AMBIKA STEELS PVT. LTD. THROUGH ITS DIRECTOR, SRI MAHINDER PAL GUPTA S/O SRI SATYA PAL Vs. STATE OF UTTAR PRADESH THROUGH INSTITUTIONAL FINANCE SECRETARY, U.P. GOVERNMENT,

JUDGEMENT

(1.) ALL the aforesaid writ petitions were heard together and are being disposed off by a common judgment as jointly agreed by the learned Counsel for the parties. A common question of law is involved in all these petitions with regard to the interpretation of words 'turnover of sales' occurring in notification nos. 1093 dated 27 of July, 1991: 780 dated 31st of March, 1995 and 640 dated 21st of February, 1997, all issued under Section 4 -A of the U.P. Trade Tax Act (hereinafter referred to as the Act). Legality and validity of the Circular No. 279 dated 6.2.2003 whereby the Commissioner of Trade Tax has clarified the import and scope of notification dated 21.2.1997 has been questioned in all these writ petitions, as also the initiation of reassessment proceedings in pursuance thereof barring the writ petition No. 288 of 2003: M/s. Kajaria Ceramics Ltd. v. State of U.P. and Ors. In this writ petition the challenge is with regard to said circular alone.

(2.) FOR the sake of convenience, we are noticing the facts of the writ petition no.278 of 2004 only which was treated as leading petition by Shri Bharat Ji Agrawal, learned senior counsel for the petitioner. Learned Counsel for the parties advanced their arguments with reference to the facts of this writ petition and submitted that the decision shall govern the remaining petitions also.

(3.) SECTION 4 -A of the Act provides exemption from trade tax in certain cases. This section broadly grants exemption from trade tax to 'new units' as also to such units manufacturing such goods which have undertaken 'expansion', 'diversification' and 'modernization' on or after April 1st, 1990. In the case on hand the petitioner has been granted eligibility certificate under Section 4 -A as the petitioner has undertaken expansion and modernization which resulted additional production as result of such expansion and modernization as provided for under Section 4 -A of the Act read with the notification dated 31st of March, 1995. Eligibility certificate has been granted to the petitioner w.e.f. 24 of January, 1997 from the date of filing of the eligibility certificate i.e. 12 of December, 1997 as the petitioner has made additional investment. In the eligibility certificate the base production of the petitioner has been specified in column - 3 (Ka) as 5600 M.T. The assessment of the petitioner unit for the Assessment Year 1996 -97 under the U.P. and Central Sales Tax was completed on 22nd of December, 1998. In the said assessment the Assessing Officer granted exemption on the consignment sale amounting to Rs. 27,22,730/ - and on stock transfer amounting to Rs. 17,00,38,442/ -. Subsequent thereto, the Deputy Commissioner (Assessment) - I, Trade Tax, issued the impugned notice under Section 21(2) of the Act to reopen the assessment on the ground that the turnover of Rs. 22,47,08,545/ - representing the stock transfer and consignment sale, have escaped assessment as these transfers prior to achievement of base production are not permissible. He opined that exemption on stock transfer or consignment sale before the base production is achieved, is not legally permissible. Impugning the said notice the present writ petition has been filed challenging the circular dated 25 of January, 2003 Annexure -5 to the writ petition also being contrary to the notifications dated 31st of March, 1995 and 21st of January, 1997, both issued under Section 4 -A of the Act.