TaxTMI 
TaxTMI 
2016 (1) TMI 872
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....ed that deep-freezers and tricycles are intended for re-sale by the petitioner in the State of U.P. The petitioner is dealing in perishable items which has a limited shelf life and, in order to extend the shelf life and proper preservation, the petitioner accordingly provides deep-freezers and tricycles on lease to its distributors and dealers. On these tricycles small freezers are mounted and hawkers are appointed by the distributors or dealers of the petitioner in order to keep the product in a saleable and marketable condition. 3. These deep-freezers and tricycles are purchased by the petitioner from outside the State of U.P. from various manufacturers of deep-freezers and tricycles. On the strength of the registration certificate granted under Section 8(3)(b) of the Act, the petitioner is entitled to purchase the deep-freezers and the tricycles from the manufacturers outside the State of U.P. at a concessional rate of tax against issuance of Form-C from its assessing authority. The petitioner contends, that it provides deep-freezers and tricycle to its distributors and dealers on lease rent basis and for this purpose the petitioner has entered into a lease agreement with its....
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....m-C, on the ground, that the registration certificate has been amended and, therefore, Form-C could not be issued. The petitioner, being aggrieved, has filed two writ petitions questioning both the orders, which have been clubbed and are being decided together. 6. In this back drop, we have heard Sri Bharatji Agarwal, the learned senior counsel assisted by Sri Piyush Agarwal, the learned counsel for the petitioner and Sri C.B.Tripathi, the learned special counsel for the State. 7. Sri Bharatji Agarwal submitted that the respondent committed a manifest error in amending the registration certificate without any valid cause and on an incorrect ground, namely, that the items purchased by them were not meant for resale, which was wholly incorrect and based on a wrong interpretation of the law. The learned counsel submitted that the petitioner is entitled to purchase goods from outside the State at concessional rate, if the said goods was intended for resale by the petitioner. In the instant case, deep-freezers and tricycles purchased by the petitioner by a deeming fiction comes within the definition of "sale" as defined under Section 2(g) of the Act and under Section 2(ac) (iv) as....
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....there is an alternative remedy, the High Court could entertain a writ petition depending on the facts of each case. Exceptions to the Rule of alternative remedy has been carved out by the Supreme Court and one such exception is, that the writ petition would be maintainable under Article 226 of the Constitution despite the availability of an alternative remedy, if a pure question of law is involved for interpretation and where no factual dispute exists. 11. This Court has dealt at length on the issue of alternative remedy in M/s Shree Bhawani Paper Mills Ltd. vs. State of U.P. and another, Writ Petition (Tax) No.255 of 2012, decided on 10.9.2015, which is wholly applicable in the instant case. In State of M.P. and others vs. Sanjay Nagayach and others, 2013(7)SCC 25, the Supreme Court held as under: "The High Court, in our view, has therefore rightly exercised its jurisdiction under Article 226 of the Constitution and the alternative remedy of appeal is not a bar in exercising that jurisdiction, since the order passed by the Joint Registrar was arbitrary and in clear violation of the second proviso to Section 53(1) of the Act." 12. In the instant case, we find, that n....
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.... (b) [***] are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or [in the telecommunications network or] in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause(c). (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a ....
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....ds were purchased by such person;" 18. "Sale price" has been defined under Section 2(h) of the Central Sales Tax as under: "2(h) "sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged: [Provided that in the case of a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, the sale price of such goods shall be determined in the prescribed manner by making such deduction from the total consideration for the works contract as may be prescribed and such price shall be deemed to be the sale price for the purposes of this clause;] 19. "Sale Price" has also been defined under Section 2(ad) of the VAT Act as under: "2(ad) "sale price" means the amount payable to a dealer as consideration for the sale of any goods,....
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....ission, remuneration or other valuable consideration and includes, - .... .... (viii) any person who carries on the business of transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash or for deferred payment or other valuable consideration; 21. From the aforesaid, it is apparently clear, that a dealer means any person who carries on the business of buying and selling or supplying or distributing the goods. Further, any person who carries on the business of transfer of the right to use any goods for any purpose would be deemed also to be a dealer of such business. By a deeming fiction, the definition of the word "sale" includes transfer of right to use any goods for any purpose. Therefore, the amount received on such transfer of right to use is leviable to tax. Section 3 of the VAT Act is the charging Section. The incidence and levy of tax as specified under Section 3(6)(a) of the VAT Act reads as under: "(6) For the purposes of this Act, following shall be determined in the prescribed manner:- (a) Turnover of sale of goods- (i) involved in the execution of works contract in whic....
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.... entitled for issuance of Form-C to enable the petitioner to avail concessional rate of tax on the purchase of these products. The respondents have also admitted that the petitioner has entered into a lease agreement with its distributors and sub-dealers and is paying taxes every year on the lease rent. 25. In the light of the aforesaid provisions, it is apparently clear, that deep-freezers and tricycles are re-sold to the distributors and dealers of the petitioner in the same form and condition as a transfer on the right to use the goods. Such "transfer of the right to use the goods" is a "sale" as defined under the Central Sales Tax Act as well as under the VAT Act. The goods purchased by the petitioner as per the products indicated in the certificate of registration are clearly intended "for resale" by it and consequently, the petitioner is entitled for issuance of Form-C in order to avail concessional rate of tax. 26. The contention that no mandamus could be issued at this stage for issuance of Form-C for the year 2010- 11, 2011-12 and 2012-13 in view of Section 12(7) of the Central Sales Tax Rules is patently erroneous. The assessing officer of the petitioner cannot invo....