2012 (12) TMI 1097 - HC - VAT and Sales Tax

Summary

Issues involved: Department's appeal u/s 11 of U.P. Trade Tax Act, 1948 against Tribunal's order on purchase tax on paddy.

Summary:

Issue 1: Application of Hon'ble Apex Court's observations
The Department filed revisions against Tribunal's order deleting purchase tax on paddy based on Hon'ble Apex Court's observations. The Tribunal held that the observations were not applicable to State Trade Tax Act, citing Notification No. 2947 exempting tax on paddy purchase. The Tribunal's reasoning was found reasonable as the notification favored the assessees, stating no tax on paddy purchase. The impugned orders were sustained, dismissing the Department's revisions.

Issue 2: Tribunal's interpretation of relevant laws
During the assessment years, assessees were involved in processing and selling rice after purchasing paddy from farmers. The Joint Commissioner levied purchase tax on paddy based on Section 10-B of Trade Tax Act. However, the Tribunal, referring to the Apex Court's obiter, concluded that the tax exemption notification favored the assessees, leading to deletion of the tax addition in each case. The Tribunal's decision was upheld, dismissing the Department's revisions for lack of merit.