Composition scheme limits govern coal tax liability; defective assessment periods call for remand, not wholesale annulment.

Under the composition scheme in section 7D of the U.P. Trade Tax Act, liability remained governed by the scheme's terms, including agreed coal quantity limits, and excess import could still attract tax. Where an assessment was considered defective as to the relevant period or scope, the proper course was not wholesale annulment but fresh consideration, restricted sustenance, or remand for clarification. The Tribunal's approach in setting aside the entire assessment on the basis of an alleged impermissible period, and in treating coal consumed in brick manufacture as outside taxability despite the scheme conditions, was stated to be erroneous. The matter required reconsideration after hearing both sides.

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Issues: Whether the Tribunal was justified in setting aside the entire assessment on the ground that it related to an impermissible period, and in holding that no tax could be levied on coal consumed in brick manufacturing under the compounding arrangement.

Analysis: The dealer had obtained the benefit of composition under section 7D of the U.P. Trade Tax Act, 1948, subject to the limits and conditions of the scheme, including the permissible quantity of coal import. The assessment was challenged before the Tribunal, which treated the assessment as relating to 18 months and also held that, since the coal was consumed in manufacture and not sold in the same form, no tax was leviable. The Court held that even if there was uncertainty about the period, the entire assessment could not be quashed outright; at the least, the matter required reconsideration for the correct 12-month period or remand for clarification. It also held that the Tribunal overlooked the conditions of the compounding scheme, and import of coal beyond the agreed quantity could still attract tax liability.

Conclusion: The Tribunal was not justified in setting aside the assessment in full, and its view on taxability under the compounding scheme was erroneous.

Final Conclusion: The matter required fresh consideration after affording opportunity to both sides, and the assessment could not be annulled wholesale on the reasoning adopted by the Tribunal.

Ratio Decidendi: Where an assessment order is found to be defective as to period or scope, the proper course is remand or restricted sustenance to the extent legally supportable, and liability under a composition scheme continues to be governed by its terms and quantity limits.

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