FAROOQ AGENCIES Vs. COMMISSIONER, COMMERCIAL TAX

JUDGEMENT

(1.) The assessee before this Court seeks quashing of the order of the Trade Tax Tribunal, Allahabad dated 20th March, 2013 whereunder it has been held that since the assessee had in aggregate a turnover, in terms of sub Section (2) of Section 3, of more than Rs. 50 lacs, he was liable to pay development tax at the rate of 1% as per the notification issued by the State Government in exercise of power under Section 3-H of the U.P. Trade Tax Act.

(2.) Challenging the order so passed by the Tribunal, counsel for the petitioner contends that the assessment year 2007-08 has to be divided in two parts; first period being 01.04.2007 to 31.12.2007 i.e. the date up to which the U.P. Trade Tax Act was applicable and the second period w.e.f. 01.01.2008 to 31.03.2008 when the provisions of the Value Added Tax (VAT) became operative. It is case that for the period covered by the U.P. Trade Tax Act his total turnover did not exceed Rs. 50 lacs, therefore the provisions of Section 3-H were not attracted. It is his case that the department could not have applied the provisions of Section 18 of the U.P. Trade Tax Act for the purpose of working out the aggregate turnover under Section 3(1) of the U.P. Trade Tax Act for applying the provisions of Section 3-H.

(3.) He submits that the assessee had not discontinued his business under the U.P. Trade Tax Act. His business had continued uninterrupted for the entire assessment year, 2007-08. However, in view of the provision applicable for the period 01.01.2008 to 31.03.2008 he was liable to be assessed under the VAT and not under the U.P. Trade Tax Act. He, therefore, submits that the provisions of Section 18 are not attracted in the facts of the case and the order of the Tribunal determining his annual turnover with reference to the provisions of Section 18 is totally uncalled for in the facts of the case. He lastly submitted that the annual turnover for the entire year should have been considered instead of working out the aggregate turnover with reference to Section 18 of the Trade Tax Act.