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The Commissioner Trade Tax, Lucknow v. Vishal Scarp Traders Kilatganj Aligarh - SALES/TRADE TAX REVISION No. 917 of 1999  RD-AH 5651 (8 March 2006)
TRADE TAX REVISION NO.917 OF 1999
The Commissioner, Trade Tax, U.P., Lucknow. ....Applicant
S/s Vishal Scrap Traders, Kilatganj, Aligarh. .Opp.party
Hon'ble Rajes Kumar, J.
This revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 29.05.1999 for the assessment year 1988-89 under Central Sales Tax Act.
Dealer/opposite party (hereinafter referred to as "Dealer") claimed to have made inter-State sales for Rs.76,419/- of iron scrap and admitted the tax liability @ 1% on the ground that such scrap have been purchased from M/s Union Sales Corporation, Mumbai and were sold in the same form and condition under the notification no.ST-II-3618/X-900(21)-69, dated 01.07.1969. Assessing authority rejected the claim of the dealer of 1% tax liability under the aforesaid notification on the ground that in the bill no tax was charged by M/s Union Sales Corporation and only 1% commission has been charged. While as per notification, it has to be established that the goods have been subjected to tax under Central Sales Tax Act. First appellate authority allowed the appeal and accepted the claim of the dealer. Order of the first appellate authority has been upheld by the Tribunal.
Heard learned Standing Counsel. Despite the service of the notice, no one appears on behalf of the dealer.
Learned Standing Counsel submitted that Tribunal has erred in accepting the claim of dealer of 1% tax under the aforesaid notification on the ground that the dealer had made the purchases from registered dealer and merely because the tax has not been charged in the bill, it could not be said that the goods has not been subjected to tax under Central Sales Tax Act. He submitted that it is true that it is not necessary that in the bill tax should be charged but the dealer by other evidences should prove that the goods have been subjected to Central Sales Tax. He submitted that the intent of the notification no.ST-II-3618dated 01.07.1969 issued under section 8 (5) of the Act is that once the tax has been paid under Central Sales Tax Act on the second inter-State sales, tax should be levied @ 1%. Therefore, for the application of the aforesaid notification it is necessary that the goods must have been subjected to tax under Central Sales Tax Act and burden lies upon the dealer, who claims the benefit under the aforesaid notification to prove that the goods have been subjected to Central Sales Tax Act. I find substance in the argument of learned Standing Counsel.
Notification No.ST-II-3618 dated 01.07.1969 reads as follows:-
"Whereas, the State Government is satisfied that it is necessary so to do in the public interest;
Now, therefore, in exercise of the powers under sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act No.74 of 1956), read with section 21 of the General Clauses Act, 1897 (Act No.10 of 1897), and in supersession of Notification No.ST-3946/X-960(9)-66, dated August 26, 1966, the Governor is pleased to direct that, with effect from July 1, 1969, the tax payable under sub-section (1) of the said section by any dealer having his place of business in Uttar Pradesh in respect of the sale by him from any such place of business, in the course of inter-State trade or commerce, of any goods to which the said sub-section (1) applies, shall, subject to the conditions hereinafter specified, be calculated at the rate of one percent;
(1) The sales are made to a registered dealer having his place of business outside Uttar Pradesh.
(2) The sales relate to goods which are proved to the satisfaction of the appropriate sales tax authority to have been imported into Uttar Pradesh and are exported from Uttar Pradesh without any change in form or identity and have already been subjected to a tax under the Central Sales Tax Act, 1956, in respect of a sale in the course of inter-State trade or commerce which resulted in the import of the goods into the State of Uttar Pradesh."
One of the condition for the application of the aforesaid notification is that the goods have already been subjected to tax under Central Sales Tax Act. Thus, it has to be proved that the goods have been subjected to Central Sales Tax Act. Merely because the goods have been purchased from the registered dealer is not sufficient to claim the benefit under the aforesaid notification. Dealer by adducing the evidences should prove that the goods have been subjected to Central Sales Tax. It is true that merely because in the bill, Central Sales Tax is not mentioned, the claim can not be refused but the dealer should prove by other evidences that the goods have been subjected to Central Sales Tax. In the present case, no evidence has been adduced to prove that the goods have been subjected to tax under Central Sales Tax Act. Merely because it is purchased from registered dealer it can not be presumed that the goods have been subjected to tax and there must be positive evidence in this regard. In the absence of any such evidence being adduced by the dealer, first appellate authority as well by the Tribunal have erred in accepting the claim of the dealer of 1% tax under the aforesaid notification.
In the result, revision is allowed. Order of the Tribunal is set aside and the appeal filed by Commissioner of Trade Tax before the Tribunal is allowed and the order of the assessing authority is restored.
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