2003 (12) TMI 620 - HC - VAT and Sales Tax

Summary

Issues Involved:
Interpretation of the term "cottage pottery industries" for exemption under a specific notification for the assessment years 1982-83, 1983-84, and 1984-85.

Detailed Analysis:

1. Certificate Validity and Exemption Claim for Bricks (1982-83, 1983-84):
The applicant, engaged in the manufacture and sales of bricks, held a certificate from the U.P. Khadi Gramodyog Board for the years 1982-83 and 1983-84. The applicant claimed exemption on the turnover of bricks based on this certificate. However, the Tribunal noted the absence of a certificate for the year 1984-85 and rejected the exemption claim. The applicant relied on a specific notification covering "cottage pottery industries" for claiming exemption, which was contested by the assessing authority, first appellate authority, and the Tribunal.

2. Interpretation of "Cottage Pottery Industries" for Exemption:
The central issue in the revision was whether a brick-kiln falls under the entry of "cottage pottery industries" as per the relevant notification. The notification dated June 30, 1979, exempted certain institutions from tax under the U.P. Sales Tax Act for selling products of village industries, including cottage pottery industries. The applicant argued that bricks should be considered pottery items based on the definition of "pottery" from various sources, including dictionaries and legal precedents.

3. Amendment and Exclusion of Bricks and Tiles (1985):
The original notification exempting cottage pottery industries was subsequently amended by a notification dated January 31, 1985, which specifically excluded bricks and tiles from pottery industries. The court analyzed the definitions of pottery from legal sources and observed that bricks, being made of clay and hardened by heat, fall under the broader definition of pottery. The court emphasized that the intent of the exemption was to support rural-based industries, including brick-kilns.

4. Conclusion and Judgment:
The court concluded that brick-kilns are covered under cottage pottery industries and are entitled to exemption under the original notification dated June 30, 1979, for the assessment years 1982-83 and 1983-84. However, the applicant was not entitled to the exemption for the assessment year 1984-85 due to the absence of a valid certificate from the U.P. Khadi Board after March 22, 1984. As a result, the revisions for the assessment years 1982-83 and 1983-84 were allowed, while the revision for the assessment year 1984-85 was dismissed.