2013 (7) TMI 866 - HC - VAT and Sales Tax

Exemption from trade tax - Utilization of timber for manufacture - Held that - It was not the case of the assessing officer that the assessee was not dealing with the items with which he was entitled to deal. He felt that since imported timbers were not being used in manufacturing activity at the registered place of business of the assessee, the imported timbers have not been utilized for manufacturing those items, which are being dealt with by the assessee, instead the imported timbers have been sold as such. The fact remains, as aforesaid, in order to come to the said conclusion, it was obligatory on the part of the assessing officer to ascertain, whether, in law or on the basis of the grant, the assessee was required to convert the imported timbers at his registered address into the products which the assessee was entitled to deal with. That having not been done, question of remitting the matter in the instant case does not arise. - Decided against Revenue.

Summary

Issues:
Assessment of trade tax exemption on imported timbers used for manufacturing goods by a registered dealer at a different location than the registered office.

Analysis:
The judgment pertains to two revision applications concerning the assessment of a registered trade tax dealer for two different years. The dealer was entitled to a concession where no trade tax would be levied on items manufactured from imported timbers. However, it was discovered through surveys that the imported timbers were not being used for manufacturing goods at the dealer's registered place of business. The assessing officer issued a notice questioning the exemption and contended that the imported timbers were being sold as they were, without being utilized for manufacturing the entitled items. The assessing officer failed to establish whether the law or exemption conditions required the manufacturing to occur at the registered office. The Tribunal overturned the assessing officer's decision, emphasizing that the timbers were indeed used for manufacturing, albeit not at the registered office. The court held that without clarity on the requirement to manufacture at the registered address, there was no basis for the assessing officer's conclusion. The court declined to interfere with the Tribunal's decision, stating that the matter did not warrant remittance as the assessing officer failed to establish non-compliance with the conditions for exemption. Consequently, the revision applications were dismissed.