Prafulla C. Pant J. - This revision, preferred under section 11(1) of the U.P. Trade Tax Act, 1948 (applicable to the State of Uttarakhand), is directed against the order dated April 6, 2004, passed by the Trade Tax Tribunal, Dehradun, whereby the Second Appeal No. 248 of 2002, filed by the assessee (present respondent) has been allowed, holding that no entry tax is payable on the purchase of diaphragm.

Heard learned counsel for the parties.

Brief facts of the case are that the respondent-assessee is a firm registered with the Trade Tax Department, who deals with the purchase and sale of machineries and parts of the machineries. During the assessment year 1999-2000, the respondent-assessee supplied 10 diaphragms to Bharat Heavy Electricals Limited, Haridwar, for manufacture of the steam turbines, which the dealer purchased for $ 2,05,000. In terms of rupees, as per the dealer, value of the goods was Rs. 90,05,650. As such, the price shown by the dealer was Rs. 9,00,565 per diaphragm. Admittedly, no customs duty, insurance charges, port clearance charges were added to the price shown by the dealer. The assessing officer (hereinafter referred as "the A.O.") took the view that after adding customs duty, insurance charges and port clearance charges, the value of the goods purchased is more than Rs. 10,00,000. As such, on the 10 diaphragms purchased, entry tax is payable under the U.P. Tax on Entry of Goods Act, 2000 (applicable to the State of Uttarakhand, as the said Act came into force before creation of the new State). Accordingly, the A.O. issued demand of Rs. 2,32,298 as an entry tax. Aggrieved by said order of the A.O., the assessee preferred first appeal before the Deputy Commissioner (Appeals) 2, Trade Tax, Dehradun, which was registered as First Appeal No. 946 of 2001. However, the said authority vide its order dated October 25, 2002, affirmed the order of the A.O. On this, the assessee went in second appeal before the Trade Tax Tribunal, Dehradun, under section 10(2) of the U.P. Trade Tax Act, 1948. The Tribunal, after hearing the parties, took the view that customs duty which was not charged by the seller cannot form part of the purchase price, as such, cannot be the "value of the goods" under the U.P. Tax on Entry of Goods Act, 2000, and set aside the orders passed by the A.O., and the first appellate authority. Hence, this revision by the Revenue.

Before further discussion, it is pertinent to mention here, the relevant provisions of law applicable to the case. Clause (e) of sub-section (1) of section 2 of the U.P. Tax on Entry of Goods Act, 2000, defines the expression "value of goods". The said definition reads as under :

"(e) 'value of goods' in relation to a dealer who has effected entry of goods into a local area shall mean the purchase price of such goods as defined in clause (gg) of section 2 of the Uttar Pradesh Trade Tax Act, 1948, or the market value of such goods if they have been acquired or obtained otherwise than by way of purchase."

Since, it is nobody's case that the items in question were not purchased, as such, as mentioned in the above definition, for calculating the value of goods one has to refer to the definition of "purchase price" given under the U.P. Trade Tax Act, 1948. Clause (gg) of section 2 of said Act defines the expression "purchase price" as under :

"(gg) 'purchase price' means the amount of valuable consideration paid or payable by a person for the purchase of any goods, less any sum allowed by the seller as cash discount according to trade practice, and shall include any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, other than the cost of freight or delivery or the cost of installation when such cost is separately charged."

The above definition of "purchase price" makes it clear that it is the valuable consideration actually paid or payable by a person to the seller for purchase of any goods, which is relevant f