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The Commissioner Trade Tax U.P. Lucknow v. Hari Fertilizer Sahupuri - SALES/TRADE TAX REVISION No. 1008 of 1999 [2006] RD-AH 12098 (24 July 2006)


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Court no. 43

Trade Tax Revision no. 1008 Of 1999.

The Commissioner, Trade Tax, U. P. Lucknow..... Revisionist.


S/S Hari Fertilizers, Varanasi. ... Opp. Party.

Hon'ble Rajes Kumar, J.

Present revision under section 11 of U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of Tribunal dated 28th  April,  1999 relating to the assessment year 1982-83 under the U. P. Trade Tax Act.

Dealer/opposite party (hereinafter referred to as the "Dealer") was carrying on the business of manufacture and sales of Chemicals and Chemical Fertilizer etc.

Heard Sri U. K. Pandey, learned Standing Counsel and Sri R. P. Ginodia learned Counsel appearing on behalf of dealer/opp. party.

In the grounds of appeal, though the question in relating to rejection of books of account has been raised, but learned Standing Counsel has confined its argument only on the question of taxability and rate of tax on Ammonium Chloride.  The First Appellate Authority as well as the Tribunal have held that the dealer had sold Ammonium Chloride to the tune of Rs.12,12,187.30 as a Chemical and admitted tax @ 8%.  Thus, such turnover is liable to tax @ 8% while rest of the turnover is liable to tax as a Chemical Fertilizer.  Learned Standing Counsel submitted that in one assessment year, one commodity cannot be treated as two different commodities.  He submitted that in the relevant assessment year, Ammonium Chloride cannot be subjected to tax as a Chemical as well as Chemical Fertilizer.  It may be either Chemical or Chemical Fertilizer.  He submitted that merely because some of the sales of Ammonium Chloride had been made as a Chemical,  it is subjected to tax @ 8% and rest of the sales were made as a Chemical Fertilizer, therefore, it had been taxed @ 5%, is erroneous.  Learned Counsel for the dealer submitted that Ammonium Chloride is a Chemical Fertilizer under the Fertilizer Control Order, 1957 and under the Essential Commodities, 1955.  He submitted that in all the previous and subsequent years, Ammonium Chloride had been assessed to tax as a Chemical Fertilizer @ 5% and therefore, the turnover of Ammonium Chloride is liable to tax as a Chemical Fertilizer.

Having heard learned Counsel for the parties and have perused the order of the Tribunal and the authorities below.  In my opinion, order of Tribunal is not sustainable.   One commodity cannot be subjected to assessment as a two different

commodities on the basis of admission of dealer, Ammonium Chloride may be either liable to tax as a Chemical Fertilizer or Chemical.  Merely because, dealer has admitted some of the turnover of Ammonium Chloride as the turnover of Chemical and some of the turnover as Chemical Fertilizer, it cannot be assessed accordingly.  The Tribunal ought to have adjudicated whether the Ammonium Chloride is a Chemical Fertilizer or Chemical.  This exercise has not been done by the Tribunal.  In this view of the matter, the order of Tribunal is liable to be set aside and the matter is remanded back to the Tribunal to decide whether the Ammonium Chloride is liable to tax as a Chemical Fertilizer or Chemical..  It is open to the dealer to adduce all the necessary evidences in support of its claim that the Ammonium Chloride is a Chemical Fertilizer.  The Tribunal is directed to consider all the evidences and record its finding in respect thereof after giving proper opportunity of hearing to the revenue authority.

In the result, revision is allowed in part.  Order of Tribunal dated 20.04.1999 is set aside and the Tribunal is directed to decide the Appeal no.427 of 1994 for the assessment year 1982-83 under the U. P. Trade Tax Act in the light of observations made above.




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