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2013 (10) TMI 864 - HC - VAT and Sales TaxDemand - State Development Tax - Held that - The questions in this writ petition have been adjudicated by this Court and the Supreme Court in the judgments cited in M/S Systematic Conscom Limited Versus State of U. P. and others 2009 (3) TMI 872 - ALLAHABAD HIGH COURT . As the circular instructions issued by the Commissioner Trade Tax U.P. dated 4.6.2007 has already been quashed no further orders are required to be made in this regard. So far as imposition of State Development Tax in the orders dated 31.3.2008 passed by respondent no.3 for the assessment years 2005-06 and 2006-07 in respect of the petitioner is concerned the same is set aside with the similar liberty to the assessing authorities as given in paragraph 24 of the judgment of the Supreme Court whether to demand the State Development Tax from those dealers who had opted for the composition charges under the composition scheme by way of issuing appropriate demand notices in accordance with law. If and when such demand notices are issued by the assessing authority/ authorities the assessee including the petitioner will be at liberty to question the same before the appropriate forum - Decided in favour of assessee.
Issues:
Challenge to Circular dated 04.6.2007 | Imposition of State Development Tax | Validity of orders under U.P. Trade Tax Act Analysis: The petitioner sought writs to quash the Circular dated 04.6.2007 and orders imposing State Development Tax for assessment years 2005-06 and 2006-07. The High Court noted that similar issues were raised previously by Systematic Conscom Ltd., resulting in the quashing of the Circular and setting aside of orders demanding State Development Tax. The Supreme Court upheld the High Court's decision, emphasizing that the introduction of State Development Tax did not constitute a change in the rate of tax under Section 7-D of the Act. The Court clarified that dealers under the composition scheme were not obligated to pay State Development Tax. The State was given the discretion to demand the tax from dealers who opted for composition charges, with the provision for dealers to challenge such demands. The petitioner's counsel argued for relief based on the Supreme Court's decision, which invalidated the Circular dated 04.6.2007. Conversely, the State contended that the legislative amendment introduced State Development Tax as a separate charge under Section 3H of the Act. The Court observed that the issues had been conclusively addressed by both the High Court and the Supreme Court. Given the quashing of the Circular, no further orders were deemed necessary. The orders imposing State Development Tax for the petitioner were set aside, mirroring the Supreme Court's directive. The assessing authorities were granted the discretion to issue demand notices for State Development Tax to dealers under the composition scheme, allowing dealers to challenge such notices before the appropriate forum. In conclusion, the writ petition was disposed of in line with the judgments of the High Court and the Supreme Court. The Circular dated 04.6.2007 was invalidated, and the orders imposing State Development Tax for the petitioner were set aside. The decision provided clarity on the applicability of State Development Tax to dealers under the composition scheme, with provisions for challenging any future demands from the assessing authorities.
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