R.L. Gulati, J. - (1.) THIS and the connected batch of writ petitions have been filed by the manufacturers of bricks and raise a common question as to whether the turnover of bricks can be assessed to tax under a notification issued under Section 3 -A of the U.P. Sales Tax Act.
(2.) THE petitioner is a partnership firm which carries on the business of manufacture and sale of bricks at Sheopur in the district of Varanasi and is a registered dealer under the Act. The petitioner's allegation is that the sales tax department had been levying tax on the petitioner on the sale of bricks under notifications issued under Section 3 -A of the Act at a rate higher than the rate prescribed in Section 3 and that the sales tax department is seeking to levy tax in respect of the assessment years 1965 -66, 1966 -67 and 1967 -68, which are pending at the rate of 7 per cent, under Notification No. S.T. 6438/X -1012 -1962, dated 1st December, 1962. The petitioner contends that the notification of 1st December, 1962, as also the earlier notifications of similar nature are ultra vires. We have heard Sri K.L. Misra, learned counsel for the petitioner, in this case and other counsel appearing on behalf of the petitioners in the connected writ petitions. The common contention raised is that according to the trade structure in the State of Uttar Pradesh bricks are sold directly by the manufacturers to the consumers. There are no middlemen and as such Section 3 -A which contemplates a series of sales by successive dealers, cannot be applied to bricks.
(3.) SECTION 3 is the charging section which provides for the levy of sales tax on the sale of every commodity and at all points of sale except the turnover of goods which are exempt under Section 4 of the Act, at a rate which since 1959 is 2 nP. per rupee. (The rate was 3 pies per rupee when the Act was originally enacted and has been enhanced to 3 paise per rupee by Act No. 11 of 1969). Section 3 -A provides for a single point taxation under which the State Government has been authorised to declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify. Sub -section (2) of this section provides that if the State Government makes a declaration under Sub -section (1) it may further declare that the turnover in respect of such goods shall be liable to tax at such rate not exceeding ten naye paise per rupee as may be specified.;