COMMISSIONER TRADE TAX Vs. MONTARI INDUSTRIES LTD

JUDGEMENT

(1.) The present revision under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the Act) is directed against the order of the Trade Tax Tribunal dated 29th May. 1998.

(2.) Brief facts giving rise to the present revision are that the dealer - Opposite Party (hereinafter referred to as the dealer) was having a factory at Tonsa in the State of Punjab for the manufacturing of pesticides and chemicals etc. In the State of Uttar Pradesh at Rampur they had a sale depot which was registered under the U.P. Trade Tax Act and under the Central Sales Tax Act. The registration under the Central Sales Tax Act was issued in Form B on 02.04.1987 for resale of the pesticides and chemicals. On 10.02.1992, peppermint oil, mentha oil, fluxfold, mentha granules etc. have been added. On 20.07.1991 the dealer moved an application for addition of machinery, equipments, air conditioner, fridge, furniture and organic chemicals. It was stated that the aforesaid items were required for the use in the research work. The assessing authority required the dealer to show cause why the application be not be rejected inasmuch as the dealer was carrying on the trading business of pesticides and chemicals. The dealer explained that as per the direction of the Agriculture Ministry a research centre was established at Noida and before the sale of pesticides etc. testing and research centre was required. Thus treating the testing as a part of the manufacturing process the aforesaid items were required to be added with registration certificate. The assessing authority rejected the application vide order dated 26.03.1995 on the ground that testing in the research centre was not the part of the manufacturing process as no manufacturing activity was being carried on in the State of Uttar Pradesh. The assessing authority held that the dealer imported the goods from Punjab Factoiy by way of stock transfer and was selling such goods in the State of Uttar Pradesh and was not involved in any activity of manufacturing in the State of Uttar Pradesh.

(3.) The first appeal filed by the dealer was rejected. The dealer filed second appeal before the Tribunal which has been allowed by the impugned order. The tribunal held that testing of pesticides etc. at Noida research centre was a part of the manufacturing process, relying upon the decision of the apex Court in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. S.T.O. 65.16 STC 259 and Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes 65.16 STC page 259.