Works contract deduction claim required proper factual inquiry before denial; Tribunal order was set aside and remanded for fresh decision.

Deduction under Section 3-F(2)(b)(iii) of the U.P. Trade Tax Act, 1948, could not be denied on a cursory view based only on interception of the vehicle and the driver's statement where the dealer claimed the goods were aluminium sheets purchased from a registered dealer and merely cut for transport. The proper inquiry was whether the goods were connected with the alleged works contract, whether purchase and tax payment were proved, and whether similar deductions had been allowed in earlier years. The Tribunal's order was set aside and the matter remanded for fresh decision after considering the disputed factual and legal issues and any permissible additional evidence.

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Issues: Whether the disallowance of deduction claimed under Section 3-F(2)(b)(iii) of the U.P. Trade Tax Act, 1948, on the footing that the dealer was a manufacturer of finished aluminium windows, was sustainable and whether the matter required remand for proper examination of the nature of the goods and their connection with the works contract.

Analysis: The authorities had proceeded mainly on the interception and seizure of the vehicle and the driver's statement, without properly examining the dealer's specific case that the goods were aluminium sheets purchased from a registered dealer, cut only for transportation, and not connected with the works contract said to be executed at Lucknow. The issue was not considered in a proper manner at any stage, and the finding that the entire deduction claim was to be denied was held to be based on an incomplete and cursory appreciation of the relevant facts. The Court considered that the Tribunal should also examine the availability of proof of purchase and tax payment, the actual nexus of the goods with the works contract, and the past allowance of similar deductions in other years, after permitting amendment of the revision and additional evidence as permissible in law.

Conclusion: The order of the Tribunal was set aside and the matter was remanded to the Tribunal for fresh decision on the disputed factual and legal questions in accordance with law.

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