Hon’ble Pankaj Mithal, J.—By this writ petition, the petitioner has challenged the order dated 17.11.2006 passed by the Deputy Commissioner Trade Tax, Saharanpur under Rule 41 (6) of the U.P. Trade Tax Rules by which purchase tax at the prescribed rate of 4% amounting to Rs. 2,33,00,663/- has been imposed along with interest at the rate of 14% on the admitted purchase of wheat.

2. The petitioner had claimed that the said purchase of wheat is exempted from the purchase tax under the Notification dated 29.8.2003 issued under Section 4-B (1) (a-1) of the U.P. Trade Tax Act. The submission has been rejected by the impugned order. The same issue has been raised in this writ petition.

3. Before considering the submission of the petitioner it may be stated here that the relevant facts are that admittedly the petitioner purchased wheat worth Rs. 58,25,16,579.62 in the month of April 2006 and supplied (not sold) this wheat for conversion into flour by grinding process to three flour mills known as (i) M/s Venkatesh Agro Food Private Limited, Chandauli, (ii) M/s Bhawani Roller Flour Mill Private Limited, Ghaziabad and (iii) M/s Goverdhan Agri Flour Mill Private Limited, Agra. After conversion of wheat into flour, it was taken back from these flourmills by the petitioner for onward sale.

4. On the sale of wheat there is no trade tax (sales tax), but on the purchase of wheat, purchase tax is payable by first purchaser on the first purchase in U.P. Thereafter, if the wheat is sold again in U.P., there is no trade tax or purchase tax on the said re-sale. There is no trade tax on the sale of flour in U.P.

5. For the benefit of those who are unfamiliar with the law of tax on sales in U.P. it may be clarified that sales tax (now known in U.P. as trade tax) is payable on sale by the seller, while purchase tax is payable on purchase by the purchaser. The two taxes are really one and the same and the difference in nomenclature is only to denote the hands in which the transaction would be taxed. Thus, sale of goods is subjected either to sales tax (now known as trade tax) or to purchase tax depending upon in which hand the transaction is intended to be taxed.

6. Purchase tax is payable on the turnover of the purchase by a dealer under Section 3-D, which is the charging section in the case of purchase tax. The U.P. Trade Tax Act in that very charging section makes it clear that the State Government has the power to fix the rate of tax and has also the goods, sales of which will be amenable to purchase tax.

7. However, the purchase tax or the sales tax leviable under the said Act is single point tax and is not payable repeatedly on every subsequent sale or purchase.

8. However, if after purchase the goods are altered into different goods through process of manufacture or otherwise, the trade tax or purchase tax may be levied again.

9. For ensuring that purchase tax remains a single point tax there are various provisions in the Act. Section 4-B (1) is one such provision.

10. In order to make the meaning and intent of Section 4-B (1) more clear certain words from sub-clause (a) and (a-1) of sub-section (1) are being re-written in simplified language below :

"4-B. Specific relief to certain manufacturers :

(1) Notwithstanding anything contained in Sections ...... 3-D—

(a) Where any goods liable to (purchase) tax ..... are purchased by a dealer ......(who) holds a recognition certificate issued under Section 4-B (2), such dealer may be granted whole or part exemption from purchase tax either unconditionally or subject to the conditions specified.

(1-a) Where any goods liable to purchase tax either sold or supplied by first purchaser to another dealer, where the latter holds a recognition certificate under Section 4-B (2), the State Government may grant similar relief as mentioned in clause (a) to the first purchaser."

11. Recognition Certificate under Section 4-B (2) is for raw material or packaging material (hereinafter referred as input goods) us