2014 (5) TMI 63 - SC - VAT and Sales Tax

Rate of Tax Classification of fabricated steel Rectification of assessment order - Jurisdiction of Tribunal - Section 22 of U.P. Trade Tax Act Whether manufacturing of fabricated steel by the respondents herein is to be assessed at the rate of 7.5% instead of 3% - Held that - Insofar as the order passed by the First Appellate Authority in rejecting the Revenue s application u/s 22 High Court has rightly come to the conclusion that the First Appellate Authority was not justified in rejecting the application since there was an error apparent on the face of record and because the order of assessing officer had merged in the order of First Appellate Authority, the rectification application filed by the Revenue before the First Appellate Authority was maintainable - The High Court while partly allowing the revision petition had come to the conclusion that the power given to Tribunal is not co-extensive with the powers of the assessing officer and hence the Tribunal can only restore assessment order but cannot enhance the turnover on tax. However, High Court has permitted the Revenue to rectify the orders passed by the assessing authority for the assessment years 1971-72, 1973-74 and 1974-75 only and confirmed the orders passed by the First Appellate Authority and Tribunal - Since the prayers sought for by the Revenue in this appeal have already been granted by the High Court and accordingly complied with by the Revenue, nothing survives in these appeals for our consideration and decision and thus, these appeals require to be disposed of in light of the same Therefore, this Court confirms the judgment and order passed by Tribunal and confirmed by High Court Decided against Revenue.

Summary

Issues:
Assessment of fabricated steel at 7.5% vs. 3%

Analysis:

Issue 1: Assessment of fabricated steel at 7.5% vs. 3%
The case revolved around the assessment of fabricated steel by a company engaged in the sale of such steel. The assessing authority initially levied tax at 3%, considering the company deals in fabricated steel alone. The company appealed, arguing for a reduced tax rate of 2%. The First Appellate Authority partially allowed the appeal, reducing tax on Zinc Dross to 1% but maintaining the fabricated steel tax at 3%. The Revenue contended that the fabricated steel should be taxed at 7.5% as an unclassified item, not at 3%. The First Appellate Authority rejected the Revenue's application for rectification under Section 22 of the Act. The Tribunal dismissed Revenue's appeals, stating it lacked jurisdiction to enhance turnover after assessment. The matter was remanded to the assessing authority, which upheld the 3% tax rate. The High Court partially allowed the Revenue's revision petition, permitting rectification for specific assessment years and confirming the previous orders. The Revenue rectified the tax rate to 7.5% as per the High Court's permission. The Supreme Court, after considering the submissions, noted that the Revenue's requests had already been granted by the High Court, thus rendering the appeals moot. The Court confirmed the judgments of the Tribunal and High Court, disposing of the appeals accordingly.

This detailed analysis provides a comprehensive overview of the legal judgment, focusing on the assessment of fabricated steel at different tax rates and the subsequent legal proceedings leading to the final decision by the Supreme Court.