JUDGMENT

Rohit Ranjan Agarwal, J.

Heard Sri Bipin Kumar Pandey, learned counsel for the revisionist and Sri A.C.Tripathi, learned Standing Counsel for the State.

2. This revision under Section 58 of the U.P. Value Added Tax Act, 2008 (hereinafter called as "Act of 2008") has been filed assailing the order of the Tribunal dated 12.3.2013 passed in Second Appeal No.43 of 2013.

3. The following questions of law arise in the present revision, which read as under :

"i. Whether admittedly on purchase of R.E.P. license which is goods, tax has been paid by the applicant, still the authorities were justified in reversing the Input Tax Credit as claimed by the applicant?

ii. Whether in view of the judgment of Hon'ble Apex Court in the case of Vikas Sales Corporation and others v. CCT, reported in (1996) 102 STC page 106 wherein R.E.P. license were termed to be goods and is liable to be taxed on its transaction, still the benefit of ITC can legally be rejected?"

4. The brief glimpse of the facts are necessary for better appreciation of the case which are as under :

5. The assessee was registered under the Act of 2008 as well as Central Sales Tax Act and is a proprietorship firm engaged in the business of trading of chemicals. The dispute relates to the assessment year 2009-10. The assessee, in its normal course of business, purchases chemicals both within the State of U.P. and also from outside the State of U.P. It also imports chemicals from outside the country. For importing chemicals from outside the country, he was required to get the license from the Custom Authorities. The license is known as R.E.P. License.

6. After purchasing the license from open market for Rs.43,89,000/-, the assessee imported goods from outside the country. The Assessing Authority while framing the assessment order dated 28.4.2012, accepted the books of accounts as well as turnover disclosed by the assessee but rejected the claim of Input Tax Credit (hereinafter called as "I.T.C.") of Rs.2,01,427.89 on the purchase of R.E.P. License. Against the rejection of the claim of I.T.C., a first appeal was preferred before the Appellate Authority, which was dismissed vide order dated 15.01.2013. Aggrieved by the said order, a second appeal was preferred before the Commercial Tax Tribunal, which was also dismissed by the order impugned, hence, the present revision.

7. Learned counsel for the assessee submitted that the rejection of claim of I.T.C. was not correct by the Assessing Authority as well as by the Tribunal as the Apex Court in Vikas Sales Corporation and others v. C.C.T. (1996) 4 SCC 433 held that import license, which are called as "replenishment licences" (R.E.P. Licenses), are goods which can be sold and purchased from the market and on the purchase and sale of such transaction, the liability of tax is there. He then contended that the assessee had purchased the goods i.e. R.E.P. license, which is liable to be taxed and admittedly the tax was paid by the assessee on its purchase therefore, refusal to grant I.T.C. was not correct. The R.E.P. licenses as per the notification dated 10.01.2008, are taxed at the rate of 4%. The denial of I.T.C. by the Taxing Authorities on the ground that assessee did not do business of purchase and sale of import license and through the license he has purchased the goods from outside India thus the benefit of I.T.C. cannot be extended as condition attached to Section 13(1)(a) of the Act of 2008 has not been complied with and no manufacturing activities has been done, the I.T.C. was refused.

8. According to Sri Pandey, the findings recorded by the Tribunal to the effect that no manufacturing act