2012 (12) TMI 952 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to assessment order u/s Gujarat Value Added Tax Tribunal, applicability of sales tax on softy ice-cream business.

Issue 1: Challenge to assessment order
The appellant challenged the judgment of the Gujarat Value Added Tax Tribunal which confirmed an assessment order passed by the Sales Tax Officer and Assistant Sales Tax Commissioner. The appellant resisted the payment of sales tax on grounds of being a small industry and engaging in the business of selling softy ice-cream without carrying out any production but only reselling. The Tribunal noted that the appellant had not maintained proper records despite claiming to be a small business, leading to a refusal to believe that the turnover was below the threshold limit.

Issue 2: Applicability of sales tax on softy ice-cream business
The appellant relied on a previous case involving Quality Ice-cream where it was held that selling softy ice-cream after cooling and condensing pre-prepared sweetened milk did not attract sales tax. However, in the present case, the authorities found that the appellant had purchased raw materials and undergone a detailed process involving various ingredients, leading to the conclusion that it was not a simple process of cooling and condensing pre-prepared mixture. The Tribunal confirmed this observation, citing the definition of "manufacture" under section 2(16) of the Gujarat Sales Tax Act and rule 3 of the Gujarat Sales Tax Rules which did not exclude the appellant's case.

In conclusion, the High Court upheld the Tribunal's decision, stating that no error was committed, and dismissed the tax appeal.