M/S. SHREE BHAGWATI ROLLER FLOUR MILLS versus THE COMMISSIONER OF SALES (TRADE) TAX

Citation: [1997] SUPP. 5 S.C.R. 383 · Decided: 25-11-1997 · Supreme Court of India · Bench: S.C. SEN · Disposal: Dismissed

Judgment (excerpt)

MIS. SHREE BHAGWATI ROLLER FLOUR MILLS 
A 
v. 
THE COMMISSIONER OF SALES (TRADE) TAX 
NOVEMBER 25, 1997 
[SUHAS C. SEN AND M. JAGANNADHA RAO, JJ.] 
B 
SALES TAX: 
U P. Sales Tax Act, 1948-Sections 4-B and 4-A-Exemption on purchase 
tax can be granted only under Section 4-B and not under Section 4-A- C 
Purchase tax on wheat purchased from open market for manufacturing notified 
commodities can not be exempted-Notification dated 18. 7. 79 issued under 
Section 4-B of the Act provides exemption on purchase tax on wheat for the 
roller flour mills only when purchased from FCJ-This pre-condition not 
done away with by any subsequent notification-Notification dated 29././995 
issued under Section 4-A does not have the effect of modifying the notification D 
dt. 18. 7. 79, issued under Section 4-B, as the notification issued under Section 
4-A can not grant exemption on purchase tax. 
The appellant Roller Flour Mills claimed exemption of purchase tax on 
wheat purchased from the open market for manufacturing notified 
commodities. By a Notification dt. 18. 7.1 979 issued under Section 4-B of E 
the U.P. Sales Tax Act, 1948, the Government ofU.P. exempted the roller 
flour mills from paying tax on purchase of wheat for manufacturing of 
notified goods provided the purchase of wheat was made from F.C.I. Another 
notification dated 29.1.85 issued under Section 4-A of the Act provided that 
in respect of any goods manufactured in a new industrial unit, starting F 
production between 1.10.1982 and 31.3.1990, no tax was payable by the 
manufacturer on the turnover of sales for the period specified in the 
notification. 
The appellant contended that the precondition of purchase of wheat 
from FCI contained in notification dt. 18.7.79 was withdrawn by the subsequent 
notification dt. 29.1.1985 and as such the appellant was entitled to exemption G 
on the wheat purchased by it from the open market. The claim as well as the 
appeal was rejected by the Commercial Tax Authority and the Tribunal 
respectively on the ground that the exemption was available only if the 
purchase of wheat was made from the FCI. The appellant made an application 
before the Tribunal for rectification of the appellate order. Tribunal rectified H 
383 
384 
SUPREME COURT REPORTS fl997] SUPP. 5 S.C.R. 
A the appellate order upholding the claim for exemption. The Commissioner 
of Trade Tax filed a revision petition in the High Court challenging the 
rectification order. The High Court set aside the order of rectification. 
Hence this appeal. 
B 
c 
Dismissing the appeal, this Court 
HELD : I. The High Court rightly he!d that unless there was an error 
apparent on record, the Tribunal could not exercise its power of rectification. 
There was no error apparent .on the face of the record of the case. The 
Tribunal revised its order wrongly exercising the power of rectification on 
a highly disputed question of law. [386-DJ 
2.1. The assessee is not entitled for the exemption claimed on the 
wheat purchased from the open market because the notification dated 
18.7.1979, issued under Section 4-B of the U.P. Sales Tax Act, 1948 made 
it absolutely clear that a Roller Flour Mill holding recognition certificate 
could be entitled to exemption from payment of purchase tax on wheat for 
D manufacturing the notified goods, provided the wheat was purchased from 
FCI. This proviso had not been done away with by any subsequent notification. 
Therefore, the appellant is not entitled for the exemption under the notification, 
as admittedly the wheat was purchased from the open market The Commercial 
Tax Officer was clearly justified in disallowing the claim of exemption made 
by the assessee. [387-BI 
E 
2.2. The High Court rightly pointed out that the reliance on the 
notification dt. 29.1.1985 on behalf of the assessee was misplaced because 
it was issued under Section 4-A of the Act. The Government could grant 
exemption to the turnover of a dealer wholly or in part by a notification 
issued under Section 4-A, but could not grant exemption from purchase tax. 
F Therefore, the notification dt. 29.1.1985 did not have the effect of modifying 
the earlier notification dt. 18.7.1979 issued under Section 4-B. It can no way 
override or control the meaning of a notification issued under Section 4-B. 
Therefore, the exemption from purchase tax under Section 4-B could only 
be claimed if the wheat was purchased from FCI .and not from the open 
market. [387-H; 388-AI 
G 
CIVIL APPEL

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