SAGAR SONS Vs. COMMISSIONER, COMMERCIAL TAX, UTTARAKHAND, DEHRADUN

JUDGEMENT

(1.) THE present commercial tax revision has been filed against the order of the Commercial Tax Tribunal, Uttarakhand, Dehradun dated May 29, 2010 whereby the appeal of the revisionist has been dismissed and the order of the Additional Commissioner, Commercial Tax, Dehradun dated August 27, 2009, has been upheld.

(2.) THE revisionist is a proprietor concern, namely, M/s. Sarva Shri Sagar Sons which is registered under the Uttarakhand Value Added Tax Act as well as the Central Sales Tax Act, 1956. The revisionist is in the business of trading in a product known as "whip topping". According to the revisionist, "whip topping" is primarily a vegetable oil which is mixed with sugar and water and emulsified in semi -solid form which is then used as an icing in bakery products, such as, cakes and pastries. The revisionist purchases this product known as "whip topping" from Delhi and consequently makes sale of this product in the territory of Uttarakhand. Prior to the imposition of the Uttarakhand Value Added Tax Act, the revisionist was paying four per cent tax on the sale of "whip topping". However, since the imposition of the Uttarakhand Value Added Tax Act (hereinafter referred to as, "the Act"), the revisionist was provisionally assessed for the first time in January, 2009. The assessing authority was of the view that the product "whip topping" shall be taxed at the rate of 12.5 per cent, as it is an "unclassified product".

(3.) AGGRIEVED by the order of the assessing authority, the revisionist moved an application under section 57 of the Act before the Additional Commissioner, Commercial Tax, Uttarakhand, Dehradun, for determining the rate of tax on "whip topping" which was sold by the revisionist in Uttarakhand. The sole contention of the applicant/revisionist before the Additional Commissioner, Commercial Tax, Uttarakhand, Dehradun was that the "whip topping" is a semi liquid form of the vegetable oil and is used as decoration of cakes and pastries and cannot be consumed directly and therefore it is an "industrial input" which is used in manufacturing/decoration of cake and pastries. Apart from this, the revisionist also contended that prior to imposition of the Act, the revisionist was paying tax at the rate of four per cent and, therefore, the present tax rate of 12.5 per cent is not justified. All the same, the Additional Commissioner, Commercial Tax, Uttarakhand, Dehradun was of the view that since "whip topping" is not classified under the Act, so it has to be taxed at the rate of 12.5 per cent, i.e., under the unclassified category. The Additional Commissioner, Commercial Tax was also of the opinion that in another matter relating to Raj Agencies the tax of 12.5 per cent on the product known as "whip topping" has been held to be correct and, therefore, the Additional Commissioner, Commercial Tax, Uttarakhand, passed an order dated August 27, 2009 holding that the revisionist has to pay tax at the rate of 12.5 per cent.