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2019 (12) TMI 623 - HC - VAT and Sales TaxImposition of tax - rejection of Form III-D's on technical grounds on technical grounds - Whether the tax imposed by rejecting the Form III-D's on technical grounds can be treated to be the tax admittedly payable by a dealer as defined in the Expla(nation appended to Sub-section 1) of Section 8 of the U.P. Trade Tax Act, for the purposes of computation of interest under the said sub-section? HELD THAT - In view of the order passed by this Court today in the companion Trade Tax Revision of case M/S TATA MOTORS LIMITED LUCKNOW VERSUS COMMISSIONER, COMMERCIAL TAX U.P. LUCKNOW AND ANOTHER 2018 (4) TMI 1774 - ALLAHABAD HIGH COURT the levy of interest will have to be reconsidered by the Tribunal and hence, the matter may be remanded back to the Tribunal for reconsideration of the matter afresh. In view of the facts and circumstances of the case and the order passed by this Court in companion Trade Tax Revision in TATA MOTORS, the matter is remanded to the Tribunal for reconsideration of the issues in accordance with law - Revision allowed.
Issues Involved:
1. Whether the tax imposed by rejecting Form III-D on technical grounds can be treated as tax admittedly payable by a dealer for the purposes of computation of interest under Section 8(1) of the U.P. Trade Tax Act. 2. Whether the presumption under Section 3-AAA of the U.P. Trade Tax Act, 1948, could be invoked for sales made to authorized dealers. 3. Whether the rent received for machinery/equipment entrusted to TMML can be taxed under 'Transfer of right to use' without a finding of effective control transfer. 4. Whether the Tribunal was justified in not considering the Application under Section 12-B of the Act submitted by the revisionist. Issue-Wise Detailed Analysis: 1. Tax Imposed by Rejecting Form III-D: The court addressed whether the tax imposed by rejecting Form III-D on technical grounds can be treated as tax admittedly payable by a dealer for interest computation under Section 8(1) of the U.P. Trade Tax Act. The revisionist argued that this should be reconsidered by the Tribunal, referencing an order passed in a companion case (Trade Tax Revision No. 34 of 2018). The court agreed, remanding the matter back to the Tribunal for fresh reconsideration. 2. Presumption under Section 3-AAA: The revisionist contended that the presumption under Section 3-AAA should not apply since the sales were made to authorized dealers who are registered under the U.P. Trade Tax Act. The revisionist argued that the motor vehicles/chassis sold are taxable at the point of sale to the consumer, and the authorized dealers had already admitted, collected, and deposited tax on these sales. The court noted that the Tribunal and lower authorities did not adequately consider this argument, and thus, remanded the issue for reconsideration. 3. Tax on Rent Received for Machinery/Equipment: The revisionist argued that the rent received for machinery/equipment entrusted to TMML should not be taxed under 'Transfer of right to use' as there was no effective control transfer. The revisionist cited clauses from the agreement with TMML, emphasizing that the machinery remained under their control and was used exclusively for manufacturing bus bodies as per their requirements. The court found that the Tribunal and lower authorities failed to consider these clauses and relevant case laws. Therefore, the court remanded the issue for fresh consideration by the Tribunal. 4. Tribunal’s Consideration of Application under Section 12-B: The revisionist claimed that the Tribunal, being the last fact-finding authority, erred in not considering the Application under Section 12-B of the Act. The court agreed that the Tribunal should have examined the application and the relevant facts more thoroughly. Hence, this issue was also remanded to the Tribunal for reconsideration. Conclusion: The court concluded that the Tribunal and lower authorities did not adequately consider the factual and legal arguments presented by the revisionist. Therefore, the court remanded the matter back to the Tribunal for reconsideration of all issues in accordance with the law. The revision was allowed, and the questions of law were answered accordingly.
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