2009 (9) TMI 896 - HC - VAT and Sales Tax

Summary

Issues: Interpretation of tax exemption under Uttaranchal Value Added Tax Act, 2005 for seeds of all kinds, including rejected seeds.

Analysis:
The judgment delivered by the High Court of Uttarakhand revolved around the interpretation of tax exemption under the Uttaranchal Value Added Tax Act, 2005 for seeds of all kinds, including rejected seeds. The Commercial Taxes Tribunal had previously ruled that all kinds of seeds, including rejected seeds, are non-taxable. This decision was challenged by the Commissioner, Commercial Tax, Uttarakhand through a revision under section 55 of the 2005 Act.

Before the enactment of the 2005 Act, the Uttar Pradesh Trade Tax Act, 1948 was applicable, where exemption from tax payment was granted to various goods through notifications issued by the State Government. In 1985, seeds certified under the Seeds Act, 1956 were exempted from tax under the 1948 Act, subject to certain conditions.

Upon the repeal of the 1948 Act by the 2005 Act, the charging and exemption sections were similar in both statutes. However, under the 2005 Act, no tax was to be paid on goods specified in Schedule I, which included "Seeds of all kinds other than oil-seeds." The petitioner argued that the term "seeds of all kinds" in the 2005 Act should be interpreted in conjunction with provisions of the Seeds Act, 1966. The court disagreed, emphasizing that the 2005 Act was a fiscal statute independent of the Seeds Act, and the expression "seeds of all kinds" in Schedule I clearly exempted all types of seeds from tax liability.

The court concurred with the Tribunal's view that rejected seeds, inferior seeds, or superior seeds were not liable to pay tax under the 2005 Act. The judgment dismissed the petition without costs, upholding the Tribunal's decision regarding the tax exemption for seeds of all kinds, including rejected seeds.