- (1.) WE have heard Sri Bharat Ji Agrawal, senior advocate, assisted by Sri Piyush Agarwal for the petitioner. Sri S.P. Kesarwani, Additional Chief Standing Counsel appears for the Central Excise Department. The petitioners are manufacturers of paper, meant for packing purposes. By this writ petition, they have prayed for the following directions: (i) issue a suitable writ, order or direction in the nature of certiorari quashing the circular dated September 7, 2006 (annexure 1 to the writ petition) issued by the Commissioner of Trade Tax, U.P., Lucknow. (ii) issue a suitable writ, order or direction in the nature of mandamus or prohibition, restraining/prohibiting the Deputy Commissioner (Assessment), Trade Tax, Muzaffanagar, respondent No. 3, from taking any action for realization of State development tax from the petitioner for the period April 2006 to November 2006. (iii) issue a suitable writ, order or direction in the nature of certiorari quashing the notices dated October 6, 2006 and December 11, 2006 (annexures 8 and 10 to the petition) for the assessment year 2006 -07 demanding State development tax for the period April 2006 to November 2006. (iv) issue any other suitable writ, order or direction, which this honourable court may deem fit and proper in the facts and circumstances of the case.
(2.) THE entry tax was levied in the relevant years, for which rebates in State development tax is claimed under the U.P. Tax on Entry of Goods Act, 2000. In Indian Oil Corporation Ltd. v. State of U.P. reported in : [2004] 137 STC 399 (All) : AIR 2004 All 277, this court declared the entry tax levied by the U.P. Tax on Entry of Goods Act, 2000 to be ultra vires, and violative of articles 301, 304(b) of the Constitution of India. In a special appeal filed against the judgment, an interim order was passed by the Supreme Court providing that 50 per cent of the due tax was to be paid, and for the balance 50 per cent, a bank guarantee was to be submitted. The entry tax was imposed again by the U.P. Tax on Entry of Goods Act 2007, the validity of which has been upheld by the court in ITC Limited v. State of U.P. reported in : [2012] 48 VST 281 (All) : [2012] 48 NTN 1. It is submitted that when the entry tax is paid on the goods, the rebate is allowed to the extent of the amount of tax on the payment of trade tax. The notification dated March 7, 2005, allows rebate on trade tax on the sale of such paper to the extent of the amount of entry tax, paid by dealer on paper meant for writing, printing or packing purpose, excluding news print under the Uttar Pradesh Tax on Entry of Goods Act 2000, subject to the conditions that: (i) the amount of rebate shall not exceed the amount of trade tax paid; and (ii) the rebate shall be allowed only in relation to such paper on which Central excise duty has been paid. The notification dated March 7, 2005, is quoted as under: Uttar Pradesh Shasan, Kar Avam Nibandhan Anubhag -2. The Governor is pleased to order the publication of English translation of Government Notification No. KA.NI -2 -732/XI - 9(37)/97 -U.P. Act -15 -48 -Order -(15) -2005, dated March 7, 2005 for general information: Notification KANI -2 -732/XI -9(37)/97 -U.P. Act -15 -48 -Order -(15) -2005Dated: Lucknow:, March 7, 2005 WHEREAS, the State Government is satisfied that it is expedient in public interest so to do: Now, Therefore, in exercise of the powers under section 5 of the U.P. Trade Tax Act, 1948 (U.P. Act No. 15 of 1948) the Governor is pleased to allow with effect from March 7, 2005, a rebate to the extent of the amount of tax, paid by dealer (whether by himself or through the manufacturer) on paper meant for writing, printing or packing purpose excluding news print under the U.P. Tax on Entry of Goods Act, 2000 (U.P. Act No. 12 of 2000) from the tax levied under the U.P. Trade Tax Act, 1948 on the sale of such paper subject to the following conditions: (i) The amount of rebate shall not exceed the amount of trade tax paid; (ii) Rebate shall be allowed only in relation to such paper on which Central excise duty has been paid. By order(Shekhar Agarwal)Pramukh Sachiv.
(3.) A rebate on payment of tax, on certain purchases or sales may be provided by the State Government under section 5 of the U.P. Trade Tax Act, 1948.;