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2014 (4) TMI 128 - HC - VAT and Sales TaxLiability to pay Entry tax - Importation of machinery and crude oil - value of goods under U.P. Tax on Entry of Goods into Local Areas 2007 Held that - Judgment in Gas Authority of India Ltd. Vs. The Commissioner of Commercial Tax U.P. 2014 (4) TMI 1 - ALLAHABAD HIGH COURT followed The expenses incurred assessee after transporting the goods inside the local area where it has to be consumed used or sold would not be a part of value of goods for the purpose of tax liability under Act 2007 but it shall confine upto the stage where the goods are brought inside the local area - In other words sale price of the goods by importer inside the local area cannot be identified as value of goods under Act 2007 - The price on which the goods are sold by assessee to its ultimate consumers inside local area cannot be taken as value of goods for the purpose of taxability under Act 2007 Judgment of Tribunal modified to the extent and the matter is remanded to Tribunal - Matter remanded back to Tribunal - Decided partly in favour of assessee.
Issues:
1. Liability for entry tax on imported machinery and crude oil. 2. Interpretation of the decision of Madhya Pradesh High Court. 3. Justification of Trade Tax Tribunal's decision in light of Kerala High Court's ruling. 4. Inclusion of amount paid to foreign seller in the value of goods for entry tax. 5. Inclusion of custom duty, port charges, and other amounts in purchase price for entry tax. 6. Determining the value of goods for entry tax on crude oil. Analysis: Issue 1: Liability for entry tax on imported machinery and crude oil The court considered whether the applicant was liable to pay entry tax on imported machinery and crude oil purchased from a foreign seller. The court noted that the questions raised were covered against the assessee under relevant sections of the U.P. Tax on Entry of Goods into Local Areas Act, 2007, and ruled in favor of the respondent. Issue 2: Interpretation of the decision of Madhya Pradesh High Court The court analyzed whether the imported machinery, used for erection and construction but not for consumption, use, or sale, was exempt from entry tax based on a decision of the Madhya Pradesh High Court. However, the court found that the relevant provisions of the U.P. Tax Act led to a different conclusion, thereby ruling against the applicant. Issue 3: Justification of Trade Tax Tribunal's decision in light of Kerala High Court's ruling The court examined whether the Trade Tax Tribunal was justified in distinguishing a decision of the Kerala High Court. The court found that the questions raised were answered against the assessee based on the provisions of the U.P. Tax Act, thereby upholding the Tribunal's decision. Issue 4: Inclusion of amount paid to foreign seller in the value of goods for entry tax The court deliberated on whether the amount paid or payable to the foreign seller should be included in the value of goods for entry tax purposes. Due to a change in statute, this issue was no longer relevant to the case. Issue 5: Inclusion of custom duty, port charges, and other amounts in purchase price for entry tax The court considered whether expenses such as custom duty, port charges, and other amounts paid by the applicant's Head Office should be included in the purchase price for entry tax. Referring to a previous judgment, the court clarified that expenses incurred after transporting goods inside the local area would not be part of the value of goods for tax liability purposes, thereby ruling in favor of the applicant. Issue 6: Determining the value of goods for entry tax on crude oil The court analyzed the definition of the "value of goods" for entry tax on crude oil purchased from a foreign seller. The court clarified that expenses incurred until the goods are brought inside the local area would be considered part of the value of goods, while expenses incurred inside the local area would not. The court modified the Tribunal's decision accordingly and remanded the matter for further proceedings. In conclusion, the court partly allowed the revision, addressing each issue raised and providing detailed reasoning based on the relevant legal provisions and precedents.
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