The Allahabad High Court while allowing the petition observed that in taxation matters, the principles of res-judicata do not apply squarely for one assessment year to the other. Unless there is a marked change from one assessment year to the other, the department cannot be allowed to take a different stand.
A Single Bench of Justice Shekhar B Saraf passed this order while hearing a petition filed by M/S John Oakey and Mohan Limited.
The following questions of law have been admitted in the revision petition:-
“(1) Whether the Tribunal was justified in affirming levy of entry tax on craft paper purchased by the applicant from outside the local area, though the craft paper purchased by the applicant has been used in manufacturing of coated abrasive sheet (Regmar paper), and is not meant for writing, printing and packing as provided by notification no.104 dated 15.1.09, upon which only the entry tax is leviable?
(2) Whether the Tribunal was justified in affirming levy of entry tax on craft paper and not considering that identical issue been decided in favour of the applicant by the Court for the assessment year 2010-11, and the assessing authority for the subsequent years 2012-13 to 2017-18 has already accepted that entry tax would not be leviable on the craft paper purchased by the applicant from outside the local area, since it is not used for writing, printing and packing within the local area, by the applicant?”
The Court noted that for the same assessee on the same issue the Tribunal had held in favour of the assessee for the assessment year 2010-11. The matter was carried to the High Court by way of Sales/ Trade Tax Revision and by an order dated December 21, 2015 the issue was decided in favour of the assessee and against the department.
This decision of the High Court was accepted by the department and has not been challenged by way of any appeal. Hence, applying the doctrine of finality this issue is no longer res-integra.
“One may of course keep in mind that in taxation matters, the principles of res-judicata do not apply squarely from one assessment year to the other. However, keeping in mind the doctrine of finality, unless there is a marked change from one assessment year to the other, the department cannot be allowed to take a different stand.
In the light of the above, it is clear that as no new facts have emerged in the case, the questions of law have to be decided in favour of the assessee”, the Court observed while allowing the petition.
“Any amount that has been deposited by the assessee in relation to the above demand shall be returned to the assessee within a period of six weeks from date”, the Court ordered.