High Court of Judicature at Allahabad
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The Commissioner, Trade Tax, Up Lucknow v. S/S Farookhi Glass Industries Firozabad - SALES/TRADE TAX REVISION No. 903 of 1997  RD-AH 2058 (23 August 2005)
TRADE TAX REVISION NO.903 OF 1997.
TRADE TAX REVISION NO.906 OF 1997.
TRADE TAX REVISION NO.910 OF 1997.
The Commissioner, Trade Tax, U.P., Lucknow..... .Applicant
M/S Farookhi Glass Industries, Firozabad. ....Opp.party
Hon'ble Rajes Kumar, J.
These three revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 29.03.1997 relating to the assessment years 1989-90, 1990-91 and 1991-92.
The assessee opposite party (hereinafter referred to as "the assessee") was carrying on the business of manufacture and sale of glass bangles and glassware. It has established a new unit for the manufacturing of the aforesaid items and applied for exemption under section 4-A of the Act on the turnover of the manufactured goods. An eligibility certificate was issued under section 4-A of the Act and as such the turnover of the manufactured goods were exempt from tax. Waste and by-product were also exempted from tax as per the circular No.2097 dated 11.12.1989. There was no dispute about the exemption on the turnover of the manufactured glass bangles and glassware. The assessee had claimed exemption on the turnover of coal-dust, kachra, reniya and bardana as a waste product. The assessing authority disallowed the claim of exemption on the ground that these items were not waste product. In first appeal, the claim of the assessee has not been accepted. Assessee filed second appeal before the Tribunal. The Tribunal by the impugned order accepted the claim of the assessee treating coal-dust, kachra, reniya and bardana as a waste product.
Heard learned Standing Counsel. No one appears on behalf of the assessee inspite of the service of notice.
Learned Standing Counsel submitted that coal-dust and reniya which is said to be the small part of the coal. Kachra and bardana were the items, which have not been obtained in the process of manufacturing of glass bangles and glassware, therefore, it could not be treated as a waste product. In support of his contention, he relied upon the decision of the Division Bench of this Court in the case of M/S J. & J. Enterprises, Saharanpur Versus Commissioner of Trade Tax reported in 1996 UPTC 471 in which the waste product has been considered to be an item obtained in the process of manufacturing.
I find force in the argument of the learned Standing Counsel. In the case of M/S J. & J. Enterprises, Saharanpur Versus Commissioner of Trade Tax (supra) the word "waste product" has been considered by this Court as follows:
"From the meaning of the words "waste product" as given in the above dictionaries, it appears, that waste product is a product what has gone waste in the manufacturing process or in other words what becomes waste for the manufacturer during the manufacturing process."
"We are not impressed by this submission, inasmuch as the words ''waste product' and ''waste material' have different connotations. When we talk of waste product then it is necessary to co-relate that with the manufacturing process of a manufacturer but the same is not necessary in the case of waste material. Anything lying waste may be said to be waste material but they cannot partake the character of bring waste products."
Coal dust and reniya, which is small size of coal, kachra and bardana, is not the product obtained in the process of manufacturing glass bangles and glassware. They appear to be left out non-useable waste item and, thus, do not come within the purview of the waste product. The Tribunal has wrongly considered the aforesaid items as waste product. The view of the Tribunal is erroneous and is liable to be set aside.
In the result, all the three revisions are allowed. The order of the Tribunal is set aside. The Tribunal is directed to pass appropriate orders under section 11 (8) of the Act.
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