- (1.) OM PRAKASH, J. This writ petition is filed by as many as six units, engaged in the manufacture of rice from paddy through their directors/partners for quashing the impugned notification dated May 21, 1994 (annexure "7" to the writ petition) issued by the State of U. P. (respondent No. 1 ).
(2.) THE validity of the said notification was challenged earlier also before a Division Bench of this Court of which one of us (OM Prakash, J.) was a member in a bunch of writ petitions (Civil Misc. Writ Petition No. 645 of 1994 - Mentha and Allied Products v. State of U. P. [1996] 103 STC 316, being the leading case ). THE Division Bench by an order dated January 17, 1996 [mentha and Allied Products v. State of U. P. [1996] 103 STC 316 (All.)] dismissed the entire bunch of writ petitions. The petitioners in the said bunch of writ petitions challenged the validity of the impugned notification on the ground that so long as recognition certificates referring to full exemption granted to them remained in force, the liability of tax could not be altered and tax at the rate of two per cent could not be legally imposed on them by the impugned notification. The recognition certificates in that bunch of writ petitions were operative till the end of the year 1995-96 and, therefore, the petitioners pleaded that until the expiry of the year 1995-96, the petitioners could not be made liable to pay tax at the rate of two per cent. Then the court held that exemption or concession is not granted by a recognition certificate and that merely contains the conditions governing the exemption, but exemption, in fact, is granted by virtue of a notification issued by the State Government from time to time. Taking such a view, the contentions of the petitioners in the entire bunch of writ petitions were rejected and the impugned notification was held to be valid. Sri M. G. Ramchandran, learned counsel for the instant petitioners, says that he wants to challenge the impugned notification wholly from a different angle and not on the ground commonly advanced on behalf of the petitioners in the aforesaid bunch of writ petitions earlier. This being so, learned counsel for the instant writ petitioners was permitted to argue, notwithstanding the objection of the respondents that the validity of the impugned notification has already been upheld by this Court by a judgment dated January 17, 1996 (Mentha and Allied Products v. State of U. P. [1996] 103 STC 316 ).
(3.) SECTION 4-B of the Uttar Pradesh Trade Tax Act, 1948 (briefly, "the Act") which was earlier named as the Uttar Pradesh Sales Tax Act, 1948, was inserted by the Uttar Pradesh Sales Tax (Amendment) Act, 1968. For the purposes of this case, sub-section (1), sub-section (2) and the Explanation to sub-section (2) are relevant. Section 3-D (1) of the Act which is a charging section, provides for the levy on the turnover of first purchase. Section 4-B (1) (a) as inserted by the amending Act of 1968, in so far as relevant, says that where any goods liable to tax under section 3-D are purchased by a dealer who is liable to tax on the turnover of first purchase under that sub-section or where any goods are purchased by any dealer in circumstances in which such a dealer is liable to trade tax on purchases of such goods under section 3-AAAA and the dealer holds a recognition certificate issued under sub-section (2) in respect thereof, he shall be liable in respect of those goods to tax at such concessional rate or be wholly or partly exempt from tax whether unconditionally or subject to conditions and restrictions specified in that behalf, as may be notified in the gazette by the State Government in that behalf.;