2012 (10) TMI 1112 - HC - VAT and Sales Tax

Summary

Issues involved: Notice u/s 25(1)(ii) of U.P. Value Added Tax Act, 2008 for provisional assessment of commercial tax; Challenge to sub-section (5) of Section 59 of the Act making Commissioner's decision binding on authorities.

Issue 1: Notice under Section 25(1)(ii) of U.P. Value Added Tax Act, 2008:
The petitioner is aggrieved by a notice dated 20.8.2012 for provisional assessment of commercial tax. The notice is based on the Commissioner's decision regarding the rate of tax on 'Finayal and Flour Cleaners' under Section 59, where it was opined that these goods are not insecticide/pesticide attracting tax at 4% but rather fall under Schedule-V attracting tax at 12.5%. The petitioner challenges this notice and seeks to contest the applicability of the tax rate on the goods manufactured and sold by them.

Issue 2: Challenge to sub-section (5) of Section 59 of the Act:
The counsel for the petitioner seeks to challenge sub-section (5) of Section 59, which makes the Commissioner's decision in the matters of any dealer binding on Assessing Authorities and Appellate Authorities. The petitioner's counsel highlights a previous case where the Court intervened and protected the interests of other dealers. The petitioner aims to file an amendment application challenging this provision and requests time for the same.

Court's Decision:
The Court allows the petitioner's counsel two weeks to file an amendment application challenging sub-section (5) of Section 59. Additionally, the Standing Counsel is granted three weeks to file a counter affidavit, with the petitioner given one week thereafter to file a rejoinder affidavit. The case is connected with a previous matter and listed for further hearing on 26.11.2012.

As an interim measure, the Court directs that the Commissioner's decision dated 5.12.2008 under Section 59 will not be binding on the petitioner's assessment cases regarding the tax rate of the goods they manufacture and sell. The Assessing Authority is instructed to decide the tax rate question independently, without being influenced by the decision in the case of M/s India Distributors. The petitioner is required to participate in the assessment proceedings and cooperate accordingly.