Purchases under UP-VAT Act made from unregistered dealers are liable for Entry Tax

While hearing a Petition seeking revision of an order passed by the Commercial Tax Tribunal pertaining to levy of Entry Tax on the purchase turnover of the Respondent, the Allahabad High Court observed there to be contradictory findings recorded by the Tribunal within the same order.

Noting that the Tribunal could not ‘blow hot and cold’ at the same time, the High Court set aside the order of the Tribunal and restored the findings of the Assessing Officer.

A Single Judge Bench of Justice Piyush Agrawal observed that once the Tribunal proceeded to hold that purchases under the UP-VAT Act had been made from unregistered dealers, then the Tribunal could not in the same order, go on to hold that no purchases had been made at all.

The Bench then went on to restore the order of the AO levying Entry Tax on the goods concerned.

The Revisionist was represented by Advocate Ravi Shanker Pandey, whereas the Respondent was represented by Advocate Saumya Srivastava.

The present Revision Petition was filed against an order passed by the Commercial Tax Tribunal, Ghaziabad, wherein which levy of entry tax amounting to Rs. 5,00,000/- on purchase turnover of Rs. 1,00,00,000/- determined under the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 (Entry Tax Act) has been set aside.

The thrust of the Revisionist’s contentions was that the Tribunal recorded contradictory findings in the same order, in one portion, recording that the Respondent-Assessee made purchases from unregistered dealers, while in another part of the order, the Tribunal recorded that no purchases had been made by the Respondent from unregistered dealers. Despite such contradictions, the Tribunal had proceeded to set aside the Entry Tax levied by the Assessing Officer.

On hearing the contentions of both the parties, the Bench observed it to be settled that a second appeal had been filed by the Revisionist against the order of the Tribunal, under the provisions of the Uttar Pradesh Value Added Tax (UPVAT) Act. The Bench also noted that the Tribunal had partly allowed the appeal so filed and upheld the levy of tax apart from purchases being made from outside the country as well as purchases made from outside the State of UP.

The Bench noted that the upholding of the levy of Entry Tax by the Tribunal and the fact that no appeal was filed against the findings of the Tribunal, meant that the purchases from unregistered dealer have been confirmed up to the Tribunal.

Once the said finding is not assailed by the respondent, the Tribunal was not correct in holding that the respondent has not made purchase of iron & steel from unregistered dealer, added the Bench.

Thus, the Bench modified the order of the Commercial Taxes Tribunal, to the extent that the levy of Entry Tax had been quashed, and restored the findings of the AO in levying Entry Tax on the Respondent-Assessee.

Cause Title: The Commissioner, Commercial Tax Vs M/s Tirupati Construction Co. [SALES/TRADE TAX REVISION No. 45 of 2023 / 2023-Enterslice-1-HC-All-VAT]

Click here to read/download the order

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