Court No. - 59
Case :- SALES/TRADE TAX REVISION No. - 145 of 2008 Revisionist :- Minerals And Metals Trading Corpn. India Ltd.
Opposite Party :- Commissioner Trade Tax Counsel for Revisionist :- Kunwar Saksena,Anil Kumar
Hon'ble Saumitra Dayal Singh,J.
1. Heard Sri Anil Kumar, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the opposite party-revenue.
2. Present revision has been filed by the assessee against the order of the Trade Tax Tribunal, Moradabad dated 18.10.2007 passed in Second Appeal No. 680 of 2005 for A.Y. 1993-94 (U.P.). By that order the Tribunal has dismissed the appeal filed by the assessee and held that nickel squares used as cathode in electroplating are not nickel in primary form and, therefore, taxable as unclassified goods at the rate of 10% as against 2.5% claimed by the assessee.
3. During the assessment year in question, the assessee was engaged in trading in minerals and metals from outside the country. In that activity, amongst others, the assessee claimed to have traded in nickel squares. According to the assessee, the said commodity was metal in its primary form and, therefore, taxable at the rate of 2.5%. While the revenue did not dispute that metal in its primary form including nickel is taxable at the rate of 2.5%, however, on the reasoning that the commodity sold by the assessee was used as cathode in electroplating process, it has been inferred that the commodity sold by the assessee was not classified. Accordingly, the nickel squares sold by the assessee for a total turnover of Rs.41,34,562.50/- had been assessed to tax at the rate of 10% as against 2.5% admitted by the assessee.
4. That order of the assessing authority has been confirmed in appeal.
5. Instant revision has been admitted without reference to any question of law. It has been heard on the following question:-
"(i). Whether, on the facts and in the circumstances of the case, Nickel Squares were liable to tax @ 2.5% as metal in primary form or as unclassified items taxable @ 10%?"
6. Learned counsel for the assessee submits that nickel square is nickel in its primary form and that identity does not get altered in any way because of it being used as a cathode in electrolysis. Reliance has been placed on an earlier decision of this Court in Minerals & Metals Trading Corporation of India Ltd. Vs Trade Tax Tribunal (2008) 11 VST 370 (All.).
7. Opposing the revision, learned Standing Counsel submits that in the first place, the decision relied upon by learned counsel for the assessee has no application to the facts of the present case, since, in that case the issue had arisen in proceedings for rectification. While the assessing authority had held nickel square to be nickel in primary form, later, he tried to rectify that order by taking a different view. Thus, that decision of this Court is confined to the scope of the proceedings under Section 22 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') and not to the merits.
8. Then, referring to the order of the Tribunal, it has been submitted, in the present case, it has been clearly held by the Tribunal that the commodity sold by the assessee was cathode and not nickel square. Therefore, there is no error in the reasoning of the Tribunal that such a commodity would not be metal in its primary form but an unclassified commodity.
9. Having heard learned counsel for the parties and having perused the record, in the first place, the decision relied upon by the learned counsel for the assessee is primarily to the effect that in absence of any evidence being led by the revenue to establish otherwise, it was not open for the assessing authority to hold nickel square to be an unclassified item. However, the similarity of the commodity involved in the two cases cannot be denied.
10. Coming to the reasoning given by the Tribunal in the instant case, it is seen that there is no denial to the fact that the commodity sold by the assessee was nickel square. However, the Tribunal has refused to treat the same as primary metal on the further reasoning that the commodity sold by the assessee had been used as cathode. The said reasoning cannot be accepted to be correct, inasmuch as, cathode is not a commodity identified as such. Rather, it is the description given to a participant in a process wherein one mineral or metal is used for platting another item or metal. Therefore, the use of nickel square as cathode is more a description, indicative of participation of the nickel square in the electrolysis process and not description of a commercial identity of the item itself.
11. Insofar as, there is no dispute that nothing had been made out by the nickel square and that no alteration had been done to it, the commodity in question remained primary metal.
12. Accordingly, the question of law is answered in the negative, i.e. in favour of the assessee and against the revenue.
13. The revision is accordingly allowed.
Order Date :- 22.8.2019 Saif