Recognition certificate exemption for packing material cannot be denied by reassessing the issuing authority's inclusion decision.

Sales of packing material to a manufacturer holding a valid recognition certificate in Form 3-B under the U.P. Sales Tax Act were treated as exempt where the notified goods were covered by the certificate. The assessing authority could not deny the exemption by re-examining whether packing material ought to have been included, because the certificate-issuing authority was entrusted with verifying the application and could amend or cancel the certificate under the scheme. The certificate as issued had to be respected for the relevant period, and the selling dealer was entitled to the concessional treatment on sales of the certified goods.

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Issues: Whether sales of packing material to a purchaser holding a recognition certificate in Form 3-B under section 4-B of the U. P. Sales Tax Act were exempt from sales tax, and whether the assessing authority could deny that exemption by questioning the inclusion of packing material in the certificate.

Analysis: Section 4-B contemplated exemption on sales of notified goods to a manufacturer holding a valid recognition certificate issued in the prescribed form. Under the Rules, the certificate issuing authority was required to satisfy itself about the correctness and completeness of the application and could also cancel or amend the certificate in appropriate cases. Once the issuing authority had granted a genuine recognition certificate mentioning the goods, the assessing authority was not expected to sit in judgment over the wisdom of that authority in including the article. The inclusion of packing material in the certificate was also treated as having been brought within the relevant category later, which supported the view that the certificate as issued had to be respected for the period in question.

Conclusion: The sales of the containers were entitled to exemption on the basis of the recognition certificate, and the assessing authority could not disallow the benefit merely on the ground that packing material was thought to be outside the eligible category at the relevant time.

Ratio Decidendi: Where a manufacturer holds a genuine recognition certificate issued under the statutory scheme, the assessing authority cannot refuse the selling dealer the exemption or concession available on sales of the certified goods by re-examining the propriety of the issuing authority's inclusion of those goods in the certificate.

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