CATALYSTS Vs. STATE OF U.P.

JUDGEMENT

(1.) The petitioner is carrying on the business of trading of Bio-chemicals. One such project, which the petitioner is selling is known as enzymes. For the assessment year 2003-04, 2004-05 and 2005-06 under U.P. Trade Tax Act and Central Sales Tax Act, the books of account of the petitioner was accepted. The Assessing Officer also accepted the disclosed sales of enzymes and assessed the same at the rate of 4% presumably under Notification No.1084 dated 25th February, 2003, which specified that chemicals of all kinds would be taxed at the rate of 4% in the hands of importer or manufacturer. Subsequently, a notice dated 24th February, 2010 was issued under Section 21(2) of the Act to the petitioner to show cause as to why reassessment proceedings under Section 21 of the Act should not be reopened on the ground that enzymes was not a chemical since it only acts as a catalyst and, therefore, is taxable at the rate of 10% as an unclassified item. The notice alleged that it was a case of under assessment and, therefore, required the petitioner to show cause as to why proceedings should not be reopened.

(2.) The petitioner submitted his reply contending that enzymes is nothing else but a kind of chemical and, therefore, is covered under Notification No.1084, which requires that chemicals of all kinds would be taxable at the rate of 4%. It was also brought to the knowledge of the authority that for the assessment year 2006-07, the Assessing Officer had not treated enzymes as a chemical in the assessment order but in appeal the appellate authority held that enzymes was a chemical and was liable to be taxed at the rate of 4%. The petitioner also enclosed a certificate issued from Micro Small and Medium Enterprises, which is a Government of India concern certifying that enzymes sold by the petitioner falls under the category of chemicals. Inspite of this reply being given, the competent authority granted permission to the Assessing Officer to issue a notice under Section 21 of the Act for reopening the assessment proceedings for the assessment year 2003-04, 2004-05 and 2005-06 under the U.P. and Central Sales Tax Act.

(3.) The petitioner, being aggrieved by the sanction order as well as by the notice, has filed Writ Petition No.704 of 2010 for its quashing in the aforesaid assessment years. The petitioner has also filed Writ Petition No.705 of 2010, which relates to the assessment year 2006-07 under the Central Sales Tax Act and Writ Petition No.706 of 2010, which relates to the assessment year 2006-07 under the U.P. Trade Tax Act.