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M/S Maheshwari Brothers Ltd v. State Of U.P. & Others - WRIT TAX No. 1272 of 2004  RD-AH 418 (15 February 2005)
Civil Misc. Writ Petition No.1272 of 2004
M/s. Maheshwari Brothers Ltd. Vs. State of U.P. and others.
Hon'ble R.K. Agrawal, J
Hon'ble P.Krishna, J
We have heard Shri S.D.Singh, the learned counsel for the petitioner and Shri K.M. Sahai appearing for the respondents. The grievance of the petitioner is that it is not being issued requisite number of Form 31 by the Assistant Commissioner of Trade Tax, Sector - 1, Mathura which is hampering its business in the State of U.P. It may be mentioned here that the petitioner had entered into a contract with the National Highways Authority of India which comes under the Ministry of Road Transport and Highway for constructing toll plaza including road and building works at 75.1 km and 164.55 km on Delhi-Agra Section of NH-2 for a sum of Rs.14.16 crores part of which is to be performed in the State of Haryana and the other part in the State of Uttar Pradesh. Apart from it has also been awarded a contract by the U.P. Public Works Department for major maintenance work under Phase-I Rehabilitation of State Highway No.66 from Azamgarh to Dohrighat km (39.5) and Major District Road No.69 from Mohammadpur to Azamgarh km (19.9) of total length 55.4 km. for Rs.16.74 crores. Another contract has been awarded by the U.P. Public Works Department for Rehabilitation of State Highway No.30 from Gosaiganj to Reedganj total length 28 km for the value of Rs.11.94 crores.
For execution of the aforesaid contracts the petitioner is required to import machineries and other raw materials from outside State of U.P. for which it requires statutory Form 31. It may be mentioned here that the petitioner also opted for composition scheme issued under section 7-D of the U.P. Trade Tax Act for payment of 1 per cent of the contract value towards tax as composition fee. However, in the said scheme it has been provided that if a person brings raw material and other goods to be used in works contract of more than 5% value of the contract from outside the State of U.P. then the composition scheme would be limited to the 5 per cent of the value of the contract and the remaining amount would be taxed in accordance with law. The Assistant Commissioner of Trade Tax Sector-1 Mathura, respondent no.3, had not been issuing Form 31 to the petitioner on the ground that the petitioner is not paying due tax on the value of works contract executed by it. The submission is that at present the composition scheme as is applicable to the extent of tax liability, if any, can only be determined when an assessment is made by the competent authority wherein its claim of exemption/non liability of tax under sections 3,4 and 5 of the Central Sales Tax Act 1956 is to be examined. According to the petitioner there is no liability for payment of tax and therefore the action of the respondent no.3 not issuing Form 31 is arbitrary. Shri K.M. Sahai, the learned standing counsel, submitted that as the petitioner had been importing the goods from outside the State of U.P., the value of which has exceeded more than 5 per cent of the contract value, the petitioner is liable to pay tax and therefore to safeguard the interest of Revenue the petitioner be directed to furnish adequate security.
Having heard the learned counsel for the parties we find that it is not in dispute that the petitioner is a registered dealer under the provisions of U.P. Trade Tax Act. For importing goods from outside the State of U.P. provisions have been made under the U.P. Trade Tax Act for issuance of Form 31 in absence of which the goods are liable to be confiscated, seized and penalty provisions are attracted. The only requirement for issuance of Form 31 under the Act and Rules framed thereunder is to make an application, deposit the requisite fee and also to submit the details of the utilization of the previously issued Form 31. In the present case the petitioner has been complying with the provisions of Rule 85 of the U.P. Trade Tax Rules and therefore the respondent No.3 was not at all justified in declining to issue the requisite numbers of Form 31 to the petitioner.
So far as the question of liability for payment of tax is concerned, we may observe that it may be open to the Assistant Commissioner of Trade Tax, Sector-1 Mathura to take steps for making provisional for final assessment as the case may be wherein the liability for payment of tax would be determined in accordance with law. So long as the liability of tax is not determined there is no question of directing the petitioner to furnish security.
In view of the foregoing discussion, the writ petition succeeds and is allowed. We direct the respondent No.3, Assistant Commissioner of Trade Tax, Sector-1, Mathura to issue the requisite numbers of Form 31 to the petitioner.
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