Sri Gandhi Ashram Vs Commissioner (Allahabad High Court)
The revision petition challenged two orders: the Commercial Tax Tribunal’s order dated 17.04.2018 in Second Appeal No. 28/2018 for Assessment Year 2012–13, and the Additional Commissioner’s order dated 22.02.2018 under Section 28(ii)(2) of the UP VAT Act. The assessee raised three legal questions: whether khadi rajai and khadi gaddey could be taxed at 14% under Schedule II-A Entry 107 when khadi garments and khadi made-ups, including rajai and gaddey, were claimed to be exempt; whether the assessee was subjected to double taxation by being charged 5% on cotton purchases and then 14% on the filled rajai and gaddey; and whether Schedule I Entry 11, providing exemption to khadi garments and khadi made-ups from 30.09.2008, was ignored.
The assessee argued that cotton-filled rajai should not attract 14% tax because rajai was an exempt khadi made-up. The assessee claimed exemption on the basis that khadi garments and khadi made-ups, including unfilled rajai, were exempt from VAT.
The State opposed this, submitting that the exemption applied only to unfilled rajai. It was recorded that the assessee had admitted before the lower authority that the rajai sold was cotton-filled. Therefore, according to the State, the taxable category applied.
