Court No. - 1
Case :- SALES/TRADE TAX REVISION No. - 1501 of 2008 Revisionist :- M/S Surya Food And Agro Ltd.
Opposite Party :- Commissioner Of Commercial Taxes U.P. Lucknow Counsel for Revisionist :- Nishant Mishra Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Heard Sri Nishant Mishra, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue.
2. The present revision has been pressed on the following question of law:-
"Whether tax can be imposed on the sales of gunny bags, drums under the entry 'Old, discarded, unserviceable or obsolete machinery, store or vehicles including waste products.......', when neither gunny bags and drums were old, discarded, unserviceable or obsolete nor the same are machinery, store, vehicles or waste products?"
3. The present revision has been filed against the order of the Trade Tax Tribunal, Greater Noida dated 15.07.2008 passed in Second Appeal No.42 of 2008 for the A.Y. 2004-05, whereby the Tribunal has rejected the second appeal filed by the assessee and affirmed the first appellate order and the assessment order imposing tax on the assessee on the sale of old gunny bags, empty drums, film and roll.
4. During the assessment in question, the assessee was engaged in manufacture and sale of biscuits. There is no dispute with respect to the tax imposable on the sale of those manufactured goods. However, the Assessing Authority vide assessment order dated 22.03.2007 imposed tax @ 5% on the sale of old gunny bags, empty drums, film and rolls, Rs.32,13,134.33/- by merely describing that the assessee was liable to pay tax by virtue of Section 2(e) and Section 2(ee) of the UP Trade Tax Act, 1948 (hereinafter referred to as the Act).
5. Section 2(e) of the Act defines 'importer' as the person who make the first sale of any goods after their import, and Section 2(ee) of the Act defines 'manufacturer' as the person who make the first sale after their manufacture. No description was given in the assessment order of any taxing entry whereunder the assessee had been subjected to tax. In the first appeal filed by the assessee, the first appellate authority vide its order dated 17.12.2007 defines that the Assessing Officer had treated the aforesaid goods as unusable, and therefore taxed the same @ 5%. The further appeal before the Tribunal also failed. In the impugned order, the Tribunal has reasoned that the assessee did not lead any evidence to establish that it had made tax paid purchase of the goods in question, from inside the State of U.P.
6. Referring to the taxing Entry no.29 under Notification No.K.A.NI-2-101 dated 15.01.2000 issued under Section 3(A) of the Act, learned counsel for the applicant would then submit that by virtue of that entry only such old or discarded or unserviceable or obsolete goods may be subjected to tax, that too at the point of sale of consumer if those goods fell within the description of machinery or stores or vehicles or waste product. Insofar as old, gunny bags, empty drums, film and rolls are not such goods, and in any case since the assessee has not been found to have sold those goods to consumers, no tax could be levied thereon. Insofar as the film and rolls are concerned, the assessee had admitted to purchase the same inside the State against payment of tax, however, these being defective goods, the assessee was forced to sell then.
7. Further, it has been submitted that none of the authorities has applied its mind to the provisions of the Act or the relevant taxing entry and without specifying the same have blindly imposed and sustained the tax liability which is grossly illegal.
8. On the other hand, learned Standing Counsel would submit that, insofar as it is admitted, that the assessee has sold these goods inside the State of U.P. and it was also admitted that it had not purchased those goods in the same form, but as packing material, while it was making sale of the goods of the same as old gunny bags or empty drums or film and rolls, it had to be treated as the manufacturer or importer of those goods, and therefore, it had been rightly subjected to tax thereon.
9. Having heard learned counsel for the parties and having perused the record, the facts of the present case are peculiar inasmuch as none of the authorities have so much as referred to any taxing entry whereunder they may have subjected the assessee to tax or found the assessee liable to tax. Merely because the assessee has been found to be a manufacturer or importer on deemed basis, it may not give rise to taxability of any sale performed by him. For the purposes of imposing tax, identification of the point of tax had to be necessarily made in terms of a pre-existing taxing entry. Insofar as, no identification has been made either by the Assessing Authority or the first appeal authority or the Tribunal of that taxing entry, it is difficult to sustain the imposition of tax on the assessee. Since all authorities have failed to examine that essential issue, no order of remand may be made at this stage as that would only amount to give second opportunity to the revenue to set up a new case. Accordingly, the question of law is answered thus:-
Insofar as the Assessing Authority did not find the assessee liable to tax with respect to any particular taxing entry and since appeal authority also failed to identify any pre-existing taxing entry whereunder the assessee had been subjected to tax, the assessee was not liable to suffer tax on old gunny bags, empty drums, film and rolls.
10. Accordingly, the present revision is allowed.
Order Date :- 26.7.2019 S.Chaurasia