2013 (4) TMI 732

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....ed by Deputy Commissioner (respondent-3) starting re-assessment proceedings. 3. It has been stated that the petitioner was a society, registered with U.P. Khadi Gram Udyog Board, Lucknow and engaged in business approved by Khadi Gram Udyog Board. It is registered also under the provisions of U.P. Trade Tax Act as well as Central Sales Tax Act. State of U.P., in exercise of powers under Section-4(b) of the Act, issued Notification No. 7037 dated 31.01.1985 granting exemption from sales tax liability on the sale of various goods mentioned in the list, by the units of Khadi Gram Udyog Board. Clause 10 of Entry No. 3 of this Government Order provides "vukt ,oa nky] Likbl] dkafMesaV] elkyk vkfn dh dqVkbZ] NVkbZ vkSj lQkbZ ¼izkslsflax&fra....

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....in that as per Notification No. 2792 dated 30.09.2004, the rice manufactured out of paddy from the unit of the petitioner was not liable for exemption from the trade tax, as such, the exemption granted to the petitioner amounted to escaped assessment. The petitioner filed his reply to the aforesaid notices. However, Additional Commissioner (respondent-2) by order dated 31.07.2008 has held that under Government Orders dated 31.01.1985 and 30.09.2004, exemption from trade tax liability has not been granted on the sale of rice to the units of Khadi Gram Udyog Sansthan, as such, the exemption given to the petitioner for the Assessment Years 2002-03 and 2003-04 amounted to escaped assessment. On the basis of the sanction granted on 31.07.2008, p....

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....ption of trade tax on the sale of rice under the Government Order dated 31.01.1985 and Government Order dated 27.02.1997. Accordingly, the exemption from trade tax liability on the sale of rice claimed on the basis of Government Order dated 27.02.1997, was rightly given. 7. Learned Special Counsel for the State of U.P. however submitted that the Apex Court in Ganesh Trading Company Vs. State of Haryana, AIR 1974 SC 1362, and in Satnam Overseace (Exports) Vs. State of Haryana, (2003) 1 SCC 561 has held that manufacture of rice from paddy is not processing but manufacture. Accordingly, exemption has been wrongly granted to the petitioner on the sale of rice as exemption was provided only on processing and not on manufacture under the Governm....