Research › Search › Judgment

Uttarakhand High Court · body

2009 DIGILAW 559 (UTT)

COMMISSIONER, COMMERCIAL TAX, UTTARAKHAND v. BAJPUR CO-OPERATIVE SUGAR FACTORY LTD. BAJPUR

2009-11-09

TARUN AGARWALA, V.K.BIST

body2009
JUDGMENT Heard Mr. Sudhir Kumar, the learned Brief Holder for the State of Uttarakhand/appellant and Ms. Puja Banga, the learned counsel for the opposite party. 2. The opposite party is a Co-operative Sugar Factory and is engaged in the manufacture and sale of sugar, countrymade liquor, molasses, etc. The present revision is confined to the assessment year 2000-2001. It transpires that the factory purchases old empty bottles from local unregistered Kabaris and re-use them for selling the countrymade liquor. The assessing authority levied purchase tax on the purchase of used empty bottles under Section 2-AAAA of the U.P. Trade Tax Act (hereinafter referred to as the ‘Act’) and also imposed interest at the rate of 2% per month. The assessee, being aggrieved by the imposition of purchase tax, filed an appeal, which was also rejected, against which, a Second Appeal under Section 10 of the Act was filed before the Tribunal. The Tribunal, after considering the matter, allowed the appeal setting aside the order of the appellate authority as well as of the assessing authority and held that no tax could be imposed on the assessee on the purchase of used empty bottles from the unregistered Kabari in view of the fact that the tax had already been paid at the time of the first sale of such bottles. The Commissioner, Commercial Tax, Uttarakhand, being aggrieved by the order of the Tribunal, has filed the present revision under Section 11 of the Act. 3. We have heard the learned ocunsel for the parties at some length. From the record, the admitted facts which have been culled out is that under the Excise Tax, the Excise Department floated a scheme whereby certain remissions were granted to the distillery which reused the old bottles for the selling of their liquor. Based on the said scheme, the assessee was purchasing used bottles from the local unregistered kabaris. The facts that the assessee had purchased the used bottles from the Kabaris is admitted by the Trade Tax Department. In evidence, it has also come out that the bottles were of a specific size and shape, which were only being used for selling the countrymade liquor and that the bottles were embossed with the words “U.P. Excise”. The facts that the assessee had purchased the used bottles from the Kabaris is admitted by the Trade Tax Department. In evidence, it has also come out that the bottles were of a specific size and shape, which were only being used for selling the countrymade liquor and that the bottles were embossed with the words “U.P. Excise”. Through these evidence, the Tribunal came to a conclusion that the used bottles were purchased by the assessee from the local unregistered dealers and that new bottles were not being used and consequently, no tax was payable by the assessee on the purpose of used bottles. 4. In the light of the aforesaid facts, the provision of Section 3-AAAA of the Act is required to be perused. For facility, the said provision is quoted hereunder :- (a) from any registered dealer in circumstances in which no tax is payable by such registered dealer, shall be liable to pay tax on the purchase price of such goods at the same rate at which but for such circumstances, tax would have been payable on the sale of such goods; (b) from any person other than a registered dealer whether or not tax is payable by such person, shall be liable to pay tax on the purchase price of such goods at the same rate at which tax is payable on the sale of such goods:- Provided that no tax shall be leviable on the purchase price of such goods in the circumstances mentioned in clauses (a) and (b), if- (i) such goods purchased from a registered dealer have already been subjected to tax or may be subjected to tax under this Act; (ii) tax has already been paid in respect of such goods purchased from any person other than a registered dealer; (iii) the purchasing dealer re-sells such goods within the State or in the course of inter-State trade or commerce or exports out of the territory of India, in the same form and condition in which he had purchased them; (iv) such goods are liable to be exempted under Section 4-A of the Act.” 5. According to the learned Brief for the appellant, the assessee was liable to pay the purchase tax under clause (b) of Section 3-AAAA, namely, that the assessee had purchased the product from an unregistered dealer and was, therefore, liable to pay the tax. According to the learned Brief for the appellant, the assessee was liable to pay the purchase tax under clause (b) of Section 3-AAAA, namely, that the assessee had purchased the product from an unregistered dealer and was, therefore, liable to pay the tax. The submission of the learned Brief Holder for the appellant seemed attractive in the first flush, but on a closer scrutiny, the submission of the learned Brief Holder for the appellant is bereft of merit in view of the proviso to clause (b) of Section 3-AAAA wich provides that no tax could be leviable on the assessee on the purchase of such goods, where tax had already been paid in respect of such goods purchased by the assessee from an unregistered dealer or where the purchasing dealer had resold such goods in the same form and condition in which he had purchased earlier. In the light of these provisions, as irresistible conclusion is drawn that the tax must have already been paid on the bottles which were purchased by the Kabari. It is a well known fact that a Kabari purchases the used bottles from various places and, it is also admitted by the department that only used bottles were sold by the Kabari to the assessee. 6. In the light of the aforesaid, namely, that used bottles were only being sold, the presumption that tax must have already been paid at an earlier point of time is implicit. Consequently, the Tribunal was justified in holding that no tax was liable to be paid by the assessee on the purchase of old used bottles from the unregistered Kabari. In view of the aforesaid, this Court does not find any error in the impugned order passed by the Tribunal. The revision fails and is dismissed. In the circumstances of the case, there shall be no order as to cost.