AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 488
X X X X Extracts X X X X
X X X X Extracts X X X X
....petitioner is authorized to purchase raw materials at a concessional rate of tax under Rule 25-B(1) of the U.P. Trade Tax Rules, 1948, which provides that where a dealer holding a recognition certificate purchases any goods referred to in Clause (b) of sub section (1) of Section 4-B for use as raw material, he shall, if he wishes to avail the concessional rate of tax, furnish to the selling dealer, a certificate in Form- III-B, which is called a Declaration Form. U.P. Trade Tax Act was superseded by the U.P. VAT Act w.e.f. 1st January, 2008 (hereinafter referred to as the Act). The levy of tax on the turnover of sale under Section 4(1)(c) of the Act is on the goods named or described in Column-2 of Schedule IV at the point of sale mentioned in Column-3 and at the rate mentioned in Column-4 of the Schedule against such goods. Under clause-(c) of sub-clause (1) of Section 4, diesel oil as defined under United Provinces Sale of Motor Spirit Diesel Oil and Alcohol Taxation Act, 1939 was liable to tax at the hand of manufacturer or importer at the rate of 21%. The State Government issued a notification dated 10th January, 2008 under sub-Section(4) of Section 4 whereby diesel oil sold ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ided he furnishes a certificate, which is called a declaration form to the selling dealer. Such provision is, however, non-existent under the U.P. VAT Act but concessional rate of tax is provided through notifications issued under Section 4 of the U.P. VAT Act. For facility, the charging section, namely, Section 4 is extracted hereunder:- " Section 4. Levy of tax on turnover of sale.-- (1) The tax, payable on sale of goods under this Act, shall be levied and paid on the taxable turnover of sale of - (a) goods named or described in column (2) of the Schedule II, at every point of sale and at the rate of four percent; (b) goods named or described in column (2) of the Schedule III at every point of sale and at the rate of one percent; (c) goods named or described in column (2) of the Schedule IV at the point of sale mentioned in column (3) and at the rate of tax mentioned in column (4) of the Schedule against such goods. (d) goods named or described in column (2) of the Schedule V at every point of sale and at the rate of twelve and half percent: PROVIDED that in respect of goods mentioned in column (2) of Schedule IV, the State Government may, by notification, declare differen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a notification dated 10th January, 2008 whereby diesel oil when sold to a registered dealer for use in the process of manufacture of any taxable goods was made liable to tax in the hands of manufacturer at the rate of 4% on production of such certificate as prescribed by the Commissioner. The Commissioner by a circular dated 14th January, 2008 prescribed a certificate in Form-D to be issued by the purchaser of diesel oil to its seller. The petitioner applied and in view of the decision of the Commissioner in "Gammon India", a show cause notice was issued to the petitioner contending that Form-D could not be issued as he was not a manufacturer. Before proceeding further, it would be essential to consider the definition of "manufacture" and "manufacturer" as defined under Section 2(e-1) and Section 2(ee) of the U.P. Trade Tax Act and Section 2(t) and 2(u of the U.P. VAT Act are extracted hereunder:- "2(e-1). 'Manufacture' means producing, making, mining, collecting, extracting, altering, ornamenting, finishing, or otherwise processing, treating or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed; 2(ee). 'Manufa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ture of Hot Mix. The show cause notice dated 9.5.01 impugned in the writ petition (before the High Court) proceeded on the basis that roads are not capable of being sold; that roads were not goods; and that roads were not moveables and, therefore, according to the Department the assessee was not entitled to the concessional rate of duty on purchase of raw materials. In our view, the impugned show cause notice dated 9.5.01 was based on complete misreading of the provisions of the said Act. Under Section 2(h) of the Act and word "Sale" is defined to mean any transfer jof property in goods for cash or deferred payment or for value consideration. The definition of the word "Sale" includes transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. These words flow from the definition of the word "Sale" in the Act to Article 366(29A)(b) of the Constitution. The said words have been interpreted by this Court, as stated above, in the second Gannon Dunkerley's case (Supra) in following words vide para 36: "36. If the legal fiction introduced by Article 366(29A) is carried to its logical end it follows that even in a single and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... oil and furnace oil. There is another aspect of the matter. Section 13(1)(a) clearly indicates that input tax credit is not available in respect of non-VAT goods. Diesel oil and furnace oil are non-VAT goods. Consequently, the application of Section 13 in so far as the petitioner is concerned is totally misplaced. An attempt was made by the learned Standing Counsel that the petitioner has a remedy of filing an appeal before the Tribunal. Section 59 (5) of the Act provides that the decision of the Commissioner shall, subject to the provisions of Section 57 and 58, be final and binding on the applicant, the Assessing Authority as well as to the Appellate Authority. In the instant case, the order of the Commissioner was not passed in the case of the petitioner and, consequently, the petitioner could not file an appeal. However, the order of the Commissioner is binding on the Assessing Authority pursuant to which the show cause notice was issued to the petitioner. The Court is of the view that rule of alternative remedy is one of discretion and is not one of compulsion. In Harbanslal Sahnia Vs. Indian Oil Corporation Ltd., 2003 (2) SCC 107, the Supreme Court held that the rule of ex....