2017 (12) TMI 1228 - HC - VAT and Sales Tax

Whether the paddy husk sold by the dealer is exempted under schedule-1, serial no. 4 of notification dated 20 December 2007? Held that - the Tribunal was justified in holding that the expression de-oiled paddy husk and outer covering of paddy would refer to two different commodities, and paddy husk which is outer covering of paddy, cannot be considered as de-oiled paddy husk - It is not disputed that the dealer had purchased paddy husk which would be covered within the meaning of the expression outer covering of paddy - revision dismissed.

Summary

Issues: Interpretation of U.P. Value Added Tax Act - Exemption under schedule-1, serial no. 4 of notification dated 20 December 2007

The High Court of Allahabad delivered a judgment related to the assessment year 2009-10 under the U.P. Value Added Tax Act. The case stemmed from an order passed by the Commercial Tax Tribunal, Moradabad Bench, Moradabad. The main issue revolved around whether paddy husk sold by a dealer is exempted under schedule-1, serial no. 4 of a specific notification. The notification mentioned "de-oiled paddy husk or outer covering of paddy."

The court considered the argument presented by the revenue's counsel, who contended that paddy husk and de-oiled paddy husk are distinct, implying that paddy husk does not include de-oiled paddy husk. The court referred to a previous case involving rice husk and paddy husk, where it was established that the notification treats rice husk and paddy husk as separate items. The court concluded that paddy husk is the outer covering of paddy, distinct from rice husk.

The judge provided an interpretation, stating that de-oiled paddy husk refers to paddy from which oil has been extracted, while paddy husk simply denotes the outer covering of paddy. Therefore, the court upheld the Tribunal's decision that paddy husk and de-oiled paddy husk are different commodities. Since the dealer had purchased paddy husk falling under the definition of "outer covering of paddy," the court found no legal basis for the revenue's arguments.

The court noted that the revenue's counsel failed to demonstrate any legal flaws in the Tribunal's order. Consequently, the court dismissed the revision, affirming the Tribunal's decision regarding the interpretation of the terms "de-oiled paddy husk" and "outer covering of paddy" under the U.P. Value Added Tax Act.

In conclusion, the High Court of Allahabad ruled in favor of the dealer, upholding the Tribunal's decision that paddy husk, as the outer covering of paddy, does not fall under the category of de-oiled paddy husk, as per the provisions of the U.P. Value Added Tax Act.