- (1.) HEARD learned Standing Counsel for revisionist and perused the record.
(2.) FOLLOWING question of law has arisen in this matter: "Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal as well as the first appellate authority were legally justified in holding that the chemicals and dyes used in the job work are not liable to tax under the provisions of U.P. Trade Tax Act -
(3.) THE Dealer M/s Bathwal Udyog Private Limited is engaged in the business of processing of fabric. It purchases grey cloth and after colouring and processing, sell it. He is also getting job work done on fabrics. After processing, which includes colouring, dyeing etc. on fabric, the goods are returned after realizing consideration towards processing fee etc. The Assessing Authority, therefore, for the assessment year 2002 -03 (Provincial) held that dyeing and colouring process, it charges only for job works and the fabric is returned but for the material used in this process, the Dealer is exigible to tax hence he is liable to pay tax on the dyes and chemicals which it has imported. By order dated 28.2.2005, Assistant Commissioner, Trade Tax determined tax liability of Dealer of Rs. 5 lacs whereagainst First Appeal No. 858 of 2005 preferred by Dealer was allowed by Joint Commissioner (Appeal) -II, Trade Tax, Gorakhpur vide judgment dated 3.9.2005 and Dealer was declared exempted from tax liability. Revenue preferred Second Appeal No. 250 of 2005 which has been rejected by Tribunal by order dated 15.5.2006. I find that a similar controversy in respect to Assessment Year 2000 -01, 2001 -02 and 2002 -03 came to be considered by a Division Bench of this Court in Writ Petition No. 1683 of 2000 (M/s Super Find Processors Pvt. Ltd. Vs. State of U.P. and others) and other connected writ petitions decided on 10.1.2013 wherein this Court has found that the State Government itself has taken a decision on 7.10.2005 regarding exigibility of tax in respect to such dyeing, colouring process and reading therefrom the Division Bench has said: "All the decisions cited by the learned counsel for the petitioner refer to the circular and decision taken by the State Government is binding on the authorities. In the present case we find that the State Government in its order dated 7.10.2005 while deciding the representation of M/s Ganga Processors pursuant to the direction given by this Court on 13th September, 2005 had also considered the representation dated 27.9.2005 made by the Northern India Textile Processors Association. It would be evident from the following recital in the order dated 7.10.2005 passed by the Principal Secretary, Tax and Registration Department, Government of U.P.: xxx xxx xxx While holding that the dyes and chemicals are consumable and lost their existence in the process of colouring, deying etc. of gray cloth, the Principal Secretary has held as follows: xxx xxx xxx From a perusal of the aforesaid finding it is amply clear that the State Government had also decided the representation made by the Northern India Textile Processors Association and had come to the conclusion that dyes and chemical used in the bleaching, colouring and dyeing etc. on gray cloth are consumed in the process and not transferred. In our considered opinion, the said finding is binding upon the assessing authorities as the representation made by the Northern India Textile Processors Association was also decided by the said order. The stand taken by the respondents that the State Government had not decided any other representation except the two preferred by M/s Ganga Processors and M/s Style Dyers is not correct. In view of the foregoing discussions, we are of the considered opinion that the respondent no.3 was not justified in imposing tax on the dyes and chemicals used in the process of dyeing, colouring, printing, bleaching, washing etc. of gray cloth by the petitioner and the impugned orders in all the writ petitions are liable to be set aside.";