Case Law Details
Unique Engineers Vs Commissioner Commercial Tax Lko (Allahabad High Court)
Admittedly, the revisionist manufactured ‘AT-PLAST’ which are being used in mixing of ready mix concrete / concrete and it has been averred by the revisionist that the said product are being used along with concrete for reducing the uses of water, delay the time of freezing as well as strengthening the concrete. In para 7 as well as in the grounds of appeal before the Tribunal, details of the chemicals used in manufacturing of the product i.e. ‘AT-PLAST’ were being given and on the strength of which, the revisionist claimed that the said goods are chemical and duly covered under Entry 29, Schedule II and the same are liable to be taxed at the rate of 4 %, but the Tribunal has not considered the same.
Learned counsel for the revisionist had relied upon the judgement of this Court dated 28.8.2014 passed in a bunch of tax revisions leading case No. Sales / Trade Tax Revision No. 457 of 2014 (The Commissioner, Commercial Tax, UP, Lucknow Vs. M/S Cico Technology Limited, Ghaziabad) where in, this Court while considering the case of waterproofing components and construction materials has held that the said items will be covered under the head of chemical and are liable to tax accordingly.
In the case in hand, none of the authorities have discussed raw material / chemicals used in manufacturing of ‘AT-PLAST’ or the chemical analysis report as furnished by the revisionist in support of its case but had decided the issue, which cannot be justified in the eyes of law.
In view of above, the revision is allowed. The impugned order of the Tribunal is set aside. The matter is remanded to the Tribunal for deciding the issue afresh keeping in mind the order & judgement of ‘Cico Technology Ltd. (supra).’
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. The present revision has been filed against the order dated 4.3.2010 passed by full Bench of Commercial Tax Tribunal, Lucknow in Appeal No. 5 of 2010 arising out of proceeding initiated under Section 59 of UP VAT Act in which following questions of law have been framed :-
“I. Whether the Commercial Tax Tribunal as well as Commissioner Commercial Tax, UP, Lucknow were justified to hold the production of the applicant / revisionist is subject matter @ 12.5 % as unclassified goods, despite the fact the aforesaid material produced by the Chemical process, and which is used in Chemistry?
Whether the Commercial Tax Tribunal was justified to hold that the production of the applicant / revisionist AT-PLAST is used with the building material and therefore, cannot be said that it is chemical, despite the fact the Commissioner has not disputed that it is not a chemical admixture?”
2. Learned counsel for the revisionist submits that the revisionist is engaged in the manufacturing of chemical in the brand name of ‘AT-PLAST’. He further submits that the said chemical is water reducing agent, which is commonly used in the construction work as a chemical for reducing the uses of water in the concrete and during the transition of concrete, it delays the process of freezing and also strengthen the concrete. He further submits that now ready mix concrete are being undertaken at plant and same are being transported from the site of its mixture to the site of construction, thus during the period of journey from the place of mixture to the consumer, the chemical manufactured by the revisionist are being used for reducing the water quantity as well as delay the process of its freezing and also gives strength to the concrete.
3. He further submits that the goods/item of the revisionist falls under Entry 29 part A of Schedule II of Section (1) (a) of section 4 of UP VAT Act. He further submits that as per part A of Schedule II, the liability of tax on the manufacturing item of the revisionist is at the rate of 4 %, as chemical covered under Section 29 of the Act. Since the issue with regard to the liability was not clear, thus an application under Section 59 of the Act has been moved before the Commissioner to clarify the rate of tax on the product of the revisionist. The Commissioner vide its order dated 9.12.2009 opined that the goods in question are liable to be taxed at the rate of 12.5 %, which was confirmed by the Tribunal vide its impugned order illegally and in the arbitrary manner.
4. He further submits that for manufacturing of its product ‘AT-PLAST’ various chemicals are being used but without considering the said fact, the Tribunal has wrongly confirmed the order of the Commissioner. He prays for allowing the revision.
5. Per contra, learned Standing Counsel supports the order passed by the authorities below.
6. After hearing the arguments of the learned counsel for the parties, the Court has perused the records.
7. Admittedly, the revisionist manufactured ‘AT-PLAST’ which are being used in mixing of ready mix concrete / concrete and it has been averred by the revisionist that the said product are being used along with concrete for reducing the uses of water, delay the time of freezing as well as strengthening the concrete. In para 7 as well as in the grounds of appeal before the Tribunal, details of the chemicals used in manufacturing of the product i.e. ‘AT-PLAST’ were being given and on the strength of which, the revisionist claimed that the said goods are chemical and duly covered under Entry 29, Schedule II and the same are liable to be taxed at the rate of 4 %, but the Tribunal has not considered the same.
8. On close scrutiny of the impugned order, it reveals that the Tribunal has neither referred the chemical used in manufacturing of said product nor has given any reference thereof. The Tribunal while coming to the conclusion has held that the goods manufactured and sold by the revisionist are used as building material and therefore justified the order passed by the Commissioner under Section 59 of the Act. The Tribunal being the last Court of fact ought to have considered various evidences as well as materials referred by the revisionist with regard to the chemical analysis report for chemical used in the manufacture of its product but had failed to do so.
9. Learned counsel for the revisionist had relied upon the judgement of this Court dated 28.8.2014 passed in a bunch of tax revisions leading case No. Sales / Trade Tax Revision No. 457 of 2014 (The Commissioner, Commercial Tax, UP, Lucknow Vs. M/S Cico Technology Limited, Ghaziabad) where in, this Court while considering the case of waterproofing components and construction materials has held that the said items will be covered under the head of chemical and are liable to tax accordingly.
10. In the case in hand, none of the authorities have discussed raw material / chemicals used in manufacturing of ‘AT-PLAST’ or the chemical analysis report as furnished by the revisionist in support of its case but had decided the issue, which cannot be justified in the eyes of law.
11. In view of above, the revision is allowed. The impugned order of the Tribunal is set aside. The matter is remanded to the Tribunal for deciding the issue afresh keeping in mind the order & judgement of ‘Cico Technology Ltd. (supra).’
12. It is expected that since the matter is very old, the Tribunal may take all possible effort to decide the same within a period of three months from the date of receipt of a copy of this order.
13. The revisionist undertakes to serve the copy of this order within a fortnight. In the event of failure on the part of the revisionist, benefit of this order shall not be accorded to the revisionist.
