- (1.) S. L. SARAF, J. The applicant is a public limited company and had its factory at Shahjahanpur where the applicant is manufacturing Indian-made foreign liquor.
(2.) DURING the assessment year 1989-90 it received a purchase order from the Canteen Stores Department, Government of India for purchase of the requisite quantity of Indian-made foreign liquor in which it was specifically mentioned that the necessary permit will be sent to the applicant-company by the Lucknow depot. Pursuant to the said purchase order the applicant sold the requisite quantity of the goods mentioned in the purchase order of Canteen Stores Department for which invoice was raised by the applicant in the name of the Canteen Stores Department, Lucknow. The permit was issued in the name of the Canteen Stores Department, challan, and G. R. were also in the name of the Canteen Stores Department. The cheques were issued by the Canteen Stores Department in the name of the applicant-company and the transport and import permits were also issued in the name of Canteen Stores Department, Lucknow, by the excise authorities. All the aforesaid documents conclusively proved that the contract of sale was between the applicant-company and the Canteen Stores Department. By a notification dated 31st January, 1985 issued in exercise of the powers under section 4 of the U. P. Sales Tax Act, as it stood then, the sales and purchases to the Canteen Stores Department/military Canteens were exempt from payment of tax on the condition that it is certified by an officer not below the rank of Commanding Officer and the goods are meant for being sold to the members of the Armed Forces of India. M/s. Carew & Company claimed exemption wider the said notification and it was submitted that if contrary to the exemption if they would have realised the amount of tax from the Canteen Stores Department they would have been liable to pay penalty which was not less than three times of the amount of tax under the provisions of section 15-A (1) (qq) read with proviso (viii ). In that view of the matter, the applicant did not realise any amount by way of trade tax from the Canteen Stores Department. It was further submitted by the applicant that the three ingredients for attracting the notification under section 4 of the U. P. Sales Tax Act, 1948 dated January 31, 1985, were complied with by the applicant and as such they were entitled to exemption under the said notification. Firstly, the goods were sold to the Canteen Stores Department, secondly, it was certified by the Commanding Officer and thirdly, the goods were meant to be sold to the members of the Armed Forces. The applicant has filed the copy of the certificate by a supplementary affidavit which was mentioned in the order of the Deputy Commissioner (Appeals ). The said certificate shows that the goods were meant for being sold to the Armed Forces and the same were duly supplied to the Canteen Stores Department. The Standing Counsel on behalf of the tax authorities have argued on the basis of the certain observations made by the Tribunal in its order whereby it is said that there was stock transfer and the sale was to a marketing agency as such the matter was correctly remanded by the Tribunal to the Trade Tax Officer to reconsider the same.
(3.) MR. Bharat Ji Agrawal vehemently replied to the said allegations by submitting that the stock transfer matter relates only to the Central assessment and the question of stock transfer also arises only to the assessment under the Central Sales Tax Act, as such the two objections raised have no basis whatsoever in the present case. I agree with the submissions of Sri Bharat Ji Agrawal that the sales made by the applicant-company to the Canteen Stores Department was totally exempt from payment of tax vide notification dated January 31, 1985, and the applicants have complied with and produced before the authorities the relevant certificate showing that the sales were made to the Canteen Stores Department and it was certified by an officer not below the rank of the Commanding Officer and the goods were meant to sale to the Armed Forces. In that view of the matter I hold that the sales made to the Canteen Stores Department are exempt from imposition of trade tax.;