2019 (5) TMI 1221 - HC - VAT and Sales Tax

Levy of Turnover Tax - turnover of old, discarded materials (Stores) - taxable at the ate of 10% or not - N/N. 1225 dated 31.03.1992 - benefit of declaration certificate of C.S.D. filed before him along with application under Section 12B - principles of natural justice - HELD THAT - None of the authorities have taken care of the amended notification or even the original notification which clearly provides the rate of tax at the rate of 6%8% and after amendment at the rate of 4% with effect from 1st April, 1992. The present dispute relates to the period starting with effect from 01.04.1997 which ended on 31st March, 1998, therefore, the rate of tax on old, discarded and unserviceable items will be 4%. Accordingly the order passed by the authorities below and the order of the Tribunal needs to correct. Furnishing of declaration certificate - HELD THAT - Tribunal has not justified in rejecting the claim of the applicant by recording a finding that the applicant do not fulfill the condition of Section 12B of the U.P. Trade Tax Act. From perusal of the contents of Section 12B of the Act, it is crystal clear that the said additional evidence can be placed or produced by the assessee, whether oral or documentary before the appellate authority or 'Tribunal' which the assessing authority had wrongly refused to admit or which after exercise of due diligence was not within the knowledge of the assessee or could not be produced by the assessee before the assessing authority - In the present case, the assessing authority passed the assessment order on 30th March, 2000 and the first appeal was decided vide order dated 25th September, 2001. Admittedly, the declaration certificate has been issued by the CSD canteen after a gap of about four years from the date of transaction which was taken place before 31st March, 1998, hence in my opinion, the rejection of the claim of the applicant/revisionist is unjustified. The matter is remitted to the Tribunal to pass appropriate order - revision allowed by way of remand.

Summary

Issues:
1. Tax imposition on old, discarded materials covered by a specific notification.
2. Rejection of benefit of declaration certificate under Section 12B of the U.P. Trade Tax Act.

Analysis:
1. The revisionist challenged the tax imposition on old, discarded materials and unserviceable items. The dispute centered around the rate of tax applicable, as per notifications dated 1981 and 1992. The assessing authority taxed certain items at varying rates, including 10%. However, the revisionist argued that the amended notification prescribed a 4% tax rate for the disputed items. The court found that previous authorities had overlooked the amended notification, leading to an incorrect tax imposition. The court clarified that for the relevant assessment year, the tax rate on such items should be 4%, not 10%, as per the amended notification.

2. The second issue involved the rejection of the applicant's claim based on the declaration certificate filed after the first appeal. The Tribunal cited Section 12B of the U.P. Trade Tax Act, which limits the submission of additional evidence unless the assessing authority wrongly refused it or it was not within the assessee's knowledge earlier. The applicant obtained the declaration certificate post the first appeal decision, leading to the rejection of the claim. However, the court noted that the certificate was issued after a considerable delay and was produced promptly upon receipt. The court deemed the rejection unjustified, emphasizing that the delay in obtaining the certificate did not warrant dismissal of the claim.

In conclusion, the court ruled in favor of the revisionist on both issues. The matter was remitted to the Tribunal for appropriate action, directing a new order under Section 11(8) of the U.P. Trade Tax Act within three months. The judgment rectified the tax rate discrepancy and highlighted the importance of considering all relevant evidence in tax disputes.