PARVATIYA SAHKARI BHAISAJ VIKAS EVEM KRAY VIKRAY SANGH LTD Vs. SALE TAX OFFICER
HIGH COURT OF UTTARAKHAND (AT: NAINITAL)
M/s Parvatiya Sahkari Bhaisaj Vikas Evem Kray Vikray Sangh Ltd.
Sale Tax Officer, Khand I, Rishikesh And others
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(1.) We have considered the averments made in the Applications for
condonation of delay in preferring these Revision Applications and, being
satisfied with the reasons furnished therein, allow the Applications for
condonation of delay and, thereby, condone the delay in preferring these
(2.) Revisionist, in these Revision Applications, is an Association of
registered cooperative societies of people, who reside in or around forest
areas. On a licence granted by the Forest Department to the revisionist,
people associated with the associated cooperative societies of the
revisionist enter the forest permitted to be entered by such licence upon
deposit of a sum of Rs 10,000/-, as and by way of security, for the purpose
of collection of Jhula Ghas (a variety of Lichen). The licence, thus
granted by the Forest Department, permits those people to collect such
lichen with obligation to store the same in the warehouse / godown of the
Forest Department of the State. Forest Department of the State,
thereupon, weighs such lichen and makes the same over to the revisionist
upon the revisionist paying consideration therefor, termed as royalty,
trade tax and other taxes. The property, in such lichen, passes on to the
revisionist upon obtaining delivery thereof from the Forest Department
after making payment of the consideration as mentioned above. The
revisionist, thereupon, sells such lichen in the same condition as it
receives the same from the Forest Department in the manner indicated
above. In relation to such sale, no trade tax is collected by the revisionist.
The revisionist, in its returns to the Department, held out so and the same
was also accepted by the Trade Tax Department for a few of the
assessment years. Later, at one point of time, it transpired that the
assessee is selling such lichen at a very high price than the price of
acquisition of the same. The Assessing Authority felt that the assessee 4
must be adding value to lichen obtained by it from the Forest Department.
After being convinced that the revisionist is not doing so, it felt that the
collection of lichen is being done by the assessee upon payment of royalty
and, accordingly, the activity of the assessee in collecting lichen is
manufacture / production requiring the revisionist to pay trade tax. The
Department, accordingly, re-opened the case under Section 21(2) of the
U.P. Trade Tax Act.
(3.) The show-cause was not replied by the revisionist, nor the
revisionist appeared before the Assessing Officer on the date fixed for
hearing. The Assessing Officer, taking note of the fact that it was the
assessee, who was collecting lichen from the earmarked forest and paying
royalty on the basis of weight of removed lichen, held that licensee was
carrying out manufacturing / production activity and one of the cost
thereof was royalty and that, therefore, when such produce was sold by
the revisionist, Trade Tax Act required the revisionist to pay trade tax
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