Vodafone South Limited Vs Commissioner (Allahabad High Court)
The Allahabad High Court decided a batch of connected sales/trade tax revisions by a common order, treating one revision for Assessment Year 2008–09 under the UP VAT Act as the leading case. The revisions challenged a judgment dated 27.12.2024 passed by the Commercial Tax Tribunal, Meerut, which had upheld the levy of VAT and entry tax on diesel used in diesel generator sets installed at mobile towers. The revisions were admitted on multiple questions of law, including whether consumption of diesel by service providers could be treated as a sale to the assessee, whether non-VAT goods taxed at manufacture or import could again be subjected to VAT, and whether the burden of proof had been correctly applied.
The assessee was engaged in providing mobile services and had installed mobile towers requiring uninterrupted power supply. For this purpose, diesel generator sets were installed at tower sites. The assessee entered into agreements with service providers for operation and maintenance of these generator sets, including timely filling of diesel, with penalty clauses for failure. Payments were made to service providers for running the generator sets, including diesel consumption. The assessee contended that diesel was a controlled commodity, not imported or manufactured by it, and that VAT had been wrongly imposed by treating it as an importer or as having purchased diesel from unregistered dealers. It was argued that all relevant information had been provided and that the authorities had ignored evidence on record. Reliance was placed on an earlier High Court judgment to support the contention that no VAT was leviable.
