Judgment

M. N. VENKATACHALIAH, J :- This appeal by certificate, preferred by the State of U.P. against the judgment, dated, 3-1-1973 of the Allahabad High Court in W.P. No. 4225/1971: (reported in 1973 Tax LR 2011) (FB), raises a short question whether the R. 25-A(5) of the U.P. Sales Tax Rules 1948 (Rules) in so far as it stipulates that a recognition- certificate issued for purposes of S. 4-B of the U.P. Sales Tax Act 1948 (Act) "shall take effect from the date of its issue" is inconsistent with; does not carry-out the purposes of and, therefore, is ultra vires of S. 4-B of the U.P. Sales Tax Act 1948 (Act).

The Full Bench of the Allahabad High Court, by a majority, has, by the judgment under appeal, preferred this view.

2. So far as the declaration on the law on the point is concerned, the matter loses much of its edge in view of the relevant amendment brought about by the U.P. Taxation Laws (Amendment and Validation) Act 1978, which now provides that such a recognition certificate shall take effect from the anterior date of the presentation of the application by the dealer. By the same amendment, the certificate is rendered valid, for three successive assessment years at a time and the renewal shall also be for like periods.

3. The necessary and material facts are in a short compass and may briefly be stated: Respondent, Haji Ismail Noor Mohammad & Co.; a registered firm of partners was a "Dealer" registered under the Act. It, inter alia, carried on the business of manufacture of oils from groundnuts and other oil seeds. The oil so manufactured was sold by the Dealer both intra-State; inter-State and by way of export. Under S. 3-D of the Act, a dealer is liable to purchase-tax on oil seeds at 3% ad valorem on the turnover of the purchases made by the dealer from the cultivators or other unregistered dealers. Section 4-B of the Act, however, contemplates special reliefs to certain manufactures of notified goods, the relief being in the form of concessional rate of purchase tax or exemption therefrom, as the case may be, as notified by the State-Government if the "dealer holds a recognition-certificate issued under sub-section (2) in respect thereof".

On 10-2-1969, the State Government notified oils of all kinds to be "notified goods" for purposes of S. 4-B and that the purchases by the dealer, liable to tax over on the turnover of the first-purchases shall be entitled to a concessional rate of tax at 2% on the raw-material required for the manufacture of notified goods.

The present controversy relates to the Dealers entitlement to the concessional rate of purchase tax respecting the purchase turnover of its first-purchases under the said notification.

4. On 21-3-1969, Respondent applied under S. 4-B(2) to the prescribed authority, in the prescribed form for the grant of a recognition certificate. The recognition certificate, for certain reasons, was granted only on 5-12-1969. There appears no dispute that the turn-over of the first-purchases of the Respondent, respecting which the claim for reduced-rate of tax was made, constituted raw-material required for the manufacture of notified goods and, therefore, satisfied the requirement of the notification. However, the relief was confined to the turnover of such first-purchases made only after 5-12-1969, i.e., the date of issue of the certificate and the relief in respect of the turnover prior to that date was refused on the basis of the condition in sub-r.(5) of R. 25-A which provided that "such certificate shall take effect from the date of its issue".

Respondent, in its writ-petition before the High Court contended that this clause in sub-r. (5) of R. 25-A is at cross-purposes with and did not carry out the objects of S. 4-B and is ultra vires S. 4-B. The High Court, by majority opinion, has accepted this contention.

5. The provisions of S. 4-B and R. 25-A(5) may now be noticed.

"4-B. Special relief to certain manufacturers.

(1) Notwithstanding anything contained in Ss. 3, 3-A, 3-AA an