STATE OF U.P. AND ORS. versus M/S. P.N.C. CONSTRUCTION CO. LTD. & ORS.

STATE OF U.P. AND ORS. versus M/S. P.N.C. CONSTRUCTION CO. LTD. & ORS.

Withdrawal of recognition certificate and issuance of show cause notice based on Commissioner’s circulars was erroneous and contrary to the Act and Constitution, as Hot Mix is a notified item and purchase of raw materials for its manufacture in execution of works contract constitutes ‘goods’ and ‘deemed sale’. The assessee is entitled to concessional rate under Section 4B(2).

Parties
Appellant: State of U.P.; Respondent: M/s. P.N.C. Construction Co. Ltd.
Jurisdiction
India
Judgment Date
08 August 2007
Procedural Posture
Civil Appeal / Final Judgment
Outcome
appeal dismissed
Legal Topics
Works Contract, Sales Tax, Recognition Certificate, Deemed Sale, Value Addition
Constitutional Law Tax Law Works Contract Sales Tax Recognition Certificate Deemed Sale Value Addition

Case Brief

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Parties

State of U.P.

Appellant

M/s. P.N.C. Construction Co. Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Judgment

Legal Issues

  1. 1 Whether withdrawal of recognition certificate for purchase of raw materials at concessional rate for works contract was justified under the U.P. Trade Tax Act, 1948 in light of Article 366(29A)(b) of the Constitution of India
  2. 2 Whether raw materials used for manufacture of Hot Mix in road construction constitute 'goods' and 'notified goods' under the Act entitling the assessee to concessional rate

Ratio Decidendi

Withdrawal of recognition certificate and issuance of show cause notice based on Commissioner’s circulars was erroneous and contrary to the Act and Constitution, as Hot Mix is a notified item and purchase of raw materials for its manufacture in execution of works contract constitutes ‘goods’ and ‘deemed sale’. The assessee is entitled to concessional rate under Section 4B(2).

Court Disposition

appeal dismissed

Orders

  • Civil appeals filed by the State dismissed.
  • High Court's order setting aside show cause notice and withdrawal of recognition certificate affirmed.