2004 (8) TMI 702 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the appellant is liable to tax on photographic papers imported from outside the State of U.P. and used in works contract?
2. What should be the turnover of the appellant based on the imported photographic papers?

Analysis:
1. The appellant, engaged in photography business, imported photographic papers for &8377; 55,48,506 from outside U.P. and used them in works contract. The dispute was whether these imported papers are liable for tax. Section 3-F of the U.P. Trade Tax Act covers tax on goods involved in works contracts. The Tribunal rejected the appellant's appeal, stating that the movement of goods was not occasioned by a specific works contract, as the papers were imported and kept as stock for general use, not tied to individual contracts. The case of M/s. Santosh and Company was cited to support the non-taxability of imported goods under Section 3-F due to the movement being in the course of inter-State trade.

2. Regarding the turnover calculation, the appellant argued that only the purchase value of &8377; 55,48,506 should be taxed. However, Section 2(h) defines sales to include property transfer in works contracts, making it taxable under Section 3-F. The turnover liable for tax is determined based on the aggregate amount of goods supplied or sold. The Tribunal estimated the turnover at &8377; 66,84,000, considering a notification stating that in cases where sale consideration is unknown, the sale price will include the cost value, expenses for bringing goods to the site, and an additional 20% markup. The Tribunal's valuation was upheld as reasonable, with no errors found in the turnover calculation.

In conclusion, the revision was dismissed as the appellant failed to establish grounds for challenging the Tribunal's order. The judgment clarified the tax liability on imported goods used in works contracts and the method for determining turnover in such cases.