High Court of Judicature at Allahabad
Case Law Search
C.T.T. v. Shankar Cold Storage - SALES/TRADE TAX REVISION No. 1198 of 1992  RD-AH 327 (21 July 2004)
SALES TAX REVISION NO.1198 OF 1992
The Commissioner, Sales Tax, U.P., Lucknow ....Applicant
S/S shanker Cold Storage & Ice Factory, Sambhal. ....Opp.Party
Hon'ble Rajes Kumar, J.
Present revision under Section 11 of U.P. Sales Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 21.04.1992 relating to the assessment year 1982-83.
Applicant was carrying on the business of manufacturing of ice. Total turn over disclosed by the applicant was at Rs.43,014.50. Applicant claimed the exemption on the said turn over being below taxable limit of Rs.50,000/-. Assessing authority levied the tax on the said turn over on the ground that exemption limit of Rs.50,000/- is not applicable to the case of the applicant in view of section 3 (3) (b) of the Act. It is stated that the applicant had purchased the machinery etc. for Rs.2,77,745.01p. from outside the State of U.P. against Form-31 and issued 11 Form-C for the value of Rs.1,94,085.54p. and these machinery have been used in the manufacturing of ice. First appeal filed by the applicant was rejected. Tribunal allowed the appeal and declared the applicant non-taxable. Tribunal has held that section 3 (3)(b) is not applicable to the case of the applicant, in as much as it is applicable to the raw material used in the manufacturing and not the machinery.
Heard learned Standing Counsel. No one appears on behalf of the dealer. Learned Standing Counsel submitted that the view taken by the Tribunal is erroneous. Section 3 (3)(b) as it existed during the relevant year reads as follows:
(3) Nothing in sub-section (2) shall apply in respect of ----
(b) the sale by a dealer of--
"(i) goods imported by him from outside Uttar Pradesh after furnishing to the selling dealer a declaration under sub-section (4) of section 8 of the Central Sales Tax Act, 1956, or, as the case may be;
(ii) goods purchased or imported by furnishing any declaration or certificate prescribed under any provision of the Act;
(iii) goods manufactured by him by using the goods referred to in sub-clause (i) or sub-clause (ii)."
In view of section 3(2) if total turn over in the case of the manufacturer is less than Rs.50,000/- it is not liable to tax. Provisions of section 3 (2) is not applicable if the situation mentioned in clause (b) of sub-section 3(3) exists. Section 3 (3)(b) (iii) says that sale by a dealer of a goods manufactured by him by using the goods referred to in sub-clause (i) or sub-clause (ii). Clause (3) does not refer to the raw material only. There is no dispute that the machinery which have been purchased from outside the State of U.P. in respect of which From-C were issued have been used in the manufacture of ice and if it is so clause (iii) of Section 3(3) (b) (3) applies. Tribunal has erred in holding that clause (iii) applies only on use of raw material. Clause (i) says that goods imported from outside the State of U.P. after furnishing to the selling dealer a declaration sub-section (4) of section 8 of Central Sales Tax Act. Clause (ii) says that the goods purchased or imported by furnishing any declaration or certificate prescribed under any provision of this Act. Admittedly, applicant had purchased the imported machinery and issued declaration Form-C, a declaration form contemplated under sub-section (4) of section 8. The case referred by the Tribunal CST Vs.Lata Candle Works, reported in 1983 U.P.T.C., 77 is not applicable in the present case. In that case material purchased from outside the State of U.P. was used for packing of the manufactured goods. It was held by the Court that packing material used in the packing of the manufactured goods can not be said to have been used in the manufacturing of the goods.
In the result, revision is allowed and the order of Tribunal is set aside.
Double Click on any word for its dictionary meaning or to get reference material on it.