- (1.) THE petitioner is a Public Limited Company incorporated under the Indian Companies Act, 1956. The petitioner is a civil work contractor and is engaged in the business of construction, namely, highways, bridges, etc. According to the petitioner, he has been awarded several contracts by the National Highway Authority of India for construction of roads in several parts of the State. One such contract relates to the construction of the National Highway between Garhmukteshwar to Moradabad in the State of U.P. For the construction of the highway, the petitioner requires cement, diesel oil, furnace oil and lubricants for the manufacture of Hot Mix materials. Under the U.P. Trade Tax Act, the petitioner has been granted a recognition certificate under Section 4 -B(2) of the U.P. Trade Tax Act for the manufacture of Hot Mix material and, on that basis, the petitioner is authorized to purchase raw materials at a concessional rate of tax under Rule 25 -B(1) of the U.P. Trade Tax Rules, 1948, which provides that where a dealer holding a recognition certificate purchases any goods referred to in Clause (b) of sub section (1) of Section 4 -B for use as raw material, he shall, if he wishes to avail the concessional rate of tax, furnish to the selling dealer, a certificate in Form - III -B, which is called a Declaration Form.
(2.) U .P. Trade Tax Act was superseded by the U.P. VAT Act w.e.f. 1st January, 2008 (hereinafter referred to as the Act). The levy of tax on the turnover of sale under Section 4(1)(c) of the Act is on the goods named or described in Column -2 of Schedule IV at the point of sale mentioned in Column -3 and at the rate mentioned in Column -4 of the Schedule against such goods. Under clause -(c) of sub -clause (1) of Section 4, diesel oil as defined under United Provinces Sale of Motor Spirit Diesel Oil and Alcohol Taxation Act, 1939 was liable to tax at the hand of manufacturer or importer at the rate of 21%. The State Government issued a notification dated 10th January, 2008 under sub -Section(4) of Section 4 whereby diesel oil sold to a registered dealer for use in the process of manufacture of any taxable goods, against a certificate prescribed by the Commissioner was made liable to tax in the hand of the manufacturer or importer at the rate of 4%. Pursuant to the said notification dated 10th January, 2008, the Commissioner, Commercial Taxes, U.P. issued a prescribed certificate in Form -D to be issued by the purchaser of a diesel oil to its seller. Since the petitioner is engaged in the manufacture of Hot Mix material, which is used in the construction of roads, hence the petitioner made an application dated 14th May, 2008 for issuance and for authenticating Form -D as per the circular of the Commissioner dated 14th January, 2008. Instead of issuing Form -D, the petitioner was issued a show cause notice dated 5th June, 2008 to show cause as to why his application should not be rejected on the ground that in view of Explanation -I to Section 13(1) of the U.P. VAT Act the petitioner, not being a manufacturer was not entitled for Form -D. According to the petitioner, this notice was presumably issued pursuant to an order dated 12th March, 2008 passed by the Commissioner under Section 59 of the Act in the application of Gammon India Ltd. holding that transfer of property involved in the execution of a works contract was a resale under Section 13(1)(e) of the Act and, therefore, a person involved in the execution of a works contract was not entitled for issuance of Form -D. The petitioner, being aggrieved by the issuance of the show cause notice dated 5th June, 2008 as well as aggrieved by the issuance of the order of the Commissioner dated 12th March, 2008, has filed the present writ petition praying for its quashing and for issuance of a mandamus to respondent no.3 to issue and authenticate adequate number of certificates in Form -D to the petitioner for purchase of diesel oil and furnace oil for the purpose of manufacturing of Hot Mix material.
(3.) WE have heard at length Sri Bharat Ji Agarwal, the learned Senior Counsel assisted by Sri Shubham Agrawal, the learned counsel for the petitioner and Sri C.B. Tripathi, the learned Special Counsel for the respondents.;