2015 (8) TMI 858 - HC - VAT and Sales Tax

Classification of shampoo Entry 48 and 63 Assessing authority assessed good taxable at 8% under Entry No. 48 UPTT - Thereafter, assessing authority had doubt as to whether shampoo imported by petitioner was taxable at 8% or 12 % under entry No. 63 and, accordingly, submitted proposal for grant of sanction under Section 21(2) of U.P. Trade Tax Act, 1948 Petitioner alleged that it was clear case of change of opinion, which was not permissible in view of settled position of law Held that - Entry No.48 of Notification No.101 of 2000, as notified in Hindi language was different As per hindi notification, Entry No. 48 only relates to such soaps which were used for washing clothes, whereas, as per english version, Washing soaps and other materials used for washing purposes In light of difference found in English and Hindi version in Entry No.48 of Notification and decision of Supreme Court in Associated Distributors Limited 2008 (5) TMI 394 - SUPREME COURT OF INDIA , Hindi version would prevail Entry No.48 was with regard to soap which were used for washing clothes Shampoo, which petitioner was importing and selling, was being used for washing hairs would not be covered under Notification No error in order of sanction found Petition dismissed Decided against Assesse.

Summary

Issues:
1. Interpretation of tax rates for shampoo under different notifications.
2. Permissibility of reopening assessment proceedings based on change of opinion.
3. Application of legal principles regarding differences between English and Hindi versions of notifications.

Analysis:
1. The petitioner imported shampoo and sold it within the State of U.P. The assessing authority initially taxed the sale at 8% but later sought to tax it at 16% under a different notification. The petitioner challenged this, arguing against the change in tax rate. The State contended that the lower tax rate was an error that could be rectified through reassessment. The court examined two relevant notifications: one taxed washing soaps at 8% and the other taxed soaps at 12%. The court analyzed the definitions and held that shampoo for hair washing did not fall under the 8% category, as it was meant for clothes washing.

2. The petitioner claimed the reassessment was a change of opinion, which is impermissible under established legal principles. However, the court found that the assessing authority had valid reasons to reopen the assessment due to the incorrect tax rate application. The court referred to previous decisions to support the position that rectification of an error in tax assessment is allowed, even if it involves a change in the tax rate.

3. The court considered the difference between the English and Hindi versions of the notifications. Citing a Supreme Court ruling, the court emphasized that in cases of disparity, the Hindi version prevails in the State of Uttar Pradesh. By comparing the Hindi versions of the notifications, the court concluded that the petitioner's shampoo, primarily used for hair washing, did not fall under the category specified in the 8% tax rate notification. Therefore, the court upheld the order permitting the reopening of the assessment proceedings based on the correct interpretation of the notifications.

In conclusion, the court dismissed the writ petition, finding no merit in the petitioner's arguments. The parties were directed to bear their own costs.