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Court No. - 39

Case :- WRIT TAX No. - 978 of 2022

Petitioner :- M/S Johnson Matthey Chemicals India Private Limited

Respondent :- State Of U.P. And 2 Others

Counsel for Petitioner :- Krishna Agarawal

Counsel for Respondent :- C.S.C.

Alongwith

Case :- WRIT TAX No. - 977 of 2022

Petitioner :- M/S Johnson Matthey Chemicals India Private Limited

Respondent :- State Of U.P. And 2 Others

Counsel for Petitioner :- Krishna Agarawal

Counsel for Respondent :- C.S.C.

Hon'ble Mrs. Sunita Agarwal,J.

Hon'ble Mrs. Jyotsna Sharma,J.

Heard Sri Suchit Ghosh learned Advocate assisted by Ms.

Anshika Agarwal and Ms. Ashwini Chandra Shekhar learned

counsels for the assessee/petitioner and Sri Ankur Agarwal learned

counsel for the respondent department.

At the outset, it may be noted that amongst all the reliefs

claimed in the present petition, learned counsels for the petitioner has

confined his arguments on the plea of violation of the principles of

natural justice in passing the exparte reassessment order dated

30.03.2022 by the respondent No.2 under Section 29(7) of the U.P.

Value Added Tax Act' 2008 (U.P. VAT Act) read with Section 9 of

the Central Sales Tax Act' 1956.

The facts relevant to decide the issue at hands are that the

petitioners herein namely M/s Johnson Matthey Chemical India

Private Ltd. claimed to have purchased the business of Catalyst from

the Company ICI now M/s Akzo Nobel India Limited (“Azko

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Nobel”). It is stated in the writ petition that the land of the said

manufacturing unit of 'Akzo Nobel' could not be transferred in the

name of the petitioner due to non clearance of the same by the

Kanpur Development Authority. Thus, in order to complete the

transfer, the petitioner and 'Akzo Nobel' entered into a Toll

Conversion Agreement dated 02.12.2002 wherein the processing of

raw material was to be done by 'Akzo Nobel' and the materials,

additional plant and machinery etc. were to be provided by the

petitioner. The copy of the agreement dated 02.12.2012 is enclosed

with the writ petition. It is stated that the petitioner had supplied raw

material and the capital goods purchased by it to 'Akzo Nobel' for

further processing and manufacturing of the finished goods as a job

worker. Because of non-transfer of physical possession of land of

Azko Nobel, the Central Excise/Service Tax registration is with the

Akzo Nobel whereas the petitioner is registered under the Trade

Tax/Entry Tax. Thus, post the manufacturing of goods by 'Akzo

Nobel', the goods were sold by the petitioner on which the applicable

VAT was discharged by the petitioner. It is stated that the activity

undertaken by the job worker qualified as manufacturer by dealer and

hence the petitioner fell within the definition of manufacturer under

the relevant provisions of U.P. VAT Act.

It is then contended that after obtaining registration under

the U.P. VAT Act, the petitioner had legally claimed the Input Tax

Credit (ITC) including ITC on capital goods as per the provisions of

Section 13 of the UP VAT Act. The compliance of the provisions of

the Central Excise Act was done by the processor 'Akzo Nobel'. It is

claimed that the petitioner being included under the definition of

"manufacturer" under Section 2(u) of the U.P. VAT Act had validly

claimed input tax credit on capital goods used in the process of

manufacture in the instant case. The annual return filed by the

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petitioner as prescribed under Section 24 of the U.P. VAT Act for the

relevant period on 28.02.2015 had been duly accepted by the

respondent No.2. The assessment order dated 09.03.2017 was passed

by the respondent No.2 for the financial year 2013-14 and no

question was raised with regard to the eligibility of the petitioner to

claim input tax credit on capital goods.

It is stated that the Special Investigation Branch (SIB) had

conducted an investigation/survey on 12.02.2015 on the warehouse of

the petitioner. The said invest