TaxTMI 
TaxTMI 
2010 (2) TMI 937
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.... Kumar, Krishna Kumar, R.S., K.S. Mahadewan, Sanjeev Malhotra, Prakash Kumar Singh, Jatin Zaveri and Ms. Shally Bhasin Maheswari, Advocates, with him) for the respondent. -------------------------------------------------- The judgment of the court was delivered by S.H. KARPADIA J.-Heard learned counsel on both sides. Delay condoned. Leave granted in the special leave petition. In all these matters, the respondents are manufacturers of notified goods. These respondents have been given Central registration under section 7 of the Central Sales Tax Act, 1956, and also recognition certificate under section 4B of the Uttar Pradesh Trade Tax Act, 1948, for purchase of high speed diesel oil at concessional rate. These certificates have been given on different dates by the appellants. The lead matter is State of Uttar Pradesh v. Vam Organic Chemicals Limited (Civil Appeal No. 1929 of 2004). Vam Organic Chemicals Limited is a public limited company incorporated under the Indian Companies Act, having its registered office at Amroha, Uttar Pradesh. It has established a continuous process chemical industry for the manufacture of vinyl pyridine....
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....pany, it was submitted that HSD was a fuel, which was absolutely essential for operating the diesel generating set (D.G. set) in the factory as the company's factory was engaged in a continuous process chemical industry and, in the absence of HSD, the D.G. set would become non-functional and if electricity cannot be generated, it would be impossible to produce chemicals. According to the company, HSD is used in D. G. sets to generate electric energy which is required for chemical industry. In this connection, reliance was placed on the Explanation to section 4B of the 1948 Act. In reply, it was the case of the Department that HSD is used in the D. G. set for generating electric energy which is not only used for chemical industry but is also used for electrical appliances in office, factory and to supply electricity for working of lights, fans, etc. According to the Department, HSD is used in the generating set for production of electricity; that the unit of the company was not registered/recognised for production of electricity; that it was not a public utility service under the relevant Electricity Act; and, hence, the company cannot call HSD a fuel/raw material used for productio....
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....e. What is argued by the learned senior counsel is that, under section 4B(2) of the 1948 Act read with the Explanation thereto, a dealer has to satisfy the assessing authority, empowered to issue recognition certificate, that he requires the duly itemised goods mentioned in the recognition certificate for use in the manufacture by him of any notified goods (final product). According to the learned senior counsel, the recognition certificate, including the list of items under section 4B(2) of the 1948 Act, cannot be read in isolation. Each item in the list is duly recognised by the assessing authority looking to its requirement for use in the manufacture of the final product (notified goods). In this connection, it was submitted that HSD does find place in the said list but if the said item is used to make the generating set functional for generating electric energy which, in turn, is captively consumed in the manufacture of chemical goods, then, in that event, an assessee will not be entitled to the benefit of concessional rate of tax. The learned counsel invited our attention to several items in the said list, including air-conditioners, stabilizers, electrical panels and diesel g....
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....in the manufacture' shall mean raw materials, processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants; and (b) 'notified goods' means such goods as may, from time to time, be notified by the State Government in that behalf. (4)(ii) The assessing authority may amend a recognition certificate granted under sub-section (2), either of its own motion or on the application of the dealer, where the dealer has changed the name or place of his business or has closed down any branch or has opened a branch or for any other sufficient reason: Provided that no registration certificate shall be cancelled or amended by assessing authority of its own motion except after reasonable opportunity of being heard has been given to the dealer." We are looking at the present controversy from a different point of view. The High Court has not examined, in the present case, the nature of the power exercised by the assessing authority under section 4B(4)(ii) of the 1948 Act. This point of view arises because, in this case(s), a show-cause notice has been issued to the assessee calling upon the assessee to sh....
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....Act to say that no recognition certificate shall be cancelled or amended by the assessing authority without giving reasonable opportunity of being heard to the dealer. It is for this reason that, in the present case, the assessing authority has given show-cause notices to all the respondent-dealers calling upon them to show cause as to why HSD, as an item, should not be deleted from the recognition certificate. In the present case, the Department submitted, before us, that, by mistake, HSD has been included in the list. The Department seeks to rectify that mistake. The question, before us, is-whether the Department is precluded from doing so. This question has not been answered by the High Court. In our view, under section 4B(4)(ii) of the 1948 Act, the assessing authority is vested with discretionary power to amend a recognition certificate granted under sub-section (2) of section 4B of the 1948 Act either on its own motion or on the application of the dealer for any sufficient reason. This pre-condition of "sufficiency of reasons" requires a show- cause notice to be given to the dealer in whose favour a recognition certificate exists calling upon him to show cause as to why an....