GIST OF JUDGMENTS

 

 
56.
The Commissioner of Trade Tax, U.P. Lucknow
Vs.
M/S Universal Traders, Dhampur

 
 

Rate of tax –Section 3-A –U.P. Trade Tax Act, 1948 –Notification prescribing rate of tax for “Beltings of all kinds” –Old conveyor belting purchased by the assessee as old, discarded, obsolete conveyor belt and sold after cutting etc. as old conveyor belting –assessee claiming sale of old belting as old, discarded, obsolete goods.
Where old, discarded, obsolete conveyor belt has been purchased and has been sold as old conveyor belting after removing unusable portion from it, whether the old conveyor belting, sold after removing unusable portion by cutting etc., remains old, discarded, obsolete conveyor belting?

Held-No. The Apex Court in the case of Rainbow Steels Limited, Meerut Road, Muzaffarnagar Versus Commissioner of Sales Tax (supra) held that machinery was usable and, therefore, it was not covered by the entry “Old, discarded, obsolete -------“
In the present case, dealer purchased old discarded obsolete conveyor belt, but after cutting etc. non usable portion appears to have been removed and conveyor belt which was usable have been sold and, thus, assessing authority levied the tax under the entry “Beltings of all kinds” at the rate of 8% and not under the entry “Old, discarded, obsolete ------“. Perusal of the order of the tribunal shows that this aspect of the matter has not been examined.


 
 
(Allahabad High Court)
 
55.
M/S Hindustan Liver Limited, Meerut
Vs.
The Commissioner of Trade Tax, U.P. Lucknow

 
 

Taxability of cattle feed –Section-4 –U.P. Trade Tax Act, 1948 –Notification No. ST-3714 providing for exemption on sale of “cattle fodder including green fodder, chuni, chhilka, choker, Javi (popularly known as ghurjai), Gowar, Deoiled cake, De-oiled Rice Polish, De-oiled rice bran and rice husk –Assessee manufacturing cattle feed in concentrated form.
Whether cattle feed is covered under the entry relating to cattle fodder and its sale was exempt from payment of tax?

That the taxability of Cattle feed has been considered by the Court in the case of Cattle Feed Plant, Pradeshik Co-operative Dairy Federation Limited, Merrut Vs. Commissioner of Trade Tax, U.P. Lucknow (supra) in detail and it is held exempted from the tax under the Notification no.ST-II-3714/X-6(1)/85-U.P. Act 15/48-Order 85dated 5.6.1985 under the entry “Cattle Fodder” including green fodder, chuni, chhilka, choker, Javi (popularly known as ghurjai), Gowar, D-Oiled cake, D-Oiled Rice Polish, D-Oiled rice bran and rice husk.
Respectfully following the aforesaid decision, it is held that the turnover of the cattle feed manufactured and sold by the applicant, is not liable to tax during the year under consideration
.

 
 
(Allahabad High Court)
 
54.
The Commissioner of Trade Tax, U.P. Lucknow
Vs.
S/S Flex Pouches Pvt. Ltd., Noida

 
 
Sale- Section 2 cluase (h) and section 3-F - The U. P. Trade Tax Act, 1948 –Contractee supplying material to contractor for use in works contract and deducting value of goods from the bill of the contractor.
Whether supply of material by the contractee to the contractor for use in the works contract is sale of material by the contrctee to the contractor?

Held-Yes, On the facts of the case, issue involved is squarely covered by the decisions of the Apex Court, which has been followed by this court in Trade Tax Revision No.1614 of 1993, M/s Majestic Auto Limited Vs. CST, decided on 21.9.2004. In the aforesaid cases, it has been held that the supply of material to the contractor has been held as sale and liable to tax.
 
 
(Allahabad High Court)
 
53.
The Commissioner of Trade Tax, U.P. Lucknow
Vs.
S/S Hanif Ahmad Thekedar, Harra, Dhampur

 
 
Liabilty of Tax –Section 3-F – U.P. Trade Tax Act, 1948-Deduction of turnover of goods where tax has been paid on purchases - Assessment made ex parte- Appellate Authority and Tribunal allowed deduction of turnover of goods claimed to have been purchased from within the State.
For the purpose of computing turnover liable to tax, Section 3-F provides for deduction of value of goods whereof tax has been levied or leviable under the Act at any earlier Stage – Whether the Appellate Authority and the Tribunal were legally justified in allowing deduction of value of goods, on the ground that the same have been purchased from within the State?
Held-No, Mere purchases within the State of U.P. is not sufficient for allowing deduction under section 3-F of the Act.

 
 
[ALLAHABAD HIGH COURT]
 
52.
STATE OF KARNATAKA AND ANOTHER Vs. SHREYAS PAPERS PRIVATE LTD. AND OTHERS
 
 
(A) Transfer of “ownership of business” –Scope of - Transfer of one or more species of assets – Whether transfer of land, building, plant and machinery amounts to transfer of ‘ownership of business’? Held –No.
Business is an activity, directed with a certain purpose, more often towards producing income or profit. Ownership of assets is merely an incident rather than a characteristic of business. Hence, the mere transfer of one or more species of assets does not necessarily bring about the transfer of the ‘ownership of business’ for ‘ownership of business’ is much wider than mere ‘ownership of discrete or individual assets’. In Fact, ownership of business is much wider than the sum of the ‘ownership of the business’ constituent assets. Above all, transfer of ‘ownership of business’ requires that business be sold as a going concern.

(B) The Karnataka Sales Tax Act, 1957 –Section 13(2)(i) – Charge for arrears of Sales Tax on property- Applicability – Whether charge is available without notice of arrears? Held –No.
While the expression ‘charge’ is not defined by the KST Act, this concept is well known in property law and has been defined by section 100 of the Transfer of Property Act, 1882.
The definition of the expression ‘charge’ in section 100 of the Transfer of Property Act, 1882, unambiguously indicates that a charge may not be enforced against a transferee if he has had no notice of the same unless by law, the requirement of such notice has been waived. There can be no fixed presumption as to the transferee having constructive notice of the charge against the property.

 
 

SUPREME COURT

 

 
51.
Andhra Pradesh General Sales Tax Act – Sections 6, 9(1) Schedule I, Entries 18 and 19 – Andhra Pradesh General Sales Tax Amendments, 22 of 1995, 27 of 1996 and 30 of 1997 - Two rates of tax on sale of cement – One rate of tax where sale price of cement is inclusive of price of packing material and other Rate of tax on sale of cement where sale prices of cement and packing material are shown separately and two sales are claimed – Constitutional Validity of provision prescribing two different rates of tax for cement.
Two rates of tax adopted to get over artificial billing – Dealer having option to bill either way -Whether provisions prescribing two different rates of tax on sale of cement are discriminatory in view of Article 14 of the Constitution of India? Held –No.

 
 
Entry 18 of the Schedule I to the Andhra Pradesh General Sales Tax Act, 1957, as substituted by the Andhra Pradesh General Sales Tax (Amendment) Act, 1996, providing for sales tax at the rate of 16 paise in the rupee where the sale price of cement includes the value of the packing material and a higher rate of 20 paise in the rupee where the packing material and cement are sold separately and /or the sale price of cement does not include the value of the packing material is valid and is not violative of article 14 of the Constitution of India.
The Legislature distinguished between two categories of sale cement recorded by the dealer as in these categories there is considerable variation in the turnover base. In the transactions falling in clause (a) of entry 18 taxable turnover includes the value of the cement and the value of the packing materials. The category of transactions falling under clause (b) the taxable turnover includes only the value of the cement; it does not include the value of the packing materials. Discrimination does not arise for any dealer because the dealer can avail any one of the options available in clauses (a) and (b).
The imposition of a higher rate of tax under clause (b) of entry 18 is to check the tax avoidance measures. Contrary to normal business practices and modalities of sale of cement, manufacturers, in order to claim the tax benefit had restored the modus operandi of the sale of containers (bags) by bifurcating the price. When evidence is created prima facie in supporting the plea of separate sale of packing material, it would be difficult for the taxing authorities to establish otherwise even though the design and purpose of creating such evidence by the process of billing, etc., is quite evident. To obviate uncertainties and long drawn enquiries, the Legislature has laid down a straight formula prescribing the rate of tax on cement dependent on the two categories envisaged in clauses (a) and (b) of entry 18. It is rationalization of the entries and is regulatory in nature. Such classification would not amount to discrimination or be violative of article 14 of the Constitution of India.


 
 

ASSOCIATED CEMENT COMPANIES LTD. Vs. GOVERNMENT OF ANDHRA PRADESH AND ANOTHER

(SUPREME COURT )

 

 
50.
M/s Carbons Crafts Pvt. Ltd.
Vs.
The State of U. P. and another
 
 
Coal and coke- Dictionary meanings thereof – Expression ‘coal’ used in Entry 17 of the U. P. Tax on Entry of Goods Act and expression ‘coal including coke in its all forms but excluding charcoal’ used in section 14 of the Central Sales Tax Act – Whether Calcined Petroleum Coke, a by-product of petroleum, is included in the expression ‘coal’ used in Entry 17 of the U. P. Tax on Entry of Goods Act? Held – No.
          The Schedule of the U. P. Tax on Entry of the Goods Act, 2000 contains list of goods notified for the purpose of levy of Entry Tax. Entry 17 of the Schedule uses the expression ‘coal’. The Assessing Authority, treating the Calcined Petroleum Coke covered under the said entry of the said schedule, issued notice to the petitioner to pay Entry Tax on Calcined Petroleum Coke, brought by it into the local area. In the writ petition, the petitioner contended that Calcined Petroleum Coke was not covered under the expression ‘coal’ used in entry no 17 of the Schedule of the said Act. In the judgment, the hon’ble Court held as follows:
          According to the general rule of interpretation, nothing can be added or extracted. On this principle, ‘coal’ cannot include ‘coke’; the two are entirely different commodities as per definitions contained in English Dictionaries.
     Item No. 17 using the expression ‘coal’ in the Schedule in question does not include ‘coke’.
 
 
[ALLAHABAD HIGH COURT]
 
49.
The Commissioner of Trade Tax U. P.
Vs.
U. P. Sahakari Katai Mill Bareilly
 
 

Levy of penalty on account of realisation of amount as sales tax, or purchase tax, in excess of tax legally payable -In the exemption period in which no tax was payable, amount realized @ 2% in the name of service charges -No service rendered - After expiry of the exemption period, amount realized @2 % in the name of Trade Tax and no amount realized as service charges - Whether levy of penalty was justified where assessee had not realized any amount as sales tax or purchase tax? Held -Yes.

        Clause (qq) of sub-section (1) of section 15-A of the U. P. Trade Tax Act, 1948, before its amendment with effect from 25-4-1990 provided for levy of penalty on account of realization of any amount as sales tax, or purchase tax, where no sales tax or purchase is legally payable or in excess of the amount of tax legally payable under the Act. The dealer, the opposite party effected sales of self manufactured cotton yarn during assessment years 1988-89 and 1889-90. Turnover of sales was exempt from payment of tax under section 4-A of the aforesaid Act. During the exemption period, the dealer realized amount @ 2% of the turnover of sale in the name of service charge. After the exemption period was over, the dealer discontinued realising amount as service charge and started realization of amount @ 2 % of the turnover of sale in the name of sales tax. The assessing authorities drew the conclusion that in the exemption period, the dealer had realized amount as sales tax. The dealer contended that amount realized as service charge could not be said as the amount realised as sales tax and therefore, provision for levy of penalty was not attracted. Rejecting the contention of the dealer, the assessing authority levied penalty. The Tribunal accepted the plea of the dealer and deleted the penalty.

        On revision by the Commissioner, the hon'ble Court set aside the orders under the revision and restored the orders of penalty. The hon'ble Court held as follows:

        "In absence of any explanation for charging 2 per cent as service charges, without providing any service to the customers, there is no hesitation in holding that the dealer opposite party charged sales tax by giving it lable of service charges. This view further gets support from the fact that for the period subsequent to the completion of exemption period, the dealer opposite party has charged 2 per cent as sales tax and did not charge any amount towards the service charges."

 
 
[ALLAHABAD HIGH COURT]
 
48.
The Commissioner Trade Tax, U. P. Lucknow
Vs.
S/S Ram Ashrey Ram Adhar, Fatehpur

 
 
The U. P. Trade Tax Act, 1948 –Section 12-B-Additional evidence on appeal – Additional evidence taken on record by the Appellate Authority – Reasonable opportunity for challenge or rebuttal to the Commissioner –A legal requirement.
Whether the Appellate Authority can accept additional evidence taken on record after examination by it and without affording reasonable opportunity to the Commissioner for challenge or rebuttal? Held –No.

        During the assessment year, the dealer opposite party declared inter-state purchases for ex-state principals and dispatched the goods to ex-state destinations. The dealer did not produce Form ‘F’ before the assessing authority. In appeal, the dealer produced additional evidence in 345 pages. The Appellate Authority did not afford the opportunity to the Assessing Authority for challenge or rebuttal of the additional evidence. The Appellate Authority, after examination of the papers, allowed benefit to the dealer. Appeal, filed by the Commissioner before the Tribunal on the ground of non affording of opportunity for challenge or rebuttal of additional evidence, was dismissed.
        On revision by the Commissioner, the hon’ble Court set aside the orders passed by the Appellate Authority and the Tribunal and sent back the matter to the Appellate Authority to decide the appeal afresh in accordance to law after giving opportunity to the Assessing Authority as contemplated under section 12-B of the Act. The hon’ble Court observed as under:
        “Section 12-B of the Act says that after taking the additional evidence on record reasonable opportunity for challenge or rebuttal shall be given to the assessing authority. Perusal of the order of the first Appellate Authority and the Tribunal shows that no opportunity was given to the assessing authority for challenge or rebuttal of those papers. Thus, order of the first Appellate Authority was vitiated and order of Tribunal confirming the said order is erroneous.”

 
 
[ALLAHABAD HIGH COURT]
 
47.
M/s Tarun Intemation Ltd. Ghaziabad
Vs.
The Commissioner of Trade Tax, U. P. Lucknow
 
 

Manufacture of C. R. strips out of C. R. Sheets and H. R. Sheets – Iron scrap obtained during the process of manufacture – Whether scrap to be treated manufactured goods?
Held –Yes. The scraps have been obtained in the process of manufacturing by using C. R. Sheets and H. R. Sheets as a raw material. Thus Iron Scrap was a different commodity than the C. R. Sheets and H. R. Sheets.

U. P. Trade Tax Act, 1948 -Section 4-BB -Set off of tax paid on raw material and packing material used in manufacture of notified goods - Iron -steel as defined in section 14 of the Central Sales Tax Act, 1956 declared notified goods - Such definition includes iron scrap -Whether set off of tax paid on C.R. Sheets and H. R. Sheets can be allowed with the tax payable on iron scraps obtained during the manufacturing of C.R. Sheets and H.R. Sheets?
Held - Yes. The applicant is entitled for the set off of tax paid on raw material with the tax payable on the Scrap under section 4-BB of the Act.

 
 
[ALLAHABAD HIGH COURT]
 
46.
M/s Radhey Shyam & Company
Vs.
The Commissioner of Trade Tax, U.P., Lucknow
 
 
The U.P. Trade Tax Act, 1948 –Section 6 –Objection to jurisdiction of assessing authority – when can be raised before Appellate Authority, Revising Authority or the Tribunal?
Held – A bare perusal of the aforesaid section shows that question of territorial jurisdiction of the assessing authority shall not be allowed to be raised before any authority or revising authority or the Tribunal unless following twin conditions are satisfied:
 
(i)
(i) The said objection was raised before the assessing authority at the earliest possible opportunity.
(ii)
(ii) Unless in the opinion of the appellate or revising authority or the Tribunal there is failure of justice.
 
        Unless and until it is established that there is consequential failure of justice the question of territorial jurisdiction cannot be permitted to be raised as it does not go to the very root of the matter.
 
 
[ALLAHABAD HIGH COURT]
 
45.
The Commissioner of Trade Tax, U.P. Lucknow
Vs.
S/S South M.P. Freight Carrier, Delhi
 
 
Origin and destination places of goods declared outside the State of U.P.- Transit Authorisation obtained by the driver of the vehicle - Vehicle alongwith goods found at the business place of the transporter within U.P. -Period allowed by the officer in-charge of the Entry Check-post un-expired - Seizure of goods by the Trade Tax Officer on the presumption that goods will be sold inside the State -Tribunal directing release of goods after accepting security in form of bank guarantee of the fifty per cent of the maximum amount of penalty that can be levied and for releasing the security if transit pass is surrendered at the Exit Check-post - Whether decision of the Tribunal is legally justified?
Held - Yes. The Tribunal has directed the release of the goods on furnishing of security in the form of bank guarantee to secure the interest of revenue and to insure the transportation of goods outside the State of U.P.
 
 
[ALLAHABAD HIGH COURT]
 
44.
The Commissioner of Trade Tax, U.P. Lucknow
Vs.
M/S Shaiwal Chemicals, Ghazipur
 
 
The U.P. Trade Tax Act, 1948 – Section 3-B – Liability on issuing false or wrong declaration or certificate – Notification and Recognition Certificate both entitling the dealer for partial exemption on purchase of goods – Dealer issuing Form prescribed for full exemption, after obtaining from its assessing authority –Dealer claiming that Forms were issued by the assessing authority after proper inquiry and therefore, it cannot be said that he (the dealer) had issued wrong and false Form while making the purchases – Whether it can be said that dealer had not issued false or wrong forms of declaration within the meaning of section 3-B of the Act?
Held –No.
        Dealer could not become entitle to avail the benefit of full exemption and to issue Form 3-B for full exemption merely because it was erroneously issued by the assessing authority on the basis of misrepresentation made by the dealer. The dealer cannot take the advantage of wrong committed by the assessing authority. Issuance of Form 3-B for full exemption for which the dealer was not entitled, amounts to be issuing a wrong and false certificate. In the circumstances, assessing authority had rightly invoked the provisions of Section 3-B and demanded a differential amount.
 
 
[ALLAHABAD HIGH COURT]
 
43.
The Commissioner of Trade Tax, U. P. Lucknow
Vs.
S/S Shyam Babu Gupta, Jalaun
 
 

Change of principal place of business by a dealer having business places in jurisdiction of more than one Sales Tax Officer – Prior permission of the Commissioner as required under Rule 6(7) of the U.P. Trade Tax Rules, 1948 not obtained - Intimation about change of principal place of business given to assessing authority – Whether the assessing authority, in whose jurisdiction earlier principal place of business was situated, loses its jurisdiction over the dealer?

Held –No.
         In the present case, the dealer started business on 15.05.1993 at Konch. On 04.02.1995 he opened a branch office at Etah, district Jalaun and Konch and had declared its principal place of business as required under Rule 6(2) and thus further change of principal place of business from Konch to Mahoba required prior permission of Commissioner of Trade Tax or any other officer authorized by him. It appears that no such permission has been granted by the Commissioner or any other officer authorized by him. Mere information about the change of principal place of business to the Trade Tax Officer concerned, was not sufficient. By the application of the dealer, jurisdiction could not be transferred and the officer could not cease with the jurisdiction, in the absence of the permission as required under Rule 6(7).

 
 
[ALLAHABAD HIGH COURT]
 
42.
Commissioner Trade Tax
Vs.
Uma Export Industries Estate
 
 
The U.P. Trade Tax Act, 1948 – Section 3-A – Provision for notifying of rate of tax for the purpose of levy of tax on sale of goods – Section 4-B –A provision for issue of notification for specifying goods for the purpose of allowing concession or exemption on purchase of raw material and packing material to be used in manufacture and packing of such notified goods –Whether notification issued for the purpose of specifying notified goods for the purpose of Section 4-B of the Act should be interpreted in the light of the notification issued under section 3-A? Held –No.

          The objects of section 4-B and section 3-A are quite different and they operate in different fields. Section 4-B grants relief to certain manufacturers by way of granting concessional rate of tax or without payment of tax on the purchase of raw material and packing material in respect of manufacture of specified goods. Section 3-A provides rate of tax except as provided in section 3-D, the tax payable by a dealer under the Act.
         The reference of the notification issued under section 3-A is wholly irrelevant for the purpose of interpretation and construction of notification issued under section 4-B of the Act.

 
 
[ALLAHABAD HIGH COURT]
 
41.
The Commissioner Trade Tax, U.P. Lucknow
Vs.
M/S Jagdamba Agencies, Farrukhabad
 
 
The U.P. Trade Tax Act, 1948 – Section 10-B –Power of Commissioner to review an order on the basis of illegality and impropriety – Section 21 – Assessment or re-assessment of turnover escaped from assessment – Scope of Section 10-B and Section 21 for initiating proceedings -Whether proceedings under Section 10-B cannot be initiated where proceedings under Section 21 have been initiated? Held –No.
         Both the sections operate on a different field and under different circumstances. If the assessing authority is of the view that there was an escapement, on the basis of the material came in the knowledge of the assessing authority subsequently, proceedings under section 21 can be initiated. However, power of section 10-B of the Act can be exercised to examine the legality and propriety of any order on the basis of the material existed on record at the time of assessment proceedings.
         The submission of the learned counsel for the opposite party that once notice under section 21 was issued proceedings under section 10-B of the Act could not be taken, cannot be accepted. This argument can be accepted only in a situation when proceeding under section 10-B of the Act is initiated on the basis of the fresh material which resulted to the escaped assessment because on the basis of such material, proceedings under section 21 of the Act could only be initiated and not under section 10-B of the Act.

 
 
[ALLAHABAD HIGH COURT]
 
40.
M/S Jai Prakash And Sons, Muzaffarnagar
Vs.
Commissioner of Trade Tax, U. P.

 
 

        Dealer's version that the shop was given on rent to another dealer and stock of fertilizer found at the time of survey belonged to such other dealer. Such other dealer had purchased the goods from another dealer. Dealer also disclosed names of such two other dealers. Assessing authority, disbelieving the version of the assessee, assessed tax on the basis goods found at the time of survey. On appeal by the dealer, case remanded to assessing authority for making assessment after conducting proper inquiry from such other dealers - Assessing authority issued notices and summons to such dealers - Such other dealers did not appear before the assessing authority but they, in their letter to assessing authority, denied the statement of assessee- Assessing authority, without taking note of summons issued by it and after accepting the version of such other dealers, passed assessment order- In appeal by the dealer, Appellate authority remanded the case for affording opportunity of cross examination with the other dealers- In appeal before the Tribunal, the assessee challenged remand order on the ground that second inning was not permissible. The Tribunal allowed the appeal. In revision by the Commissioner, the hon'ble Court set aside the order of the Tribunal.

Held - Though assessing authority had only issued summons to the aforesaid two parties and they have also responded but the assessing authority had not asked those parties to appear and had not given any opportunity for cross examination. Therefore, enquiry was not properly conducted. In these circumstances, direction of the first appellate authority to make proper enquiry and summon the aforesaid two parties to provide opportunity of cross examination cannot be said to be unjustified.

 
[HIGH COURT ALLAHABAD]
 

39. The U. P. Trade Tax Act, 1948 –Section 10-B –Review by the Commissioner –Appeal under section 9 of the Act against assessment order decided and dismissed –Assessment order merged in the appellate order- Assessment order cannot be revised by the Commissioner under section 10-B of the Act.

Dismissing the revision filed by the Commissioner the hon’ble Court has held –
        “Issue involved in the present revision is covered by decision of this Court in the case of M/s Puran Chand And Company Vs. CST, reported in 2000 UPTC, 1233 in which relying upon the Division Bench decision of this Court in the case of M/s M.R. Soap (Pvt) Ltd. Ghaziabad Vs. Assistant Commissioner (Ass.) Sales Tax Modinagar, Ghaziabad, reported in 1991 UPTC, 517 it has been held that assessment order merged in the appellate order, therefore, assessment order cannot be revised under section 10-B of the Act.”

The Commissioner, Trade Tax, U. P. Lucknow Vs. S/S Manoj Trading Company, Kanpur 2006 NTN (Vol-29) – 100 [ALLAHABAD HIGH COURT]

38. The U. P. Trade Tax Act, 1948 –Section 8(1) –Payability of interest on the tax admittedly payable – In the return dealer declaring sales liable to tax at concessional rate of tax against submission of Form 3-D –Dealer failed to furnish Form 3-D in respect of some of the sales- Assessing authority creating demand of interest treating difference of amount of tax levied as the tax admittedly payable -Tribunal holding the differential amount of tax as disputed tax and not the tax admittedly payable –Tribunal’s decision not based on any reasoning, cannot be sustained.

        Allowing the revision filed by the Commissioner, the hon’ble Court held-
        “ CST Vs. Indian Herbs Research and Supply Co., 1982 U.P.T.C. is directly on the controversy involved in the present case. This Court has considered section 8 of the Central Sales Tax Act alongwith Section 8 of the U. P. Sales Tax Act, as amended by U. P. Act No. 38 of 1975 and has held that where a dealer is seeking exemption from levy of tax upon some part of turnover unless he fulfills the statutory requirement for such a claim he shall have to pay interest upon the unpaid amount of tax calculated on the turnover worked out without regard to claim of exemption. In this case the High Court disapproved the view of the Tribunal that interest for not filing of Form “C” on the unpaid amount would be payable from the date of assessment. The reason is that in sub-section (1) of section 8 of the Act, the starting point for the liability for payment of interest on the unpaid part of the admitted tax, whichever is later. The Tribunal in the case in hand has not given any reason for deletion of levy of interest except saying that it is not proper in their opinion. The order of the Tribunal is thus laconic and cannot be sustained.”

        The learned counsel for the dealer has placed reliance upon a judgment of this Court in the case of CTT Vs. Ram Ratan Ambrish Kumar 2003 NTN (22) 522. After careful reading of above case I find that it has no application to the controversy involved in the present case. In that case, the revision was dismissed by the Court on the ground that the finding of the Tribunal that the dealer was under bonafide belief and there was no malafide, is a question of fact. No principle of law was decided. Apart from above, the earlier various pronouncements referred to in the earlier part of this judgment have not been considered by the learned Single Judge.”

The Commissioner of Trade Tax, U. P. Lucknow Vs. S/S Deepak Hume Pipe Manufacturing Company 2006 NTN (Vol-29) – 104 [ALLAHABAD HIGH COURT]

37. (A) The U. P. Trade Tax Act, 1948 –Section 3-A- Classification of goods for the purpose of rate of tax – In the entry “All kinds of minerals, ores, metals and alloys including sheets and circles”, metal refers to metal in primary form –Aluminium powder being manufactured product, can not be said metal in primary form – to be treated as unclassified item.
(B) The U. P. Trade Tax Act, 1948 –Section 22 – Rectification of apparent mistakes on face of record in any order – The Apex Court holding the metal under the entry “All kinds of minerals, ores, metals and alloys including sheets and circles”, metal in primary form –In the assessment order, assessing authority assessed sale of aluminium powder treating it metal – Mistake in order apparent mistake on face of record and can be rectified under section 22 of the Act in view of the judgment of the Apex Court.

        Allowing the revisions filed by the Commissioner, the hon’ble court held-
        “In my view, aluminium powder cannot be said to be metal in primary form, in as much as it is manufactured product. It can not be treated as metal under the entry All kinds of minerals, ores, metals and alloys including sheets and circles” including in any other entry of any other notification issued under the Act of the notification no. 6075 dated 01.10.1981. It is settled principal of law that on the basis of the decision of the High Court and the Apex Court order can be rectified under section 22 of the Act being mistake apparent on face of record. Reliance is placed on the decision of M/s Karam Chand Thapar &Bros Ltd. Vs. State of U. P. and another reported in 1976 UPTC, 671, M/s Ram Singh and Sons Engineering Works Vs. State of U. P. reported in 1977 UPTC, 74 and in the case of Hotel Clarks Shiraz Vs. CST reported in 1992 UPTC, 986.”

The Commissioner, Trade Tax, U. P. Lucknow Vs. S/S Deva Metal Powder Products Pvt. Ltd. 2006 NTN (Vol-29) – 108 [ALLAHABAD HIGH COURT]

36. The U. P. Trade Tax Act, 1948 -Section 15-A (1) o – imposition of penalty in cases of goods imported from outside the State with a view to evade payment of tax –assessee importing silver ornaments from outside the State –goods not accompanied by bill and Form –31 –Imposition of penalty justified.

Two statements of the dealer recorded on two different dates. In first statement recorded in presence of police at the time of survey of the shop, dealer admitting purchase of goods from a dealer outside the State– In second statement recorded on different occasion the dealer disclosed that some of the ornaments belonged to him and some to two other persons and stated that silver was sent to Salem alongwith Form-31 through a local travel agent for preparation of ornaments – dealer alleging that first statement was given under duress- Plea not taken when second statement was recorded –Also no document was found relating to dispatch of goods outside the State at the time of interception of goods –Documents found related to ex-state dealer - Second version not reliable.

        Dismissing the revision filed by the dealer, the hon’ble Court held as follows:
        “I am of the view that no interference is called for in the present case. Admittedly, alongwith goods no bill and declaration certificate was found. At the time of statement dated 2.11.1991 it was categorically stated that 120 Kg. Silver ornaments was purchased from M/s Kala Refinery. Alongwith the goods documents relating to Kala Refinery was only found. No documents relating to M/s V. N. Payals were found. On 16.12.1991 also Bal Krishna had not stated that the statement given on 2.11.1991 was under duress. Thus, on the facts stated above, it is a clear case where the dealer has attempted to evade the tax. Therefore, penalty has rightly been imposed on the applicant.”

Abhishekh Jewellers Vs. Commissioner of Trade Tax 2006 NTN (Vol-29) – 110 [ALLAHABAD HIGH COURT]

35. The U. P. Trade Tax Act, 1948 – Section 3-D –Exemption from payment of tax on purchase of goods against furnishing of Declaration in Form 3 C(5) –Forms furnished by purchasing dealer before its assessing authority genuine and issued by the Department to the selling dealer – Payments made by the purchasing dealer to the selling dealer by cheques – Department alleging that selling dealer was bogus – No collusion established between seller and purchaser -Exemption cannot be denied.

        Dismissing the revision filed by the Commissioner, the hon’ble Court has held that the exemption against declaration forms cannot be refused unless form is found forged and case of collusion between the parties is made out.

The Commissioner, Trade Tax U. P. Lucknow Vs. M/s Satya Narain Singh &Co., Etawah 2006 NTN (Vol-29) – 113 [ALLAHABAD HIGH COURT]

34. The U. P. Trade Tax Rules, 1948 –Rules 77 and 77-A – Service of notice on agent - Agent not authorized by the dealer in writing –Service invalid.
        Dismissing the revision filed by the Commissioner the hon’ble court held as follows:
        “Rule 77-A says that an authorize agent must be appointed by the dealer in writing. In the present case, Sri Raman Kumar was not appointed as the authorized agent by the dealer in writing, therefore, service on Sri Raman Kumar can not be said to be a valid service and it has been rightly held by the Tribunal.”

Commissioner of Trade Tax, U. P. Lucknow Vs. M/s Chaudhary Ramchandra & Sons, Kanpur 2006 NTN (Vol-29) – 116 [ALLAHABAD HIGH COURT]

33. The U. P. Trade Tax Act, 1948 –Section 3-F – Transfer of right to use goods – contract of transportation of milk from one place to other-Places specified under the contract – Vehicles remaining in the control of the owner – Salary of employees, diesel expenses, taxes, insurance charges, maintenance charges borne by the owner of the vehicles –contract of transportation of milk and not a contract for transfer of the right to use vehicles.
        Held – “ Further, a bare perusal of the various terms and conditions of the aforesaid contract show beyond doubt that it was essentially a contract to transport the milk from one point to another. It was not a case of transfer of transport vehicle and its use. The transport vehicle remained under the control of the dealer the opposite party in as much as it has to employ the driver and other staff for its running and was made liable to get the vehicle insured and pay the road tax, goods tax and salary of the driver and cleaners etc. The Tribunal misconstrued the terms and conditions of the above contract and it has wrongly reached to the conclusion that there was transfer of right to use the transport vehicle.”

M/s Jagannath Gautam Vs. Commissioner of Trade Tax, U. P. Lucknow 2006 NTN (Vol-29) – 118 [ALLAHABAD HIGH COURT]

32. The U. P. Trade Tax Act, 1948 – Sections 10-B and 21 –Scope of – Surcharge, leviable on sale of Matar, not levied by the Assessing Authority in the assessment order passed by it – Assessment order can be reviewed by the Deputy Commissioner under Section 10-B of the Act- Tribunal illegally quashed the order under section 10-B of the Act.

        Allowing the revision filed by the commissioner, the Hon’ble Court has set aside the order passed by the Tribunal and has held that both the sections operate on a different field and under different circumstances. If the assessing authority is of the view that there was an escaped assessment on the basis of the material came in the knowledge of the Assessing Authority subsequently, proceeding under section 21 of the Act can be initiated. However, power of section 10-B of the Act can be excercised to examine the legality and propriety of any order on the basis of the material existed on record at the time of assessment proceeding.
        In the present case, admittedly surcharge could not be levied on the turnover of matar, which was leviable under the provisions of the Act and therefore, if the Deputy Commissioner (Executive) on the basis of the material on record arrived to a conclusion that non levy of surcharge was improper and illegal, he was vested with the power to revise the assessment order, which he has rightly exercised. The Tribunal has illegally quashed the order under section 10-B of the Act.

The Commissioner of Trade Tax, U. P. Lucknow Vs. S/s Mathura Prasad Gaya Prasad, Kanpur Dehat 2006 NTN (Vol-29) – 126 [ALLAHABAD HIGH COURT]

31. The U. P. Trade Tax Act, 1948 – Section 21 and The U. P. Trade Tax Rules, 1948 –Rule 77 – Service of notice for initiating proceedings under Section 21 – In first instance mode of service by affixation adopted - Assessee raising objection about service of notice but participated in the proceedings - Service of notice by mode of affixation, without exhausting other modes and without recording that other modes were inapplicable, invalid –Assessment order, being without jurisdiction, quashed.
        Quashing the impugned reassessment order, the Hon’ble Court has held that the service of the reassessment notice was not made on the petitioner within the statutory period of limitation i.e. within two years from the end of the assessment year. The alleged service of the notice by affixation on 31st March, 2005 was not a valid service and as such even if the petitioner had acquired the knowledge of the assessment proceedings and subsequently participated in the proceedings, it would not confer jurisdiction on the assessing authority to frame the assessment order. The assessing authority resorted to the service straightway. The assessment order does not disclose that any attempt was made by the assessing authority to serve the reassessment notice either by tendering it personally to the dealer or his family members or by registered post. He has not recorded any finding nor given any reason that the service of the notice by other modes could not be effected. There is no material to show that there was any reasonable ground to believe that the addressee was evading service. The Assessing Authority wrongly assumed the jurisdiction to initiate the reassessment proceeding and to frame the impugned reassessment order.
M/s National Chemical Products Vs. State of U. P. and others 2006 NTN (Vol-29) – 120 [ALLAHABAD HIGH COURT]

30. The U. P. Trade Tax Act, 1948 –Scope of Sections 10-B, 21 and 22 – Discrepancies mentioned in the notice under section 10-B explained in the proceedings initiated by Assessing Authority under Section 21 – Whether proceedings taken under Section 10-B are illegal and unjust? Held –No.

        The dealer, the opposite party carrying on business of sale of Hosiery, Readymade Garments, merchandise goods etc. disclosed import of goods worth Rs. 3,87,414.42. On this basis, the Assessing Authority determined Rs. 4,50,000.00 as the turnover of sales and assessed it to tax. Subsequently, the Deputy Commissioner (Executive) found that the dealer had imported goods for Rs. 9, 57, 704.06. The Deputy Commissioner issued notice for revision of the assessment order under Section 10-B of the Act. In the notice four other reasons were also mentioned. The dealer did not cooperate in the proceedings under Section 10-B. The Assessing Authority, initiating proceedings under Sections 21 and 22 of the Act sought the explanation of the dealer on the discrepancies mentioned in the notice issued under Section 10-B and observed that the dealer had explained the discrepancies. The Deputy Commissioner passed ex parte order under Section 10-B. In appeal before the Tribunal against the order passed under Section 10-B, the Tribunal quashed the order passed by the Deputy Commissioner (Executive).
        In revision filed by the Commissioner, Trade Tax, the Hon’ble Court allowed the revision and remanded the matter to the Deputy Commissioner (Executive) for passing order after affording opportunity to the dealer.
        Held- “In my opinion, the order of the Tribunal is not sustainable. Section 21, 22 and 10-B of the Act operate in a different circumstances and gives power to the different authorities under the Act. Assessing Authority has power to initiate proceedings in case, if he has material to form a believe that turnover escaped assessment. Under Section 22 of the Act, Assessing Authority or any other Authority can rectify the order if there is amistake apparent on the face of record. Under Section 10-B of the Act, Commissioner or Deputy Commissioner have power to revise the assessment order or any other order passed by the Assessing Authority, if they are found to be improper or illegal. Merely because, a proceeding under Section 21 had been initiated and in the order passed under Section 21 of the Act, objection raised in the notice under Section 10-B has been discussed it will not take away the jurisdiction of the Revising Authority to proceed under Section 10-B of the Act to examine the legality or propriety of the assessment order. The view of the Tribunal in this regard is illegal and erroneous.”

The Commissioner Trade Tax, U. P.Lucknow Vs. M/s Harish Chandra and Sons, Aligarh 2006 NTN (Vol-29) – 101 [ALLAHABAD HIGH COURT]

29. The U. P. Trade Tax Act, 1948 –Section 3-F –Plying of buses etc. on the scheduled routes prescribed by Indian Oil Corporation for carrying its staff members –Vehicles remained in the control and possession of the owner of buses - Whether matter involves transfer of the right to use the buses.

        The dealer opposite party had contended that he had not transferred right to use buses and therefore, transportation charges received were not turnover of sale. Assessing Authority, after rejecting the plea of the dealer, assessed the receipts treating it the turnover of sale, effected by transfer of right to use buses. In appeal before the Tribunal, the Tribunal, after making following observations, accepted the plea of the dealer:
        “It appears that in view of the terms and conditions of the agreement made from the Indian Oil Corporation, Mathura, the vehicle remained in the ownership of the appellant after the day word on scheduled routes are over. The bus owner was also liable for all expenditure in running the bus and for its upkeep. The driver and all other staff were the employees of the bus owner. The bus owner was also liable not only for running expenditure but also for the insurance etc.”
        Dismissing the revision filed by the Commissioner, Trade Tax, the Hon’ble Court held that the case was squarely covered by the judgment in the case of M/s Ahuja Goods Agency and another Vs. State of U. P. 1997 UPTC 629, delivered by the Division Bench of that Court. In that case it was found that the custody of the trucks remained with the owner and only transportation charges for transportation of goods were paid. There was no transfer of right to use any specified vehicle. The vehicle remained in the custody of the owner through drivers. Therefore, it was held that transportation charges were not liable to tax.

The Commissioner, Trade Tax, U.P. Lucknow Vs. Sunil Agrawal 2006 NTN (Vol-29) – 98 [ALLAHABAD HIGH COURT]


28. The U. P. Trade Tax Act, 1948 –Section 2 (i) Turnover –Amount of freight -Coal imported by coal agent from outside the State through Railways and sold to brick kiln owners by endorsement of builties –Delivery of coal taken by brick kiln owners after payment of Railway freight – whether amount of freight forms part of the turnover of coal agent? ––Freight amount is not part of turnover where sale effected by endorsement of builties.

        The contention of the opposite party was that he, had imported coal from outside the State in the capacity of coal agent of brick kiln owners. He had endorsed the Railway receipts in the name of the brick kiln owners. Railway freight was paid to Railways directly by the brick –kiln owners and therefore, the amount of freight was not part of his turnover. The Department had alleged that the opposite party, the dealer had purchased coal in its own account, imported the goods against its own Form –31, the purchase bills were in the name of the dealer and thereafter, by raising the bills coal were sold to brick kiln owners, therefore, sale by the dealer to brick kiln owner were on principal to principal basis. The Assessing Authority, after rejecting the claim of the dealer, included the amount of freight in the turnover of the dealer and assessed such turnover to tax. In appeal before the Trade Tax Tribunal, the Tribunal held that amount of freight paid by brick kiln owners was not part of the turnover of the dealer.
        In the revision filed by the Commissioner, Trade Tax, the Hon’ble Court sent back the matter to the Tribunal for reconsideration in the light of the following observations:
        “None of the authorities have considered the claim of the dealer as raised by the counsel of the dealer that the coal was sold by endorsement of builties in favour of brick kiln owners. If the sale had been affected by the endorsement of builties in favour of brick kiln owners and the brick kiln owners have taken the delivery of the goods from Railway on payment of freight, the position would be entirely different. In my opinion, in that case freight would not form part of the turnover. No such finding has been recorded by the Tribunal. Therefore, matter needs reconsideration by the Tribunal. It is further stated that the Tribunal should also consider whether the dealer acted as an agent of brick kiln owners in making the purchase and what is evidence in this regard. This aspect of the matter requires reconsideration in the light of the decision of this Court in the case of CST Vs. Ramapati Tewari (supra) and CST Vs.Sharma Coal Depot (supra).”

The Commissioner, Trade Tax, U.P. Lucknow Vs. S/s Vardhman Trading Company, Meerut 2006 NTN (Vol-29) – 96 [ALLAHABAD HIGH COURT]

27.The U. P. Trade Tax Act, 1948 – Section 2(h) – Sale or bailment -Sale of Indian Made Foreign Liquor in bottles – Amount charged for bottles at the time of sale of liquor at rates fixed by the Commissioner Excise –If empty bottle is returned by the vendor, he is paid a sum, less than the some charged at the time of sale of liquor, fixed by the Excise Department – The transaction involves sale of bottles.

        The opposite party, the assessee had sold IMFL in bottles and had realized amount for bottles of alongwith sale price of liquor.The amount for bottles of 750 ml was charged @ Rs.2.30 per bottle. If the vendor returned empty bottle, he was paid Rs. 1.45 for such bottle. These amounts were fixed by the Commissioner of Excise, U. P.. The assessee contended that he had realized security amount in respect of bottles and amount so realized was not turnover of sale of bottles. According to the assesseee it was a case of bailment. Assessing Authority, after rejecting the contention, assessed tax on sale of bottles. In appeals, plea of the assessee was accepted. The Tribunal had held it to be a case of bailment.
        On revision by the Commissioner the hon’ble Court has observed that it had only been provided that in case if the bottle is refunded, some part of the amount would be refunded. Therefore, there was no question of providing bottle on bailment to the vendor.
        Held that amount charged by the dealer from the customer was towards the price of bottle and not towards the security subject to refundable on the return of the bottle when price was charged from the customer, it was towards the sale consideration. It had only been provided that in case if the bottle would be refunded, some part of the amount would be refunded, therefore, in the present case, bottle was sold against the sale consideration, therefore, there was no question of providing bottle on bailment to the retail vendor.

Commissioner, Trade Tax, U.P. Lucknow Vs. The Cooperative Co. Ltd., Saharanpur 2006 NTN (Vol-29) – 91 [ALLAHABAD HIGH COURT]

26.Whether sale of “Boroplus” is liable to tax @ 12% under the notification No. ST-II-5784 /X-10(1)-80-U.P. Act XV/48 –Order-81, dated 7th September, 1981, prescribing rate of tax for “All kinds of cosmetics and toilet preparations for beautification or care of face, skin, hair, nails, eyes or brows but not including soaps, safety razor blades, hair combs, tooth pastes, tooth powders and other dentifrices, tooth brush and kumkum” or @6% as medicine under the notification No. ST-II-5785/X-10(1)-80-U.P. Act XV/48 –Order-81, dated 7th September, 1981, prescribing rate of tax for “Medicines and pharmaceutical preparation including insecticides and pesticides”?
Held-

     “In my opinion, on the consideration of various decisions and Dictionary meanings referred hereinabove following aspect are relevant for classification of product under the entry “cosmetic or toilet preparation” and medicine.
(i) How product is known in common parlance and in commercial sense.
(ii) Mere fact that the product has some curative or preventive effect is not enough to classify the product as a medicine.
(iii) Mere fact that the product is being manufactured under the Drug License is not enough to classify the product as medicine.
(iv) Language of the entry has to be given effect.
(v) How the product is known in scientific sense or technical sense is not much relevant.
(vi) Dictionary meaning is a good guide but not conclusive.
(vii) For being a medicine a product must have a effect either to cure the disease or to prevent and intend use must be for treatment, mitigation or prevention of disease and in common parlance and commercial sense known as medicine.
(viii) Cosmetics and toilet preparation are product which is used for beatification or care of face, skin, hair, nails, eyes or brows and are known as cosmetic and toilet preparation in common parlance and commercial sense.
(ix) Onus lies on the revenue to prove that product falls under particular entry.
    Himani Boroplus is commonly and generally available in a cosmetic or general merchandise shop and not in a medicine shop. It is generally and commonly used during winter to protect skin and to make it smooth. It is commonly known as cosmetic and not as a medicine. It may have some antiseptic effect but that will not classify it as medicine. It is not intended to be used for treatment, mitigation or prevention of disease. Entry of cosmetic is much wide to include all cosmetic not only used for beautification but also for care of skin. A product which is used for care of skin must necessarily have some antiseptic effect but that will not take out the product from cosmetic and to bring under medicine.
     For the reasons stated above, I have no manner of doubt that Himani Boroplus is classifiable as cosmetic and and liable to tax accordingly.”
Trade Tax Revision No. 705 of 1998, Commissioner, Trade Tax, U.P. Lucknow Vs. M/s Singhal Brothers, Hathras (Allahabad High Court)



25.Whether processed and branded fresh fruits and green vegetables preserved and packed in sealed containers are covered under the entry "Fresh fruits and green vegetables?
Held - Yes
Phrase “fresh fruits and green vegetables” includes processed and branded fresh fruits and green vegetables sold in sealed containers.

24. Whether process of preservation and tinning of fresh fruits and green vegetables amounts to manufacture within the definitin of the word manufacture provided in section 2 of the U. P. Trade Tax Act, 1948?
Held-No.
Process of preservation and tinning of fresh fruits and green vegetables does not yield some new commercial commodity. Preserved and tinned fresh fruits and green vegetables remain fresh fruits and green vegetable. Therefore, process of preservation and tinning of fresh fruits and green vegetables does not amount to manufacture of goods.
S. R. Cannery, 151, Rasulabad, Allahabad Vs The Commissioner, Trade Tax, U. P. Lucknow
Trade Tax Revisions No. 50 of 1999 and 52 of 1999 (Allahabad High Court)


23. Whether lubricant oil used in machines employed in manufacture of goods can be said to have been used in manufacture of goods for the purpose of Section 3-G of the U. P. Trade Tax Act, 1948?
Held- Yes. The lubricant oil used in machines employed in manufacture of goods was used in manufacture of goods and therefore, assessee was liable for payment of differential amount of tax.


Bijali Cotton Mills Compound, Menda Road Hathras Vs The Commissioner of Trade Tax U.P. Lucknow
Trade Tax Revisions No. 1651 to 1654 and 1656 of 1998 (Allahabad High Court)


22.     Whether provisions requiring registration of transporters and maintenance of accounts by transporters under Sections 42, 44, and 46A of the Assam General Sales Tax Act, 1993 are constitutionally valid?
Held -yes.
(A) These provisions requiring registration of transporters are legally sound and analogous to Section 38B of Tripura Sales Tax Act, 1976 – The obligation imposed upon the transporters under Section 42, 44 and 46A of the Assam Act is also a part of the preventive measures against any evasion of taxes and have in no way infringed the fundamental rights of the petitioner – The State Legislature has the jurisdiction.
(B) Sections 42 and 44 of the Assam Act do not impose any liability upon the transporters, carriers etc. to pay any sales tax under the Act. The said Sections are basically meant to check the evasion –Provisions regarding maintenance of accounts and the certificate of registration by a transporter or any such agent is only for similar purpose as incorporated under Sections 36A and 38B of the Tripura Sales Tax Act, 1976 which has been held to be a valid piece of legislation in the case of Tripura Goods Transport Association v. Commissioner of Taxes,(1999) 2 SCC 253 (SC).
(C) Transporters whether dealers and liable for maintaining documents as required under section 44 of the Assam General Sales Tax Act, 1993, and whether penalty can be imposed on the transporters for non compliance of such a provision?
Held-Yes.
    Transporters dealing in documents of title to goods cannot be excluded from definition of dealer. The transporters are not strangers to sale or purchase of goods, to the contrary are parts and parcels and are directly involved in storing goods purchased or sold by, and in many cases such transporters are fictitiously carried on in false name and address besides false classification vis-ŕ-vis transportation of such goods in and outside the State making themselves party to the episode of such fictitious transactions for the sole purpose of evasion of tax by the dealers purchasing and selling the goods.

A.B.C. India Vs State of Assam and another

CA No. 2768 of 2000 (Supreme Court of India)




21.     Whether assessment order can be revised by the Commissioner under section 10-B of the U. P. Trade Tax Act, 1948 on the basis of material which came on record after assessment?

        No, the proceedings under section 10-B of the Uttar Pradesh Trade Tax Act, 1948 can be taken only on the basis of illegality and impropriety and not on the basis of fresh material.

The Commissioner Trade Tax Lucknow vs. M/s Jainarain Rangilal

2004 NTN (Vol-24) 587, Allahabad High Court




20.     Whether the appellate authority under the U. P. Trade Tax Act, 1948 has power to enhance the tax?

        The judgment of this court in M/s Saru Smelting Pvt. Limited (Supra) directly covers the issue regarding power of the first appellate authority to enhance the tax. ----- The view of the Tribunal that the First Appellate Authority had no power to enhance the tax is, therefore, not legally sound.

The Commissioner Trade Tax Lucknow vs. M/s Kranti Enterprises Dhampur

2004 NTN (Vol-24) 585 Allahabad High Court




19.     The words " other valuable consideration" which find place under section 2(h) of the Act do not find place in the definition of 'sale' in the Sale of Goods Act. Interpreting the words "other valuable consideration" this court in 1967 (19) STC 400, Sales Tax Commissioner vs. Ram Kumar Agrawal, has held that other valuable consideration mean payment i. e. by cheque, bills of exchange or any such other negotiable instrument.

M/s Durga Metal works vs. The Commissioner Sales Tax

2004 NTN (Vol-24) 578 Allahabad High Court




18.     Expression "valuable consideration" used in definition sale under the Punjab General Sales Tax Act, can only mean some other monetary payment in the nature of cash or deferred payment.

M/s Devidas Gopal Krishna vs. State of Punjab

AIR 1967, Supreme Court 995




17  ;      Non consideration of an uncontroverted affidavit itself vitiates the findings.

M/s Balaji Asbestos Traders vs. The Commissioner Trade Tax U. P.

2004 NTN (Vol-24) 576, Allahabad High Court




16.         There is a presumption about correctness of uncontroverted affidavit filed by a party.

M/s Juggilal Kamlapathi vs. RamJanki Gupta

AIR, 1962 Allahabad High Court




15.         Small size coal, non useable coal in manufacture of S S F (smokeless fuel) is not waste product obtained in manufacture of S S F. Hence sale of such small size coal is liable to tax in the hands of the dealer holding eligibility certificate under section 4A of the U. P. Trade Tax Act, 1948.

The U .P. Trade Tax Act, 1948

Allahabad High Court




14.         There being no material on record to show that dealer has imported any goods from outside the State, if the assessing authority fixes liability of tax on sale of imported goods, the burden to prove taxable event lies on the revenue and it is for the assessing authority to collect cogent and relevant evidence to support his finding that the dealer has imported goods from outside the State.

The U .P. Trade Tax Act, 1948

Allahabad High Court




13.         Water Methyl Mixture is not covered under Methyl Alcohol and therefore, its sale is liable to tax as an unclassified item.

The U .P. Trade Tax Act, 1948

Allahabad High Court




12.         M. S. Patti and M. S. Flat cannot be said two different items. Similarly, M. S. Bar and M. S. Tor, both are Bars.

The U .P. Trade Tax Act, 1948

Allahabad High Court




11.         The word "fodder" means "food supplied to cattle". There is no material difference between cattle fodder and cattle feed. Cattle fodder includes item in concentrated form.

The U .P. Trade Tax Act, 1948

Allahabad High Court




10.         Where review petition against a decision of the Supreme Court admitted by it and matter referred to larger bench, tax payable on the basis of earlier judgment is not admitted tax of the dealer.

The U. P. Trade Tax Act, 1948

Allahabad High Court








9.         Bebefit of concessional rate of tax can only be allowed on furnishing of portion of declaration form C marked as "Original" and not on the basis of portion marked as Duplicate or Counterfoil.

The Central Sales Tax Act, 1956

Supreme Court of India





8.         In an ex-parte decision, mere mentioning that the dealer could not appear inspite of service of the notice, is not sufficient. It is necessary to give details about the service of the notice.

The U .P. Trade Tax Act, 1948

Allahabad High Court




7.         Where bills for sale of coal by the Coal India Limited were prepared in the name of the consumers and the coal agent only rendered services towards giving guarantee for arrangement of movement and loading supervision for the same, arranged consent of loading from the Coal India Ltd. against financial coverage in the shape of Bank Guarantee, collecting paymet from consumers and making payment to the coalliery, coal agent is not a dealer.

The U .P. Trade Tax Act, 1948

Allahabad High Court




6.         Foodstuff is that which is taken into the system to maintain life and growth and to supply waste of tissue.

Supreme Court of India




5.         Beverage as commonly understood means any liquid for drinking other than water.

Supreme Court of India





4.         Where limitation of period for passing order after remand has expired, general provision of limitation for assessment of escaped turnover does not apply.

The U .P. Trade Tax Act, 1948

Allahabad High Court







3.         Supply of apparatus, outfits/storage tanks and equipments by Indian Oil Corporation to petrol pump owners does not fall within the scope of transfer of right to use goods.

The U .P. Trade Tax Act, 1948

Allahabad High Court







2.         Under the Central Sales Tax Act, 1956, Registration Certificate cannot be amended with retrospective effect.

The Central Sales Tax Act, 1956

Allahabad High Court







1.         No security or additional security can be demanded without giving reasonable opportunity of hearing.

The U. P. Trade Tax Act, 1948

Allahabad High Court