Job work qualifies as manufacture by the dealer for concessional raw material purchase under U.P. trade tax law.

Section 4-B(2) of the U.P. Trade Tax Act, 1948 was construed to cover raw material used in the manufacture of notified goods even where the manufacturing process was carried out through job work by another agency. The phrase "by him" was treated as referring to manufacture for the dealer's business, not to self-manufacture in the dealer's own unit. On that reading, goods produced on job work remain manufactured for the dealer, so concessional purchase of raw material is not denied merely because actual processing was outsourced. The departmental view requiring self-manufacture was rejected, and penalty under section 4-B(5) was held unsustainable.

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Issues: Whether raw material purchased on concessional rate under section 4-B of the U.P. Trade Tax Act, 1948 could be treated as having been used in the manufacture of notified goods when the manufacturing was got done through job work by another agency.

Analysis: Section 4-B(2) permits a recognition certificate where the dealer requires specified goods for use in the manufacture of notified goods by him. The expression "by him" was construed to mean manufacture for the dealer's business and not necessarily manufacture by the dealer with his own hands or in his own unit. Goods got manufactured on job work are still manufactured for the assessee, and the use of raw material in such production satisfies the statutory requirement. The departmental view that only self-manufacture qualifies was rejected, and the administrative circular relied on by the assessee supported this interpretation.

Conclusion: The assessee's purchase and use of raw material through job work was covered by section 4-B(2), and penalty under section 4-B(5) was not sustainable.

Ratio Decidendi: For the purpose of section 4-B of the U.P. Trade Tax Act, 1948, manufacture through job work amounts to manufacture by the dealer, and concessional purchase of raw material cannot be denied merely because the actual processing was done through another agency.

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