HIMALAYA STONE INDUSTRY Vs. STATE OF UTTARANCHAL

JUDGEMENT

(1.) THIS petition has been filed for quashing the condition/restriction placed in the notification dated February 16, 2004 issued under section 3-A(1) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") which provides for levy of tax on stone grit/gitti at the point of sale by the stone crushers to the consumers; for a direction in the nature of mandamus or prohibition restraining the respondent from realising the tax from the petitioners on the sale of the gittis/stone grits prepared out of the tax-paid stone boulders purchased from Uttaranchal Van Vikas Nigam and Uttaranchal Forest Department and for a direction to refund the entire tax realised from the petitioners in pursuance to the condition of the said notification.

(2.) THE petitioners are purchasing stone boulders from Uttaranchal Van Vikas Nigam and Uttaranchal Forest Department and they are paying tax at the rate of 8 per cent. The petitioners are crushing the stone boulders into stone grits and gittis and are selling it to dealers and consumers. The Government of Uttaranchal issued notification dated February 16, 2004 (annexure 2 to the writ petition) and the goods notified have been made taxable at the point of sale to the consumers. However a condition has been placed that if the goods are sold by the dealer to the stone crushers, then tax shall be realised at the point of sale by the stone crushers and further that if tax has been paid by the dealer on the purchases made by the stone crushers then amount shall be refunded or adjusted to the dealer in accordance with section 29-A of the Act.

(3.) THE respondent-State contested the petition, inter alia, on the grounds that there is no bar under section 3-A(1) of the Act on the Government to impose conditions and restrictions in the notification issued under this section; that the State Government can impose tax differently on different class of goods as in the notification dated February 16, 2004 the point of tax in two different situations, i.e., in the case of sale by a dealer and in the case of sale by a stone crusher has been mentioned; that the notification clearly provide that where sale is made by any dealer to the stone crusher the tax will be levied on the sale by the stone crusher and it has further been provided that the dealer selling such goods to the crusher shall be entitled to refund of tax paid by him on purchase of such goods; that from February 16, 2004 there is no tax liability on Van Vikas Nigam of the Forest Department on their sale of stone boulders to the petitioners/crushers; that by the notification dated February 16, 2004 the general point of tax has been maintained at the point of sale to the consumer but a specific provision that where such items are sold by any dealer to the crusher, the tax will be levied at the point of sale by such crusher has been introduced; that since the price of gittis/stone grits sold by the crushers is 4 to 5 times higher than the purchase price of the stone boulders therefore with a view to realise tax on the sale price of gittis/stone grits, etc., in order to augment the revenue of the State the specific provisions have been introduced in the notification and that the State Government was legally authorised to place the condition accordingly in the notification dated February 16, 2004. Sri Bharatji Agrawal, learned Senior Counsel appearing on behalf of the petitioners argued that in exercise of the delegated power the State Government cannot go beyond section 3-A(1)(b) of the Act by providing two different point of sale in respect of same goods, namely, stone boulders which shall include stone gittis, etc. He further urged that section 3-A(1)(b) of the Act does not authorise the State Government to issue notification subject to any conditions or restrictions unlike other provisions of the Act where power has; been given to the State Government to issue a notification subject to such condition as may be specified in the notification. The learned Brief Holder on behalf of the State refuted the contentions raised on behalf of the petitioners, while reiterating the propriety of the stand taken in the counter-affidavit.