# M/s Indo Gulf Fertilisers Lucknow Revisionist v. Commissioner of Commercial Taxes U.P. Lucknow

- **Citation:** (2022) 5 ILRA 341
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-05-09
- **Case number:** Writ Tax No. 161 of 2013
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-indo-gulf-fertilisers-lucknow-revisionist-v-commissioner-of-commercial-48527
- **Pages:** 4

## Headnote

A. Tax Law - The controversy in the present
case pertains only to enhanced rate of nitrogen
component in DAP as distinguished from
enhanced rate of tax on nitrogen component.
The Agriculture department has enhanced only
the rate of nitrogen for the purpose of levying
tax and did not bring any change in the rate of
tax. However, the revisionist had collected the
enhanced rate of DAP and consequently is lible
tp pay tax on the enhanced rates which was so
collected by him. (Para 15)

Revision Rejected. (E-10)

List of Cases cited:

M/s Ganesh International & anr. Vs Assistant
Commissioner & ors. 2001 (18) NTN DX 43
(distinguished)

## Text

5 All. M/s Indo Gulf Fertilisers Lucknow Vs. Commissioner of Commercial Taxes U.P. Lucknow 341
of public interest litigation questioning the
constitutionality or validity of a statute or a
Statutory Rule."

19. In the case at hand, we find that
the U.P. Land Record Manual merely
provides the manner and procedure to
maintain the land records. Section 234(3)
of the U.P. Revenue Code, 2006 provides
that the Land Record Manual in force on
the date of commencement of the Revenue
Code, 2006, shall continue to remain in
force, to the extent they are not inconsistent
with the provisions of the Revenue Code,
2006 until amended rescinded or repealed
by any regulations made under this Section.

20. In the wake of the above, we are
not inclined to entertain the petition styled
as PIL particularly in view of the fact that
Section 234(3) of the U.P. Revenue Code,
2006, itself takes care of the inconsistency
of the Land Record Manual and upholds it
only to the extent it is not inconsistent with
the provisions of the Revenue Code, 2006.
We are of the opinion that this is not a fit
case where PIL jurisdiction should be
invoked or exercised.

21. Accordingly, we dismiss the
petition on account of non maintainability
by imposing cost assessed at Rs. 10,000/-
to be deposited with the High Court Legal
Services
Committee,
High
Court,
Allahabad, within 45 days from today,
failing which the same shall be recovered
from the petitioner as arrears of land
revenue.
----------

(2022)05ILR A341
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.05.2022

BEFORE
THE HON'BLE ALOK MATHUR, J.

Writ Tax No. 161 of 2013

M/s Indo Gulf Fertilisers Lucknow
 ...Revisionist
Versus
Commissioner of Commercial Taxes U.P.
Lucknow ...Opposite Party

Counsel for the Revisionist:
Mudit Agarwal

Counsel for the Opposite Party:
C.S.C.

A. Tax Law - The controversy in the present
case pertains only to enhanced rate of nitrogen
component in DAP as distinguished from
enhanced rate of tax on nitrogen component.
The Agriculture department has enhanced only
the rate of nitrogen for the purpose of levying
tax and did not bring any change in the rate of
tax. However, the revisionist had collected the
enhanced rate of DAP and consequently is lible
tp pay tax on the enhanced rates which was so
collected by him. (Para 15)

Revision Rejected. (E-10)

List of Cases cited:

M/s Ganesh International & anr. Vs Assistant
Commissioner & ors. 2001 (18) NTN DX 43
(distinguished)
(Delivered by Hon'ble Alok Mathur, J.)

1. The controversy in the present
revision is with regard to the rate of Trade
Tax under the U. P. Trade Tax Act
applicable for the Nitrogen component in
the
Chemical
Fertilizer
DAP
(Di
Ammonium Phosphate). The impugned
Judgment of the Commercial Tax Tribunal,
Lucknow Bench while rejecting the appeal
preferred by the Revisionist held that the
Nitrogen content in the DAP was rightly
charged at the rate of Rs.1494.80 rather
than Rs.1381.30 per metric ton in light of
342 INDIAN LAW REPORTS ALLAHABAD SERIES
the fact that the Government of India had
enhanced the rates of DAP with effect from
29/01/1999, which would be the relevant
date for implementation of the enhanced
rate of Trade Tax.

2. The revisionist is engaged in the
business of manufacturing of Chemical
Fertilizer at its unit at Jagdishpur.

3. During the financial year 1999 -
2000 the assessment of the revisionist was
carried out and the Assessing Authority
assessed the Tax on sale of DAP on the
value of Nitrogen content at the rate of Rs.
1490.80 per metric ton, calculated the Tax
@6.5% there on.

4. The Revisionist being aggrieved by
the said assessment preferred an appeal
before the Deputy Commissioner (Appeal),
Trade Tax, Lucknow which was dismissed
by order dated 29/09/2001, and similar was
the fate of the second appeal at the hands of
the Commercial Tax Tribunal, Lucknow.

5. The Assessing authority, 1st
Appellate Authority
as
well
as
the
Commercial Tax Tribunal came to a
concurrent finding that the Trade Tax levied
upon the component of Nitrogen in DAP
would be assessed treating the value of
Nitrogen at Rs.1381.30 per metric ton was
applicable with effect from 27/05/1998 but
as soon as the rate of DAP was enhanced
by the Government of India with effect
from 29/01/1999 the revised/enhanced rates
of Tax would be deemed to have come into
force and the Nitrogen component in DAP
would be valued at Rs. 1 494.80 per metric
ton, and hence did not agree with the
submissions of the revisionist.

6. The question which arises for
determination in the present revision is :-

Whether the revision in the rate
of Nitrogen content in DAP would be
applicable from the date of enhancement of
the rate of DAP by the Government of
India with effect from 29 January, 1999 or
from 26 February, 2000 when the same was
notified by the State Government ?

7.

To
address
the
aforesaid
proposition it is necessary to go into the
various notifications governing the field
with regard to levying of Trade Tax on the
Fertilizer where Nitrogen is one of the
components. According to the notification
dated 27th May, 1998 passed in exercise of
Clause [a] of Section 4 read with Section
25 of the Uttar Pradesh Trade Tax Act 1948
it was provided that no Tax under the said
Act shall be payable on the sale of Potash
and Phosphatic component of the Chemical
Fertilizers during the period 1st April, 1998
to 31st March, 2000. It was also provided
that the percentage of the different
components of the Chemical Fertilizers
shall be determined according to the
guidelines
issued
by
Department
of
Agriculture, Uttar Pradesh from time to
time. In the same notification it is
mentioned
that
the
Department
of
Agriculture has determined the value of the
Nitrogen component in DAP to be
Rs.1381.30 per metric ton.

8. Further, the above notification also
provided that the value of Nitrogen in DAP
is liable to be taxed and the value of
Nitrogen will be determined by the
Agriculture Department which according to
the notification dated 27.5.1988 was
determined to be Rs.1381.30 per metric
ton. It is noticed that the value of Nitrogen
is also notified by the Trade Tax
Department and taxed @ 6.5 per cent. The
value of Nitrogen is also notified by the
Trade
Tax
Department
on
the
5 All. M/s Indo Gulf Fertilisers Lucknow Vs. Commissioner of Commercial Taxes U.P. Lucknow 343
recommendation
of
Agriculture
Department, at par with their duty to
determine the rate of Tax.

9. The revisionist started collecting
Tax on the Nitrogen component of the DAP
treating the value to be Rs.1381.30 and
during the assessment years 1998-99, 19992000 and continued to charge and deposit
the Tax at the said value. It is the
proceedings
for
assessment
for
the
assessment
year
1999-2000
that
the
authority objected to the said determination
and
sought
to
assess
the
Nitrogen
component @ Rs.1494.80 per metric ton.

10. The circular dated 26/02/2000
issued by the Commissioner Trade Tax
referred the order dated 14/10/99 issued by
the State Government stating that as per the
notification of the Commissioner of Trade
Tax dated 6 May, 1998, the Director
(Agriculture)
vide
his
letter
dated
19/08/1999 has informed that the value of
the Nitrogen component has changed and,
therefore, the revised rates of the Nitrogen
component in the Potash and Phosphate
fertilizers are enhanced to Rs.1494.80 per
metric ton.

11. There is no dispute with regard to
facts in issue inasmuch as vide notification
dated 27th May, 1998 the value of Nitrogen
component in DAP was fixed at ₹1381.30.
Subsequently the value of DAP was
enhanced by the Union of India on
29/1/1999.
The
notification
of
the
Commissioner, Trade Tax dated 26/02/2000
referred to the said enhancement of rate of
DAP and consequent enhancement of value
of the Nitrogen component in the DAP vide
circular issued by the Department of
Agriculture
which
was
given
wide
circulation. There is no dispute that prior to
notification
dated
26/02/2000
the
notification dated 27th May, 1998 was in
existence.

12. It has been contended by the
counsel
for
the
revisionist
that
the
notification dated 27.5.1998 held field till it
was amended/modified by the subsequent
notification related 26.02.2000. It is,
therefore, contended that in absence of any
valid law / notification there was no
occasion for the opposite parties to deduct
trade Tax at the enhanced rate of
Rs.1494.80, and in case the Tax is deemed
to have enhanced with effect from
14/10/1999 i.e. is the date of enhancement
of the rates of DAP, the Tax could not have
been
enhanced
retrospectively
and
consequently submitted that the assessment
order, the order passed in first appeal as
well as the impugned order of the
Commercial Tax Tribunal are illegal and
arbitrary and deserve to be set aside.

13. The Revenue, on the other hand,
has submitted that once the rate of DAP
was enhanced by the Government of India
and the revisionist having recovered the
enhanced rate of DAP, was bound to pay
Tax at the enhanced rate and should have
himself found out about the enhanced rate
of Nitrogen component in DAP and has,
therefore, supported by orders of the
authorities below.

14. The notification dated 6th May,
1998 itself provided the percentage of
different components of the Chemical
Fertilizer shall be determined according to the
guidelines issued by the Department of
Agriculture from time to time and the
Department of Agriculture had informed the
Commercial Tax Department vide letter dated
08/05/1998 that value of the Nitrogen
component in DAP would be ₹1381.30. In
the meanwhile, the rate of the DAP was
344 INDIAN LAW REPORTS ALLAHABAD SERIES
enhanced by the Government of India by
means of order dated 14/10/1999 but no
order/notification
was
issued
by
the
Commercial
Tax
Department
or
the
Agricultural Department enhancing the rate
of the Nitrogen component in DAP. The first
appellate court as well as Commercial Tax
Tribunal have both while disallowing the
claim of the revisionist have held that at the
moment the rate of DAP were enhanced by
the Central Government vide its order dated
29.1.1999, the revisionist started collecting
the enhanced rate.

15. It is also noticed that the
controversy in the present case pertains only
to enhanced rate of nitrogen component in
DAP as distinguished from enhanced rate of
tax on Nitrogen component which remained
at 6.5 percent. It is not a case where there was
any change in the rate of tax but only rate of
nitrogen for the purpose of levying Trade Tax
was enhanced by the Agriculture Department.
Admittedly, the revisionist had collected the
enhanced rate of DAP and consequently is
liable to pay Tax on the enhanced rates which
was so collected by him. The entire argument
of the revisionist stating that the rate of tax
would not have retrospective effect and relied
upon the judgment of this Court in the case of
M/S Ganesh International and Another vs
Assistant Commissioner and others, 2001
(18) NTN DX 43. The said judgment would
not be applicable to the facts of the present
case as in the present case there was no
change or enhancement in the rate of tax but
only change in value of taxable goods.

16. No material has been placed by the
revisionist before this Court to upset the
concurrent finding of facts recorded by both the
authorities below that the revisionist had
collected the enhanced rate of DAP from the date
of notification issued by Government of India. It
is also noticed that vide its order dated 26.2.2000
the Commissioner, Trade Tax had circulated the
letter of Government of India dated 14.10.1999
which fact was already within the knowledge of
the revisionist, who is a dealer of DAP and the
contention of the revisionist in this regard has not
been accepted by the first appellate court as well
as Commercial Tax Tribunal.

17. The revisionist having realized
enhanced rate of DAP from 1999 when the rate
was enhanced by the Government of India, he
would be liable to pay Trade Tax at the enhanced
rate of Nitrogen content in DAP. This finding
recorded by the Tribunal has not been assailed by
the revisionist. In case, the revisionist is allowed
to pay Trade Tax the earlier rate of nitrogen
component in DAP, it would amount to unjust
enrichment and, therefore, even in this view of
the matter the revision fails.

18. This Court in consideration of the
aforesaid facts is of the considered opinion that
no interference is required with the judgment of
the Commercial Tax Tribunal that enhanced
rate of nitrogen would be effective from 1999
itself rather than 26.2.2000. The question is
answered in favour of the revenue as against the
revisionist. Consequently, the revision is
dismissed.
----------
(2022)05ILR A344
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.04.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 420 of 2022

M/s UP Pipe Fitting Supplier, Chippitola,
Agra U.P. ...Petitioner
Versus
G.S.T. Network & Ors. ...Respondents