2008 (7) TMI 911 - HC - VAT and Sales Tax

Summary

Issues:
Challenges to Trade Tax Tribunal's order on tax imposition for sale of paddy husk and packing material without proper basis and utilization of available material.

Analysis:
The revisions before the High Court pertain to the assessment years 1993-94, 1994-95, and 1995-96, involving a dealer engaged in the business of rice milling and sale. The questions of law raised in the memo of revision primarily focus on the legality of the Trade Tax Tribunal's decision regarding the imposition of tax on the sale of paddy husk and packing material. The judgment in Commissioner of Sales Tax v. Straw and Agro Product Limited, Moradabad, has already established that paddy husk is not taxable as it is considered cattle fodder. Consequently, the High Court concurs with this precedent and finds no fault in the Tribunal's order concerning paddy husk.

Regarding the packing material, the Tribunal's finding indicates that it was purchased within the State of U.P. and sold along with rice without a separate charge to customers. As the dealer did not recover the price of packing material from customers in line with section 3AB of the U.P. Trade Tax Act, 1948, the Tribunal's decision to exempt the packing material from tax liability is deemed appropriate by the High Court. Therefore, the Court dismisses the revisions, emphasizing the lack of merit in challenging the Tribunal's order on the taxation of packing material.

In conclusion, the High Court upholds the Trade Tax Tribunal's decision, citing legal precedents and statutory provisions to support the non-taxability of paddy husk and the rationale behind exempting packing material from tax liability. The dismissals of the revisions are affirmed, with no costs imposed on either party.