2022 (8) TMI 371

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....onfirmed the first appeal order deleting the demand of entry tax created under Section 12 of Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as the Act), on sale of sugar manufactured by the assessee. 5. The revision has been pressed on the following questions of law: 1. Whether on the facts and circumstances of the case when it is found that delivery of sugar has been given at the factory gate and thereafter the purchaser was at liberty to transport the goods at his own choice, it is local sale made by the opposite party/dealer on which the entry tax was chargeable? 2. Whether on the facts and circumstances of the case the delivery of sugar outside the State of U.P. or the export of the same outside the State not established then also the tribunal as well as Ist. Appellate Authority were justified in deleting the amount of entry tax levied by the assessing authority?" 6. Having heard learned counsel for the parties and having perused the record, in the first place, it may be noted, there is no dispute to the fact that the assessee is a manufacturer of sugar at Bulandshahr, inside the State of U.P. During the assessmen....

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.... (5) Provisions regarding imposition of penalty in respect of amount of tax deducted under section 34 of the Uttar Pradesh Value Added Tax Act, 2008 and provision regarding payablity of interest 'under sub-section (2) of section 33 of the said Act shall mutatis mutandis apply to amounts collected by manufacturers from purchasers under this section. (6) The amount of tax deposited under this section shall be deemed to have been deposited for and on behalf of the dealer from whom such tax has been received. The manufacturer shall mention the amount of such tax in the tax invoice or sale invoice, as the case may be, issued to the purchasing dealer. It shall be deemed to be the proof for deposit of tax unless the tax invoice or sale invoice, as the case may be, is found forged or bogus or fake or not validly issued or obtained fraudulently." 8. The First Appeal Authority and the Tribunal have sustained the challenge raised by the assessee to applicability of Section 12 of the Act on the reasoning, though the sale may have been completed at the factory gate, yet the transactions were performed against orders placed by the selling agents of the assessee, at Delhi. The....

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....tside the country. That exclusion must exist as it is inherent in the Constitutional scheme. A State legislature may impose tax only within its territory. This intention is also reflected from the language of Section 12(1) of the Act itself. It only provides for pre-deposit of Entry Tax by the purchaser with the manufacturer, if he intends to take the purchased goods to another local area inside the State. By using the phrase "intends to bring into the local area", the legislature had made it plain that the provision of Section 12 of the Act would apply only if the intention of the purchaser is to take the goods to a "local area" as defined under Section 2(d) of the Act. Those areas would be such as may fall within the territory of State of U.P. only and not outside it. 13. Second, that exclusion has to be applied on the 'intention' and not on satisfaction of the test required to be satisfied to establish export or inter-state sale. Therefore, even if a local (inter-state) sale is completed within a local area as may not satisfy the test of Section 3 or Section 5 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act), yet it may not, therefore, f....

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....f the Central Act would apply, is (as discussed above) much higher and different. In that case, no evidence was led to establish existence of a prior contract of sale that may have occasioned the movement of goods from the State to Nepal. 18. Thus, it has to be observed, for the purpose of applicability of Section 5 of the Central Act, it was necessary to establish existence of prior contract of sale occasioning the movement of goods, to outside the country. That issue is not before this Court, in the present case. It would arise and would have to be tested on its own merit, in the central assesment, if that issue arose. However, for the purposes of the Act, the lesser test would allow the assessee to successfully contend that no occasion arose as may have created the obligation on the assessee to charge and receive payment on entry tax act while making sale of goods that were intended to be carried outside the State of U.P. 19. Assuming, for the purposes of answering the questions of law raised that the sale was complete at the factory gate, yet it survived for consideration whether the intention of sale was to carry the goods outside the State of U.P. for the purpose of con....