COMMISSIONER, TRADE TAX Vs. MODI XEROX LIMITED

JUDGEMENT

(1.) These three revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as 'Act') are directed against the order of Tribunal dated 08.05.1996 relating to assessment years 1986-87, 1988-89 and 1989-90 under the U.P. Trade Tax Act.

(2.) Dealer/Opposite Party (hereinafter referred to as "the Dealer") was engaged in the business of manufacture and sale of Xerographic Equipment and System since 1985. Dealer applied for Recognition Certificate under Section 4-B of the Act in Form 18 on 10.6.1985. On 26.6.1985, dealer moved an application before the Sales Tax Officer, Rampur giving information that only three items namely Corrugated Boxes, Wooden Pallets and Packing Crates are being purchased at present as required to be mentioned in Column 6. It appears that inadvertently in Column 6 of the application instead of mentioning the manufactured items, material required in the manufacturing had been mentioned. On 29.6.1985, the Assessing Authority had passed orders that the Recognition Certificate be issued with effect from 13.6.1985. In pursuance thereof, Recognition Certificate was issued on 29.6.1985 with effect from 13.6.1985. In Column of the goods, for which, the dealer was entitled to purchase goods at a concessional rate only "packing material" (enclosure attached) was mentioned. Further application being moved on 25.9.1985, asking to add paints and allied Chemicals and on such application, paints and Allied Chemicals was added w.e.f. 25.9.1985.

(3.) During the years under consideration, dealer purchased electronic goods in the name of machinery parts and issued Form 3-B in respect thereof, and availed the benefit of concessional rate of tax. The Assessing Authority initiated proceedings under Section 3-B of the Act on the ground that as per the Recognition Certificate, dealer was entitled for the benefit of concessional rate of tax only on the "packing material" and not on the electronic goods and thus, Form 3-B issued for the purchases of electronic goods were wrong and false. Dealer filed reply, wherein, it was stated that in the application, "packing material, raw-material and other allied materials which were required in the manufacturing of Xerographic Equipment and System were mentioned. It was also submitted that the Assessing Authority had ordered for issuance of Recognition Certificate with effect from 13.6.1985 without passing any order declining the benefit on any of the items claimed in the application. It was also submitted that as per the Notification No. ST-II-45/18/X/1987- U.P. Act-10-48-Order-87 dated 5.9.1987. dealer was entitled for the benefit of concessional rate of tax on the "packing material as well as raw-material" thus, Form 8-B were issued under the bonafide belief that it was entitled for the concessional rate of tax on the electronic goods being raw-material. The Assessing Authority, however, had not accepted the plea of the dealer and demanded the amount under Section 3-B of the Act @ 8.8% and demanded interest @ 2% from 01.10.1989. Dealer filed appeals before the Deputy Commissioner (Appeals). Trade Tax, Allahabad. The Deputy Commissioner (Appeals), Allahabad vide its order dated 27.2.1996, rejected the appeals. The Commissioner of Trade Tax filed appeals before the Tribunal. The Tribunal by the impugned order, allowed the appeals and quashed the orders passed under Section 3-B of the Act. The Tribunal held that the orders passed under Section 3-B of the Act were barred by limitation. The Tribunal further held that the notices under Section 3-B of the Act in all the three years, were issued after expiry of four years. On the merit of the case, the Tribunal held that the conduct of the parry shows that it was under the impression that the Recognition Certificate granted to the dealer included the raw-material also as one of the items, and entitled to purchase at the concessional rate of tax. On the facts of the case. Tribunal concluded that the authorities below have not established that the dealer had issued false and wrong certificate Form 3-B.