The completion of a sale in an auction and the applicability of concessional rate of tax under U.P. Trade Tax Act, 1948 in the context of intra-state sales.

JUDGMENT :

1. Petitioner is a proprietorship firm engaged in the manufacture of Kutch (commonly known as ‘Kattha’) for which Khair Wood is a raw material. Petitioner’s manufacturing unit is situate in District Agra (Uttar Pradesh). Petitioner had a valid recognition certificate issued by the Competent Authority under Section 4-B of U.P. Trade Tax Act, 1948, which entitled him to purchase Khair Wood at concessional rate of trade tax by producing Form III-B as per Rule 25-B of U.P. Trade Tax Rules, 1948.

2. U.P. Forest Corporation issued an auction notice on 05.09.2000 inviting bids for sale of various lots of Khair Wood. Pursuant to the said notice, petitioner participated in the auction held on 18.09.2000 at Tanakpur Depot of U.P. Forest Corporation, while Tanakpur was part of State of Uttar Pradesh. Petitioner’s bid for certain lots of Khair Wood, being the highest, was accepted and sale certificate was issued in favour of the petitioner by Depot Officer of U.P. Forest Corporation on 17.10.2000. However, petitioner moved the Khair Wood purchased in the said auction to its manufacturing unit at Agra (Uttar Pradesh) after State Reorganisation, on 15.11.2000.

3. On the strength of Form III-B, produced by petitioner while purchasing Khair Wood from Tanakpur Depot, he was asked to pay concessional rate of Trade Tax @ 2.5 percent under Section 4-B of U.P. Trade Tax Act, 1948, which was paid by petitioner. State of Uttar Pradesh was subsequently reorganised as per U.P. State Reorganisation Act w.e.f. 09.11.2000 and Uttaranchal Forest Development Corporation was established for the new State under provisions of U.P. Forest Corporation Act, 1974 in March, 2001.

4. Divisional Marketing Manager, Uttaranchal Forest Development Corporation raised a demand of Rs.86,760/- vide letter dated 21.10.2002 on the ground that petitioner was not entitled to concessional rate of tax and he was asked to pay the difference amount of tax, failing which proceedings would be initiated against him for recovery of the balance amount. Thus, feeling aggrieved, petitioner filed this writ petition seeking following reliefs:-

I. To issue, a writ order or direction in the nature of certiorari quashing the impugned notice dated 21.10.2002 issued by the respondent no. 2 contained as annexure no. 1 to the writ petition after summoning the original of the same from the respondents.

II. To issue, a writ order or direction in the nature of certiorari quashing the order alleged to be passed by respondent no. 5, as mentioned in the impugned notice, after the summoning original of the same from the respondents.

III. To issue, a writ order or direction in the nature of certiorari quashing the order dated 03.02.2001 passed by respondent no. 3 contained as annexure no. 14 to the writ petition, after summoning the original of the same from the respondents.

IV. To issue a writ order or direction in the nature of mandamus restraining the respondents for imposing the enhanced Trade Tax on the petitioner in regard to the Khair wood auctioned on 18.09.2000 by the U.P. Forest Corporation.

5. Learned State Counsel appearing for respondent no. 5 submits that the demand raised by Uttaranchal Forest Development Corporation is consequential to the show cause notice issued by Assistant Commissioner (Assessment) Trade Tax, Khatima to U.P. Forest Corporation, which is enclosed as Annexure CA-4 to the counter affidavit filed by respondent no. 5.

6. The said show cause notice is premised on the assumption that interstate sale of Khair Wood was effected after State reorganisation, therefore, concessional rate of tax would not be applicable on the strength of Form-III B.

7. Learned State Counsel contended that in case of interstate sale benefit of concessional rate of tax would be available only when registered dealer furnishes Form-‘C’, issued by the Competent Authority under Section 8(4) of Central Sales Tax Act, 1956. Thus, he submits that since the goods were moved from Tanakpur (Uttarakhand) to Agr