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TMI Blog2016 (5) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty is wholly irrelevant to the transactions made under the VAT Act. The charge under the VAT Act is on the turnover of sale and not on the manufacture. A transaction may or may not be a manufacture but it has to come within the definition of sale as provided under the Vat Act. If the transaction does not satisfy the definition of sale, the question of subjecting it to tax under Vat Act does not arise. Consequently, omission of additional excise duty as contended by the learned Special Counsel for the State has no relevance to the issue. - Decided in favour of petitioner - Civil Misc.Writ Petition No. 273 of 2014, Civil Misc. Writ Petition No. 59 of 2015, Civil Misc.Writ Petition No. 60 of 2015, Civil Misc.Writ Petition No. 403 of 2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner, Commercial Tax issued a circular dated 26.12.2002 directing all Additional Commissioners that dyes and chemicals, which are being used in the processing of cloths and which do not loose their identity even after use would be exigible to tax under Section 3-F of the U.P.Trade Tax Act. Based on this circular, a large number of assessing authorities initiated the assessment proceedings against various dealers including the petitioners. 3. In this regard, representations were made by some traders as well as by the Northern India Textile Processors Association, in which the petitioners are members before the State Government for an authoritative decision in the matter. The Principal Secretary (Tax Registration), State of U. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dyeing etc. on gray cloth are consumed in the process and not transferred. In our considered opinion, the said finding is binding upon the assessing authorities as the representation made by the Northern India Textile Processors Association was also decided by the said order. The stand taken by the respondents that the State Government had not decided any other representation except the two preferred by M/s Ganga Processors and M/s Style Dyers is not correct. In view of the foregoing discussions, we are of the considered opinion that the respondent no.3 was not justified in imposing tax on the dyes and chemicals used in the process of dyeing, colouring, printing, bleaching, washing etc. of gray cloth by the petitioner and the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t writ petition. Similar prayer and contention has been made by the other petitioners. 8. We have heard Sri Rahul Agrawal, the learned counsel for the petitioners and Sri Vipin Kumar Pandey and Sri C.B.Tripathi for the State. 9. The stand taken by the respondents is the same, which they had taken before the State Government, namely, that the dyes and chemicals used in the processing of cloth do not loose their identity and, therefore, they are not consumables and in fact is a deemed sale. The Department has justified its action in contending that in view of the decision of various High Courts treating dyes and chemicals as a deemed sale, the Department was justified in distinguishing the decision of this High Court. 9. Sri C.B.Trip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government in the processing of the cloth is binding on the assessing authority especially in the absence of any averment in the assessment order that the processing done by the petitioner is different. In the case of Commissioner of Central Excise, Bolpur Vs. M/s Ratan Melting Wire Industries, (2008) 38 NTN DX 206, the Supreme Court held that circulars and instructions issued by the Board are binding on the authorities. The Supreme Court held : Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be enforced and the assessing authorities should not deviate from the decision of the State Government, which has been affirmed by this Court. The decision cited by the respondents in the case of M/s Aristo Printers (Supra) of a learned Single Judge is distinguishable. In that case, a specific finding has been given that the assessee of that case did not contend that the chemicals used by him in the process of the cloth were consumables and that it had not passed on to the customers. In view of that finding, the learned Single Judge held that the ink and chemicals used in the process had passed on to the customers and consequently, were exigible to tax. In the instant case, a specific case has been stated by the petitioners, namely, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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