The Commissioner Of Trade Tax ... vs S/S Harihar Plastic
2013 Latest Caselaw 5635 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. 10
 
Case :- SALES/TRADE TAX REVISION No. - 1091 of 2007
 

 
Applicant :- The Commissioner Of Trade Tax U.P.Lucknow
 
Opposite Party :- S/S Harihar Plastic
 
Counsel for Applicant :- Standing Counsel
 

 
Hon'ble Arun Tandon,J.

Heard Sri U.K. Pandey on behalf of the Department. Nobody is present on behalf of the assessee.

This revision is directed against the order of the Trade Tax Tribunal, Kanpur dated 28.02.2007 passed in second appeal no. 244 of 1997 connected with other appeals in so far as it has set aside the penalty imposed under Section 4B(5) of the U.P. Trade Tax Act in respect of the assessment year 1992-93. The Tribunal under the order impugned has dismissed the appeal filed by the department and has allowed the appeal filed by the assessee.

For the assessment year 1992-93 proceedings under Section 4B(5) were initiated against the assessee and vide order dated 4.1.1997 penalty to the tune of Rs.48,324 was levied. It was recorded that the assessee had purchased plastic granules the raw material and claimed complete exemption from tax under form 3B. The purchased granules were not used for manufacture of packing material instead for manufacturing plastic goods namely plastic bottles and plastic jar. Accordingly, notice was issued under Section 4B(5). After considering the explanation submitted by the assessee it was found that the assessee had not manufactured plastic packing material but has manufactured plastic goods and therefore penalty to the tune of Rs.48,324 was imposed. Not being satisfied, the assessee filed first appeal before the Deputy Commissioner, Appeal, the appeal was partly allowed vide order dated 31.3.1997. The quantum of penalty was reduced to Rs.24,162.

This resulted in two second appeals being filed one by the department and the other by the assessee before the Tribunal. The Tribunal under the order impugned has held that the plastic jar and plastic bottles manufactured by the assessee out of the raw material plastic granules answer the description of packaging material as per the notification dated 29.8.1987 and therefore the levy of penalty was not justified.

Counsel for the department points out that the assessee himself had declared the manufactured goods as plastic goods in proforma 4 as well as form 82 and therefore it was his own case that he had not manufactured any packaging material from the plastic granule purchased. It was also, the case of the department that in the facts of the case no reduction in the quantum of penalty was uncalled for. The Tribunal has wrongly held that in view of the order dated 29.8.1991 any wrong declaration in proforma 4 and form 82 will not alter the nature of the goods manufacture nor shall it act as estoppal..

I have heard counsels for the parties and examined the records of the writ petition Entry 4 of the notification no. 4519 dated 29.8.1987 relied upon by the department is quoted herein below:-

ST-II-4519/X-19/87-UP Act-XV/48-Order-87, dt. 29.8.1987

(Gazette dt. 29.8.1987)

In exercise of the powers under section 4-B of the Uttar Pradesh Sales Tax Act, 1948 (UP Act No XV of 1948) read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (UP Act No 1 of 1904), and in supersession of all previous notifications issued under the aforesaid section 4-B, the Governor is pleased:

(a) to declare the goods mentioned in column 2 of Annexure I, II and III to this notification to be notified goods for the purpose of aforesaid section 4-B, and

(b) to order that with effect from September 1, 1987 and subject to the conditions and restrictions specified in the said section 4-B:-

(1)no tax shall be payable in respect of the sale to or, as the case may be, purchase by a dealer, holding a recognition certificate under sub-Section (2) of the aforesaid section 4-B, of any raw materials, accessories and com ponent parts required for use in the manufacture by him of the notified goods mentioned in column 2 of Annexure I or of any goods required for use in the packing of such notified goods manufactured by him;

(2)no tax shall be payable in respect of the sale to or, as the case may be, purchase by a dealer, holding a recognition certificate as aforesaid, of goods mentioned in column 3 of Annexure II required for use as raw material in the manufacture by him of the notified goods mentioned in column 2 of the said Annexure;

(3)in respect of the sale to or, as the case may be, purchase by a dealer, holding a recognition certificate as aforesaid, of goods mentioned in column 3 of Annexure III required for use as raw materials, accessories or components parts in the manufactured by him of the notified goods mentioned in column 2 of the said Annexure, or of goods required for use by him in the packing of such notified goods manufactured by him, tax shall be payable at the rates specified in column 4 of the said Annexure;

(4)in the case of a dealer being a new unit holding a recognition certificate as aforesaid, the date of starting production where of falls on or after October 1, 1982, no tax shall be payable or, as the case may be, tax shall be payable at the concessional rate of four percent. In respect of the sale to or, as the case may be, purchase by such new unit of sub-assemblies and consumable stores required for use in the manufacture by it of the notified goods mentioned in column 2 of Annexure I or, as the case may be, Annexure III, and

(5)in respect of the sale to or, as the case may be, purchase by any dealer, holding a recognition certificate as as aforesaid of machinery, plant, equipment, spare parts, processing materials, fuels or lubricants and , in cases not covered by sub-clause (4) above, of consumable stores and sub assemblies, required by such dealer for use in the manufacture by him or any of the notified goods mentioned in Annexures I, II and III, tax shall be payable at concessional rate of four per cent.:-

Provided that no concessional under this notification shall be admissible:-

(i) if the turnover of goods manufactured by the dealer is exempt from tax under section 4 of the said Act of 1948; and

(ii) in respect of the sale to or purchase by distilleries and breweries and dealers engaged in the manufacture of paper, catechu (kattha) matches, empty match boxes, match splints and match veneers.

Explanation:-

The expression "new unit" and "date of starting production" shall have the meaning assigned to them in section 4-A of the Uttar Pradesh Sales Act, 1948.

Annexure-I

1. Bicycles, tricycles, perambulators, and parts and accessories thereof including seat tops (saddle).

2. Glass and glassware including optical glass in all its forms but excluding ornamented or cut glass bangles.

3. Oils extracted by solvent extraction process.

4. All kinds of packing materials including cases and containers.

5.............................

In the opinion of the court, the said entry applies when the plastic bottles and plastic jars are used for the purposes of packaging of liquids and other goods so as to answer the description of the packaging material but when the bottles and jars are sold in the open market as plastic goods in themselves to be used by the ultimate consumer for storing whatever he so desires they will answer the description of plastic goods nor covered by item 4 of Annexure I of the notification. Therefore the counsel for the department appears to be justified in submitting that when the assessee in his proforma 4 and form 82 has himself declared the manufacture goods as plastic goods there was little or no evidence before the Tribunal to come to the conclusion that the goods so manufactured were packaging materials. The order of the Tribunal is not supported by cogent reasons as no material fact have been recorded for arriving at the conclusion contrary to what was held by the assessing authority as well as by the First Appellate Authority.

Accordingly, the order of the Tribunal dated 28.02.2007 is hereby set aside.

Second Appeal No. 245 of 1997 assessment year 1992-93 and second appeal no. 381 of 1997 assessment year 1992-93 are restored to their original number.

Let the Tribunal decide the same in light of the observations made hereinabove, preferably within 2 months from the date a certified copy of this order is filed before it, after affording opportunity of hearing to the parties concerned.

The Revision is immediately allowed.

Order Date :- 10.9.2013

Fahad