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Allahabad High Court · body

2005 DIGILAW 116 (ALL)

Commissioner, Trade Tax v. Elgin Mills Co. Ltd.

2005-01-25

RAJES KUMAR

body2005
RAJES KUMAR, J. ( 1 ) PRESENT revision under Section 11 of U. P. Trade Tax Act (hereinafter referred to "act") is directed against the order of Tribunal dated 5th September, 1996 relating to the assessment year, 1981-82 by which the Tribunal has rejected the appeal filed by the commissioner of Trade Tax against the order of the Deputy commissioner (Appeals), Trade Tax, Kanpur rejecting the application under Section 22 of the Act. ( 2 ) BRIEF facts of the case are that by the order dated 5th June, 1987, Deputy Commissioner (Appeals), Trade Tax has accepted the plea of the dealer that the turnover of cotton yarn without form C was liable to tax at the rate of 2 percent upto 06. 09. 1981 and at the rate of 2. 5 percent after 07. 09. 1981. Commissioner of Trade Tax filed an application under Section 22 of the Act on the ground that in view of Section 8 (2) of the Central Sale Tax Act. In the absence of Form-C the turnover of cotton yarn being declared commodity was liable to tax double to be tax applicable under the State Law. Said application was rejected. Tribunal has also rejected the appeal on the ground that there was no mistake apparent on record. ( 3 ) HEARD learned counsel for the parties. ( 4 ) LEARNED Standing Counsel submitted that the order of the Tribunal and the first appellate authority are patently illegal. He submitted that Section 8 (2) of the Central Sales Tax Act contemplates that in the absence of Form-C, declared commodity is liable to tax double the rate applicable under the State Law and since cotton yarn was liable to tax at the rate of 2 percent under the U. P. Trade Tax Act, therefore, it was liable to tax at the rate of 4 percent. He submitted that mistake was apparent and such no debate or investigation of fact was required. Learned counsel for the dealer relied upon the orders of the Tribunal and the first appellate authority. ( 5 ) I have perused the order of the Tribunal. Order of the Tribunal cannot be sustained. He submitted that mistake was apparent and such no debate or investigation of fact was required. Learned counsel for the dealer relied upon the orders of the Tribunal and the first appellate authority. ( 5 ) I have perused the order of the Tribunal. Order of the Tribunal cannot be sustained. ( 6 ) THE relevant provisions of Section 8 (1), 8 (2) and 8 (2-A) of the Central Sales Tax are referred as below: section-8 Rates of Tax on the Sales in the Course of inter State trade or commerce- (1) every dealer, who in the course of inter State trade or commerce (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in Sub-section (3); shall be liable to pay tax under this Act, which all be (four per cent) of this turnover. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof related to the sale of goods in the course of inter State trade or commerce and falling within sub-section (1) (a) in the case of declared goods, shall be calculated (at twice the rate) applicable to the sale or purchase of such goods inside the appropriate State; and (b) in the case of goods other then declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate state, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. (2-A) Notwithstanding any thing contained in Sub-section (1-A) of Section 6 or in Sub-section (1) (or Clause (b) of Sub-section (2) of this section, the tax payable under this Act by a dealer on the turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than (four per cent) whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate. Explanation- For the purposes of this sub section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. ( 7 ) ADMITTEDLY, in respect of inter state sales of cotton yarn, Form-C as contemplated under section 8 (4) was not filed and therefore, it can not be treated as a sale to the registered dealer under Section 8 (1) (4) of the Act. Under Section 8 (2) (a), tax payable by the dealer on his turnover, in case of declared goods, shall be calculated at twice the rate of tax applicable to the sale or purchase of such goods inside the appropriate State Section 8 (2-A) has overriding affect over the section 8 (1) or Clause (b) Sub-section 2, but it has no overriding effect over the Section 8 (2) (a) and therefore, in the case of declared goods, tax is payable at twice the rate applicable to the sale inside the appropriate State under Section 8 (2) (a) and provision of Section 8 (2-A) not applicable. ( 8 ) SINCE the rate of tax was 2% under U. P. Trade Tax Act, tax under the Central Sales Tax Act was payable @ 4%. ( 9 ) IN the result revision is allowed. ( 8 ) SINCE the rate of tax was 2% under U. P. Trade Tax Act, tax under the Central Sales Tax Act was payable @ 4%. ( 9 ) IN the result revision is allowed. Order of the Tribunal dated 5th September, 1996 and the order of the Deputy Commissioner (Appeals), Trade Tax, Kanpur dated 20th November, 1991 are set aside. Order dated 05. 05. 1997 is rectified to the extent order the turnover of cotton yarn is liable to tax at the rate of 4 percent. . .