Allahabad High Court
The Commissioner, Commercial Tax vs M/S Bhawati Trading Co. on 26 July, 2022
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 38 Case :- SALES/TRADE TAX REVISION DEFECTIVE No. - 39 of 2019 Revisionist :- The Commissioner, Commercial Tax Opposite Party :- M/S Bhawati Trading Co. Counsel for Revisionist :- Bipin Kumar Pandey Counsel for Opposite Party :- Nishant Mishra Hon'ble Saumitra Dayal Singh,J.
1. Heard Shri A.C. Tripathi, learned Standing Counsel for the revenue and Shri Nishant Mishra, learned counsel for the assessee.
2. Present revision (carrying a delay of 129 days) has been filed against the order dated 20.07.2018 passed by Commercial Tax Tribunal, Saharanpur Bench, Saharanpur, in Second Appeal No. 201 of 2016 for A.Y. 2008-09 (U.P.) under the provisions of U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act) whereby the Tribunal has found that commodity 'toffee' sold by the assessee was covered under the Entry No. 137 Schedule II Part A. It has accordingly subjected it to tax @ 4% as against the claim of the revenue that the said commodity was taxable as an unclassified commodity @ 12.5%.
3. Having heard learned counsel for the parties and having perused the record, it transpires, the Tribunal has specifically found, the assessee had purchased 'toffee' from M/s Perfetti Van Melle India Pvt. Ltd., G.T. Road, Ghaziabad. Then, as to the sugar content, relying on an order passed by the Commissioner of Commercial Tax, under Section 59 of the Act, it was held - any commodity having sugar content more than 70% would qualify as a sugar product under Entry No. 137 Schedule II Part A of the Act. That decision of the Commissioner has also been referred to by the State in its affidavit filed in another revision being Sales/Trade Tax Revision Defective No. 99 of 2016 (The Commissioner, Commercial Tax, Lucknow Vs. S/S I.T.C. Limited, S.P. Marg, Saharanpur), listed together with the present case.
4. In that background, learned counsel for the assessee is quite right in his submission that the issue is no longer res-integra, inasmuch as, the revenue authorities accepted as final, the decision made by the Tribunal acknowledging 'toffees' manufactured by M/s Perfetti Van Melle India Pvt. Ltd., having sugar content more than 70%, to be covered under Entry No. 137 Schedule II Part A of the Act.
5. In that regard, it may be noted, earlier, another distributor -M/s United Traders had approached this Court in Commercial Tax Revision No. 830 of 2010 (M/s United Traders 34/78, Block-4, Govind Nagar, Kanpur through its Authorized Signatory. Vs. Commissioner of Commercial Taxes, U.P. Lucknow). That revision was disposed of with the following observations:
"Learned Counsel for the revisionist states that his products in fact contains more than 90% sugar. He contends that he has produced before the assessing authority even chemical analysis report to establish this but the same has been ignored. He argues that the Circulars are binding on the Commissioner under which the percentage of sugar to be contained in a sugar product has been clearly spelled out. His contention is that he has been wrongfully denied of the benefit of Entry 137 and his product is not being classified as a sugar product and is being wrongly classified as an unclassified item.
Learned Standing Counsel for the State does not deny the decision of the Commissioner nor does he deny the binding effect of such a decision made under Section 59 of the VAT Act. However, since the facts of the case are still in realm of dispute it would be in the best interest of justice as well as the department that products, which are being sold and traded by the assessee are subjected to a chemical analysis test, which may be carried out by a government approved laboratory to testify as to what is the percentage of Sugar and thereafter the assessing authority may pass fresh orders in accordance with law. The Chemical analysis may be carried out within the next two months from the date a certified copy of this order is being placed before the authority concerned. A copy of this order may be placed before the authority within a period of one week from today. The assessing authority may pass fresh orders thereafter in accordance with law within a period of next three months.
In view of the directions given above, the order of the Tribunal dated 21.7.2007 is set aside. Fresh orders may be passed in accordance with law.
All the revisions stand disposed of."
6. Upon remand, Commercial Tax Tribunal, Kanpur Bench - I, Kanpur, vide its order dated 22.10.2016, in Second Appeal Nos. 318 of 2013 and 317 of 2013, held the commodity in question dealt with by M/s United Traders to be the 'toffees' as the sugar content found was more than 90%. There were certain disputes with respect to report of fifth sample that got tested by the Tribunal. Upon retest, sugar value in that sample was again found to be more than 90%.
7. In that situation, revenue assailed the above order of the Tribunal in Sales/Trade Tax Revision No. 147 of 2017 (The Commissioner, Commercial Tax, U.P. Lucknow Vs. M/S. United Traders, Kanpur). That revision was not entertained. Relevant to our discussion, the order dated 24.4.2017 refusing to entertain the revision, is quoted below:
"Pursuant to an order passed by this Court in Revision No.830 of 2010, dated 8.12.2011, a chemical analysis of toffees, candies and lollipops were undertaken, in which out of 05 samples, 04 reported sugar content of 90%, whereas fifth one demonstrated sugar content at 54.20%. In respect of fifth sample, where sugar content was found at 54.20%, a prayer was made for fresh analysis by the assessee and was allowed. In the fresh analysis, fifth sample is also found to carry 90% sugar content. Tribunal acting thereupon has proceeded to assess the respondent firm. Aggrieved by it, the revenue is before this Court.
Learned Standing Counsel for the revenue submits that the toffees produced by the assessee was not manufactured after 2012, and no fresh sample was available. Submission is that in such circumstances, the order of Tribunal is bad.
Sri Nishant Mishra, who appears for the respondent assessee, points out that the order of Tribunal directing fresh chemical analysis of the product has attained finality.
The dispute raised is on facts as to whether sugar content in the candies is 90% or not.
Learned Standing Counsel submits that production of candies stopped in the year 2012, and thereafter, no fresh sample was available.
Learned counsel for the assessee submits that production of candies had not stopped, and that candies were available in the market, but it was only that its selling by the assessee was stopped.
Having heard learned counsel for the parties, I find that as against 05 samples initially sent for chemical analysis, in four of them sugar content was found around 90%. Upon objection of the assessee, fifth sample also has reported sugar content of 90% in re-analysis. The manufacturing of candies was otherwise not discontinued. In such circumstances, if the Tribunal has proceeded to treat the sugar content at 90% for the fifth sample also, no perversity could be shown. This Court in exercise of revisional jurisdiction is not required to re-appraise facts.
Revision, accordingly, is consigned to records."
8. Then, in case of M/s Perfetti Van Melle India Pvt. Ltd. i.e. the manufacturer, a similar view was taken by Commercial Tax Tribunal, Ghaziabad, in Second Appeal No. 1674 of 2014, for A.Y. 2009-10 (U.P.), decided on 05.06.2017. Also, another issue was involved pertaining to classification of two products i.e. 'Chlormint with Herbasol' and 'Happydent White'. The revenue challenged the said order of the Tribunal by means of Sales/Trade Tax Revision No. 411 of 2017. Initially, it did not raise any challenge to the finding pertaining to taxability of 'toffees'. It confined the revision to classification of 'Chlormint with Herbasol' and 'Happydent White'.
9. During pendency of that revision, the revenue filed an amendment application seeking to press the question with respect to classification of toffees. At the same time, by order dated 23.01.2018, the revenue got dismissed the amendment application, as not pressed.
10. Thereafter, Sales/Trade Tax Revision No. 411 of 2017 was also dismissed by order dated 19.02.2018. That order of this Court is stated to have attained finality, inasmuch as, Special Leave Petition (S.L.P.) filed by the revenue against that order is also stated to have been dismissed by the Supreme Court on 05.03.2019.
11. In that fact background as noted above, it is difficult to accept this conduct of the State to now challenge the rate of tax on 'toffee' in the case of the present dealer, who is an agent of the manufacturer - M/s Perfetti Van Melle India Pvt. Ltd. The commodity being the same and the assessee being not the manufacture, a different view may never arise - one for the manufacturer and the other for the trader.
12. Adjudication having been made once and the revenue with open eyes having not pressed the issue of taxability of 'toffees' beyond the level of Tribunal, though it carried the remaining dispute arising from the same order up to the Supreme Court, it cannot be permitted to adopt dual standards while dealing with the case of a trader. One commodity may be taxed at one rate, at the same point in time. Revenue has no discretion in the matter.
13. That apart, the order of the Commissioner though not be binding on the assessee, itself provides, products having more than 70% sugar content be classified as sugar products. To that end, there is no dispute that the commodity dealt with by the assessee were 'toffees' having sugar content more than 70%.
14. In view of the above, no material has been shown to exist that may warrant a different view to be taken either on facts law.
15. Revision is delayed and lacks merit. It is accordingly dismissed.
Order Date :- 26.7.2022 Prakhar