COMMISSIONER OF COMMERCIAL TAX, U.P. versus M/S OSWAL GREENTECH LIMITED

Citation: [2016] 5 S.C.R. 851 · Decided: 28-10-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Dismissed

Judgment (excerpt)

[2016] 5 S.C.R. 851 
COMMISSIONER OF COMMERCIAL TAX, U.P. 
v. 
M/S OSWAL GREENTECH LIMITED 
(Civil Appeal No. 10430of2016) 
OCTOBER 28, 2016 
[DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.] 
A 
B 
U.P. Trade Tax Act, 1948 - ss. 3B and 4B - Recognition 
certificate - Concessional rate oftax-Assessee holder of recognition 
certificate as per s. 4B - Purchase of raw material-natural gas at 
C 
the concessional rate of tax against Form Ill B - Manufacture of 
notified goods-fertilizers out of the purchases of natural gas 
purchased - Transfer of finished goods outside the State of UP -
Imposition of penalty by the Revenue since .. the assessee made stock 
transfer of the goods in violation of ss. 3B and 4B(2) - In appeal,. 
tribunal held inf av our of assessee - High Court upheld the said 
order - On appeal, held: Tribunal rightly held that the trader· was 
authorized to purchase the natural~ gas for the manufacture of . 
fertilizer and had manufactured fertilizer by utilizing the natural 
D 
gas purchased against the issue of Form JJI-B; and that no action 
can be taken u/s. 3-B on the ground that the products utilizing the 
natural gas purchased against the issue of Form JJI-B were sent 
through stock transfer without selling those directly, because s. 4-B 
cannot be extended to determine the responsibility uls.3-B - Section 
4B has nothing to do with the fact that how notified goods are to be 
disposed of because s. 3B is not applicable in case the raw material 
is used for production of the notified goods mentioned in the 
recognition certificate - Section 3B would apply when a false and 
wrong certificate or declaration is made - Order passed by the 
tribunal was upheld by the High Court and is justifiable and does 
not call for any interference. 
Dismissing the appeal, the Court 
HELD: 1.1 Sub-section (2) to Section 4-B of the U.P. Trade 
Tax Act, 1948 requires ·that the notified goods should be 
"intended" to be sold by the dealer within the State or in the 
course of inter-State trade or commerce or in the course of 
851 
E 
F 
G 
H 
852 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016) 5 S.C.R. 
exports out of India. The expression "intended" is significant 
and important. It refers to the intention of the dealer after the 
goods are manufactured and packed. The expression "in the 
course inter-State trade or commerce" is quite broad and wide. 
Sub-section (6) is a specific provision which deals with the case 
of the dealer who has been issued the recognition certificate and 
has purchased goods without payment of tax or at concessional 
rates, but has sold the manufactured goods or packaged goods 
otherwise than by way of sale in the State, or in the course of 
inter-State trade or commerce or export out of India. The 
provision specifically deals with cases where the dealer 
manufactures or packs the notified goods and has taken benefit 
of lower/concessional or nil rate of tax on the raw material but is 
unable to fulfill the intendment. In such cases, the dealer is liable 
to pay the amount of difference on the amount of sale or purchase 
of such goods on which concession or nil rate of tax was paid on 
account of issue of the requirement certificate and the amount of 
tax calculated@ 4%. The sub-section is a particular and a specific 
section which deals with and specifies the consequences when 
the dealer is unable to meet and comply with intendment. The 
sub-section (6) would, thus, be applicable. [Para 17] [863-B-G] 
1.2 Section 3-B undoubtedly commences with a non-
obstante clause, but the provision has to be read harmoniously 
with sub-section (6) to Section 4-B. Any other interpretation would 
make sub-section (6) a dead letter, for if the plea of the Revenue 
whenever there is violation or failure to abide with the 
"intendment" is accepted, Section 3-B would be invoked and 
applied, not sub-section(6) to Section 4-B. Section 3-B would apply 
when a false and wrong certificate or declaration is made. Sub-
section (6) on the other hand, deals with cases where the dealer 
is unable to comply with the intendment, i.e., for some reason he 
is unable to sell the goods within the State, export them or sell 
them in the course of inter-State trade or commerce. Intendment 
of the said na 111 re has not been treated as false or wrong 
declaration as consequences have been prescribed in sub-section 
(6). It is essential to be stated that consistency and certainty in 
tax matters is necessary. In cases relating t

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