2018 (9) TMI 977 - HC - VAT and Sales Tax

Scope of SCN - Appeal was rejected on a completely fresh ground - Whether Hon ble Tribunal was justified in law to reject the appeal on a completely fresh ground neither arising out of the order appealed against nor raised by the revisionist in ground of appeal filed against the impugned order nor argued during the pleadings by the revisionist or the respondent? - Held that - Even from a reading of the response filed before this Court in the revision in question there is no such assertion that this plea was ever raised before the Tribunal. It being so this Court is of the view that the Tribunal should not have decided the question as aforesaid without it having been raised, argued or discussed during the course of hearing and without it having put the parties to notice on it - decided in favor of revisionist. Whether the Hon ble Tribunal was justified in law to hold that the Mild Steel Welding Electrodes and Cast Iron Welding Electrodes may be different goods but are not the goods of a different nature as both are welding electrodes when the raw material used, manufacturing process, chemical composition, machines required for manufacturing, end use of both types of electrodes and common parlance meaning of both types of electrodes is completely different? - Held that - The relevant aspects of the matter as pointed out by Sri Mishra are based on the grounds taken in appeal before the Tribunal, but have not been considered by the Tribunal appropriately. The Court finds that though the extract of the government order dated 27.9.2002 has been quoted at internal page 7 of the impugned judgment of the Tribunal dated 26.3.2003 the quotation is not complete and there is no discussion as to why the said government order would not help the revisionist herein who was the appellant before the Tribunal - While it is true that the tribunal is the last fact finding authority, it did not consider the matter in correct perspective leaving out relevant parameters as also the grounds raised by the appellant before it therefore it erred while recording it s findings on this question which have to be set aside for reconsideration by it - matter on remand. The matter is remanded back to the Tribunal for re-consideration - appeal allowed in part and part matter on remand.

Summary

Issues:
1. Maintainability of review application for exemption based on diversification under section 4-A of the U.P. Trade Tax Act 1948.
2. Classification of Mild Steel Welding Electrodes and Cast Iron Welding Electrodes as goods of different nature for exemption under section 4-A.

Issue 1: Maintainability of review application for exemption based on diversification under section 4-A of the U.P. Trade Tax Act 1948:
The revisionist argued that the Tribunal erred in rejecting the appeal on a new ground not raised by either party during the proceedings. The Tribunal should not have considered this ground without it being raised, argued, or discussed during the hearing. Legal precedents were cited to support this argument. The Divisional Level Committee did not reject the review application based on maintainability, but on merits. The Court found in favor of the revisionist on this issue, quashing the Tribunal's judgment and remanding the matter for reconsideration, emphasizing the importance of raising relevant issues during proceedings.

Issue 2: Classification of Mild Steel Welding Electrodes and Cast Iron Welding Electrodes as goods of different nature for exemption under section 4-A:
The revisionist contended that the two types of electrodes were distinct in end use, raw materials, manufacturing process, and Indian Standard Code. The revisionist had specifically raised these points in the appeal before the Tribunal, which were allegedly ignored. The revisionist also highlighted a government order distinguishing goods of different nature for exemption purposes. The Tribunal, however, considered the electrodes to be similar, citing a circular. The Court agreed with the revisionist that the Tribunal failed to consider relevant aspects and grounds raised in the appeal, leading to an erroneous classification. The Court set aside the Tribunal's findings on this issue, directing reconsideration. The respondents were permitted to raise the question of review application maintainability before the Tribunal.

In conclusion, the Court allowed the revision in part, quashed the Tribunal's judgment, and remanded the matter for reconsideration within a specified timeframe. The judgment highlighted the importance of raising relevant issues during proceedings and ensuring proper consideration of all aspects by the adjudicating authority.