2014 (8) TMI 500 - HC - VAT and Sales Tax

Classification of goods - Whether product of revisionist-assessee i.e. Perforated Steel Sheets will come within the term Metallic Jaali under Entry 92, Schedule-2 of U.P.Value Added Tax Act, 2008 or will be an unclassified item - Held that - it does not appear as to what reason has been assigned by the traibunal to hold Metallic Jaali and Perforated Steel Sheet , being two different items, except of simply referring to the stand taken by Department and thereafter discussing the judgments cited by assessee and holding that the judgments do not help the assessee. - The assessee has also referred to a circular issued by Commissioner Trade Tax dated 12.3.2014 explaining his earlier circular of 2008 wherein it has explained that Perforated Sheet is a Metallic Jaali are same and has clarified this aspect - Matter remanded back to tribunal to reconsider its decision.

Summary

Issues:
Interpretation of whether "Perforated Steel Sheets" fall under the term "Metallic Jaali" as per Entry 92, Schedule-2 of U.P. Value Added Tax Act, 2008.

Analysis:
The High Court considered multiple revisions arising from a common Tribunal judgment to decide whether "Perforated Steel Sheets" should be classified as "Metallic Jaali" under the tax act or as an "unclassified item." The Assessing Authority initially deemed the item as unclassified, but the First Appellate Authority reversed this decision, equating "Perforated Steel Sheets" with "Metallic Jaali" under Entry 92. However, the Tribunal overturned this decision without providing a clear rationale, failing to address the detailed findings of the First Appellate Authority. The High Court criticized the Tribunal for not adequately justifying the distinction between the two items and for mechanically reversing the lower authority's decision without proper analysis.

Furthermore, the Court noted a circular issued by the Commissioner of Trade Tax clarifying that "Perforated Sheet" and "Metallic Jaali" are synonymous, which the Tribunal failed to consider. Consequently, the High Court directed the Tribunal to reexamine the issue, emphasizing the need for a fresh assessment. As a result, the Court allowed the revisions, set aside the Tribunal's order, and remanded the matter for reconsideration. The revisionist-assessee was also awarded costs amounting to Rs. 5,000 in the leading case.