Installed production capacity for composition tax must be assessed on relevant documents, with expert review where technical evidence is disputed.

Determination of installed production capacity for composition tax under section 7D of the U.P. Trade Tax Act required consideration of the dealer's reply and supporting material, not reliance only on survey and inspection reports. The High Court noted that the authority had not dealt with certificates, annual report material, declarations and contractual papers produced to support a lower installed capacity. It treated capacity assessment as a technical requiring a careful examination, and stated that an expert committee could be used where the existing material was insufficient. The impugned order was therefore held unsustainable and the matter was remitted for fresh decision on capacity and consequential composition liability.

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Issues: Whether the order determining the installed production capacity for composition of tax under section 7D of the U.P. Trade Tax Act, 1948 was liable to be quashed for failure to consider the petitioner's reply and supporting documents, and whether the matter required reconsideration by an expert committee.

Analysis: The dispute related to assessment of the installed production capacity of a vanaspati ghee unit for fixing the composition amount. The Court noted that the authority had proceeded mainly on survey and inspection reports and had not dealt with the documents relied upon by the petitioner, including certificates, annual report material, declarations and contractual papers supporting the claim of a lower installed capacity. The Court further observed that determination of installed production capacity is a technical matter and should not be decided in a cursory manner or by survey alone. It indicated that an expert committee would be the appropriate mechanism to assess the capacity if the authority was not satisfied on the existing material.

Conclusion: The impugned order was unsustainable and required fresh consideration after taking into account the petitioner's reply and documents, with liberty to obtain an expert committee report.

Final Conclusion: The writ petition succeeded and the matter was sent back for a fresh decision on the installed production capacity and consequential composition liability.

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