2013 (4) TMI 378 - HC - VAT and Sales Tax

Purchase tax on the purchase of paddy relying on Supreme Court decision - U.P. Trade Tax Act - Held that - The Tribunal vide its impugned orders have deleted the addition in each case by observing that the obiter of the Hon ble Apex Court is not pertaining to the State Trade Tax Act as it is related to the Central Sales Tax. Notification No. 2947 dated 11.12.1995 issued by the Government of U.P. has specifically granted the exemption from the tax on the purchase of paddy. So, each addition was deleted.

Summary

Issues involved:
Assessment year 2004-05 under U.P. Trade Tax Act - Revision against assessment order - Purchase tax on paddy - Exemption notification - Tribunal's decision - Applicability of Apex Court's observations - Dismissal of revisions by Department.

Analysis:

1. Assessment Year 2004-05 and Revision Against Assessment Order:
The case pertains to the assessment year 2004-05 under the U.P. Trade Tax Act. A notice was issued to the assessee, followed by an assessment order dated 20.3.2007. The revisionist filed a first appeal, partly allowed by the Appellate Tribunal, Faizabad. Subsequently, the assessee filed a second appeal, allowed by the U.P. Commercial Tax Tribunal, Bench-II, Lucknow, Camp Bench-Faizabad. The present revision under Section 11 (1) of the U.P. Trade Tax Act 1948 was filed by the Commissioner, Commercial Trade Tax, Lucknow.

2. Purchase Tax on Paddy and Exemption Notification:
During the assessment years in question, the assessees were involved in the processing and sale of rice, having purchased paddy from farmers. The Joint Commissioner levied purchase tax on the paddy purchases based on observations from a Supreme Court case. However, the Tribunal, through its orders, deleted the tax addition, stating that the Supreme Court's observations were not applicable to State Trade Tax Act cases. The Tribunal also noted that a specific exemption notification by the Government of U.P. exempted tax on paddy purchases, leading to the deletion of the additions.

3. Applicability of Apex Court's Observations and Tribunal's Decision:
The Tribunal's decision to delete the tax addition was supported by the fact that the Supreme Court's observations were related to Central Sales Tax, not State Trade Tax Act. The Tribunal's interpretation of the exemption notification favoring the assessees was considered reasonable in light of the facts and circumstances of the case. Consequently, the Tribunal's orders were sustained, as there was no reason to interfere with them based on the grounds mentioned therein.

4. Dismissal of Revisions by Department:
The Department's revisions were dismissed as lacking merit, following the reasoning provided by the Court in a previous judgment dated 12.12.2012 related to similar matters. The revision was ultimately dismissed based on the Court's previous decision and the lack of dispute from the assessee's counsel regarding the dismissal.

In conclusion, the judgment addressed various issues related to the assessment year 2004-05 under the U.P. Trade Tax Act, focusing on the purchase tax on paddy, the applicability of exemption notifications, and the Tribunal's decision in light of Supreme Court observations. The dismissal of the Department's revisions was based on the Court's previous judgment and the lack of merit in the present case.