2011 (3) TMI 1329 - HC - VAT and Sales Tax

Reassessment - Circular No. 1/1990-91 - Held that - As it appears that this petitioner firm stood dissolved much earlier and not in the business any longer - nobody appeared on behalf of the petitioner - The writ petition is accordingly dismissed as infructuous and also in default because of no representation on behalf of the petitioner

Summary

Issues:
Challenge to reassessment orders for assessment years 1983-84 and 1985-86 under Delhi Sales Tax Act, 1975, and Central Sales Act, 1956.

Analysis:
The petitioner, a registered partnership, challenged reassessment orders dated 1st June, 1989 and 23rd January, 1990 for the assessment years 1983-84 and 1985-86 respectively. The petitioner contended that certain purchases, like electrodes, were exempt from sales tax. The Sales Tax Officer initially allowed the exemption based on registration certification but later reassessed the petitioner, holding the purchase of electrodes as unauthorized. Similarly, for the assessment year 1985-86, the petitioner was taxed on welding rods and an additional amount. The appellate authority upheld the orders, relying on a Division Bench judgment that certain items used in manufacturing cannot be considered as raw materials. This led to a Circular instructing authorities to delete such items from records. The petitioner argued that electrodes became part of the finish product and should be exempt. The matter was referred to a larger Bench for reconsideration based on a Supreme Court judgment. However, during the hearing, no representation was made on behalf of the petitioner, leading the Court to dismiss the writ petition as infructuous and in default due to the dissolution of the petitioner firm and the enactment of the Delhi Value Added Tax Act.

This judgment involved the interpretation of sales tax laws and the classification of items used in manufacturing processes. The Court analyzed the exemption claim for electrodes and the impact of previous judgments on the case. The reference to a larger Bench highlighted the need for clarity on whether certain items should be considered raw materials. The dismissal of the writ petition due to lack of representation and changes in tax legislation concluded the case.