2008 (8) TMI 863 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the finding that the transaction amounts to a sale is correct?
2. Whether the imposition of additional tax on ornaments and bullions is justified?

Analysis:
1. The first issue pertains to whether the transaction in question amounts to a sale. The dealer claimed to be a goldsmith who manufactures ornaments on a labor basis without involving any sale or purchase of bullion or gold ornaments. However, this claim was rejected by all authorities, including the Tribunal, based on evidence from a survey. The Tribunal found 21 sets of silver ornaments with gold polish and 250 gms of gold ornaments during the survey, supporting the conclusion that the dealer was engaged in the sale and purchase of bullion. The Tribunal's finding was deemed factual and not arbitrary, as it was based on the evidence at hand, leading to the rejection of the dealer's claim of only doing job-work.

2. The second issue revolves around the imposition of additional tax on ornaments and bullions. The assessment order and the first appellate authority did not levy any additional tax on these items. However, the Tribunal imposed additional tax when the assessed turnover exceeded Rs. 10 lakhs. This decision was challenged based on the principle that the Commissioner cannot challenge the assessment order under section 10 of the U.P. Trade Tax Act. Referring to a previous judgment, it was established that the subject matter of the appeal before the Tribunal was limited to the relief granted by the first appellate authority and did not extend to imposing additional tax not levied by the assessing officer. Consequently, the Tribunal's decision to levy additional tax at a rate of one per cent was deemed unjustified and was subsequently deleted, leading to the success of both revisions in part.

In conclusion, the judgment addressed the issues of whether the transaction constituted a sale and the justification for imposing additional tax on ornaments and bullions. The Tribunal's findings were upheld regarding the sale transaction, while the imposition of additional tax was deemed unjustified and subsequently deleted.