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Commissioner, Trade Tax, U.P. v. S/S P.N. Garg Thekedar - SALES/TRADE TAX REVISION No. 2319 of 2004 [2006] RD-AH 15667 (8 September 2006)


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Court no.22


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


S/S P.N. Garg, Thekadar, Jhansi.                                      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 21st May, 2004 relating to the assessment year, 2000-2001.

Dealer/Opposite party (hereinafter referred to as "dealer") was contractor appears to be engaged in the construction of road and was also holding recognition certificate under section 4-B of the Act. During the year under consideration, dealer issued two Forms 3-B for making purchases of machinery parts, bitumen etc. Dealer also appears to have paid the tax under the compounding scheme under section 7-D of the Act. Assessing authority, however, passed the assessment order under section 3-B of the Act on the ground that the recognition certification of the dealer was cancelled inasmuch as the road construction does not amount to manufacturing and the dealer was not entitled for the benefit of concessional rate of tax against Form 3-B and accordingly, levied the tax. First appeal filed by the dealer was rejected. Dealer filed second appeal before the Tribunal. Tribunal by the impugned order allowed the appeal and deleted the tax. Tribunal held that the dealer was liable to tax under the compounding scheme. Tribunal further held that the recognition certificate was cancelled on 28th March, 2001, while the purchases have been made prior to the date of cancellation of the recognition certificate for which Form 3-B was issued when the dealer was holding valid recognition certificate and, therefore, the Form 3-B which were neither false nor wrong.

Heard learned counsel for the parties.

I do not find any error in the order of the Tribunal. Section 3-B of the Act reads as follows:

"3-B. Liability on issuing false certificate etc.

Notwithstanding anything to the contrary contained elsewhere in this Act and without prejudice to the provisions of Sections 14 and 15-A a person, who issued a false or wrong certificate or declaration prescribed under any provision of this Act or the rules framed thereunder to another person by reason of which a tax leviable under this Act on the transaction of purchase or sale made with or by such other person ceases to be leviable or becomes leviable at a concessional rate, shall be liable to pay on such transaction an amount which would have been payable as tax on such transaction had such certificate or declaration not been issued:

Provided that before taking any action under this section the person concerned shall be given an opportunity of being heard.


Where a person issuing a certificate or declaration discloses therein his intention to use the goods purchased by him for such purposes as will make the tax not leviable or leviable at a concessional rate but uses the same for a purpose other than such purpose, the certificate or declaration shall, for the purpose of this section, be deemed to be wrong."

It has not been shown by the learned Standing Counsel that the recognition certificate, which was cancelled on 28th March, 2001 was with retrospective effect prior to the date on which the purchases were made and Form 3-B were issued. Dealer was holding valid recognition certificate and, therefore, the Form 3-B issued in respect of the said purchases were valid Forms and  were neither false nor wrong. Section 3-B of the Act is applicable only in case, if the declaration Form is found to be false or wrong.

On the facts and circumstances of the case, Form issued was neither false nor wrong, therefore, Tribunal has rightly deleted the Tax under section 3-B of the Act.

In the result, revision fails and is, accordingly, dismissed.




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