - Held that - Admittedly whipping top is not an item mentioned exclusively as such in the Schedule. Therefore it being an unclassified item has to be charged tax at the rate of 12.5 per cent. Moreover fiscal matter has to be strictly interpreted if the Legislature of the State in its wisdom has decided that the whip topping has to be treated as unclassified item then it has to be treated as such. The court cannot impose either its opinion or wisdom on this aspect.
Issues:
Rate of tax on "whip topping" under the Uttarakhand Value Added Tax Act. Analysis: The revisionist, a proprietor concern trading in "whip topping," contested the imposition of a 12.5% tax rate on the product by the assessing authority under the Act, claiming it should be taxed at 4%. The Additional Commissioner upheld the 12.5% rate, deeming "whip topping" unclassified. The revisionist's appeal to the Commercial Tax Tribunal was rejected on the grounds that the product did not fit under any specific category and should be taxed at 12.5%. The High Court concurred, emphasizing that if a product cannot be reasonably classified, it must be placed in the unclassified category. As "whip topping" did not fit any specific classification, it was liable for tax at 12.5%. The court highlighted that fiscal matters must be strictly interpreted, respecting the legislature's decision to classify "whip topping" as unclassified. The judgment affirmed the orders of the Additional Commissioner and the Commercial Tax Tribunal, holding the revisionist accountable for paying tax at 12.5% on "whip topping." The court dismissed the commercial tax revision, stating that the revisionist's contentions were misplaced, and there was no merit in challenging the tax rate imposed on the product. In conclusion, the High Court upheld the 12.5% tax rate on "whip topping," rejecting the revisionist's arguments for a lower tax rate. The judgment emphasized the importance of adhering to legislative decisions in fiscal matters and dismissed the revision, affirming the decisions of the lower authorities.
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