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M/S.SARU COPPER ALOYS SEMIS(P)LTD., MEERUT versus COMMISSIONER OF TRADE TAX U.P.

High Court of Judicature at Allahabad

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M/S.Saru Copper Aloys Semis(P)Ltd., Meerut v. Commissioner Of Trade Tax U.P. - SALES/TRADE TAX REVISION No. 970 of 1999 [2007] RD-AH 4260 (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

TRADE TAX REVISION N0.970 OF 1999.

AND

       TRADE TAX REVISION N0.981 OF 1999.

M/S Saru Copper Alloys Semis (P) Ltd., Meerut.                                Applicant                                                                             Versus

Commissioner, Trade Tax, U.P., Lucknow.                                     Opp-party

Hon'ble Rajes Kumar, J.

Present two revisions under section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") are directed against the order of the Tribunal dated 23rd October, 1999 relating to the assessment years, 1994-95 and 1995-96 under the Central Sales Tax Act (hereinafter referred to as "Central Act").

The short question involved in the present revisions relates to the refund of the amount. For the assessment year, 1994-95 and 1995-96 as against the tax due the excess amount deposited by the applicant was to the extent of Rs. 1,85,264.50 and Rs. 3,73,453/- respectively. The applicant had claimed refund of the aforesaid amount being the amount in excess of the tax due. Assessing authority refused to refund under section 29-A of the Act on the ground that the applicant had realized the aforesaid amount from the customers. Thus, not refundable to the applicant but to the customers under section 29-A (3) of the Act. The view of the assessing authority has been upheld in first appeals and by the Tribunal.

Heard learned counsel for the parties.

Learned counsel for the applicant submitted that the provisions of Section 29-A of the Act is not applicable to the Central Act and, therefore, the excess amount cannot be detained under section 29-A (2) of the Act. He submitted that the provisions of the refund has not been made applicable to the Central Act, therefore, the provisions of Section 29-A (2) is not applicable. In support of his contention, he relied upon the decisions of the Apex Court in the case of Khemka & Co. (Agencies) Pvt. Ltd Versus State of Maharashtra reported in 35 STC 571, Indian Carbon Ltd. etc., Versus State of Assam reported in 1998 UPTC 1 and the decision of the Bombay High Court in the case of Commissioner of Sales Tax Versus Ram Krishna Kulvantrai reported in 37 STC 564. He further submitted that no tax can be levied without the authority of law as contemplated by Article 265 of the Constitution of India.

Learned Standing Counsel submitted that the provisions of the refund is a procedural provision and the provision of the refund under the U.P. Trade Tax Act has been made applicable to the Central Act in view of its adoption by Section 9 (2) of the Central Act. He submitted that under section 9 (2) of the Central Act "refund" has been added by Act No. 61 of 1972 w.e.f. 1.4.1973, therefore, the provisions relating to the refund under the U.P. Trade Tax Act is applicable under the Central Act. Section 29-A (2) of the Act being a provision relating to the refund is therefore, applicable to the Central Act. He submitted that the decision of the Bombay High Court in the case of Commissioner of Sales Tax Versus Ram Krishna Kulvantrai (supra) is not applicable to the present case inasmuch the case is based on the provisions enforced prior to 1973 and before the amendment by Act No. 61 of 1972 w.e.f. 1.4.1973. He submitted that the decision of the Apex Court in the case of Indian Carbon Ltd. etc., Versus State of Assam (supra) is also not applicable to the present case. He submitted that the Apex Court has held that the provisions of interest is a substantive provision and unless there is a provision for the charge of the interest, the provision of interest under the U.P. Trade Tax Act cannot be made applicable to the Central Act. He submitted that the provisions of the refund is procedural provision and not a substantive provision and since the provision of the refund under the U.P. Trade Tax Act has been adopted by virtue of the provisions of Section 9 (2) of the Central Act, the provision of refund is applicable under the Central Act.

Having heard the learned counsel for the parties, I have perused the order of the Tribunal and the authorities below.

The provisions of Section 9 (2) and 9-A of the Central Act as they existed prior to 1.4.1973 reads as follows:

"9. Levy and collection of tax and penalties.-

(2). Subject to the other provisions of this Act and the rules made there under, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds,  penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly:

Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub-section.

9-A. Collection of tax to be only by registered dealer.- No person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of inter-State trade or commerce any amount by way of tax under this Act, and no registered dealer shall make any such collection except in accordance with this Act and the rules made there under."

Section 9 (2) and  (2-A) of the Central Act prior to Finance Act, 2000 and after the Finance Act, 2000 reads as follows:

"Prior to Finance Act, 2000.

"9. Levy and collection of tax and penalties.-

(2). Subject to the other provisions of this Act and the rules made there under, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly:

Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub-section.

(2-A). All the provisions relating to offences and penalties including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in Sections 10 and 10-A of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, reassessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law."

"After the Finance Act, 2000.

"9 . Levy and collection of tax and penalties._

(2). Subject to the other provisions of this Act and the rules made there under, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess reassess, collect and enforce payment of tax, including any (interest or penalty) payment by a dealer under this Act as if the tax or (interest or penalty) payment by such a dealer under this Act is a tax or (interest or penalty) payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, review, revisions references, ( refunds, rebates, penalties) (charging or payment of interest) compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly:

Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, be rules made in this behalf make necessary provisions for all or any of the matter specified in this sub-section.

(2-A). All the (provisions relating to offences, interest and penalties) (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in section 10 and 10-A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any tax required to be collection under this Act in such State or in relation  to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law."

A bare reading of the provisions of Section 9 (2) of the Central Act reveals that the provisions of the refunds of the State law has been made applicable to the Central Act.

The decision of the Bombay Court in the case of Commissioner of Sales Tax Versus Ram Krishna Kulvantrai (supra) is not applicable to the present case. In the said case, the tax was collected on the amount, which was not in the nature of sales and in the absence of any provision under the Central Act for the forfeiture of the amount, it has been held that the provisions of Section 9-A of the Central Act could not be invoked inasmuch as the amount realized was not in the nature of tax. Though, the question has been raised as to whether on true and proper interpretation of Section 9 (2) of the Central Act as amended by the Central Sales Tax (Amendment), Act, 1969, Tribunal is correct in law in coming to the conclusion that the Provisions of Section 46 and 37 of the Bombay Sales Tax Act, 1959 could not be invoked for the purposes of Central Sales Tax Act, 1956, but the said question has not been pressed and adjudicated upon.

The decision of the Apex Court in the case of Indian Carbon Ltd. etc., Versus State of Assam (supra) is also not applicable to the present case. In the said case, the Apex Court held that there was no substantive provision in the Central Act requiring the payment of interest on the Central Sales Tax. It has been held that the word "charging or payment of interest" in Section 9 (2) of the Central Act  occur in what may be called the latter part thereof authorizes the sales tax authorities of a State to assess, re-assess, collect and enforce payment of Central Sales Tax payable by a dealer if it was payable under the State Act. By the second part of Section 9(2) authorities are empowered to exercise the powers they have under the State Act including provisions relating to charging and payment of interest, which relates to the application for procedural purposes alone, the provisions relating to the interest in the latter part of Section 9 (2) can be employed by the States sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. The Apex Court held as follows:

"Now, the words "charging or payment of interest" in Section 9(2), occur in what may be called the latter part thereof. Section 9(2) authorizes the sales tax authorities of a State to assess, re-assess, collect and enforce payment of the Central Sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka & Co., it must beheld that the substantive law that the States sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9 (2) can be employed by the States sales tax authorities only if the Central sales tax makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax, the States sales tax authorities cannot, for the purpose of collecting the enforcing payment of Central sales tax, charge interest thereon.".

The decision of the Apex Court in the case of Khemka & Co. (Agencies) Pvt. Ltd Versus State of Maharashtra (supra) and in the case of Indian Carbon Ltd. etc., Versus State of Assam (supra) thus, held that the procedural part of the State provision of the State Act are applicable for the enforcement of substantive law of the Central Act.

In the case of Khemka & Co. (Agencies) Pvt. Ltd Versus State of Maharashtra (supra), Apex Court held that the procedural part relating to the penalty provision of State Law can only be invoked for the enforcement of the substantive provision of the penalty under the Central Act. Likewise in the case of Indian Carbon Ltd. etc., Versus State of Assam (supra), it has been held that in the absence of any substantive provision relating to the levy of interest under the Central Sales Tax Act the substantive provision relating to the interest of the State Act cannot be applied. Similar is not the position in the case of refund. The provision relating to the refund is a procedural provision in which there is no levy or charge and thus, it does not require any substantive provision. The procedural provision of the refund has been specifically made applicable to the Central Act under section 9 (2) of the Central Act. Section 29-A (2) and 29-A (3) of the U.P. Trade Tax Act are the provisions relating to the refund, therefore, in my opinion they are applicab le to the Central Act. The validity of Section 29-A of the U.P. Trade Tax Act has already been upheld by the Apex Court in the case of Kasturi Lal Har Lal Versus State of U.P. reported in 1987 UPTC 135 and M/S Kheria Brothers, Lalitpur Versus Assistant Commissioner (Judicial), Sales Tax, Jhansi reported in 1995 UPTC 593.

For the reasons stated above, both the revisions have no merit and are liable to be dismissed.

In the result, both the revisions fail and are, accordingly, dismissed.

Dated.13.03.2007

VS.


Copyright

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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