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THE COMMISSIONER TRADE TAX versus S/S P.C. PAL SONS

High Court of Judicature at Allahabad

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The Commissioner Trade Tax v. S/S P.C. Pal Sons - SALES/TRADE TAX REVISION No. 1136 of 2000 [2007] RD-AH 866 (12 January 2007)

 

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HIGH COURT OF JUDICATURE OF ALLAHABAD

Hon'ble Rajes Kumar, J.

Heard Learned Standing Counsel.

By the impugned order, Tribunal has deleted the interest under section 8 (1) of U.P. Trade Tax Act (hereinafter referred to as "Act"). Dealer/opposite party (hereinafter referred to as "Dealer") had sold Three-wheeler chassis and admitted the liability of tax @ 4%, applicable to the motor vehicle. Assessing authority held that Three-wheeler chassis was not the motor vehicle, inasmuch as it was not capable to carry the passengers and the goods. Assessing authority had levied the tax @ 8% upto 30.09.1994 and treated the tax assessed as admitted amount of tax and demanded the interest under section 8 (1) of the Act. The levy of tax on the chassis has been upheld by the Tribunal and the demand of the interest has been deleted on the ground that at no stage dealer had admitted the tax and the liability of tax has been bonafidely disputed relying upon the decisions of the Apex Court in the case of J.K. Synthetics Limited Vs. The Commercial Taxes Officer, reported in 1994 UPTC, 893, and this Court in the case of Commissioner of Sales Tax, U.P., Lucknow Vs. S/S Sheo Nath Rai Kanhaiya Lal, Arhati, Baraut, reported in 1996 UPTC, 1053 and in the case of M/S The Indure (P) Ltd., Ghaziabad Vs. Commissioner of Sales Tax, U.P., Lucknow, reported in 1996 UPTC, 978.

I do not find any error in the order of the Tribunal deleting the interest under section 8 (1) of the Act. At no stage, dealer had admitted the liability of tax @ 10% on the chassis. Dealer had contested the levy of tax @ 10% upto the stage of Tribunal. The claim of the dealer was that the chassis was motor vehicle and liable to tax @ 4%. The issue involved was highly debatable and in the circumstances it can not be said that the dealer had not disputed the liability of tax bonafidely. Therefore, tax assessed can not be treated as admitted amount of tax.

In the result, Trade Tax Revision Nos.1136 and 1137 of 2000 fails and are accordingly, dismissed.

Dt.12.01.07

R./1136/00


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