2007 (8) TMI 695 - HC - VAT and Sales Tax

Court upholds Tribunal's order on tax assessment for inter-State purchases under U.P. Trade Tax Act

The Court dismissed all ten revisions challenging the Tribunal's order related to assessment years 1989-90 to 1993-94 under the U.P. Trade Tax Act, 1948, ... - Issues involved: The judgment involves ten revisions under section 11 of the U.P. Trade Tax Act, 1948, challenging the order of the Tribunal related to assessment years 1989-90, 1990-91, 1991-92, 1992-93, and 1993-94 under both the U.P. Trade Tax Act, 1948, and the Central Sales Tax Act, 1956.Summary:The applicant, a registered dealer under the U.P. Trade Tax Act, claimed to be a purchasing commission agent who purchased gur on behalf of an ex-U.P. principal and dispatched the goods at the principal's destination. The assessing authority treated the purchases as on own account and levied tax on both the purchases and the movement of goods outside the State of U.P. The Tribunal remanded the matter back to the assessing authority to examine each transaction in light of the law laid down by the apex court in Commissioner of Sales Tax v. Bakhtawar Lal Kailash Chand Arhti.The applicant contended that the Tribunal should have examined each transaction itself instead of remanding the case. However, the Court held that under section 10 of the Act, the Tribunal has the power to remand the case for transaction examination. Since not every transaction was scrutinized by the assessing authority, the Tribunal's direction to examine each transaction was deemed appropriate. The Court referred to the law established in Commissioner of Sales Tax v. Bakhtawar Lal Kailash Chand Arhti, emphasizing the need for a correlation between purchases made on behalf of an ex-U.P. party and their dispatch outside the state for them to be considered inter-State purchases not liable to tax under the U.P. Trade Tax Act.Conclusively, the Court found no merit in the applicant's petitions, leading to the dismissal of all ten revisions.