Concessional purchase for electricity generation upheld; reassessment failed because no escaped turnover was shown.

Machinery and plant purchased in 1984-85 against form III-D for generation of electrical energy were treated as eligible for concessional tax under section 3G of the U.P. Sales Tax Act because the restrictive proviso excluding goods used in manufacture or packing of goods other than electrical energy came into force only from 13 September 1985. Earlier departmental circulars had permitted the concession, and the later amendment could not affect completed purchases. Reassessment under section 21 was also found unjustified, as that provision applies only where turnover has in fact escaped assessment; no such escapement was shown on these facts. The Tribunal's view was therefore upheld.

---

---

Issues: (i) Whether machinery and plant purchased by the assessee against form III-D for generation of electrical energy were entitled to concessional treatment under section 3G of the U.P. Sales Tax Act, 1948. (ii) Whether reassessment under section 21 of the U.P. Sales Tax Act, 1948 was justified on the ground that turnover had escaped assessment.

Issue (i): Whether machinery and plant purchased by the assessee against form III-D for generation of electrical energy were entitled to concessional treatment under section 3G of the U.P. Sales Tax Act, 1948.

Analysis: Section 3G granted special rate of tax on specified sales to government bodies and undertakings, and the proviso in sub-section (2) excluded goods purchased for resale or use in manufacture or packing of goods, other than electrical energy, only after the amendment with effect from 13 September 1985. The purchases in question were made in 1984-85, before that amendment. The circulars relied upon by the department had earlier permitted such concessional purchase, and the subsequent change could not affect the assessee's completed purchase. The machinery was purchased for the ultimate object of generating electricity, and the Tribunal's view that the expression related to raw material rather than plant and machinery was accepted.

Conclusion: The assessee was entitled to the concessional treatment under section 3G, and the challenge on this issue failed.

Issue (ii): Whether reassessment under section 21 of the U.P. Sales Tax Act, 1948 was justified on the ground that turnover had escaped assessment.

Analysis: Section 21 could be invoked only where turnover or part of it had escaped assessment. Since the original purchase and its tax treatment were justified on the facts, there was no escaped turnover warranting reopening. The Tribunal therefore correctly held that the reassessment proceedings were not maintainable.

Conclusion: Reassessment under section 21 was not justified.

Final Conclusion: The order of the Tribunal was upheld, and the revision failed because the assessee's concessional purchase was valid and no escapement of turnover was shown.

Ratio Decidendi: A purchase made before a restrictive amendment cannot be reopened as escaped assessment when the original concessional treatment was valid under the governing statutory and circular framework, and reassessment lies only where turnover has in fact escaped assessment.

---