Recognition certificate cancellation without jurisdiction when final appellate order stood and no misuse of form 3-B was alleged.

A notice proposing cancellation of a recognition certificate under section 4-B of the U.P. Trade Tax Act, 1948, was without jurisdiction because the certificate had been granted by a final appellate order and no breach of its conditions or misuse of form 3-B was alleged. The petitioner used raw materials purchased against form 3-B to manufacture hot mix material for road construction, repair and maintenance work, which was treated as falling within the enlarged meaning of sale after article 366(29-A). Later circulars could not override the binding appellate order or justify cancellation of an already valid certificate. The availability of an alternative remedy did not bar direct challenge to a notice lacking jurisdiction.

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Issues: Whether the notice proposing cancellation of the recognition certificate under section 4-B of the U.P. Trade Tax Act, 1948, on the strength of subsequent circulars, was sustainable when the petitioner manufactured hot mix material used in road construction and there was no allegation of misuse of the certificate.

Analysis: The petitioner manufactured hot mix material from raw materials purchased against form 3-B under a recognition certificate granted under section 4-B(2). The material was used in the execution of road construction, repair and maintenance works, which fall within the enlarged meaning of sale after clause (29-A) of article 366 of the Constitution of India and the corresponding provisions of the U.P. Trade Tax Act, 1948. The order granting recognition certificate, having been made in appeal and not challenged further, attained finality and bound the revenue authorities. No breach of the certificate conditions or misuse of form 3-B was alleged. The notice was founded only on later circulars and could not be used to cancel a certificate already validly granted under a binding appellate order. The objection based on availability of alternative remedy was rejected because a notice without jurisdiction can be challenged directly.

Conclusion: The notice and the consequent cancellation proceeding were without jurisdiction and liable to be quashed.

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