Case: Commissioner Of Trade Tax, U.P Vs. M/S. Malviya Chemicals &amp; Pharmaceutical Private Limited, Ghaziabad

is higher. 6.(a) Turnover of sale of goods in any assessment year to the extent of the quantity covered by production of that year and the stock of base production of previous years shall be deemed to be the turnover of base production. (b) Only the turnover of goods in any assessment year in excess of the quantity referred to in clause (a) shall be entitled to the facility of exemption from or reduction in the rate of tax. ANNEXURE I - ANNEXURE II RULE 41- Submission of returns and assessment of tax (1) Every dealer liable to tax, the aggregate of whose turnover, of purchases and sales in any assessment year exceeds rupees five lakhs, shall before the expiry of the next succeeding month, submit to the Trade Tax Officer a monthly return of his turnover in Form IV, giving Annexure I and II thereof, detailed information, according to Code numbers notified by the State Government from time to time, in respect of each category of goods in which he carries on business: Provided that the return for the month of February shall be submitted to the Trade Tax Officer on or before the twentieth day of March: Provided further that the dealer may, instead of submitting a return as aforesaid, estimate his turnover for the years on the basis of the turnover admitted by him in his return, or disclosed in his account books, whichever is greater, for the immediately preceding year, calculate the amount of tax payable thereon and deposit a sum equal to one twelfth thereof during each of the first two months of every quarter, and deposit the balance of tax due on the turnover admitted by him in his return for the relevant quarter, which shall be prepared and submitted in the manner laid down in this rule. (8) Upon the expiry of the assessment year, the Assessing Authority shall, after such enquiry, as he may deem necessary, determine the turnover of sales or of purchases, or both, as the case may be, of the dealer in respect of the assessment year and shall assess the tax payable thereon; Provided that in the case of a dealer to whom sub-section (1) of Section 18 applies or owner or in charge of the vehicle to whom sub-section (1) of Section 28-B applies, the assessing authority may make an assessment order and assess the tax payable thereon before the expiry of the assessment year: Provided further that, before determining the turnover of the dealer to the best of his judgment, the assessing authority shall cause a notice to be served on the dealer, stating the reasons, for non-acceptance of the turnover of sales or purchases or both, as disclosed in the returns, if any, submitted by him and shall give him a reasonable opportunity of furnishing his reply thereto. Section 7.-Determination of turnover and assessment of tax. (1-A) Before submitting the return under sub-Section (1) or along with such return, the dealer shall deposit, in such manner as may be prescribed, the amount of due on the turn- over shown in such return. 9. A similar issue came up for consideration in Commissioner of Trade Tax, U.P. Vs. Modipan Fibres Co. (2006 (6) SCC 577 ). In that case, this Court was considering an appeal filed by the present appellant where challenge lay to the decision rendered by the High Court in Modipan Fibres Co. Vs. C.T.T. (2000 UPTC 319). 10. The said case was relied upon by the High Court in support of its conclusions which are challenged in the present appeal. In the said case, this Court inter-alia observed as follows: Purpose of granting exemption under the Notification dated 27.7.1999 was to promote the development of certain industries in the State. By the said Notification exemption from payment of tax or reduction in rate of tax was granted to new units as also to the units which had undertaken expansion, diversification or modernization. The units of dealers in all the revisions are units, which had undertaken expansion/modernization. The units of the dealers (respondents) are covered by Clause (1-B) (a) of the Notification. Exemption granted is on the turnover of sales of quantity of goods manufactured in excess of base production. Under clause 6(a) of the said Notification, turnover of sale of goods in any assessment year to the extent of quantity covered by the base production of that year and balance stock of base production of previous years, shall be deemed to be turnover of the base production. Under clause 6(b) of the Notification, the facility of exemption can be availed on the turnover of goods in any assessment year in excess of the quantity referred to in sub-clause (a) of clause 6. A conjoint reading of Clause (1-B) (a), clause 6(a) and 6 (b) makes it clear that the dealer is entitled to claim exemption in respect of the turnover of sale of goods of an assessment near in excess of the base production. Assessment Year has been defined in Section 3 (j) to mean the twelve months ending on March 31. If that be the case then the extent of entitlement to exemption will depend on the sale of goods in the assessment year minus the base production determined under the Act. Simply because dealer has to file returns from month to month and deposit the admitted tax at the time of filing of the return does not mean that question of exemption on the turnover of the production in excess of the base production can be considered only after the base production is achieved. Returns filed every month and the tax paid would be subject to adjustment at the time of the finalization of the assessment. Intention of the legislature is clear and unambiguous. Exemption is to be given on the turnover of sale of goods in an assessment year in excess of the base production. We do not find any substance in the submission advanced on behalf of the appellants.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]9. A similar issue came up for consideration in Commissioner of Trade Tax, U.P. Vs. Modipan Fibres Co. (2006 (6) SCC 577 ). In that case, this Court was considering an appeal filed by the present appellant where challenge lay to the decision rendered by the High Court in Modipan Fibres Co. Vs. C.T.T. (2000 UPTC 319)10. The said case was relied upon by the High Court in support of its conclusions which are challenged in the present appeal. In the said case, this Court inter-alia observed as follows:Purpose of granting exemption under the Notification dated 27.7.1999 was to promote the development of certain industries in the State. By the said Notification exemption from payment of tax or reduction in rate of tax was granted to new units as also to the units which had undertaken expansion, diversification or modernization. The units of dealers in all the revisions are units, which had undertaken expansion/modernization. The units of the dealers (respondents) are covered by Clause (1-B) (a) of the Notification. Exemption granted is on the turnover of sales of quantity of goods manufactured in excess of base production. Under clause 6(a) of the said Notification, turnover of sale of goods in any assessment year to the extent of quantity covered by the base production of that year and balance stock of base production of previous years, shall be deemed to be turnover of the base production. Under clause 6(b) of the Notification, the facility of exemption can be availed on the turnover of goods in any assessment year in excess of the quantity referred to in sub-clause (a) of clause 6. A conjoint reading of Clause (1-B) (a), clause 6(a) and 6 (b) makes it clear that the dealer is entitled to claim exemption in respect of the turnover of sale of goods of an assessment near in excess of the base production. Assessment Year has been defined in Section 3 (j) to mean the twelve months ending on March 31. If that be the case then the extent of entitlement to exemption will depend on the sale of goods in the assessment year minus the base production determined under the Act. Simply because dealer has to file returns from month to month and deposit the admitted tax at the time of filing of the return does not mean that question of exemption on the turnover of the production in excess of the base production can be considered only after the base production is achieved. Returns filed every month and the tax paid would be subject to adjustment at the time of the finalization of the assessment. Intention of the legislature is clear and unambiguous. Exemption is to be given on the turnover of sale of goods in an assessment year in excess of the base production. We do not find any substance in the submission advanced on behalf of the appellants