2008 (8) TMI 837 - HC - VAT and Sales Tax

Court Upholds Tax on Mefron Gas as Chemical Under Trade Tax Act

Commissioner, Trade Tax, UP., Lucknow Versus Sondh Sons

The High Court dismissed the revision, affirming the Tribunal's decision to tax mefron gas at 10% as a chemical under the U.P. Trade Tax Act, 1948. The ... - Issues:Tax liability of mefron gas at 10% or 15% under U.P. Trade Tax Act, 1948.Analysis:The revision before the Allahabad High Court challenged an order passed by the Trade Tax Tribunal regarding the tax liability of mefron gas for the assessment year 1995-96. The dealer admitted a tax liability at 10%, but the assessing officer later claimed it should be taxed at 15%. The first appellate authority ruled in favor of the dealer, considering mefron gas as chloro-flouro hydrocarbon used in refrigeration and air-conditioners, thus liable to be taxed as a chemical. The Tribunal upheld this decision, stating that mefron gas falls under the category of chemicals and should be taxed at 10%. The Tribunal rejected the appeal, emphasizing that the assessing officer's finding that mefron gas should be taxed at 15% was not legally sound. The High Court endorsed the Tribunal's decision, noting that mefron gas is indeed a chloro-flouro hydrocarbon and should be taxed at 10% as a chemical, not 15% as an accessory of refrigeration and air-conditioners. The Court also highlighted that a disputed question of fact or debatable point of law cannot be raised in a proceeding under section 22 of the Act, citing a previous judgment.In conclusion, the High Court dismissed the revision, affirming the Tribunal's decision to tax mefron gas at 10% as a chemical under the U.P. Trade Tax Act, 1948. The Court found no illegality or perversity in the Tribunal's ruling and emphasized the legal classification of mefron gas as chloro-flouro hydrocarbon falling under the category of chemicals for taxation purposes.