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TMI Blog2011 (8) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax on purchase of tendu patta, i.e., at 2.5 per cent. The assessing authority initiated proceedings under section 3B of the Trade Tax Act vide notice dated March 7, 2001, against the assessee on the ground that the declaration in form IIIB had been falsely issued inasmuch as the tendu patta covered by the said declaration had been used for manufacture of bidi at a unit situate outside the State of Uttar Pradesh for which no exemption certificate under section 4B has been granted in favour of the assessee. The assessee responded to the notice and in reply submitted that no wrong or false declaration was given in form IIIB. Tendu patta purchased was although used as raw material for manufacture of bidi at a unit outside Uttar Pradesh but the manufactured bidi was sold within the State of Uttar Pradesh. There has been no breach of the provision of section 4B(2) of the Act and therefore the proceedings under section 3B of the Act were bad. The assessing authority vide order dated April 10, 2011 did not agree with the explanation furnished by the assessee and held that the assessee had given a wrong declaration in form IIIB. He was not entitled to concessional rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm IIIB that the raw material should be used for manufacture at a unit within the State of Uttar Pradesh. The only obligation is that manufactured goods should be sold within the State of Uttar Pradesh qua which there is no dispute. Heavy reliance has been placed upon the honourable apex court decision in Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax reported in [1978] 41 STC 409 (SC); [1978] 1 SCC 636, specifically paragraph 18. An effort was made in view of the aforesaid upon the court that the facts of the present case are squarely covered by the decision laid down by the Supreme Court in respect of the transaction which has taken place in the State of Delhi prior to issuance of the amendment of rule 26 of the Delhi Sales Tax Rules with effect from March 29, 1973 and therefore since under the declaration form in form IIIB it was not necessary for the assessee to have disclosed that the raw material will be used for manufacturing at a unit situate outside the State of Uttar Pradesh. The court held through declaration form subject-matter of consideration in Polestar Electronic (Pvt.) Ltd. [1978] 41 STC 409 (SC); [1978] 1 SCC 636 the relevant period and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: 4. (2) Where a dealer requires any goods, referred to in subsection (1) for use in the manufacture by him, in the State of any notified goods, or in the packing of such notified goods manufactured or processed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade or commerce or in the course of export out of India, he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof, and if the applicant satisfies such requirements including requirement of depositing late fee and conditions as may be prescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form and subject to such conditions, as may be prescribed. Explanation.-For the purposes of this sub-section- (a) goods required for use in the manufacture shall mean raw materials, processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants; and (b) 'notified goods' means such goods as may, from time t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the purchasing dealer). On harmonious reading of the aforesaid provisions this court has no hesitation to hold that a person holding a certification under section 4B of the Act alone is entitled to apply for a declaration form IIIB under rule 25B(1) of the U.P. Trade Tax Rules. What follows from the aforesaid provisions is that a manufacturer having exemption certificate under section 4B in respect of the manufacturing unit situate within the State of Uttar Pradesh alone can avail of the concessional rate of tax by availing of the declaration form under rule 25B in form IIIB. Use of raw material so purchased under declaration form IIIB for manufacturing at the unit covered by exemption certificate under section 4B is therefore a condition precedent for declaration to be issued in form IIIB. If the assessee at the time of purchase of raw material is aware that such raw material is not to be used in a unit covered by 4B situate within the State of Uttar Pradesh he has no right to use and issue declaration in form IIIB. Reference may also be made to section 3B of the Act which provides for the liability for issuing false or wrong certificates. The same is quoted below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was subject-matter before the Supreme Court in the case of Polestar Electronic (Pvt.) Ltd. [1978] 41 STC 409 (SC); [1978] 1 SCC 636, for the relevant period reads as follows (page 431 in 41 STC): . . . But the form of the declaration to be given by the purchasing dealer to the selling dealer, as prescribed in rule 26, was not amended until March 29, 1973 with a view to bringing it in conformity with the amended section 5(2)(a)(ii). The result was that from May 28, 1972 to March 29, 1973 the form of the declaration continued to be the same as before and carried the statement that the goods were purchased by the purchasing dealer 'for use by him as raw material in the manufacture of goods for sale' without any restriction as to place of manufacture or sale and this was the form in which declarations were given by the assessees to the selling dealers when they purchased the goods. The declaration given by the assessees did not state that the goods were purchased for use by them as raw materials in the manufacture in the territory of Delhi of goods for sale inside Delhi, since that was not the prescribed form and the first proviso required that the declaration should be giv ..... 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