- (1.) S. H. A. RAZA, J. It is an admitted case of the parties that wheat is a notified commodity for the purpose of levying tax under section 14 of the Central Sales Tax Act, 1956. The petitioner who runs the Roller Flour Mills, which carries on the business of manufacturing atta, suji, maida and bran, purchased wheat from the Regional Food Controller, which was earlier purchased from farmers after it was rejected by the Food Corporation of India, at the rate of Rs. 151 per quintal, has prayed for issuance of a writ in the nature of mandamus commanding the Regional Food Controller, Moradabad Division, Moradabad (respondent No. 2) and the Commissioner, Department of Food and Civil Supplies, Government of Uttar Pradesh, Lucknow (respondent No. 3) to issue forms III-C (2) to the petitioner in respect of the rejected wheat sold by them as registered dealers to the petitioner during the assessment year 1983-84. A writ in the nature of mandamus, who also prayed for restraining the Sales Tax Officer, Sector 3, Moradabad, respondent No. 4, from taking any assessment proceedings for the assessment year 1983-84 till the requisite forms III-C (2) are issued to the petitioner by the respondents Nos. 2 and 3 in respect of the rejected wheat purchased by the petitioner during the assessment year 1983-84.
(2.) LEVY of purchase or sales tx on certain goods have been mentioned in section 3-D of the U. P. Sales Tax Act, 1948, which reads as under : " 3-D. LEVY of purchase or sales tax on certain goods.- (1) Except as provided in sub-section (2), there shall be levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in the prescribed manner, - (a) of first purchases of opium, at such rate not exceeding twenty-six per cent; (b) of first purchases of such other goods, at such rate not exceeding - (i) the maximum rate for the time being specified in section 15 of the Central Sales Tax Act, 1956 (Act 74 of 1956), in respect of goods declared by section 14 of the Act to be special importance in inter-State trade or commerce, and (ii) fifteen per cent in respect of other goods, and with effect from such date, as the State Government may, by notification in the Gazette, specify in relation to purchases made within Uttar Pradesh by a dealer (whether on his own account or on account of any one else), or through a dealer acting as a purchasing agent : . . . . . . . . . . . . . (2) Where in respect of any goods notified under sub-section (1), the purchaser whether on his own account or on account of any one else, is a person other than a registered dealer, there shall be levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in the prescribed manner, of sale of such goods by the dealer who sells the goods or through whom the goods are sold to such purchaser, and the rate of tax shall be the same as notified under sub-section (1 ). (3) Where tax is payable, and has been so paid, under sub-section (1) or sub-section (2) as the case may be, by a commission agent, or any turnover of sales or of purchases on behalf of his principal, the principal shall not be liable to pay the tax in respect of the same turnover : Provided that - (1) The provisions of section 18 shall mutatis mutandis apply : (2) Nothing in this sub-section shall apply to a dealer in respect of purchases or sales of goods by a dealer in the circumstances mentioned in sub-section (3) of section 3. (3 ). . . . . . . . . . . (4) On the issue of a notification under this section, no tax shall be levied under any other section in respect of the goods so notified. (5) The provisions of sub-section (4) of section 3 and of section 18 shall mutatis mutandis apply in relation to the tax payable under this section. (6) Where any goods in respect of which tax is levied under any other section are notified under this section, or where any goods notified under this section are denotified and tax in respect thereof is levied under any other section during the course of an assessment year, the tax payable by a dealer shall be computed as follows, that is to say - (a) for the period the goods are subject to liability to tax under this section, on the turnover of purchases or sales thereof as the case may be; and (b) for the period the goods are subject to the liability to tax under any other section, on the turnover of sales thereof. (7) (a) Every purchase within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall, for the purposes of sub-section (1), be deemed to be the first purchase, unless the dealer proves otherwise to the satisfaction of the assessing authority after having furnishing such declaration or certificate, obtained from the selling dealer, in such form and manner and within such period, as may be prescribed. (b) Every sale within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall, for the purposes of sub-section (2), be deemed to be a sale to a person other than registered dealer, unless the dealer selling the goods proves otherwise, to the satisfaction of the assessing authority after having furnished such declaration or certificate, obtained from the purchaser of such goods, in such form and manner and within such period, as may be prescribed. (8) Every notification made under this section shall, as soon as may be after it is made, be laid before each House of the State Legislature, while it is in sessions for a total period of not less than fourteen days, extending in its one session or more than one successive sessions, and shall, unless some later date is appointed, take effect from the date of its publication in the Gazette, subject to such modifications or annulments as the two Houses of the Legislature may during the said period agree to make, however, that any such modification or annulments shall be without prejudice to the validity of anything previously done thereunder except that any imposition, assessment, levy or collection of tax or penalty shall be subject to the said modification or annulment. Explanation.- (1) For the purposes of this Act, the following goods shall be deemed to be different from each other, namely : (a) Khandsari, molasses, including Sheera-sayar, Sheera galawat and sheera salawat; (b) rab, including rab sayar, rab galawat and rab salawat; (c) gur lauta and raskat; and accordingly, nothing in this section shall be coustrued to prevent the imposition, levy or collection of tax under section 3-A in respect of any one of the said goods merely because tax has been imposed, levied or collected under this section in respect of any other of them, or vice versa. Explanation II.- For the purposes of assessment relating to any period commencing on October 1, 1964 and ending with November 14, 1971, split or processed foodgrains, cereals or pulses shall be deemed to be different from unsplit or unprocessed foodgrains, cereals or pulses and accordingly, nothing in this section shall be construed to prevent imposition, levy or collection of tax in respect of the first purchase relating to such period, of split or processed foodgrains, cereals or pulses merely because tax has been imposed, levied or collected earlier in respect of such foodgrains, cereals or pulses in their unsplit or unprocessed form. " Relying upon the provisions contained in sub-section (7) of section 3-D, Mr. Bharat Ji Agrawal, learned counsel for the petitioner, submitted that there is nothing on the record to show that the order passed by the State Government for purchasing the rejected wheat by the roller mills was issued under the provisions of the Essential Commodities Act. The Regional Food Controller himself is registered under the U. P. Sales Tax Act as a dealer and if it purchases any wheat, rejected or otherwise, liability of payment of tax, as far as sales tax is concerned, would be his. In view of sub-section (7) of section 3-D it was contended that every purchase within Uttar Pradesh by a dealer, either directly or through another, whether on his own account or on account of any one else, shall, for the purposes of sub-section (1), be deemed to be the first purchase, unless the dealer proves to the satisfaction of the assessing authority after having furnished such declaration or certificate, obtained from the selling dealer, in such form and manner and within such period, as may be prescribed. In this regard the attention of the court was drawn towards sub-rule (1) of rule 12-B of the U. P. Sales Tax Rules, 1948 which provides that "the certificates or declarations REFERRED TO in sub-section (7) of section 3-D shall be in forms III-C (1), III-C (2), III-C (3), III-C (4) and III-C (5)". Sub-rule (12) of rule 12-B of the U. P. Sales Tax Rules also provides that "any dealer, who wishes to claim exemption from tax under sub-section (7) of section 3-D, shall submit to the Sales Tax Officer the portion marked 'original' of the certificate, received by him under sub-rule (6) or (7) from other dealers, in respect of such claim up to the first date on which he is required to furnish his accounts for final assessment in respect of assessment year to which the claim relates. The Sales Tax Officer may in his discretion, require the dealer to produce for inspection the portion of the declaration marked 'duplicate'. " The main thrust of Sri Bharat Ji Agrawal is two-fold, firstly that the liability to pay the purchase tax of the rejected wheat is on the Regional Food Controller. He, being the first purchaser in accordance with sub-section (7) of section 3-D of the U. P. Sales Tax Act, secondly that the State Government by issuing various orders, had given assurance to the roller mill dealers, that in case they purchase the rejected wheat from the Regional Food Controller, the purchase tax would be paid by the Regional Food Controller. In this regard the attention of this Court was drawn to various Government Orders dated March 7, 1984, January 11, 1984, May 8, 1984 and May 21, 1984.
(3.) ON the other side the learned Standing Counsel laid much emphasis on the Explanation II to sub-section (1) of section 3-D, which reads as under : " For the purposes of this sub-section, in relation to purchases of foodgrains in pursuance of any order made under section 3 of the Essential Commodities Act, 1955, including any purchase in excess of the levy share, the purchase first made by a dealer from the State Government or its purchasing agent shall be the first purchase of such foodgrains and the tax shall accordingly be levied at that point on such dealer. " According to the learned Standing Counsel the aforesaid Government orders were issued under section 3 of the Essential Commodities Act, 1955. Hence the roller mills would be deemed to be the first purchaser and the liability of payment of purchase tax would fall on the dealers.;