The Allahabad High Court has held that the item AT-PLAST used in mixing of ready mix concrete taxable at the rate of 4% under the Uttar Pradesh VAT Act.
The Revisionist-Assessee, M/S Unique Engineers is engaged in the manufacturing of chemical in the brand name of ‘AT-PLAST’. They claimed that the said chemical is water reducing agent, which is commonly used in the construction work as a chemical for reducing the uses of water in the concrete and during the transition of concrete, it delays the process of freezing and also strengthen the concrete. It was also contended that now ready mix concrete are being undertaken at plant and same are being transported from the site of its mixture to the site of construction, thus during the period of journey from the place of mixture to the consumer, the chemical manufactured by the revisionist are being used for reducing the water quantity as well as delay the process of its freezing and also gives strength to the concrete.
According to the assessee, the goods/item falls under Entry 29 part A of Schedule II of Section (1) (a) of section 4 of UP VAT Act with 4% tax liability. However, the VAT department rejected these contentions and applied a higher rate of tax.
Justice Piyush Agrawal observed that “Admittedly, the revisionist manufactured ‘AT-PLAST’ which are being used in mixing of ready mix concrete / concrete and it has been averred by the revisionist that the said product are being used along with concrete for reducing the uses of water, delay the time of freezing as well as strengthening the concrete. In para 7 as well as in the grounds of appeal before the Tribunal, details of the chemicals used in manufacturing of the product i.e. ‘AT-PLAST’ were being given and on the strength of which, the revisionist claimed that the said goods are chemical and duly covered under Entry 29, Schedule II and the same are liable to be taxed at the rate of 4 %, but the Tribunal has not considered the same.”
Allowing the revision petition, the Court held that none of the authorities have discussed raw material / chemicals used in manufacturing of ‘AT-PLAST’ or the chemical analysis report as furnished by the revisionist in support of its case but had decided the issue, which cannot be justified in the eyes of law.
Mr. N.C. Gupta, Advocate appeared for the revisionist-assessee.
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