2003 (12) TMI 604 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order for the year 1984-85, validity of penalty notice under section 15-A(1)(a) of the Act, direction to issue form III-C(2) to the petitioner, prohibition on passing assessment orders subsequent to 1984-85.

Analysis:
The petitioner, a new unit under section 4-A of the U.P. Trade Tax Act, 1948, engaged in manufacturing "dal", sought exemption under an eligibility certificate. The petitioner sold "dal" with the expectation of receiving form III-C but faced issues with the assessing authority regarding the issuance of the forms. The assessment order for the year 1984-85 imposed tax on purchases of arhar, mung, etc., leading to a penalty notice under section 15-A(1)(a) of the Act.

The petitioner challenged the assessment order, penalty notice, and sought direction for form III-C(2) issuance, claiming entitlement to exemption on raw material purchases post a specific Government order. The counter-affidavit acknowledged exemption eligibility post a certain date but argued that "dal" did not qualify for full exemption under section 4-B of the Act, making the petitioner liable for tax on arhar purchases.

The Court found no merit in the petition, stating that full exemption for "dal" units was not provided under section 4-B, requiring tax payment at 4% on purchases unless a tax-paid certificate was furnished. The Court highlighted the appeal option against the assessment order and advised the petitioner to respond to the penalty notice for adjudication.

Regarding form III-C(2) issuance, the Court clarified that it depends on tax payment verification. While manufacturers generally cannot issue the form, an exception was made for dal manufacturers, subject to certain conditions. The Court cited a previous case and official directives supporting the assessing authority's stance on form issuance based on tax payment verification. The petitioner was advised to apply to the assessing authority, provide proof of tax payment, and contest any denial with reasons given for appeal/revision.

The Court dismissed the petition, emphasizing the need for verification before mandamus issuance for form III-C(2) and vacated any interim orders.

Conclusion:
The Court upheld the assessment order and penalty notice validity, emphasizing the need for tax payment verification before form III-C(2) issuance. The petitioner was advised to follow proper procedures, provide evidence of tax payment, and contest any denials through appeal/revision.