Court No. - 1
Case :- SALES/TRADE TAX REVISION No. - 877 of 2008 Revisionist :- M/S S.R. Industries Opposite Party :- Commissioner Trade Tax U.P. Lucknow Counsel for Revisionist :- N.C. Gupta Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. The present revision has been filed by the assessee against the order of the Trade Tax Tribunal, Varanasi dated 07.06.2008 in Second Appeal No. 583 of 2007 for A.Y. 2004-05 (U.P.). By that order, the Tribunal has dismissed the appeal filed by the assessee and confirmed the order of the first appeal authority.
2. The revision has been pressed on the following questions of law:
"I. Whether the learned Trade Tax Tribunal as well as the authorities below were justified in levying tax on sale of dismantled material of building of factory as well as its plant and machinery despite the fact that the aforesaid building and plant and machinery was purchased in an auction made by PICUP, a State Government Corporation.
II. Whether the finding given by the learned Tribunal regarding confirmation of tax levied by the authority below was justified to levy tax under Section 3AAAA of U.P. Trade Tax Act despite the fact that the aforesaid provision has been made for the person who purchase goods from unregistered dealer."
3. Learned counsel for the assessee submits that during the assessment year in question, undisputedly, the assessee had made the auction purchase of a factory premises from a registered dealer, namely, PICUP. Thereafter, it is not disputed that the assessee dismantled the plant and machinery and disposed of the same. In the assessment proceedings, the assessing authority issued a show cause notice on four points. Point no. 3 pertains to the dismantling of the factory and of having sold the dismantled goods. It also appears that the assessee submitted some reply to that notice. However, the assessing officer proceeded to treat the sale made by the assessee to be one of old, discarded, unserviceable machinery and parts. Accordingly, he determined the tax liability on the assessee at Rs. 10,56,093/-. The same became subject matter of appeal wherein the first appeal authority granted part relief on account of some classification issue, that is not involved in the present revision. The Tribunal confirmed the appeal. Hence, the present revision.
4. Learned counsel for the assessee submits that merely because the assessee may have been treated as a manufacturer by virtue of Section 2(ee) of the U.P. Trade Tax Act (hereinafter referred to as the 'Act'), the same could not have given rise to a tax liability against the assessee. Neither any show cause notice was issued to specify the taxing entry, where under it was proposed to impose tax on the assessee nor the assessee was given any opportunity to review such claim. Therefore, the tax liability is wholly unwarranted.
5. On the other hand, learned Standing Counsel would submit that, in the admitted facts of the case, the assessee had purchased established factory from the PICUP. The fact that it is further admitted to the assessee that it dismantled the factory, clearly brought the assessee within the purview of Section 2(ee) of the Act as a manufacturer of the items obtained as a result of the dismantling performed by the assesse. Also, it has not been disputed by the assessee that it sold the dismantled items that are nothing other than old, discarded, obsolete machinery. Therefore, the tax liability has been rightly imposed on the assessee.
6. Having heard learned counsel for the parties and having perused the record, insofar as it is admitted to the assessee that it was engaged in the activity of dismantling the factory and further in selling the dismantled items, clearly, he engaged in manufacture of those items by virtue of the provisions of Section 2(ee). Then, presumption arose under Section 3AAA of the Act, once the assessee did not produce any evidence to establish that it had made sale to registered dealer.
7. Thus, by virtue of the fact that old, discarded, unserviceable machinery etc. were liable to suffer tax at the rate of 5 percent on the point of sale to consumer, in absence of any other facts and evidence pleaded by the assessee to dispel that presumption, the authorities have not erred in imposing the tax on the assessee.
8. The revision lacks merit and is accordingly dismissed.
Order Date :- 26.7.2019 AHA