2014 (8) TMI 49 - HC - VAT and Sales Tax

Court Upholds Concessional Tax Rates for Raw Material Sales in Single Declaration Form IIIB

Assistant Commercial Taxes Officer, Ward-II, Circle-B, Alwar Versus REBI Casting (Pvt.) Ltd. and another

The court dismissed the revision filed by the Revenue, upholding the Tribunal's decision that sale transactions spanning multiple quarters in a single ... Denial of concessional rate of tax - inputs / goods required for manufacture of notified goods - Whether the Commercial Tax Tribunal and the Joint Commissioner, Commercial Tax, erred in law in accepting the sale transaction mentioned in single declaration form IIIB for concessional rate of tax which pertains to a period of more than a quarter - Held that:- The Tribunal as well as the first appellate authority has taken note of the fact that even if declaration form IIIB contained sale transactions of two quarters in a single form that by itself is not sufficient to deny the conces sional rate of tax to the dealer - since for a complete assessment year normally rate of tax remains the same for a commodity, as such merely for the reason that single declaration contained entries of more than a quarter is not sufficient ground to deny the dealer the concessional rate of tax in respect of an item which is sold as a raw material to the purchaser. No illegality in order passed - Decided against Revenue. Issues: Interpretation of Rule 25B of U.P. Trade Tax Rules, 1948 regarding concessional rate of tax based on form IIIB for sale transactions exceeding a quarter.Analysis:The judgment revolves around a revision filed under section 11 of the U.P. Trade Tax Act, 1948, challenging an order by the Commercial Tax Tribunal regarding the concessional rate of tax claimed by a dealer for the assessment year 1992-93 provincial. The dealer submitted a return based on form IIIB issued by the purchaser, seeking a lower tax rate, but the assessing officer charged tax at 10% due to the sale transactions exceeding a quarter. The Joint Commissioner, Trade Tax, allowed the dealer's appeal, emphasizing the transactions mentioned in a single form IIIB. The Revenue then filed a second appeal, which was dismissed by the Commercial Tax Tribunal, leading to the current revision.The key legal provision in question is Rule 25B of the U.P. Trade Tax Rules, 1948, which outlines the conditions for availing concessional rates of tax based on form IIIB for specified goods used as raw material. The central issue before the court was whether the Tribunal erred in accepting sale transactions spanning more than a quarter in a single declaration form IIIB for concessional tax rates. Both the Tribunal and the first appellate authority noted that the presence of transactions from two quarters in one form does not automatically disqualify the dealer from concessional rates.Upon reviewing the Tribunal's order, the court concluded that the mere inclusion of entries from more than a quarter in a single declaration form IIIB does not justify denying the dealer the concessional rate of tax for raw material sales. The court emphasized that the tax rate for a commodity remains consistent throughout an assessment year, and the presence of transactions from multiple quarters in a single form does not alter this principle. Consequently, the court found no legal flaw in the Tribunal's decision to uphold the first appellate authority's ruling on the matter.In light of the above analysis, the court dismissed the revision, ruling against the Revenue on the substantial question of law. The judgment clarifies the interpretation of Rule 25B and affirms that the presence of sale transactions spanning multiple quarters in a single form IIIB does not automatically disqualify a dealer from availing concessional tax rates for raw material sales during an assessment year.