Civil Appeal No. 1929 of 2004 with Civil Appeal Nos. 1930/2004, 1931-1932/2004, 1933/2004, 2810-2938/2004, 4298/2009, 4299/2009 and Civil Appeal No. 2056/2010 @ S.L.P. (C) No. 6979/2010 @ CC 2279/2009. Case: State of Uttar Pradesh and Others Vs Vam Organic Chemicals Limited. Supreme Court (India)
Case Number | Civil Appeal No. 1929 of 2004 with Civil Appeal Nos. 1930/2004, 1931-1932/2004, 1933/2004, 2810-2938/2004, 4298/2009, 4299/2009 and Civil Appeal No. 2056/2010 @ S.L.P. (C) No. 6979/2010 @ CC 2279/2009 |
Counsel | For Appellant: Sunil Gupta, Sr. Adv., S.K. Dwivedi, AAG, Aarohi Bhalla, Vandana Mishra, Manoj Kumar Dwivedi, Kamalendra Mishra, Gunnam Venkateswara Rao, Advs and For Respondents: Dhruv Aggarwal, Sr. Adv., Nandini Gore, Debmalya Banerjee, Sonia Nigam, Kartik Bhatnagar, R.N. Karanjawala, Manik Karanjawala, Praveen Kumar, Rani Chhabra, Siddhartha ... |
Judges | S. H. Kapadia & Aftab Alam, JJ. |
Issue | Uttar Pradesh Trade Tax Act, 1948 - Sections 4B(4)(ii), 4B(2), 4B; Central Sales Tax Act, 1956 - Section 7; Companies Act, 1956; Electricity Act, 2003 |
Citation | JT 2010 (3) SC 169 , 2010 (3) UJ 1268 (SC) , (2010) 29 VST 1 (SC) |
Judgement Date | February 26, 2010 |
Court | Supreme Court (India) |
Judgment:
S. H. Kapadia, J.
Heard learned counsel on both sides.
Delay condoned.
Leave granted in the special leave petition.
In all these matters, respondents are manufacturers of notified goods. These respondents have been given central registration under Section 7 of the Central Sales Tax Act, 1956, and also Recognition Certificate under Section 4-B of the Uttar Pradesh Trade Tax Act, 1948, for purchase of high speed diesel oil at concessional rate. These certificates have been given on different dates by the appellants.
The lead matter is State of Uttar Pradesh & Ors. vs. M/s. Vam Organic Chemicals Limited [Civil Appeal No.1929 of 2004].
M/s. Vam Organic Chemicals Limited is a public limited company incorporated under the Indian Companies Act, having it's registered office at Amroha, Uttar Pradesh. It has established a continuous process chemical industry for the manufacture of Vinyl Pyridine, Picoline, etc. [for short, `chemicals']. The said Company is registered under the Uttar Pradesh Trade Tax Act, 1948 [for short, `1948 Act'], as well as under the Central Sales Tax Act, 1956 [for short, `1956 Act'], as a dealer.
M/s. Vam Organic Chemicals Limited [for short, "Company"] was granted a Registration Certificate under Section 7 of 1956 Act in which a List of Items was annexed. As per the said List, the Company was entitled to purchase goods under 1956 Act. The Company was also granted a Recognition Certificate under Section 4-B of 1948 Act authorizing it to purchase goods on concessional rates. On the basis of the Recognition Certificate granted by the State, the Company became entitled to purchase various goods against Form III-B, which was issued by the Assessing Authority on payment of concessional rate of tax. Since the Company had obtained Registration Certificate under Section 7 of 1956 Act, it purchased high speed diesel oil [`HSD', for short] against Form-C from Indian Oil Corporation Limited. The Company had also bought HSD against Form III-B from Indian Oil Corporation Limited under which Indian Oil Corporation Limited charged the tax at the rate of two per cent against Form III-B.
On 12th June, 2000, a meeting was organised by the Principal Secretary, Finance, Uttar Pradesh, in which a decision was taken that the benefit of Form III-B for purchase of HSD to be used in Diesel Generating Sets in the factory should not be given the benefit of concessional rate since such HSD was not directly used in the manufacture of notified goods [chemicals]; rather, it was used for generating electricity in the Generating Set which electricity was then captively used for manufacturing chemicals. On the basis of the said decision dated 12th June, 2000, the Additional Commissioner, Trade Tax, Meerut, Uttar Pradesh, issued a Circular on 20th June, 2000, to all the subordinate officers for it's implementation and, accordingly, all Trade Tax Authorities of the State, who, at the relevant time, were under the administrative control of the Commissioner, issued notices for deletion of HSD, an item mentioned in the Company's Recognition Certificate. It is this show-cause notice which came to be challenged by M/s. Vam Organic Chemicals Limited and others by filing writ petitions in the Allahabad High Court.
In the writ petition filed by the Company, it was submitted that HSD was a fuel, which was absolutely essential for operating the Diesel Generating Set [D.G. Set] in the factory as the Company's factory was engaged in a continuous process chemical industry and, in the absence of HSD, the D.G. Set would become non-functional and if electricity cannot be generated, it would be impossible to produce chemicals. According to the Company, HSD is used in D.G. Sets to generate electric energy which is required for chemical industry. In this connection, reliance was placed on Explanation to Section 4-B of 1948 Act. In reply, it was the case of the Department that HSD is used in the D.G. Set for...
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