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2025 (4) TMI 359 - HC - VAT / Sales TaxRestraint on respondents from realizing entry tax from the petitioner - HELD THAT - Bare perusal of the impugned assessment order a categorical finding of fact in favour of the petitioner that on perusal of the records and the bill shows that the petitioner has not realized any entry tax from its customers while making the sale. Once a finding of fact in favour of the petitioner has been recorded no entry tax can be realized from the petitioner in view of the circular dated 18.10.2006 which still holds water. The impugned order dated 29.05.2024 passed by the Additional Commissioner Grade - 2 (Appeals-1) State Tax Bareilly is modified to the extent that no recovery of entry tax for the period from 01.04.2005 to 29.05.2005 shall be made from the petitioner. Petition disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Imposition of Entry Tax on IMFL under the 2007 Act Relevant legal framework and precedents: The Uttar Pradesh Tax on Entry of Goods into Local Area Act, 2007, was introduced with retrospective effect from November 1, 1999. The petitioner argued that IMFL was not listed in the schedule of taxable items under this Act. Court's interpretation and reasoning: The Court noted that the schedule under the 2007 Act did not mention IMFL as a taxable item, thus questioning the jurisdiction to impose entry tax on it. Key evidence and findings: The petitioner provided evidence that IMFL was not listed in the schedule of the 2007 Act, supporting the argument that no entry tax should be levied. Application of law to facts: The Court applied the statutory interpretation principle that items not listed in the tax schedule cannot be taxed. Treatment of competing arguments: The respondent argued that the levy was saved by the transition from the 2000 Act to the 2007 Act, but the Court found the absence of IMFL in the schedule decisive. Conclusions: The Court concluded that the imposition of entry tax on IMFL for the specified period was without jurisdiction. 2. Liability of Manufacturer to Collect Entry Tax Relevant legal framework and precedents: The petitioner cited precedents indicating that the burden of entry tax falls on the purchaser, not the manufacturer. Court's interpretation and reasoning: The Court agreed that the manufacturer is not liable to collect entry tax unless specified by law. Key evidence and findings: The petitioner's role as a manufacturer was undisputed, and the Court found no legal provision imposing tax collection duty on manufacturers. Application of law to facts: The Court applied the legal principle that manufacturers are not inherently liable for entry tax collection. Treatment of competing arguments: The respondent's argument that manufacturers must ensure tax payment before delivery was not supported by statutory provisions. Conclusions: The Court concluded that the petitioner, as a manufacturer, was not liable to collect entry tax. 3. Impact of the Circular Dated October 18, 2006 Relevant legal framework and precedents: The circular instructed that no entry tax should be collected for the specified period if not already realized. Court's interpretation and reasoning: The Court found the circular binding and applicable, preventing tax recovery for the specified period. Key evidence and findings: The circular explicitly stated non-recovery of entry tax for the period in question. Application of law to facts: The Court applied the circular's provisions, which were binding on tax authorities. Treatment of competing arguments: The respondent's argument that the circular did not apply was dismissed based on its clear language. Conclusions: The Court concluded that the circular precluded entry tax recovery for the specified period. SIGNIFICANT HOLDINGS The Court held that:
The final determination was that no entry tax recovery shall be made from the petitioner for the period from April 1, 2005, to May 29, 2005, and the writ petition was disposed of accordingly.
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