2019 (11) TMI 824 - HC - VAT and Sales Tax

Rate of tax - bolders, sand, pipes, etc. - It is the contention of the assessee that the rate of tax on such commodity was 4% whereas he has been subjected to tax @ 12.5% - HELD THAT - For the purposes of deduction of tax at source, lower rates are prescribed, whereas the rate of tax on commodity is independent and is separately notified in that regard. The commodities being taxable @12.5%, there is no merit in the submission advanced by learned counsel for the assessee. Also, it has been submitted that the bolders supplied by the assessee were of size less than 90 mm. Therefore, it was taxable @ 4%. It is contended that, that issue has not been decided by the Tribunal - However, perusal of the order of the first appeal authority reveals that admittedly, the assessee had not maintained any books of accounts during the assessment year in question. That being an undisputed fact, the argument being raised, cannot be carried any further, this being the revisional jurisdiction. Revision dismissed.

Issues: Challenge to imposition of tax rate on commodities, Deduction of tax at source, Tax rate on commodities, Lack of maintenance of books of accounts

Challenge to Imposition of Tax Rate on Commodities:
The judgment pertains to a revision filed against the order of the Commercial Tax Tribunal, Varanasi, which dismissed the assessee's appeal regarding the imposition of tax on commodities such as bolders, sand, and pipes. The assessee contended that the tax rate should have been 4% instead of the imposed 12.5%. However, the Tribunal upheld the assessment order, noting that the grounds raised by the assessee were not mentioned in the appeal before the Tribunal. The plea that tax was deducted at 4% by the contractee and hence the higher rate could not be imposed was deemed misconceived. The court clarified that the rate of tax on commodities is independent of the deduction rate, and since the commodities were taxable at 12.5%, the assessee's submission lacked merit.

Deduction of Tax at Source:
The judgment highlighted that lower rates are prescribed for the deduction of tax at source, while the tax rate on commodities is separately notified. The court emphasized that the deduction rate and the commodity tax rate are distinct, and the fact that tax was deducted at a lower rate did not warrant a reduction in the imposed tax rate of 12.5%. This analysis aimed to clarify the misconception raised by the assessee's counsel regarding the relationship between tax deduction at source and the tax rate on commodities.

Tax Rate on Commodities:
Regarding the specific issue of the tax rate on bolders supplied by the assessee, the argument was made that since the bolders were less than 90 mm in size, they should be taxed at 4%. However, the first appeal authority's order revealed that the assessee had not maintained any books of accounts during the relevant assessment year. As this fact was undisputed, the court concluded that the argument about the size of the bolders could not be pursued further in the revisional jurisdiction. The court's analysis underscored the importance of maintaining proper records and the impact of such omissions on challenging tax assessments based on specific criteria.

Lack of Maintenance of Books of Accounts:
The judgment highlighted the significance of maintaining books of accounts for proper assessment and dispute resolution. The court noted that the assessee's failure to maintain books of accounts during the assessment year in question was a crucial factor in evaluating the validity of the challenges raised in the revision. This lack of documentation limited the scope of arguments that could be entertained in the revisional jurisdiction, emphasizing the importance of maintaining accurate financial records for tax compliance and dispute resolution purposes.

In conclusion, the High Court dismissed the revision, finding it lacking in merit based on the analysis of the issues related to the challenge of tax rates on commodities, the deduction of tax at source, the specific tax rate applicable to the commodities supplied, and the impact of the lack of maintenance of books of accounts on the revisional jurisdiction.

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