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2021 (3) TMI 35 - HC - VAT and Sales TaxLevy of Administrative Charges - post GST situation - sale and supply of molasses under the provision of the U.P. Sheera Niyantran Adhiniyam, 1964 - the contention is that once the realization of tax has been subject to maintenance of separate accounts, the demand by the respondents of GST, as also Administrative Charges, would again amount to double taxation - HELD THAT - The issue is decided in the case of U.P. DISTILLERS' ASSOCIATION THROUGH IT'S SECRETARY GENERAL VERSUS UNION OF INDIA THROUGH SECY. FINANCE REVENUE NEW DELHI ORS. 2018 (5) TMI 274 - ALLAHABAD HIGH COURT where it was held that as an interim measure, we provide that the respondents shall not demand any Administrative Charges, provided the petitioner continues to deposit GST as demanded both by the Central and the State Government under the said enactments. Similar interim reliefs is granted to the petitioner in the present case - List and connect with Writ Petition in U.P. Distillers' Association v. Union of India and others.
Issues:
- Controversy regarding Administrative Charges on sale and supply of molasses under U.P. Sheera Niyantran Adhiniyam, 1964 - Challenge of double taxation due to demand of Trade Tax along with Administrative Charges - Previous judgment in M/S SAF Yeast Company Private Ltd. Vs. State of U.P. & Anr. - Implementation of Goods and Service Tax (GST) post 2017 - Demand for stay on Administrative Charges and willingness to pay GST - Maintenance of separate accounts for molasses transactions during legal proceedings Controversy regarding Administrative Charges: The petitioner, an Association of Distillers in Uttar Pradesh, sought to restrain the respondents from levying Administrative Charges on molasses sales under U.P. Sheera Niyantran Adhiniyam, 1964. This was challenged as potentially leading to double taxation due to the demand of Trade Tax alongside Administrative Charges. Challenge of double taxation: A Division Bench previously held in M/S SAF Yeast Company Private Ltd. case that demanding Trade Tax on molasses purchases was arbitrary and illegal, leading to a partial allowance of the writ petition. The State was directed to refund the Trade Tax amounts realized post a specific date. Implementation of GST: Post the implementation of Goods and Service Tax (GST) in 2017, the demand for GST and Administrative Charges raised concerns of potential double taxation, especially after the Trade Tax demand had been quashed in the M/S SAF Yeast Company Private Ltd. case. Demand for stay on Administrative Charges: The petitioners requested a stay on the demand for Administrative Charges while expressing readiness to pay GST. They agreed to maintain separate accounts for molasses transactions to prevent double taxation issues. Maintenance of separate accounts during legal proceedings: During the legal proceedings, several interim orders were passed requiring the parties to maintain separate accounts for molasses sales and purchases. This was to ensure that neither the State nor the distillers faced prejudice based on the final outcome of the legal proceedings. Conclusion: The High Court granted interim relief to the petitioner by providing a stay on the demand for Administrative Charges, subject to the continued deposit of GST. It was directed that separate accounts for molasses transactions be maintained by both the petitioner and the State until the final resolution of the case. The judgment aimed to prevent potential double taxation issues and maintain fairness during the legal proceedings.
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