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The Commissioner,Trade Tax U.P.Lucknow v. S/S Controller Of Stores Eastern Railway - SALES/TRADE TAX REVISION DEFECTIVE No. 1833 of 1998 [2005] RD-AH 4851 (25 October 2005)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).


                                               Court no. 55

Trade Tax Revision no.  (1833) Of 1998.


Trade Tax Revision no.  (1832) Of 1998.

The Commissioner of Trade Tax, U.P. Lucknow. ... Applicant.


S/S Controller of Stores, Gorakhpur. ... Opp. Party.

Hon'ble Rajes Kumar, J.

These two revisions under Section 11 of U. P. Trade Tax Act (hereinafter referred to as ''Act') are directed against the orders of Tribunal dated 16.04.1998 both relating to assessment years 1985-86 and 1986-87 under the U. P. Trade Tax Act respectively.

During the aforesaid assessment years, Dealer/Opposite Party (hereinafter referred to as "the Dealer") had sold Iron scraps, which have been obtained as a result of dismantling of Coaches and Wagons against Form 3-A and claimed exemption on the sale of turnover.  Assessing Authority had refused the exemption and levied tax on the turnover of Iron scrap @ 4%.  First Appeal fled by the dealer was rejected.  Dealer filed Second Appeal before the Tribunal.  Tribunal has allowed the claim of exemption on the sale of Iron scrap against Form 3-A.  

Heard learned Standing Counsel.  No one appears on behalf of the dealer despite service of notice.  

Learned Standing Counsel submitted that Iron scrap was liable to tax at the point of manufacturing or importer vide Notification no. ST-II-8305/X-6(26)-77-U.P. Act XV/48-Order-82 dated 31.3.1982.  Iron scrap was one of item mentioned at Serial no. (i) under the heading "Iron & Steel" as defined under Section 14 of the Central Sales Tax Act, thus, exemption granted on the sales against Form 3-A of the Act was not justified.  He submitted that Form 3-A is applicable to the goods, which are liable to tax at the point of sale to consumer to prove that the sale had not been made to the consumer but to the registered dealers.  

I find force in the argument of learned Standing Counsel.  Form 3-A is provided under Rule 12-A (1) which reads as follows:-

Rule 12-A (1)

"A registered dealer who wishes to purchase any goods liable to tax under sub section (1) of Section 3-A or Section 3-AA at the point of sale to the consumer, without payment of tax shall furnish to the selling dealer a Certificate in Form III-A duly filled in and signed by him."


      Section 3-AAA reads as follows:-

"Where the goods are liable to tax under this Act only at the point of sale to consumer, every sale by a dealer-

(a) to a registered dealer who does not purchase them for sale within the State or in the course of interstate trade or commerce, in the same for and condition, in which, he has purchased them or

(b) any person other than registered dealer,

shall be, deemed to be a sale to the consumer unless  the dealer proves otherwise to the satisfaction of the Assessing Authority and for that purpose also furnishes to the Assessing Authority and declaration, obtained from the purchasing dealer, in such form and manner and within such period as may be prescribed")

Since the Iron scrap was liable to tax at the point of manufacture or importer and not at the point of sale to the consumer, no benefit of exemption can be given against Form 3-A.  Admittedly, dealer was involved in dismantling of Wagons and Coaches, which resulted production of Iron scrap.  The dealer was therefore, manufacturer and liable to tax on the sale of Iron scrap.  Tribunal has illegally granted exemption on the sale of Iron scrap against Form 3-A.

In the result, both the revisions are allowed.  Orders of Tribunal are set-aside to the extent granting exemption on the sale of Iron scrap, which has been obtained as a result of dismantling of Wagons against Form 3-A.




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