2015 (2) TMI 270 - HC - VAT and Sales Tax

Advantage of section 4BB of the U.P. Trade Tax Act, 1948 - Entitlement for credit of tax - Held that - Section 86 of the Uttar Pradesh Reorganisation Act conveyed that creation of the State of Uttarakhand by carving out a part of the State of Uttar Pradesh shall not be deemed to have affected any change in the territories, to which U.P. Trade Tax Act, 1948 extends or applies and territorial references in the U.P. Trade Tax Act, 1948 to the State of Uttar Pradesh shall, until otherwise provided by a competent Legislature or other competent authority, be construed as meaning the territories within the existing State of Uttar Pradesh before the appointed day, i.e., before creation of the State of Uttarakhand. - conclusion would be that the State mentioned in section 4BB of the U.P. Trade Tax Act, 1948 shall mean the territories of the State of Uttar Pradesh as well as the territories of the State of Uttarakhand until such time, the competent Legislature of the State of Uttar Pradesh or of the State of Uttarakhand decides otherwise. That was not done until March 23, 2002. Therefore, until March 23, 2002, purchases made in any part of the State of Uttar Pradesh as it stood before the creation of the State of Uttarakhand would come within the meaning of purchases made inside the State as mentioned in section 4BB of the Act. In the event, purchases were made on or after March 23, 2002, the same will have a different effect. We, accordingly, permit only that effect to be ascertained by the assessing officer in accordance with law. - revision application is disposed of.

Summary

Issues:
Interpretation of section 4BB of the U.P. Trade Tax Act, 1948 regarding purchases made inside the State for tax credit eligibility.
Application of section 86 of the Uttar Pradesh Reorganisation Act in relation to territorial references in the U.P. Trade Tax Act, 1948.

Analysis:
1. The judgment addressed the issue of purchases made by the respondent-assessee for manufacturing goods and the eligibility for tax credit under section 4BB of the U.P. Trade Tax Act, 1948. The State contended that purchases made from Uttar Pradesh did not qualify as purchases made inside the State of Uttarakhand. The Tribunal disagreed with this interpretation, leading to the revision application.

2. The court examined section 86 of the Uttar Pradesh Reorganisation Act, which stated that references to the State of Uttar Pradesh in laws should be construed as including territories within the State of Uttar Pradesh before the creation of Uttarakhand. This interpretation was crucial in determining the applicability of the U.P. Trade Tax Act, 1948 to purchases made in Uttar Pradesh before and after the creation of Uttarakhand.

3. By analyzing the provisions of the Reorganisation Act, the court concluded that until March 23, 2002, purchases made in any part of Uttar Pradesh, including territories that later became Uttarakhand, were considered as purchases made inside the State for the purposes of section 4BB of the Act. However, post-March 23, 2002, a different interpretation would apply, subject to the decision of the competent Legislatures of both states.

4. The judgment clarified that the State mentioned in section 4BB encompassed both Uttar Pradesh and Uttarakhand territories until a legislative change occurred. The assessing officer was tasked with determining the effect of purchases made after March 23, 2002, in accordance with the law. Consequently, the revision application was disposed of, providing clarity on the interpretation of territorial references in tax laws post-state reorganization.