1998 (12) TMI 625 - HC - VAT and Sales Tax

Summary

Issues:
1. Reduction of taxable turnover despite evidence of tax suppression.
2. Exemption of turnover for goods dispatched to Ex-U.P. principal.
3. Levying interest under Section 8(1) of the Act.

Analysis:
1. The first issue pertains to the reduction of taxable turnover despite evidence of tax suppression. The Tribunal found that the respondent acted as a commission agent for farmers, dispatching goods to Ex-U.P. traders for sale. The revenue questioned the Tribunal's decision, citing a different case law. However, the Tribunal's factual finding was upheld as the respondent's case differed from the case law referenced. The Tribunal's decision was deemed factual and not legally flawed, hence not subject to revision.

2. The second issue concerns the exemption of turnover for goods dispatched to an Ex-U.P. principal. The Tribunal accepted the respondent's contention that they acted as a commission agent for farmers, dispatching goods for sale outside U.P. on consignment basis. This factual finding was upheld, and the Tribunal's decision was considered valid, warranting no interference in revisional jurisdiction.

3. The final issue revolves around the leviability of interest under Section 8(1) of the Act. The dealer, holding an eligibility certificate, claimed exemption from tax on goods manufactured, including unsplit pulses purchased. The Tribunal deleted the interest levied by the assessing officer, citing the dealer's misconception regarding tax exemption on raw material purchases. However, the Court reversed the Tribunal's decision, stating that the dealer's claim lacked merit and was not bona fide. The dealer's failure to pay purchase tax on unsplit pulses was deemed unjustified, leading to the reversal of the Tribunal's decision on interest levy.

In conclusion, the revision petition was partly allowed, setting aside the Tribunal's decision on interest levy under Section 8(1) of the Act. The Court held that the dealer's claim of tax exemption on raw material purchases lacked merit and was not bona fide, thus upholding the levy of interest. The parties were directed to bear their own costs.