2014 (9) TMI 901 - HC - VAT and Sales Tax

Penalty under Section 15A (1) (o) of U.P. Trade Tax Act, 1948 - Proceedings were taken under Section 28A read with section 13A of the U.P. Trade Tax Act, 1948 - Held that - Product in question is subjected to duty under the Additional Duties of Excise Act as contended by the learned counsel for the revisionist. Unlike the provisions of the Andhra Pradesh Act, there is no provision which exempts the product of the revisionist on the basis of that it is subjected to tax under the Additional Duties of Excise Act. We were also shown the Additional Duties of Excise (Goods of Special Importance) Act, 1957. We do not find therein anything which would in any way foreclose the State to impose sales tax/VAT on those commodities which are subjected to duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. As far as the State of Uttarakhand is concerned, in the predecessor State, i.e. the State of U.P., law relating to sales tax is contained in the U.P. Trade Tax Act. As far as the impact of the levy under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 on the levy under the U.P. Trade Tax Act is concerned, as we have already noted, there is no obstruction which is brought to our notice in the State levying tax on a commodity which has already been visited with levy under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Therefore, even if the product is covered under sub-heading 2404.49 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, it will not in any way deprive the State of power to levy tax under the U.P. Trade Tax Act as applicable to the State of Uttarakhand. - no merit in the revision - Decided against assessee.

Summary

Issues:
1. Interpretation of the U.P. Trade Tax Act, 1948 regarding the levy of penalty on the transfer of 'Double Mazza' Pan Masala.
2. Applicability of sales tax/trade tax on 'Double Mazza' Pan Masala in Uttarakhand.
3. Comparison with the judgment in M/s Kothari Products Ltd. Vs. Govt. of A.P. regarding the classification of the product as 'gutka' and its tax implications.

Analysis:
1. The revisionist challenged the penalty imposed under Section 15A (1) (o) of the U.P. Trade Tax Act, 1948 for transferring 'Double Mazza' Pan Masala from Noida to Haldwani. The value of the goods was assessed at Rs. 2,10,000, resulting in a penalty of Rs. 84,000. The revisionist appealed before the 1st Appellate Authority and the Tribunal, eventually reaching the High Court.

2. The High Court considered substantial questions of law regarding the levy of sales tax/trade tax on 'Double Mazza' Pan Masala. The court analyzed whether the product had already incurred additional excise duty and fell under specific sub-headings of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Reference was made to a judgment involving 'gutka' classification and tax exemption under the Andhra Pradesh General Sales Tax Act, emphasizing differences in the Uttarakhand tax laws.

3. The court examined the impact of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 on the U.P. Trade Tax Act. It was clarified that the existence of duty under the former act did not preclude the imposition of trade tax under the latter. The judgment differentiated between the Andhra Pradesh and Uttarakhand tax legislations, concluding that the product in question was taxable in Uttarakhand. Consequently, the revision was dismissed, emphasizing that the State retained the authority to levy trade tax despite the product's classification under the Additional Duties of Excise Act.

This detailed analysis highlights the court's interpretation of the legal provisions, application of precedents, and the specific tax implications concerning the transfer and taxation of 'Double Mazza' Pan Masala in Uttarakhand.