Taxability of closing footwear stock under U.P. Sales Tax Act upheld where goods were untaxed before the charging shift.

Footwear held in stock on 1 May 1979, and not previously taxed, was treated as liable under section 3-D(2) of the U.P. Sales Tax Act because the tax incidence had shifted from sale to the consumer to first purchase, and the goods remained untaxed on the relevant date. The court accepted that stock purchased earlier against form 3-A and sold to a person other than a registered dealer fell within the charging scheme. The Tribunal's view on taxability was upheld, and the revision was dismissed.

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Issues: Whether footwear held in stock on 1 May 1979, and not previously taxed, was liable to tax under section 3-D(2) of the U.P. Sales Tax Act.

Analysis: Footwear had earlier been taxable at the point of sale to the consumer, but from 1 May 1979 the turnover of footwear became taxable at the point of first purchase. The stock in hand on that date had been purchased earlier against form 3-A and had not suffered tax before the change in incidence. The Court applied the view that where goods remain in stock on the relevant date and are not already taxed prior to that date, they fall within the charging scheme under section 3-D(2) if sold to a person other than a registered dealer. The Tribunal had therefore committed no error in upholding taxability.

Conclusion: The footwear stock was liable to tax under section 3-D(2) of the U.P. Sales Tax Act, and the revision was dismissed.

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