Decided on April 25,2012

M/s Parvatiya Sahkari Bhaisaj Vikas Evem Kray Vikray Sangh Ltd. Appellant
Sale Tax Officer, Khand I, Rishikesh And others Respondents


- (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 Revision Applications.
(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 thereon.;

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