2018 (12) TMI 1016 - HC - VAT and Sales Tax

Liability of tax - secondary machines which are in fact discarded by the petitioner-assessee on installation of a cone crusher - compounding proceedings - Held that - Though the petitioner submits that the secondary crushers were discarded, there is absolutely nothing to show that the same were not being operated. In fact, the question of law raised by the petitioner, specifically No.4, indicates that the secondary crushers were discarded for reason of the two crushers being worn out, which indicates that the crushers are still existing in the unit. There is absolutely no document produced to evidence that the crushers having been removed or the AO intimated of such removal. The petitioner is obliged to satisfy the compounding fee for one primary crusher and two secondary crushers. The petitioner as per the second permission granted, has to satisfy the compounding fee for one primary crusher and one cone crusher for the two later quarters of the assessment year. Revision dismissed.

Summary

Issues:
1. Computation of liability on secondary machines discarded by the petitioner on installation of a cone crusher.
2. Overlooking of compounding proceedings by the Tribunal.

Issue 1: Computation of liability on secondary machines:
The petitioner had one primary crusher and two secondary crushers at the beginning of the year. Compounding was granted for them. Later, the petitioner filed another compounding application for a primary crusher and a cone crusher, which was also allowed. The Tribunal reduced the compounding fee for one primary crusher and one cone crusher to two quarters of the assessment year. The petitioner argued that the secondary crushers were discarded, but the applications indicated additions, not replacements. The petitioner could have approached the Assessing Officer for revision of the compounding application if the facts were different. The Tribunal's decision was based on the applications filed and the lack of evidence showing removal of the secondary crushers.

Issue 2: Overlooking of compounding proceedings:
The petitioner contended that there was no cancellation of the compounding permission granted earlier. However, the court differentiated this case from a previous case where compounding permission was not cancelled. In this case, two compounding applications were filed in the same year, and both were allowed without cancellation. The petitioner could have requested revision of the first permission if the facts were different. The court also referred to previous judgments where compounding fees were fixed proportionately based on the introduction of new crushers. The Tribunal's decision to restrict the compounding fee for the primary crusher and cone crusher to two quarters of the assessment year was upheld. The court found no merit in the petitioner's contentions based on facts and dismissed the revision.

In conclusion, the High Court dismissed the revision, emphasizing that there was no question of law arising from the Tribunal's order. The court upheld the Tribunal's decision regarding the computation of liability on secondary machines and the compounding proceedings, finding the petitioner's contentions lacking merit.