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Commissioner Trade Tax U.P. Lucknow v. Avadh Export Rampur - SALES/TRADE TAX REVISION No. - 113 of 2003  RD-AH 15072 (6 September 2007)
HIGH COURT OF JUDICATURE AT ALLAHABAD
TRADE TAX REVISION NO. 113 of 2003.
The Commissioner, Trade Tax,U.P., Lucknow.. Applicant
S/S Avadh Export, Rampur. Opp.Party.
Hon'ble Rajes Kumar, J.
Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 28th September, 2002 relating to the assessment year, 1996-97.
The dispute relates to the levy of tax on consideration received on the sale of import license which has been issued from the office of Joint Director General of Foreign Trade, Moradabad. The claim of the dealer was that it was neither manufacturer nor importer in respect of the said transaction and, therefore, the sale consideration was not liable to tax. Assessing authority, however, levied the tax treating the dealer as manufacturer. First appellate authority deleted the tax, which has been confirmed by the Tribunal. Both the authorities have held that the dealer was neither importer nor manufacturer in respect of sale of import license.
Heard learned Standing Counsel.
Issue involved is squarely covered by the decision of this Court in the case of Commissioner of Trade Tax Versus S/S Ovject De Art India, Moradabad reported in 2006 UPTC 790 in which this Court held as follows:
"From the perusal of the aforesaid cases it would appear that some process has to be carried out on a commodity to obtain a new manufactured commodity. In every case of manufacture there has to be some process whether slight or extensive. This act of processing can be carried out only intangible goods and not in respect of intangible goods; therefore, definition of the term manufacture given under section 2 (e-1) of the Act apply only to tangible goods and not to intangible goods. REP Licenses/Exim Scrips being intangible goods are incapable of being manufactured in the sense in which term manufacture has been defined under U.P. Trade Tax Act. Thus, the authority granting licence cannot be treated as manufacturer of licence.
It may be mentioned here that the first notification in respect of patents,Trade Mark, Import License, Export Permit or License or Quota was issued by the State Government in exercise of powers under proviso to Section 3-A (1) (e) of the Act vide Notification No. ST-710, dated 27th February, 1999 whereby sales of the aforesaid goods were made liable to tax @ 4 per cent in the hands of importer or the person in whose name the license/permit had been issued. The proviso under which this notification has been issued stated that the State Government may modify the rate of the point of tax while subjecting these goods to tax. Significantly the liability of tax under the aforesaid notification has not been fastened on the manufacturer of these permits and licenses. This is so apparently because these permits and licenses are not manufactured and there can be no manufacturer thereof. In fact, licenses, or permits are issued or granted and not manufactured and, therefore, in the said notification the words manufacturer are significantly missing. It is also important to mention that the aforesaid notification has been issued under the same provisions i.e. under Section 3-A (1-e) under which the Revenue wants in the present case to levy tax on the dealer treating him to be a manufacturer."
In view of the above, the order of the Tribunal is upheld.
In the result, revision fails and is, accordingly, dismissed.
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