Prakash Krishna, J. - (1.) THE following questions of law have been framed in the memo of revision: 1. Whether, under the facts and circumstances of the instant case, the Trade Tax Tribunal was legally justified to allow exemption on beltings as an agricultural implements?
(2.) WHETHER , under the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to hold that the beltings are not covered under Notification No. ST -2 -5784/x -10(2)/80 -U.P. Act -15 -48 -Order -81 dated September 7, 1981 as beltings of all kinds taxable at the rate of eight per cent? 2. Heard the counsel for the parties and perused the record. It is submitted that the assessment year 1990 -91 (Central) is involved in the present case. The dealer -opposite party is a manufacturer and seller of rubber belting. The account books of the dealer was accepted by the assessing authority but its claim that no taxes were payable on the turnover of Rs. 10,94,593 being the sale of belts as part of agriculture implements was not accepted. The assessing authority held that the said turnover is taxable under the Notification No. 5784 dated September 7, 1981 issued under Section 3A of the Act, vide order dated November 15 1993. The said order has been reversed by the first appellate authority in Appeal No. 649 of 1993 and it has been held that the belts manufactured by the dealer, which are used in harvester, an agriculture implement, is covered by a Notification No, 8305 dated June 30,1986 issued under Section 4 of the U.P. Trade Tax Act, 1948. It has been so held by the Tribunal also. The Notification No. 5784 dated September 7, 1981 issued under Section 3A of the U.P. Trade Tax Act, 1948 by entry No. 8 provides that "belting of all kinds" is taxable at the rate of eight per cent at the point of manufacture or import. The learned Standing Counsel submits that it will include all kinds of belting even if it is used in a harvester. The contention, on the other hand, of the dealer is that in view of Notification No. 8305 dated June 30, 1986 issued under Section 4 of the U.P. Sales Tax Act, 1948 is a subsequent notification wherein agriculture implements and parts, accessories and attachments thereof as per details given in the notification are exempted from payment of any tax. "Harvester" is included in category B titled as tractor drawn or power drawn implements. The contention of the dealer -opposite party is that it manufactures a special kind of belt which is used in harvester and it has no other use. Harvester is a big machine and costs several lakhs of rupees and number of belts are used therein. The finding recorded by the authorities below is that the belt manufactured by the dealer cannot be used as a fan belt or V belt. Such a belt is very hard, of more than one inch in thickness having different diameters and can be used in harvester only. The said fact is fortified by the purchase vouchers. It is established that the dealer is manufacturing and selling harvester belts only. The said finding having been confirmed by the Tribunal, it leads to a conclusion that the belt is covered under Notification No. 8305 dated June 30, 1986 dealing with the agriculture implements, parts, accessories and attachments thereof.
(3.) STRONG reliance was placed by the learned Standing Counsel on a decision of apex court in the case of Commissioner, Sales Tax v. Agra Belting Works, [1987] 66 STC 1 :, [1987] UPTC 850. The said decision is distinguishable on facts and is not applicable herein. The commodity involved therein was cotton fabric which was exempted by a notification dated November 25, 1958 under Section 4 of the Act but by a subsequent notification issued under Section 3A dated December 1, 1973 it was included within "belting of all kinds" taxable with effect from December 1, 1973. The apex court in the majority judgment has disapproved the view of the High Court. The High Court had held that a notification of recall of exemption is a condition precedent to impose tax at any prescribed rate by a valid notification under Section 3A in respect of a commodity earlier exempted under Section 4. It was held by the apex court that the second notification issued under Section 3A can easily be treated as a combined notification both for withdrawal of exemption and also for providing higher tax. In the case on hand, the position is in the reversed order. The notification levying tax issued under Section 3A is earlier in point of time and the notification granting exemption is subsequent thereto.;