J P STEELS Vs. SALES TAX OFFICER

JUDGEMENT

(1.) In these two petitions by the same petitioner, notices dated January 6, 1989 and November 30, 1988 issued for the levy of tax under Section 3-B of the U.P. Sales Tax Act, 1948 for the assessment years 1985-86 and 1983-84, respectively, were challenged.

(2.) We have heard Sri Bharat Ji Agrawal, learned Senior Advocate, for the petitioner and Sri C.S. Singh, learned Standing Counsel.

(3.) The petitioner is an iron and steel merchant. Its case is that it purchased old and discarded railway wagons from the railways which are taxable on sale to consumer under entry No. 32 of a notification dated September 7, 1981. The said entry provides for tax in respect of old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products except cinder, coal ash and such items as are included in any other notification issued under the Act. If a registered dealer purchases such goods not for consumption but for resale in the same form and condition, he can postpone the tax liability till the goods are sold to a consumer by furnishing to the selling dealer a declaration in form III-A which requires the registered dealer to certify that the goods have been purchased for sale in the same form and condition. The petitioner furnished to the railways the declarations in form III-A and thus the railways did not charge any tax on the sale of the condemned railway wagons to the petitioner, Under the terms of the auction by which the railways sell the goods to the petitioner and others, certain items which are part of the wagons and are 35 in number, have to be removed and detached from the railway wagons and returned to the railway authorities and it is only the remaining things that stands sold. The petitioner's case is that in order to remove and detach some of the items, the old wagons have to be dismantled and to remove some times they have to be cut with the aid of gas flame. Out of the goods so purchased from the railways, the assessee sold some of the goods to registered dealers against form III-A and the rest of the goods were sold to consumer who were holding recognition certificates issued under Section 4-B of the Act and who issued declarations in his form III-B, as a result of which the sales made by the petitioner were not liable to any tax.