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C.S.T. versus S/S RAM NARAIN PRATAP NARAIN, FARRUKHABAD.

High Court of Judicature at Allahabad

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C.S.T. v. S/S Ram Narain Pratap Narain, Farrukhabad. - SALES/TRADE TAX REVISION No. 1704 of 1993 [2007] RD-AH 4220 (13 March 2007)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

RESERVED

SALES TAX REVISION N0.1704 OF 1993.

   AND

SALES TAX REVISION N0.1705 OF 1993.

The Commissioner, Sales Tax, U.P., Lucknow.                           Applicant                                                                             Versus

S/S Ram Narain Pratap Narain, Farrukhabad.                                   Opp-party

     

Hon'ble Rajes Kumar, J.

At the instance of the Revenue, following two questions have been raised in the present revisions.

"1. Whether the Sales Tax Tribunal was legally justified to hold that Nagar Motha Oil, Pipermint Oil and Raunsa Oil fall under the entry of "Oil of all kinds" despite the fact that the aforesaid commodities fall under the category of an unclassified item and are liable for tax accordingly?

2. Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to hold that the proceedings under section 21 are barred by limitation in view of the decision of Hon'ble High Court in the case of CST Versus Bhagwan Finance Corporation 1988-27 STL (34) and decision of Hon'ble Supreme Court in the case of Additional Commissioner Versus Jyoti Traders 1999 UPTC 45?".

For the assessment year 1976-77 under section 21 (2) of the U.P. Trade Tax Act (hereinafter referred to as "the Act"), the limitation for making the assessment was four years from the end of the assessment order, which expired on 31.03.1981, therefore, the assessment should be made by 31st March, 1981. The notice under section 21 of the Act was admittedly not issued within four years i.e. by 31st March, 1981, but was issued on 6th March, 1982 by U.P. Sales Tax (Amendment and Validation) Act, 1983 (U.P. Act no.16 of 1983), proviso to section 21 (2) of the Act was amended and the limitation to make assessment has been extended upto 31st December, 1982. Relying upon the decision of this Court in the case of M/S Jaiswal Colour Trading Company Versus Commissioner of Sales Tax reported in 1987 UPTC 504, Tribunal held that the proceeding under section 21 of the Act was barred by limitation inasmuch as the amendment was not applicable because the entire proceeding was closed when the amendment was introduced.

Learned counsel for both the parties agreed that the question No.2 is squarely covered by the decision of the Apex Court in the case of Additional Commissioner (Legal) and another Versus M/S Jyoti Traders and another reported in 1999 UPTC 45 in which it has been held that the amendment made, extending the period of limitation applies to a case where no proceeding was pending.

Respectfully, following the decision of the Apex Court, question No.2 is answered in favour of the Department and against the assessee and the order of the Tribunal to this extent is set aside.

Now coming to question no.1. Tribunal held that Nagar Motha Oil, Peppermint Oil and Raunsa Oil are covered under the entry " Oil of all kinds". In this regard, Tribunal held as follows:

"The second dispute in the present appeals are as to whether Nagar Motha Oil, Peppermint Oil, Raunsa Oil being essential Oils are covered under the entry of "Oil of all kinds". It has been argued by the learned counsel for the assessee that Nagar Motha Oil, Pepperment Oil and Raunsa Oil are extracted from roots, herbs and plants and are essential oils, hence the same is taxable as "Oil of all kinds". The learned counsel for the assessee has further submitted that in the assessee's case, second appeal no.691/83, Commissioner of Sales Tax Vs. M/S Ram Narain Pratap Narain (assessee), for the assessment year 1975-75, decided on 14.4.1983, the Kanpur Bench of the Tribunal, after relying on the case of M/S R. Oil and Chemicals, Bareilly Vs. Commissioner Sales Tax, 1983 STI (Alld H.C) page-295, has already held that Rausa and Menthol Oils are manufactured from Rausa and Mentha grass. They are covered under the general entry "Oil of all kinds". There is nothing on record to show that the said decision of the Tribunal has neither been set aside or the operation of the order is stayed. Consequently, we hold that Nagar Motha Oil, Peppermint Oil and Raunsa Oil will fall under the entry of "Oil of all kinds".

The question for determination is as to whether the Nagar Motha Oil, Peppermint Oil and Raunsa Oil being essential oils are covered under the entry "Oil of all kinds". It has been argued by the learned counsel for the assessee that Nagar Motha Oil, Peppermint Oil and Raunsa Oil are extracted from roots, herbs and plants and are essential oils, hence the same is taxable as Oil of all kinds. Learned counsel for the assessee has further submitted that in the assessee's case in second appeal no.691 of 1983, Commissioner of Sales Tax Versus M/S Ram Narain Pratap Narain (assessee) for the assessment year 1975-76 decided on 14.04.1983, the Kanpur Bench of the Tribunal, after relying on the case of M/S  R. Oil and Chemicals, Bareilly Versus Commissioner of Sales Tax, reported in 1983 STI (Alld. H.C.) page 295 has held that Raunsa and Menthol Oils are manufactured from Rausa and Mentha grass and they are covered under the general entry "Oil of all kinds". There is nothing on record to show that the said decision of the Tribunal is either set aside or the operation of the order is stayed.

Learned Standing Counsel was asked to file the copy of the order of the Tribunal for the assessment year, 1975-76 and to inform whether any revision against the order of the Tribunal was filed or not. By supplementary affidavit dated 15th December, 2006, it has been informed that the file relating to the assessment year, 1975-76 is not available and the order dated 14.04.1984 passed in appeal no. 691 of 1983 is not traceable. Learned Standing Counsel is not able to show any illegality in the decision of the Tribunal.

There is no dispute that Nagar Motha Oil, Peppermint Oil and Raunsa Oil are the oils and they are not been classified elsewhere under any of the Notification. The entry "Oil of all kinds" is a generic entry and includes all kinds of oil. Thus, there appears to be no reason why Nagar Motha Oil, Peppermint Oil and Raunsa Oil are not covered under the entry "Oil of all kinds". It is settled principle of law that effort should be to classify a commodity under the entry and if it is not possible to classify under any of the entry then only the commodity should be taxed as an unclassified goods. In the case of Collector of Central Excise, Shillong Versus Wood Craft Products Ltd. reported in 1995 (3) SCC page 454, Apex Court held that the residuary can be resorted to only when even a liberal construction of the specific headings is not capable of covering the goods in question. Thus, in the absence of any specific entry relating to the aforesaid three items, being essential oils has been rightly covered under the generic entry " Oil of all kinds".

In the result, both the revisions are allowed in part. The order of the Tribunal is set aside. Tribunal is directed to pass appropriate orders under section 11 (8) of the Act.

Dated.13.03.2007

VS.


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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