Prior-stage taxation proof is essential for deduction on bricks used in a works contract; missing purchase evidence defeats the claim.

In a works contract, the value of goods used is taxable under section 3F of the U.P. Trade Tax Act, and deduction under section 3F(2)(b)(iii) is available only if the assessee proves that tax on the relevant goods was levied or was leviable at an earlier stage. The assessee bears the burden of showing that the bricks were purchased from a dealer covered by the compounding scheme under section 7D. In the absence of a purchase voucher, that foundational fact was not established, so the claimed deduction or exemption failed. The point of levy under the notification was held irrelevant to liability under section 3F, because the notification governed rate of tax, not the stage at which the commodity became taxable.

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Issues: Whether, in the absence of a purchase voucher, the assessee was entitled to deduction or exemption in respect of bricks used in a works contract on the footing that tax had been levied or was leviable at an earlier stage, and whether the point of levy under the notification affected liability under section 3F of the U.P. Trade Tax Act, 1948.

Analysis: In a works contract, the value of goods involved is liable to tax under section 3F of the U.P. Trade Tax Act, 1948, and deduction under clause (iii) of section 3F(2)(b) is available only when the assessee establishes that tax on the relevant goods was levied or was leviable at an earlier stage. The burden of proof lay on the assessee to show that the bricks had been purchased from a dealer covered by the compounding scheme under section 7D. Since the purchase voucher was not produced, that foundational fact was not proved. The Court further held that, for levy under section 3F and determination of net turnover, the point of levy under the notification was not material; the notification concerned only the rate of tax, not the point at which the commodity became taxable.

Conclusion: The assessee was not entitled to the claimed deduction or exemption, and the Tribunal's deletion of the tax was unsustainable.

Final Conclusion: The revision succeeded, and the assessment made by the Deputy Commissioner was restored.

Ratio Decidendi: A deduction under section 3F(2)(b)(iii) is unavailable unless the assessee proves that tax on the goods was levied or leviable at an earlier stage, and the absence of purchase evidence defeats a claim based on prior-stage taxation or compounding.

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