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Judgment
We have heard Sri Bharat Ji Agrawal, learned senior advocate assisted by Sri Piyush Agrawal, learned counsel for the petitioner and Sri S.P. Kesarwani, learned standing counsel for the State-respondent.
Civil Misc. Delay Condonation Application No. 74514 of 2008.
Cause shown for the delay in filing the review application is sufficient. The delay in filing the Review Application No. 74515 of 2008 stands condoned. Application is allowed.
Civil Misc. Review Application No. 74515 of 2008.
By means of this writ petition the petitioner who is a manufacturer and has undertaken expansion, has prayed for quashing of the notices issued by the assessing authority calling upon it to deposit the admitted tax excluding stock transfer from the quantity of base production, in view of decision of Division Bench of this court dated September 28, 2007 in Writ Petition No. 278 of 2004 (Tax) between Ambika Steels Pvt. Ltd. Vs. State of Uttar Pradesh, . The petitioner has further prayed for a writ of mandamus retraining the assessing authority from taking any further proceedings for imposition of taxes in respect of stock transfer which have been included in the quantity of base production for the assessment year 2007-08.
The writ petition was dismissed vide judgment and order dated December 18, 2007 following the decision of Division Bench of this court dated September 28, 2007 passed in Writ Petition No. 278 of 2004 (Tax) between Ambika Steels Pvt. Ltd. Vs. State of Uttar Pradesh, .
Against the aforesaid judgment dated December 18, 2007, the petitioners preferred petitions for special leave to Appeal (Civil) No. 4645 of 2008 before the apex court. The apex court vide order dated March 3, 2008 granted liberty to the petitioners to move the High Court by way of review or by way of I.A. in the matter pending before the Larger Bench, in view of the statement made by the learned counsel for the petitioner that a Division Bench had referred the question of law arising in the said SLP to the Larger Bench vide order dated February 18, 2008. The order of the apex court dated March 3, 2008 is quoted hereinbelow:
We are informed that on February 18, 2008, the Division Bench of the Allahabad High Court has referred the question of law arising in this SLP to the Larger Bench.
In the circumstances, permission is sought to withdraw the SLP with liberty to move the High Court either by way of review or by way of an I.A. in the matter pending before the Larger Bench. Allowed to be withdraw.
It is pursuant to the said order that the present review application has been filed.
Sri Bharat Ji Agrawal, learned senior advocate, has submitted that vide order dated February 18, 2008 passed in a bunch of similar petitions the Division Bench had referred the following questions of law to be answered by a Larger Bench (page 19 in 36 VST):
Whether the view taken by the Division Benches of this court in Ambika Steels Pvt. Ltd. Vs. State of Uttar Pradesh, and IFFCO''s case (Writ Petition No. 1715 (Tax) of 2007 decided on December 16, 2007--Allahabad High Court) with regard to the interpretation of clauses 1(B) and 7(a) and 7(b) of the notification dated March 31, 1995 is in conflict with the decision of the Supreme Court in Commissioner of Trade Tax, U.P., Lucknow Vs. Modipan Fibres Company, , and consequently requires reconsideration?
Sri Agrawal has further placed before the court the judgment of the Full Bench dated October 27, 2010 ( Hindustan Lever Limited Vs. State of U.P. and Others ). The Full Bench recorded its conclusion in the following terms (page 32 in 36 VST):
Conclusion
In view of the foregoing discussion, we are of the view that under the notification No. 640 dated February 21, 1997 the unit undergone expansion is entitled for the exemption on the turnover of the ''quantity'' in excess of the ''quantity of base production'' plus stock of the base production of the previous years. The base production includes the quantity of the stock transfer/consignment transaction.
In view of the above, we are of the considered opinion that the view taken by the Division Bench in the case of Ambika Steels Pvt. Ltd. Vs. State of Uttar Pradesh, and in the case of IFFCO Ltd. v. State of U.P. (Writ Petition No. 1715 (Tax) of 2007 decided on December 16, 2007--Allahabad High Court) does not lay down the correct law and as such both the aforesaid decisions stand overruled.
The reference is answered accordingly.
Let this judgment be placed before the appropriate Division Bench for the disposal of individual writ petition in the light of the law laid down as above.
As the Larger Bench has specifically overruled the judgment dated December 16, 2007 passed in the present case, referred to as the case of IFFCO Ltd. v. State of U.P. (Writ Petition No. 1715 (Tax) of 2007 decided on December 16, 2007--Allahabad High Court) therein, the present petition deserves to be decided in terms of the decision taken by the Larger Bench.
Accordingly we allow the review application and recall the judgment and order dated December 16, 2007. The writ petition is allowed. The impugned notices dated October 23, 2007 and November 17, 2007, annexures 12 and 14 to the writ petition are hereby quashed. The assessing authority will decide the proceedings afresh in accordance with the law laid down by the Larger Bench referred to above ignoring the view taken in the circular dated January 25, 2003 and the directions contained therein.