2018 (2) TMI 1656 - HC - VAT and Sales Tax

Whether the Tribunal could have decided the second appeal in the manner it has done, cursorily, without considering the grounds of the second appeal and the questions raised before it, by merely reiterating and affirming the order of the First Appellate Court without giving any reasons for non acceptance of the pleas raised before it by the revisionist-appellant? Held that - the second appeal of the revisionist is required to be re-considered by the Tribunal keeping in mind the issues involved on merits as noticed hereinabove, as it has not done so as per the requirements of law - the question is decided in favor of revisionist. Revision allowed.

Summary

Issues:
1. Tribunal's decision on second appeal without proper consideration of grounds.
2. Justification of Tribunal in not considering Supreme Court's law on execution of agreements outside State.
3. Justification of Tribunal in not considering the transfer of right to use as a deemed sale.
4. Tribunal's decision on levy of tax on lease rentals received in Delhi.
5. Claiming interest on a non-taxable transaction.

Analysis:

1. The High Court considered the challenge to the Trade Tax Tribunal's common judgment for the assessment years 1994-95 and 1995-96. The Court formulated questions for consideration, including the Tribunal's cursory decision without proper reasoning. The Court found that the Tribunal failed to address the grounds raised by the revisionist, leading to the decision being set aside.

2. The Court examined whether the Tribunal was justified in not considering the law laid down by the Apex Court regarding transactions executed outside the State of U.P. The revisionist argued that the situs of sale was outside U.P., based on a Supreme Court decision, but the Tribunal did not address this argument. The State counsel admitted to the non-consideration of relevant pleas, leading to the Court setting aside the Tribunal's decision.

3. The Court analyzed whether the Tribunal was justified in not considering the transfer of the right to use as a deemed sale. The revisionist contended that the leased equipment did not qualify as "goods" under the Trade Tax Act and should not be subjected to tax. The Tribunal's failure to address this contention led to the decision being remanded back for reconsideration.

4. The Court evaluated the Tribunal's decision on the levy of tax on lease rentals received in Delhi. The revisionist argued that the lease agreement did not fall within the definition of "goods" and should not be taxed. The State counsel's response lacked satisfactory explanation, leading the Court to remand the matter for fresh consideration.

5. The Court examined the issue of claiming interest on a non-taxable transaction. The revisionist had already paid the tax under protest, and the Court ordered the interest realization to remain in abeyance pending further security submission. The Court directed the Tribunal to re-consider the second appeal, emphasizing the need for a thorough examination of the issues involved.