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2016 (8) TMI 923 - SUPREME COURT

2016 (8) TMI 923 - SUPREME COURT - TMI - Validity of the judgement dated 16.01.2007 - Trade Tax, Saharanpur under Rule 41(6) of the U.P. Trade Tax Rules imposition of purchase tax along with interest - benefit of exemption Notification dated 29.08.2003 issued under Section 4B(1)(a-1) of the Uttar Pradesh Trade Tax Act, 1948 - Section 3D(1) of the Act purchase of wheat supply to flour mills for grinding process Held that: - in order to avail the benefit of the Notification and evade payme .....

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t event he would not be in a position to get the benefit of the special relief provided under Section 4B of the Act. Therefore, Notification dated 29.08.2003 should have been read as it is and on that basis the High Court was supposed to examine as to whether the appellant satisfied the conditions of Section 4B of the Act read with the aforesaid Notification dated 29.08.2003 or not. The benefit is extended to a dealer and for availing this benefit it is not necessary that he has to be a manufact .....

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nt : Mr. Ravi Prakash Mehrotra,Adv. Mr. Vibhu Tiwari, Adv. Mr. Abhinav K. Malik, Adv. Mr. Vinay Garg, Adv. ORDER These appeals are preferred by the appellant/assessee questioning the validity and/or propriety of the judgment dated 16.01.2007 passed by the High Court of Judicature at Allahabad whereby the writ petitions preferred by the appellant have been dismissed. The said writ petitions were filed by the appellant challenging the order dated 17.11.2006 passed by the Deputy Commissioner, Trade .....

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ppellant was rejected by the Deputy Commissioner, Trade Tax and the High Court has, as mentioned above, upheld the order of the Deputy Commissioner, Trade Tax while dismissing the writ petitions filed by the appellant. Few relevant facts which need to be noticed to decide the controversy are as follows: The appellant herein is the first purchaser of wheat from the farmers in the State of U.P. It supplies the wheat so purchased to certain Roller Flour Mills in the State of U.P. for conversion of .....

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of Section 4B(1) (a-1) of the Act read with Notification dated 29.08.2003, both of which provide for such exemption in respect of goods that are sold or supplied by the first purchaser of the goods to such Roller Flour Mills. However, vide order dated 23.11.2006 passed by the Deputy Commissioner, this exemption was denied on the basis that the same was not available in case of supply of the wheat by the appellant to the Roller Flour Mills. Two show cause notices were issued by the Deputy Commiss .....

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Act, which is a charging section, prescribes the levy of trade tax on purchaser or sale of certain goods. These goods, admittedly, include wheat. Notwithstanding this provision contained in Section 3D of the Act, Section 4B(1)(a-1)contains a special provision providing special relief to such assessees. The heading of the section is special relief to certain manufacturers . Since the appellant is claiming the benefit of the special relief that is provided under the aforesaid provision, we would .....

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ds a recognition certificate issued under sub-section(2) in respect thereof, he shall be liable in respect of those goods to tax at such concessional rate, or be wholly or partly exempt from tax, whether unconditionally or subject to the conditions and restrictions specified in that behalf, as may be notified in the Gazette by the State Government in that behalf: (a-1) Where any declared goods liable to tax under sub-section (1) of section 3-D are sold or supplied by a dealer, who is the first p .....

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ny declared goods liable to tax under sub-section (1) of Section 3-D are sold or supplied by a dealer, who is the first purchaser thereof, to another dealer and the said dealer holds a valid recognition certificate under sub-section(2) thereof, the State Government may, by a notification, grant the same relief as mentioned in clause(a) to such first purchaser. The conditions that are required to be satisfied for claiming the benefit under these provisions are: (1) the declared goods should other .....

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ax would be payable by a registered dealer who is the first purchaser of wheat within the State when such wheat is sold or supplied by such first purchaser to a Roller Flour Mill and Atta Chakki Plant holding a valid recognition certificate under sub-Section (2) of Section 4B(1)(a-1) of the Act and such manufactured goods shall be notified goods for the purposes of the said section. It is clear from the above that this Notification which was issued in exercise of powers conferred under Section 4 .....

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nd Atta Chakki Plant has been granted benefit of composition of tax liability under Section 7D during the relevant period; 3. The first purchaser of wheat within the State furnishes a declaration in Form 3B as provided under the Act, obtained from the purchasing Roller Flour Mill and Atta Chakki Plant alongwith following endorsement on the back from such Roller Flour Mill and Atta Chakki Plant. It is not in dispute that the appellant herein had supplied the goods to three flour mills which are o .....

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High Court has dismissed the writ petitions on the spacious ground that the Notification dated 29.08.2003 though uses the expression sold or supplied , the words or supplied are redundant because they are mechanically borrowed from the wording of Section 4B(1)(a-1) of the Act. We fail to understand the aforesaid reason given by the High Court in arriving at the conclusion that the words or supplied should not have been in the first part of the Notification. The High Court ignored the fact that t .....

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ovides for special relief not only in the case where the goods are sold but also supplied by a dealer. Excluding the goods which are supplied by a dealer, in fact, would be doing violence to the provisions of Section 4B(1)(a-1) of the Act. The Notification dated 29.08.2003 was, thus, rightly issued by the State Government giving the benefit to those goods which are supplied as well. It was not proper on the part of the High Court to tinker with the language of the Notification and exclude the be .....

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man or an agent who will be the first purchaser and who will claim exemption under the said Notification and will supply wheat to flour mill beyond its assessed grinding capacity and the excess quantity of wheat which the flour mill will receive is only by way of supply and not by way of purchase. As mentioned above, this is not only a hypothetical situation, but even the illustration as given is not a correct illustration. If a dealer sets up any middle man or an agent who purchases the goods,t .....

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ve, the appellant satisfies all the conditions. At this stage, we would like to deal with the arguments which were advanced before us by the learned counsel for the State Government. In the first instance, it was submitted that Section 3D of the Act, which is a charging section, should be read along with Section 4B of the Act and it is Section 3D which governs Section 4B of the Act. This argument is totally misconceived and needs to be out-rightly rejected inasmuch as Section 4B of the Act, whic .....

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ain manufacturers as is clear from the marginal note of the said section. We are afraid, even this argument is without any substance. No doubt, marginal note states that the special relief is to certain manufacturers . However, in the body of the section and particularly, sub-section(1), manufacturer is not mentioned at all and as can be noticed from our discussion above, the benefit is extended to the dealer who is the first purchaser of the goods and sells or supplies the same to another deale .....

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