Composition scheme excludes separate State development tax where the scheme does not expressly provide an additional levy.

State development tax could not be levied in addition to the composition amount payable under the compounding scheme for tax discharge under the UP Trade Tax Act. The composition scheme was treated as a simplified mode of settling the tax liability in lieu of the tax otherwise payable, and the earlier interpretation applied that Section 3H did not override Section 7D unless the scheme expressly said so. Because the scheme did not provide for separate recovery of State development tax, and separate turnover examination would defeat the object of compounding, the additional levy was unsustainable.

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Issues: Whether State development tax under Section 3H of the UP Trade Tax Act, 1948 could be levied over and above the composition amount payable under the compounding scheme under Section 7D of the Act.

Analysis: The composition scheme was treated as a simplified mode of discharge of tax liability in lieu of the tax otherwise payable under the Act. The earlier binding interpretation held that Section 3H does not override Section 7D and that, unless the scheme itself provides to the contrary, the composition amount includes State development tax. The scheme did not state that State development tax was separately chargeable in addition to the composition amount. As the object of compounding would be frustrated if turnover had to be separately examined for levying State development tax, the levy could not be sustained over and above the composition amount.

Conclusion: State development tax was not payable in addition to the composition amount under the compounding scheme, and the levy was unsustainable.

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