TMI Blog2004 (1) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... e and sale of camphor and other allied products. The petitioner has been granted a recognition certificate under section 4-B of the U.P. Trade Tax Act, 1948. 5.. It is stated in paragraph 2 of the writ petition that on the basis of the recognition certificate granted to the petitioner, the petitioner has been purchasing diesel, RFO (residue fuel oil)/furnace oil against form III-B under section 4-B(2) of the U.P. Trade Tax Act, 1948. The goods manufactured, namely, camphor and other allied products, out of such raw material, whether purchased against form III-B or without form III-B have been sold within the State of U.P., in the course of inter-State trade or commerce and also in the course of export outside the country, vide paragraph 6 of the writ petition. 6.. The camphor so manufactured by the petitioner is also transferred by way of stock transfer outside the State of U.P. on which the petitioner has been paying the differential tax in accordance with section 4-B(6) of the U.P. Trade Tax Act, 1948. Section 4-B(2) states: "Section 4-B. Special relief to certain manufacturers.- (1)........................ (2) Where a dealer requires any goods, referred to in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated at the rate of four per cent, on the sale or purchase of such goods." 8.. The Deputy Commissioner (Assessment) initiated proceedings under section 3-B of the U.P. Trade Tax Act, 1948 on the ground that the petitioner has purchased fuel, namely, R.F.O. (residue fuel oil) and furnace oil against form III-B which was used for the manufacture of camphor but the camphor so manufactured was not only sold within the State of U.P., inter-State trade or commerce but was also transferred by way of stock transfer. Hence the petitioner was required to show cause as to why the differential rate of tax on the purchase of fuel be not charged. 9.. The petitioner submitted a reply dated January 22, 2003 that the R.F.O. and furnace oil have been used as "fuel" for running the boiler and heater which has been used for the purpose for which it was purchased against form III-B, and hence no action can be legally taken under section 3-B of the U.P. Trade Tax Act, 1948. True copy of the reply is annexure 3 to the writ petition. 10.. In spite of the said reply having been filed, the assessing authority passed an order dated January 24, 2003 on the basis of the two judgments of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of camphor and other allied products for which the recognition certificate was granted. Hence the petitioner cannot be deemed to have issued any wrong or false certificate and no differential tax can be legally charged under section 3-B of the U.P. Trade Tax Act. 1948. 14.. It is further contended on behalf of the petitioner that a perusal of section 3-B clearly shows that the petitioner has not issued any wrong or false certificate or declaration in form III-B inasmuch as both RFO and furnace oil have been used for the same purpose, namely, for use in the process of manufacture of the goods, i.e., camphor and allied products. 15.. In the counter-affidavit filed on behalf of the respondent it has been mentioned in paragraph 3-B that against the order passed under section 3-B an appeal is maintainable under section 9 of the U.P. Trade Tax Act, 1948, and hence the present writ petition is not maintainable. 16.. In paragraph 3-B of the counter-affidavit it has also been mentioned that the controversy is concluded by the judgment of this Court in the case Commissioner of Sales Tax, U.P. v. Vijendra Industries 1987 UPTC 653 and also in the case of Mahabir Wire Netting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate was granted then no proceedings under section 3-B of the Act can be legally initiated since there was no wrong or false declaration issued by the dealer for purchase of the material against form III-B. It has been observed in paragraph 6 of the said judgment: "It is well-settled that proceedings under section 3-B shall be initiated only when the assessee issues a false or wrong certificate or declaration provided under any of the provisions under the Act or Rules framed thereunder. This view has been constantly taken by this Court in Sahni Engineering Works v. Commissioner of Sales Tax 1994 UPTC 70, Commissioner of Sales Tax v. B.K. Co. Engineering Works, Agra 1995 UPTC 502 and S.G. Industries v. State of Uttar Pradesh [1998] 108 STC 328; 1997 UPTC 616 of this Court. Therefore, unless it was shown that the form III-B issued by the revisionist were false or wrong, or the declarations made therein was false or wrong, no proceedings under section 3-B of the Act could have been initiated. It is also not the case of the department that the assessee did not use the goods purchased by him for the purpose for which exemption certificate was granted to him. Therefore, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g time and tax being recurring one, the petitioner is likely to be subjected to a huge liability, which might impair his business. In these circumstances, we are of the opinion that the alternative remedy under the Act is not efficacious and speedy." 24.. Even otherwise, the question has to be decided as to whether in respect of the fuel purchased against form III-B which has been admittedly used in the manufacture of camphor, any proceedings under section 3-B can be legally initiated only on the ground that manufactured goods are sold in the course of inter-State trade or commerce, within the State and also by way of stock transfer. So long as the observations made in Mahabir Wire Netting industries 1987 UPTC 16 and Vijendra Industry 1987 UPTC 653, are not explained and clarified by this Court no authority can take a contrary view as held by a division Bench of this Court in Dass Hitachi (Pvt.) Ltd. v. Assistant Commissioner (Assessment), Sales Tax, Ghaziabad [1981] 48 STC 142; 1980 UPTC 1020 in which it was observed (vide paragraph 13; page 147 of STC): "We find force in the submission made on behalf of the petitioner that in the circumstances it will not be proper to refuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Uttar Pradesh [1978] 41 STC 147 (All); 1977 UPTC 81. In Union of India v. State of Haryana (2000) 10 SCC 482 and State of U.P. v. Indian Hume Pipe Co. Ltd. [1977] 39 STC 355 (SC); 1977 UPTC 282 (SC); AIR 1977 SC 1132, it was held that where the controversy is likely to be of a recurring nature and it does not involve disputed questions of fact but only questions of law then it should be decided by the High Court instead of dismissing the writ petition on the ground of an alternative remedy." 26.. In the present case we find that the petitioner has admittedly used RFO and furnace oil purchased against form III-B for the manufacture of camphor and other allied products for which the recognition certificate was granted under section 4-B of the Act. Merely because the final product has been sold not only within the State, in the course of inter-State trade or commerce but also some of the final product has been transferred by way of stock transfer, the provisions of section 3-B will in our opinion not be attracted. 27.. A learned single Judge of this Court in Commissioner of Trade Tax v. Spox India and Allied Industries 1998 UPTC 631 and Arora Steel Udyog (P) Ltd. v. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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