Vinod Kumar Sunil Kumar vs Commissioner of Trade Tax, Uttar Pradesh

Since the question of law involved in these two appeals are common, the same are being disposed of by this common order. The Appellant/Assessee is a dealer registered under the Uttar Pradesh Sales Tax Act, 1948 (now renamed as the Uttar Pradesh Trade Tax Act, 1948) (for short, ''the Act'') and is engaged in the business of cloth made of jute. In these two appeals we are concerned with the assessment years 1987-88 and 1988-89.

The Appellant/Assessee had claimed exemption from payment of sales tax under the Act on the ground that he is a dealer in jute and canvass cloth and the benefit of the Notification issued by the State Government in exercise of its powers Under Section 4(a) of the Act should be made applicable to him.

The Assessing Authority dismissed the claim made by the Appellant/Assessee and has imposed tax liability of Rs. 15,058/- and Rs. 1,10,227.36/- for the assessment years 1987-88 and 1988-89 respectively. The Appellant/Assessee aggrieved by the order passed by the Assessing Authority has preferred appeals before the First Appellate Authority. However, the First Appellate Authority had partly allowed the appeal filed by the Assessee and reduced the tax liability to Rs. 14,560.92/- and Rs. 1,10,030.00/- for the assessment years 1987-88 and 1988-89 respectively.

The Revenue being aggrieved by the orders passed by the First Appellate Authority had preferred second appeal before the Trade Tax Tribunal, Kanpur (for short, "the Tribunal"). The Tribunal after considering the contentions canvassed by the learned Counsels and examining the documents on record observed that the Appellant/Assessee purchased Canvas Cloth and sold the same as Canvas Cloth and thus allowed the exemption on sale of Canvas Cloth.

The Revenue being aggrieved by the order so passed by the Tribunal had preferred Trade Tax Revision case before High Court. The High Court by the impugned judgment and order has allowed the appeal(s) preferred by the Revenue and set aside the order so passed by the Tribunal. Being aggrieved by the impugned judgment and order, the Appellant/Assessee is before us in these appeals.

We have heard Shri Tanmaya Agarwal, learned Counsel for the Appellant and Shri Ratnakar Dash, learned senior Counsel for the State.

To answer the issues canvassed by the learned Counsel for the Appellant, we need not to notice the Notification issued by the State Government, dated 31.01.1985. The relevant Entry is Entry 53 which talks about ''Textiles''. Entry 53 specifically excludes commodities like durries, carpets, druggets, hosiery goods, ready-made garments, jute cloth, cotton, rayon, etc. but includes, specifically apart from others, canvass cloth, tarpaulins and water proof cloth.

The Tribunal, which is the last fact-finding Authority in the instant case has positively come to the conclusion that the Appellant is a dealer who purchases canvass cloth and effects sale of the canvass cloth and therefore exigible for exemption in view of the notification issued by the State Government.

After carefully going through the judgment(s) and order(s) passed by the Courts below, in our opinion, the High Court was not justified in setting aside the order so passed by the Tribunal. In view of the above, we allow these appeals, set aside the judgment and order passed by the High Court and restore the order passed by the Tribunal.