Notified goods requirement under trade tax law defeated where consignment sales of khali were outside the statutory scope

Section 4-B(6) of the U.P. Trade Tax Act was not attracted because the alleged contravention concerned consignment sales of khali, a residue from edible oil manufacture, rather than sale or disposal of notified goods purchased under a recognition certificate. The provision applies only where goods covered by the relevant notification are dealt with otherwise than as contemplated after purchase for manufacture of notified goods. As khali was not shown to fall within the notified goods, the statutory condition for invoking section 4-B(6) was not met, and the notice based on that alleged violation was held illegal.

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Issues: Whether consignment sales of khali, being a residue obtained in the manufacture of edible oil, amounted to a violation of section 4-B(6) of the U.P. Trade Tax Act so as to justify issuance of the impugned notice.

Analysis: Section 4-B(6) applied where a dealer holding a recognition certificate purchased goods for use in the manufacture of notified goods and then sold or disposed of those notified goods otherwise than in the manner contemplated by the provision. The expression "notified goods" had to be confined to the goods covered by the relevant notification. Khali was a residuary product and was not shown to be included within the notified goods under the applicable notifications. Since the alleged contravention related only to consignment sales of khali and not to sale or disposal of the notified goods themselves, the statutory condition for invoking section 4-B(6) was not satisfied.

Conclusion: Section 4-B(6) was not violated, and the impugned notice was illegal.

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