COMMISSIONER, TRADE TAX, U. P. Vs. PARAGAON INDUSTRIES

JUDGEMENT

(1.) These are two revisions against the order of the Tribunal dated May 26, 2003 for the assessment years 1996-97 and 1997-98 both under the Central Sales Tax Act, 1956 (called, "the Central Act", for short).

(2.) The dispute in both the revisions relates to the rate of tax on the inter-State sales of iron kamani, which is a declared commodity under section 14 of the Central Act, whether it is liable to tax at the rate of four per cent or at the rate of two per cent. The Tribunal has held that it is liable to tax at the rate of two per cent.

(3.) The brief facts of the case are that the assessee has manufactured iron kamani from iron leaves purchased within the State of U. P. after paying the tax. Such kamani has been sold in the course of inter-State sales and on the turnover the assessee admitted the tax at the rate of two per cent. The claim of the assessee had been rejected by the assessing authority on the ground that under Notification No. 1626/XI/7 dated May 21, 1994 such kamani was liable to tax at the rate of two per cent on the condition that tax has been paid on raw material. Therefore, in view of the Explanation of section 8(2A) of the Central Act, kamani was not generally liable to tax under the State Act at the rate of two per cent. The assessing authority accordingly levied the tax at the rate of four per cent.