9911796707
TMI Blog2003 (2) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... by which the cash security for issuing form XXXI under U.P. Trade Tax Rules, 1948 for import of stone ballast has been increased from Rs. 180 to Rs. 530 per form. 4.. The petitioner supplies stone ballast to the Railways in accordance with the Railways specification. Copy of the relevant extract of the contract dated October 25, 1999 is annexure 1 to the writ petition. Under the contract, the rate of supply of ballast, transportation charges, loading and unloading charge, stacking charges, etc., are separately stipulated. Under the U.P. Trade Tax Act stone ballast is liable to pay trade tax at 7.5 per cent under notification dated November 23, 1998. The Railway is a Central Government Department and is hence authorised under the U.P. Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 to Rs. 530 per form vide annexure 4 to the writ petition for import of 300 cubic feet stone ballast from outside the State. It is alleged that the fixation of cash security at Rs. 530 per form is wholly arbitrary and has no reasonable nexus with the actual tax liability under the U.P. Trade Tax Act. 8.. In paragraph 14 of the petition it is alleged that the rate of ballast is Rs. 215 per cubic metre. At this rate, the value of 300 cubic feet comes to Rs. 1,826.42 taking it to a round figure at Rs. 1,850. The tax at the rate of 7.5 per cent comes to Rs. 138.75. It is stated that one cubic metre is equal to 35.31 cubic feet. The petitioner is getting form III-D from the Railway and the rate of tax is 5 per cent. On that basis the tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner, Trade Tax has been upheld vide annexure CA-1 to annexure CA-12. 12.. We have carefully perused the aforesaid decisions which have been annexed to the counter-affidavit. In paragraph 11 of the counter-affidavit it has been stated that while determining the tax payable after such import the sale value of better quality stone ballast has been taken into consideration. In paragraph 25 of the counter-affidavit it is stated that the value of cash security under section 8-C(3-A) is determined on the basis of best quality of goods and also the average freight incurred thereon plus reasonable margin of profits. If in a given case the cash security is found excessive the same may be refunded or adjusted on making the final assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x which may be payable on the sale of the stone ballast. In J.P. Stone Company v. State of U.P. 1993 UPTC 1371 a division Bench of this Court observed: "The power conferred on the Commissioner under section 8-C(3-A) must be exercised in a reasonable manner and the security amount which is fixed in exercise of that power must have a nexus with the object for which security is demanded". The court also observed: "The amount of security which may be required to be paid by a dealer should be reasonable and commensurate with the tax that may be realised from him and should not be excessive." 16.. It may be mentioned that section 8-C(3) mentions ".......the amount of such security or additional security shall also in no case exceed the tax payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n therefore, would be for the Commissioner to issue circulars under section 8-C(3-A) of the U.P. Trade Tax Act, 1948 on rational and reasonable principles. For example, the Commissioner can in his circular grade the various varieties of stone ballast which are known in the market in various grades, e.g., Grade I for the best quality, Grade II for the next best, Grade III for the next, etc., according to the price of these various grades in the market, and the cash security for form XXXI should be demanded accordingly. It is inappropriate and arbitrary to demand cash security only on the basis of the highest grade or quality of stone ballast, as has been done in the present case. 21.. We make it clear that we are not directing the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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