Court quashes trade tax on textile processing materials, deems State decision binding on assessing authorities.

The Court allowed all the writ petitions, quashing the orders imposing trade tax on dyes and chemicals used in textile processing. The State Government's decision on 7.10.2005 was deemed binding on assessing authorities, clarifying that these materials were consumed, not transferred, and thus not subject to trade tax. The petitioners were not required to pursue an alternative remedy of appeal due to the pure question of law involved. The petitioners were successful, and the orders were quashed, with each party bearing its own costs.

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Issues Involved:
1. Quashing of orders imposing trade tax.
2. Issuance of declaration forms for import.
3. Binding nature of State Government decisions on assessing authorities.
4. Consumption vs. transfer of dyes and chemicals in textile processing.
5. Availability of alternative remedy by way of appeal.

Detailed Analysis:

1. Quashing of Orders Imposing Trade Tax:
The petitioners sought to quash the orders dated 29.9.2007, 31.3.2008, 11.12.2008, and 18.12.2008, passed by the Assistant Commissioner, Trade Tax, imposing trade tax on dyes and chemicals used in the processing of gray cloth. The Court noted that the State Government had already decided on 7.10.2005 that no trade tax was payable on such activities. The orders imposing trade tax were found unjustified and were quashed.

2. Issuance of Declaration Forms for Import:
One of the writ petitions requested a mandamus directing the Deputy Commissioner to issue requisite Form 38 for import declarations. The judgment did not specifically address this issue, focusing instead on the broader issue of tax liability on dyes and chemicals.

3. Binding Nature of State Government Decisions on Assessing Authorities:
The Court held that the decision taken by the State Government on 7.10.2005, which clarified that no tax was payable on the activities of job work involving dyes and chemicals, was binding on the assessing authorities. The Court cited several precedents, including *M/s Kichha Sugar Company Ltd.* and *Paper Products Ltd.*, to support the binding nature of such government decisions and circulars on tax authorities.

4. Consumption vs. Transfer of Dyes and Chemicals in Textile Processing:
The core issue was whether dyes and chemicals used in textile processing were consumed or transferred to the gray cloth. The State Government had concluded that these materials were consumed and lost their existence in the process, thus not liable for trade tax. The Court upheld this view, rejecting the respondents' argument that these materials were transferred and constituted a sale.

5. Availability of Alternative Remedy by Way of Appeal:
The respondents argued that the petitioners should have availed the alternative remedy of appeal. However, the Court, referencing its earlier order dated 06.12.2007, declined to relegate the petitioners to the alternative remedy, noting that the issue involved a pure question of law on admitted facts, which warranted direct judicial intervention.

Conclusion:
The Court allowed all the writ petitions, quashing the impugned orders imposing trade tax on the dyes and chemicals used in textile processing. The decision of the State Government on 7.10.2005 was held binding on the assessing authorities, and the Court emphasized that the materials in question were consumed in the process, not transferred, thus not subject to trade tax. The petitions were successful, and the orders were quashed, with each party bearing its own costs.

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