9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1005 - HC - VAT and Sales TaxLevy of tax on Timber - Notification No. T.I.F.-2-2375/XI-9(251)/97-U.P.Act-15-48-Order-98, dated 23.11.1998 - First appellate authority granted partial relief declaring that for the assessment year 1997-98, the items are not taxable - However, Tribunal levied tax @ 15% on timber - Held that - it appears that as per notification for the assessment year 1997-98, no tax can be levied as the timber was not taxable item - For the assessment year 1998-99, only for four months (1st December, 1998 - 31st March, 1999), the sale of timber or its items are subject to the tax @ 15%, as the said notification is applicable with effect from 1st December, 1998 - A.O. will pass a fresh order pertaining to the levy of tax on the sale of timber for the period of 1st December 1998 to 31st March, 1998 (four months) after examining the record, but within a period of three months after receipt of a certified copy of this order, as the matter is too old - Decided in favour of assessee.
Issues: Trade Tax Revisions under Section 11 of the U.P. Trade Tax Act, 1948 against the order dated 25.09.2004 passed by the Trade Tax Tribunal, Lucknow in Appeal Nos. 523 & 524/2002 for the assessment year 1997-98 & 1998-99 respectively.
Analysis: 1. Issue 1 - Interpretation of Taxability of Timber Items: The case involved a dispute regarding the taxability of timber items for the assessment years 1997-98 and 1998-99. The A.O. initially levied tax at 15% on timber items. However, the first appellate authority considered a notification dated 23.11.1998, which declared timber as taxable @ 15% w.e.f. 1st December, 1998. The appellate authority ruled that for the assessment year 1997-98, the items were not taxable, and for the assessment year 1998-99, only for four months starting from 1st December, 1998, the items were taxable at 15%. This interpretation led to a reduction in the tax demand for the mentioned assessment years. 2. Issue 2 - Validity of Rectification Orders under Section 22: The revisionist argued that the A.O. could not pass rectification orders without relevant material, citing a legal precedent from M/s. Deva Metal Powder Pvt. Ltd. vs. Commissioner of Trade Tax, U.P. The revisionist emphasized that a mistake must be apparent on the face of the record for rectification under Section 22. The judgment highlighted that rectification under this section is limited to errors that are patent, obvious, and do not require extensive argument or investigation to discover. The revisionist contended that the A.O.'s rectification orders were not justified under this legal framework. 3. Issue 3 - Tribunal's Decision and Judicial Review: The Department, dissatisfied with the appellate authority's decision, filed an appeal before the Tribunal, which upheld the A.O.'s orders by setting aside the appellate authority's decision. The revisionist challenged this decision, leading to the present revisions. The High Court, after hearing both parties and examining the notification, concluded that for the assessment year 1997-98, no tax could be levied on timber items. However, for the assessment year 1998-99, only sales from 1st December, 1998 to 31st March, 1999, were subject to a 15% tax rate as per the notification. Consequently, the High Court set aside the Tribunal's order for 1997-98 and directed the A.O. to reevaluate the tax levy for the four-month period in 1998-99 within three months. 4. Final Judgement: The High Court allowed Trade Tax Revision No. 324 of 2004 for the assessment year 1997-98 and partly allowed Trade Tax Revision No. 325 of 2004 for the assessment year 1998-99. The Court made no cost ruling in this matter. The judgment clarified the taxability of timber items for the relevant assessment years based on the legal interpretation of the notification and rectification orders under Section 22 of the U.P. Trade Tax Act, 1948.
|
