2022 (8) TMI 100 - HC - VAT and Sales Tax

Classification of Toffees - toffee and candy manufactured and sold by the dealer are liable to be taxed in schedule-V of U.P. Value Added Tax Act or in the category of sweetmeat and sugar product as mentioned in schedule-IIA at serial no.137? - HELD THAT - While the Tribunal has specifically considered the sugar content in the product manufactured and sold by the assessee and the manufacturing process to reach the conclusion that the products were toffee manufactured by the assessee, in no situation, in the field of tax regime and laws, two persons can be treated differently for the purposes of rate of tax. One commodity has to be charged to tax at one rate. The revenue having chosen to tax the same or similar commodity at the lesser rate in case of other dealers whether manufacturer or trader, it cannot be permitted to take a different view as that may introduce uncertainty and arbitrariness in tax regime, which is never permissible. In view of the stand taken by the revenue, in case of another manufacturer - M/s Perfetti Van Melle India Pvt. Ltd. of the commodity and distributor - M/s United Traders and also in absence of material brought on record to take any different view, revision filed by the revenue on similar question of law has been dismissed. For the same facts and on the same reasoning, the present revision is also dismissed.

Summary

Issues:
1. Interpretation of tax classification for toffee under U.P. Value Added Tax Act, 2008.

Analysis:
The High Court heard arguments from both the revenue's Standing Counsel and the assessee's counsel regarding a revision filed against the Commercial Tax Tribunal's order. The Tribunal had classified the toffee manufactured and sold by the assessee under Entry No. 137 Schedule II Part A of the U.P. Value Added Tax Act, 2008. The revision raised a question of law regarding the correct tax classification of the toffee and candy products. The Tribunal's decision was based on the sugar content in the products and the manufacturing process. However, the High Court emphasized that under tax laws, the same commodity must be taxed at a consistent rate to avoid uncertainty and arbitrariness in the tax regime.

In a related judgment concerning another manufacturer and distributor of similar products, the High Court dismissed a Sales/Trade Tax Revision Defective filed by the revenue. The dismissal was primarily due to the revenue's stance on the tax classification of the products in question. The High Court noted that in the absence of any new evidence or material to warrant a different view, the revision was rejected based on the same reasoning applied in the previous case. Consequently, the present revision against the classification of toffee under the U.P. Value Added Tax Act was also dismissed by the High Court.