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of <h1>Court rules color addition to base paint does not create new taxable product, favoring assessee over State's appeal.</h1> <h3>M/s Kumar Paints & Mill Stores Versus. Commissioner of Trade Tax, U.P AND The Commissioner, Trade Tax, U.P. Versus. S/s Raj Deep Brothers, Rambagh, Agra</h3> M/s Kumar Paints & Mill Stores Versus. Commissioner of Trade Tax, U.P AND The Commissioner, Trade Tax, U.P. Versus. S/s Raj Deep Brothers, Rambagh, Agra - ... Issues Involved:The judgment deals with the interpretation of Entry No. 47 of Notification No. 2375 dated 23.11.98 regarding the taxation of paints and varnishes, specifically focusing on whether the addition of color to base paint constitutes a new taxable product.Issue 1: Consideration of Materials and JudgmentsThe first issue questions the Trade Tax Tribunal's failure to consider various materials and judgments while deciding the appeal, emphasizing the importance of legal precedents in such matters.Issue 2: Legality of Tribunal's OrderThe second issue challenges the legality of the Trade Tax Tribunal's order, raising concerns about the non-consideration of written arguments and decisions from higher courts, which could impact the validity of the Tribunal's decision.Issue 3: Taxability of Paints under NotificationIssue three delves into whether paints and varnishes are taxable at a single point under Notification No. 2375 dated 23.11.1998, arguing that once the base paint is taxed, the addition of color should not trigger a fresh tax liability.Issue 4: Existence of Manufacturing ActivityThe fourth issue questions the Tribunal's assertion that the addition of color to base paint amounts to 'manufacture,' highlighting the lack of evidence or admission supporting this conclusion.Issue 5: Error in Tribunal's OrderThe fifth issue challenges the correctness of the Trade Tax Tribunal's order, seeking its reversal based on the alleged errors in the Tribunal's reasoning.The judgment discusses the findings of a related case involving M/s Raj Deep Brothers and a certificate from the Harcourt Butler Technological Institute, Kanpur, supporting the view that base paint remains paint even after the addition of color. It emphasizes that the addition of color does not create a new commercial commodity, aligning with legal principles on manufacturing activities.The judgment cites the definition of 'manufacturer' under the U.P. Sales Tax Act and references the decision in Raj Deep Brother's case to support the argument that base paint remains taxable as paint even after color is added. It also draws on a Supreme Court decision to emphasize that not every variation in goods amounts to manufacturing unless a new commercial commodity emerges.In conclusion, the judgment affirms the decision in the case of Raj Deep Brothers, setting aside the Trade Tax Tribunal's order dated 11th October 2002. It allows Trade Tax Revision No. 711 of 2002 in favor of the assessee while dismissing Trade Tax Revision No. 1550 of 2005 filed by the State, confirming the applicability of Notification No. 2375 dated 23.11.98 to both cases.
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