STATE OF U.P. & ANOTHER versus HAJI ISMAIL NOOR MOHAMMAD & CO.

Citation: [1988] SUPP. 1 S.C.R. 261 · Decided: 09-05-1988 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

Judgment (excerpt)

STATE OF U.P. & ANOTHER 
A 
v. 
HAJI ISMAIL NOOR MOHAMMAD & CO. 
MAY 9, 1988 
[R.S. PATHAK, C.J. AND M.N. VENKATACHALIAH, J.] 
B 
U.P. Sales Tax Act, 1948/U.P. Sales Tax Rules, 194S.Sections JD 
and 4B/ Rule 25A (5)-Tax-Special relief to dealer holding recognition 
certificate -Date of actual issue of certificate immaterial-Dea/er to be 
in possession of certificate at assessment. 
The respondent "dealer" registered under the U .P. Sales Tax 
Act, 1948 was carrying on the business of manufacture of oils from 
groundnuts and other oil seeds, and was under section 3-D .of the Act, 
liable to purchase-tax on oil seeds at 3% ad valorem on the turnover of 
its purchases from ihe cultivators or other unregistered dealers. Section 
c 
4-B of the Act contemplated special reliefs in purchase-tax to certain 
D 
manufacturers of 'notified goods', if the "dealer holds a recognition-
certificate issued llllder sub-section (2) in respect thereof''. Sub•rnle (5) 
of Rule 25-A of the U.P. Sales Tax Rules, 1948, however, stipulated that 
a 'recognition-certilicate' issued for purposes of Section 4-B of the Act 
''shall take effect from the date of its issue." 
On 10.2.1969 the State Government notified oils of all kinds to be 
"notified goods" for purposes of section 4-B entitling the dealer to a 
concessional rate of purchase tax at 2% on the raw material required t"or 
E 
the manufacture of the "notified goods". On 21.3.1969, respondent 
applied under section 4-B(2) for the grant of a recognition certificate, 
which was granted only on 5.12.1969. The relief to the respondent in 
F 
the form of concessional rate of purchase tax was accordingly confined 
and limited to the turnover of such rrrst-purchases made only after 
5.12.1969, the date of issue of the recognition certificate. 
In the writ petition filed by the respond~nt, the Full Bench of the 
Allahabad High Court, by majority, accepted its contention I.bat the 
G 
clause in sub-rule (5) of Rule 25-A regarding the effective date of the 
recognition certificate was at cross-purposes with and did not carry out 
the objects of Section 4-Band was therefore, ultra-vires section 4-B. The 
High Court held that the requirements of section 4-B were substantially 
complied with if the dealer, at the time of assessment, held a recognition 
certif!cate, subject to the requirement that the turnover was after the date 
of the application. 
261 
H 
262 
SUPREME COURT REPORTS 
[ 1988] Supp. 1 S.C.R. 
A 
Before this Court the Revenue contended that the interpretation 
placed by the High Court runs•in the teeth of the express statutory 
language and the clear intendment of the provision tba.t the dealer 
should bold the 'recognition certificate' at the time ortbe purchases. 
B 
c 
Dismissing the appeal, it was, 
HELD: (1) There is nothing basically wrong in the approach of 
the High Court that the statutory laiiguage does not insist upon the 
contemporaneity of the holding of the certificate with the purchases and 
that ii was sufficient if the dealer, subsequently, came to hold a certi-
ficate "in respect thereor'. (2670-E I 
' 
(2) To insist upon a contemporaneity would amount to qualifying 
the word 'bolds' in section 4-B by adding the words "at the time of the 
purchases". [267E) 
(3) The words "in respect thereor• are "colourless words", but 
D 
in section 4-B they are, in their reference to the certificate, sufficiently, 
though non-specifically, wide enough to include a certificate obtained 
later but pertaining to the turnover in question. [267F-G I 
(4) The rule which compels only its prospective operation might, 
not unreasonably, be held to be inconsistent with the ultra vires of 
E 
section 4-B. There is nothing unreasonable in this construction of sec-
tion 4-B. Indeed, by the 1978 Amendment, this position has been made 
\• 
clear in the rule itself, which after the amendment, expressly provides 
that the certificate will take effect from the date of the application made 
by the dealer and not merely from the date of the issue. [267G-H; 268Al 
F 
Trustees v. !RC., (1946) 174LT133, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 768 
(NT) of 1975. 
From the Judgment and Order dated 3.1.1973 of the Allahabad 
(} 
High Court in Writ Petition No. 4225of1971. 
S.C. Manchanda and A.K. Srivastava for the Appellants. 
NEMO for the Respondents. 
H 
The Judgment of the Court was delivered by 
STATE OF U.P. v. HAJJ ISMAIL [VENKATACHALIAH, J.] 
263 
VENKATACHALIAH, J. This appeal 

Excerpt shown. Read the full judgment & AI analysis in Lexace.