SHIVAN INDUSTRIES Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) This writ petition is directed at the instance of two petitioners, namely, Shivan Industries of district Lakhimpur Kheri and Luxman Das Radhey Shyam of Shahjahanpur, hereinafter referred to as "first and second petitioner" respectively.

(2.) The dispute relates to the assessment year 1976-77. During the relevant year the first petitioner was engaged in the business of manufacture and sale of khandsari sugar. It sold sugar directly and also through commission agents. The second petitioner in the year in question was acting as commission agent on behalf of its principals, one of them being the first petitioner and claims to have sold certain quantity of khandsari sugar manufactured by the first petitioner, as its selling agent. Although a number of reliefs have been claimed through this writ petition but during the course of hearing learned counsel for the petitioners stated that principal relief is directed against the assessment order passed against the second petitioner for the assessment year 1976-77, in so far it brings to tax under Sub-section (2) of Section 3-D of the U.P. Sales Tax Act, 1948, the turnover of sales of khandsari sugar which the second petitioner had sold, as the selling agent of the first petitioner. According to the petitioners the disputed turnover of khandsari sugar was not liable to any tax, for the sugar sold through the second petitioner had already suffered excise duty both basic and additional, leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. In proof of the claim that such excise duty had already been paid by the first petitioner, the second petitioner filed a certificate to that effect before its assessing officer, which was issued by one of the partners of the first petitioner. However, the assessing authority rejected the claim for exemption taking the view that the certificate ought to have been in the prescribed form as contemplated under Sub-rule (7) of Rule 12-B of the U.P. Sales Tax Rules, 1948, i.e., to say, in form III-C(5). The present writ petition has been filed challenging the assessment order and for grant of relief set out earlier.

(3.) As a result of a Notification No. ST-1615/X-902(9)-52 dated 13th August, 1959, issued under Section 4 of the U.P. Sales Tax Act (for short "the Act") the sale of khandsari sugar was exempted from tax with effect from 28th February, 1959, on the condition that the Central excise duty both basic as well as additional leviable thereon from 1st March, 1959, had been paid and that the dealers thereof furnished proof to the satisfaction of the assessing authority that such duty has been paid.