M/S ADVANCE GASES & CONSULTANTS LTD. Vs. COMMISSIONER OF TRADE TAX,U.P.
SUPREME COURT OF INDIA
M/S Advance Gases And Consultants Ltd.
Commissioner Of Trade Tax,U.P.
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(1.) These appeals arise out of a judgment and order dated 13.01.2009 passed by the High Court of Judicature at Allahabad whereby Trade Tax Revision Nos.863 of 2000, 201 of 2001 and 216 of 2001 filed by the respondent-Revenue have been allowed, orders passed by the Trade Tax Tribunal in Second Appeal Nos.206 of 1999, 100 of 2000 and 102 of 2000 set aside and those passed by the Assessing Officer and the First Appellate Authority affirmed.
(2.) The appellant-company carries on business of manufacture and sale of Oxygen Gas. For the assessment years 1994-1995, 1995-1996, the assessing officer assessed the appellant-company to payment of sales tax under the U.P. Trade Tax Act disallowing the contention raised on behalf of the appellant-company that service charges collected by it in connection with cleaning and testing of cylinders used for filling oxygen gas was not exigible to sales tax. Aggrieved, the appellant preferred appeals before the First Appellate Authority which were dismissed confirming the order passed by the Assessing Officer. The appellant then preferred second appeals before the U.P. Trade Tax Appellate Tribunal, Agra Bench, which were heard and allowed by the Tribunal in terms of its order dated 25.02.2000 in respect of assessment year 1994-1995 and 26.08.2000 in respect of assessment year 1995-1996. The Tribunal took the view that the charges collected by the appellant-company from the customers for cleaning and testing of cylinders used for filling the oxygen gas was not a part of the sales turnover of the appellant and hence not liable to be taxed. The High Court has in Trade Tax Revision Nos.863 of 2000, 201 of 2001 and 216 of 2001 reversed the view of the Tribunal and restored that taken by the Assessing Officer and the First Appellate Authority. The High Court has on an interpretation of the provisions of the Act and in particular on an interpretation of the expression "turnover" appearing in Section 2(i) of the U.P.Trade Tax Act, 1948 (for short "the Act") held that sums charged by the appellant-company from the purchasers towards cleaning and testing of the cylinder used for filling oxygen gas was in fact a part of its taxable turnover as the process of cleaning and testing of cylinder would tantamount to the dealer doing something in respect of the goods sold within the meaning of the expression "turnover' as defined in Section 2(i) of the Act. The High Court has relying upon the decision of this Court in Union of India v. Shri A.B. Shah and Ors. [JT 1996 (5) SC 128] , The Chief Inspector of Mines and Another v. Lala Karam Chand Thapar Etc. [(1962) 1 SCR 9 ] and M/s Mc Dowell and Co. Ltd. v. Commercial Tax Officer VII Circle, Hyderabad [AIR 1977 SC 1459 ] held that the definition of the term "turnover" was wide enough to include the process of cleaning of the cylinders in the case at hand for purposes of maintaining the purity of oxygen gas filled in the same. So also the High Court has relying upon the decision of this Court in Totaram v. State of Bombay [AIR 1954 SC 496] held that the expression "in respect of" has a wider connotation and has to be accordingly interpreted. Reliance was also placed by the High Court upon its decision in Har Prasad v. Hans Ram [AIR 1966 Allahabad 124] where the High Court has interpreted the term "in respect of" appearing in Section 2(i) of the Act in its widest connotation so as to include even a document which was prepared before the proceedings started in a court of law but was projected or given in evidence in the proceedings subsequently. The High Court has relied upon South India Carbonic Gas Industries Ltd. v. State of Kerala [(2004) 135 STC 541] to hold that in a situation where a dealer cleans or tests cylinders before filling them with carbonic gas the charges recovered for such testing of cylinders was liable to be included in the taxable turnover of the dealer.
(3.) Appearing for the appellant-company, Mr. Dhruv Agarwal, learned senior counsel strenuously argued that the High Court had fallen in error in holding that the expression "anything done by the dealer in respect of the goods sold" would extend to cleaning and testing process undertaken by the dealer also. It was submitted that the process of cleaning of cylinders or testing the same did not involve anything done to goods themselves which in the case at hand was oxygen gas. It was argued by Mr. Agarwal that in order that "anything done to the goods" becomes chargeable to tax it was necessary that something was done to the goods themselves and not something done to the container in which the goods may be eventually sold.;
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