2021 (4) TMI 178 - HC - VAT and Sales Tax

Classification of goods - equipment in question which has been held to be an electronic equipment - covered by item no. 5 machinery and spare parts of machinery of Schedule referred in Section 4(1) of the U.P. Tax on Entry of Goods Act? - Ex-parte order - HELD THAT - The Tribunal has erred in reaching a contrary conclusion that too without considering it s earlier view. In that regard it has been further submitted that the petitioner could not bring to the knowledge of the Tribunal an earlier adjudication made by it in the case of the assessee itself since the matter proceeded ex-parte on practically the first date fixed in the proceedings after the Tribunal reopened post lockdown enforced due to spread of the pandemic Covid-19 - The ex-parte nature of the order apart at present it does stand out that the Tribunal has taken two divergent views in the case of the assessee itself inasmuch as in the earlier order the Tribunal had clearly opined that the goods that have been dealt with by the assessee are not taxable under the provisions of the Entry Tax Act whereas in the appeal giving rise to the present revision a contrary view has been taken. While taking a such contrary view the Tribunal has not considered the earlier adjudication made by it which adjudication had become necessary in light of the earlier decision of this Court. The matter remitted to the Tribunal to pass a fresh order in accordance with law - Revision allowed by way of remand.

Summary

Issues:
1. Revision filed against Commercial Tax Tribunal order.
2. Interpretation of whether certain equipment qualifies as electronic machinery under the U.P. Tax on Entry of Goods Act.
3. Tribunal's failure to consider earlier adjudication and reaching divergent views.
4. Ex-parte order passed without considering previous decisions.

Analysis:
1. The revision was filed against the Commercial Tax Tribunal's order dated 18.2.2021, concerning Second Appeal No. 64 of 2019 for A.Y. 2008-09 (Entry Tax). The Tribunal had dismissed the appeal by an ex-parte order, leading to the revision being brought before the High Court.

2. The primary issue revolved around the interpretation of whether the equipment in question, deemed as electronic equipment, falls under the category of machinery and spare parts of machinery as per the U.P. Tax on Entry of Goods Act. The Tribunal was critiqued for not providing a reasoned decision on this crucial matter.

3. The Tribunal's failure to consider and decide on the essential issue of whether the imported machinery qualified as taxable under the Entry Tax Act led to the High Court remitting the matter for fresh consideration. The Tribunal's lack of reasoned findings and failure to address the specific issue raised by the assessee necessitated a re-adjudication of the case.

4. The High Court highlighted the Tribunal's inconsistency in reaching divergent views in the case of the same assessee, failing to consider its earlier adjudication. The ex-parte nature of the order, passed without taking into account previous decisions, was a significant factor leading to the setting aside of the order and remitting the matter back to the Tribunal for a fresh decision.

Overall, the High Court emphasized the importance of considering previous adjudications, providing reasoned decisions, and ensuring fair proceedings in tax matters. The need for a thorough examination of the facts and legal provisions was underscored to reach a just and well-founded conclusion in such cases.