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TMI Blog2014 (7) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... to a resale of goods and, therefore, the assessee was entitled to the benefit of input tax credit under Section 13 of the Act and cannot be called a manufacturer. The issuance of a show cause notice to the petitioner by the Deputy Commissioner (Assessment), based on this decision of the Commissioner, is also erroneous. The definition of the word "manufacturer" as defined under Section 2(u) of the U.P. VAT Act is solely relevant for the purpose of giving the benefit of the notification dated 10th January, 2008 issued under Section 4(4) of the U.P. VAT Act. Explanation to Section 13(1)(e) does not in any manner override the definition of the word "manufacturer" as defined under Section 2(u) of the Act . Order of the Commissioner was not passed in the case of the petitioner and, consequently, the petitioner could not file an appeal. However, the order of the Commissioner is binding on the Assessing Authority pursuant to which the show cause notice was issued to the petitioner. The Court is of the view that rule of alternative remedy is one of discretion and is not one of compulsion - writ petition was entertained in the year 2008 and an interim order was issued directing the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 whereby diesel oil sold to a registered dealer for use in the process of manufacture of any taxable goods, against a certificate prescribed by the Commissioner was made liable to tax in the hand of the manufacturer or importer at the rate of 4%. Pursuant to the said notification dated 10th January, 2008, the Commissioner, Commercial Taxes, U.P. issued a prescribed certificate in Form-D to be issued by the purchaser of a diesel oil to its seller. Since the petitioner is engaged in the manufacture of Hot Mix material, which is used in the construction of roads, hence the petitioner made an application dated 14th May, 2008 for issuance and for authenticating Form-D as per the circular of the Commissioner dated 14th January, 2008. Instead of issuing Form-D, the petitioner was issued a show cause notice dated 5th June, 2008 to show cause as to why his application should not be rejected on the ground that in view of Explanation-I to Section 13(1) of the U.P. VAT Act the petitioner, not being a manufacturer was not entitled for Form-D. According to the petitioner, this notice was presumably issued pursuant to an order dated 12th March, 2008 passed by the Commissioner under Section 59 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment may, by notification, declare different rates of tax, not exceeding fifty percent, in respect of different goods or class of goods: PROVIDED FURTHER that turnover of sale of textile and sugar except khandsari sugar, mentioned or described in column (2) of Schedule II, shall be liable to tax from such date and at such rate, not exceeding four percent, as may be notified by the State Government. (2) In respect of any entry of any Schedule of this Act, explanation or clarification, if any, given in footnotes of such Schedule, shall be deemed to be a part of such entry of such Schedule. (3) Where a dealer, selling any goods, is not entitled to realize or has not realized if entitled amount of tax, payable by him on the turnover of sale of such goods, separately on tax invoice, sale invoice, cash memo or bill from the purchaser of the goods, amount of tax payable by him on the turnover of such sale shall be computed using the formula- Amount of tax payable = Rate of tax X Aggregate of sale prices 100 + Rate of tax (4) The State Government may, by notification in the Gazette, amend any entry of any Schedule, add any new entry in any of the Schedule and in the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing processes as may be prescribed; 2(ee). 'Manufacturer' in relation to any goods means the dealer who makes the first sale of such goods in the State after their manufacture and includes:- (i) a dealer who sells bicycles in completely knocked down form; (ii) a dealer who makes purchases from any other dealer not liable to tax on his sale under the Act other than sales exempted under Sections 4, 4A and 4-AAA. 2(t). 'Manufacture' means producing, making mining collecting, extracting, mixing, blending, altering, ornamenting, finishing, or otherwise processing, treating or adapting any goods; but does not include such manufacture or manufacturing processes as may be prescribed. 2(u). 'Manufacturer' in relation to any goods mentioned or described in column (2) of Schedule IV of this Act, means a dealer who, by application of any process of manufacture, after manufacture of a new commercial commodity inside the State, makes first sale of such new commercial commodity within the State, whether directly or otherwise; and includes a selling agent who makes sale of such new commodity on behalf of the person who has manufactured it. A pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle 366(29A) is carried to its logical end it follows that even in a single and indivisible works contract there is a deemed sale of the goods which are involved in the execution of a works contract where the contract is divisible into one for sale of goods and the other for supply of labour and services. The Supreme Court while dismissing the appeals filed by the State found that Hot Mix was a notified goods, which was used for construction of roads and if the raw material was utilized for construction of roads, the contractor was entitled to the benefit of Section 4-B of the Act. The Supreme Court found that the word sale would be a deemed sale as defined under Article 366(29A)(b) of the Constitution as interpreted by the Supreme Court in the case of State of Madras Vs. Gannon Dunkerley Co. (Madras) Ltd., AIR 1958 SC 560. In the light of the aforesaid decision, the Commissioner committed a manifest error in its order issued under Section 59 of the Act in holding that a person engaged in the construction of roads was not a manufacturer. The Commissioner further erred in holding that under the Explanation to Section 13(1)(e), the transfer of property in goods involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Indian Oil Corporation Ltd., 2003 (2) SCC 107, the Supreme Court held that the rule of exclusion of a writ jurisdiction by availability of an alternative remedy was a rule of discretion and not one of compulsion and that the Court must consider the pros and cons of the case and only then may interfere, if it comes to the conclusion that the petitioner sought enforcement of any fundamental rights of where there was a failure of the principles of natural justice or where the orders were wholly without jurisdiction or where the vires of an Act was challenged. The same view was reiterated by the Supreme Court in Whirlpool Corporation Vs. Registrar of Trade Marks, 1998 (8) SCC 1, State of H.P. Vs. Gujrat Ambuja Cement Ltd., 2005 (6) SCC 499 and Sanjana M. Wig Vs. Hindustan Petroleum Corporation Ltd., 2008 (8) SCC 242. The Court finds that the writ petition was entertained in the year 2008 and an interim order was issued directing the authorities to issue Form-D. Affidavits have been exchanged and, consequently, it would not be appropriate to delegate the petitioner at this stage to avail the alternative remedy. The submission of the learned Standing Counsel on this aspect is, consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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