2003 (9) TMI 757 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of section 3G of the U.P. Sales Tax Act for the assessment year 1984-85 regarding the legality of purchases made against form III-D for the production of electrical energy.

Analysis:
The High Court's judgment in this case was a revision against the Tribunal's order dated July 6, 1991, related to the assessment year 1984-85 under section 21 of the U.P. Sales Tax Act, 1948. The respondent had purchased machines worth Rs. 1,60,90,505 from BHEL, Hardwar and issued form III-D, leading to the initiation of proceedings under section 21. The contention was that the machines purchased against form III-D were used for producing electrical energy, which was not covered under section 3G of the Sales Tax Act for that year. However, the Tribunal found that the plant was commissioned in 1986-87 for producing electrical energy, thereby deeming the purchase against form III-D legal.

The issue in this revision was found to be similar to a previous judgment of the court in Sales Tax Revision No. 1610 of 1991, where purchases were made against form III-D for the assessment year 1984-85, and the plant was commissioned in 1987-88. The court considered the amendment made in section 3G in 1985, which clarified the scope of the provision regarding the use of goods. Referring to circulars issued by the Government and previous court decisions, including those in U.P. State Sugar Corporation Ltd. and Kichha Sugar Company Ltd. cases, the court concluded that purchases made against form III-D in 1984-85 and used for the generation of electrical energy in 1987-88 were legal.

Based on the precedent set by the previous judgment and the interpretation of the law and circulars, the High Court upheld the Tribunal's order, stating that there was no error in its decision. Consequently, the revision was dismissed, affirming the legality of the purchases made against form III-D for the production of electrical energy in the given circumstances.