Judgment – Both these Sales Tax Revisions have been filed against the judgment and order dated 27-9-1990, passed by the Sales Tax Tribunal, Bench Haldwani. As both the revisions arise from the same judgment and order, hence are decided by this common judgment. 2. Brief facts of the case are that the respondent SIS Jindal Solvent Extraction, Kashipur is a dealer, deals in Rice Brand Oil, Soabeen Oil, Deoiled Cake, etc. 3. In C.R. No. 21/2003, the controversy relates to the sales tax of the year 1981-82. For the assessment year 1981-82, the taxable turnover was for Rs. 70,67,820=72 P. Hence a sum of Rs. 2,78,747=40 P. was deposited towards sales tax. The O.P. claimed exemption on Rs. 3,03,639/- regarding the sale made against Form No. 3-Kha. The Assessing Authority rejected the claim of the dealer/O.P. on various grounds given in the assessment order contained as Annexure-1 with the revision. The Assessing Authority accordingly fixed the taxable turnover at Rs. 74,26,480/- and tax at Rs. 2,97,104=64 P. 4. In C.R. No. 22/2003, the controversy relates to the sales tax of the year 1982-83. For this assessment year the taxable turnover was for Rs. 1,53,92,173/- and a sum of Rs. 6,15,618/- was deposited towards sales tax. The O.P. claimed exemption on Rs. 1,27,624/regarding the sale made against Form No. 3-Kha. The Assessing Authority rejected the claim of the dealer/O.P. on various grounds given in the assessment order contained as Annexure1 with the civil revision. The Assessing Authority accordingly fixed the taxable turnover at Rs.1,60,54,687/- and tax at Rs. 6,42,187=48 P. 5. Against the aforesaid assessment orders, the dealer/opposite party went in the first appeal, U/S 9 of the U.P. Sales Tax before the Deputy Commissioner (Appeals) Sales Tax. The first appellate authority upheld the orders passed by the Assessing Authority and dismissed the appeals. 6. Feeling aggrieved by the order of the first appellate court, the dealer/opposite party preferred the second appeals U/S 10 of the U.P. Sales Tax Act before the Tribunal. The Tribunal allowed the appeals holding that the assessing authority had no jurisdiction to interfere on Form No. 3-Kha issued by the another dealer and more so it is not mentioned in the Form 3-Kha that only concessional rate shall be applicable in their cases, as such the dealer was entitled for having full tax exemption. 7. The Tribunal allowed the appeals holding that the assessing authority had no jurisdiction to interfere on Form No. 3-Kha issued by the another dealer and more so it is not mentioned in the Form 3-Kha that only concessional rate shall be applicable in their cases, as such the dealer was entitled for having full tax exemption. 7. The Trade Tax Department preferred the revisions before the Allahabad High Court against the impugned order dated 27-9-1990 passed by the Tribunal. The revisions have been transferred to this court after creation of the separate State for disposal. 8. This court while admitted the revisions vide order dated 30-7-2004 framed following questions of law in C.R. No. 21/2003 :1) Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal was legally justified to allow full exemption u/s 48 of the U.P. Trade Tax Act for sales made to manufacturers? 2) Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal was legally justified in holding that no tax could be realized from the selling dealer if the purchasing dealer had issued - wrong declaration in Form 3-Kha despite the fact that the exemption could only be granted if it is provided that the dealer was entitled for exemption u/s 12Aof U.P. Trade Tax Act ? 9. In C.R. No. 22/2003 the following questions of law were framed :1) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in granting total exemption of tax despite the fact it was already recorded on the Form No. 3-Kha for Rs. 20,270/- that only concessional rate of tax shall be applicable to the purchaser of goods ? 2) Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal was legally justified to allow full exemption u/s 48 of the U.P. Trade Tax Act for the sales made to the manufacturer? 1 0. Heard learned counsel for the parties and perused the record. 11. The record reveals that in the present case the dealer / O.P. sold oil to certain parties of the State who were holding recognition certificate. 1 0. Heard learned counsel for the parties and perused the record. 11. The record reveals that in the present case the dealer / O.P. sold oil to certain parties of the State who were holding recognition certificate. Therefore, the main dispute in this case is that the goods so purchased from the dealer were fully exempted or the tax was payable at concessional rate on such sales by the O.P./dealer to the parties holding recognition certificate. 12. The O.P./dealer of such sales treated as full exempt, whereas the entire sales were governed by the No. ST-II-7551/X-9(21)-75-U.P.ActXV/48-0rder-76 dated 31st December, 1976, published in U.P. Gazette Extraordinary, dated 31 December, 1976, which reads as follows: "In exercise of the powers under Section 4B of the U.P. Sales Tax Act, 1948 (U.P. Act No. XV of 1948), read with Section 21 of the U.P. General Clauses Act, 1904 (U.P. Act No.1 of 1904) and in super session of Government Notification No. ST-II2958/X-9(1) /76, dated May 20,1976 (S.No. 169), the Governor is pleased to order that, with effect from January 1,1977 and subject to the conditions and restrictions specified in the said section 4-B:(1) No tax shall be payable on the sale to or, as the case may be, purchase by a 'new unit' in respect of 'raw materials' required by it for use in the manufacture of the goods mentioned in Annexure I or for the packing of the said goods manufactured by it, for a period of five years from the date of starting production, if the new unit is established in the District mentioned in Annexure II and for a period of three years from such date if it is established in the remaining Districts of the State: Provided that the date of starting production does not fall later than the first day of January 1979. (2) No tax shall be payable on the sale to or, as the case may be, purchase by any unit in respect of 'raw materials' required by it for use in the manufacture of the goods mentioned in Annexure III or for the packing of the said goods manufactured by it; (3) In the case of any unit other than those referred to in clauses (1) and (2) above, but not including Distilleries, Breweries and units engaged in the manufacture of paper, catechu (Kattha), matches, empty match-boxes, match-splints and match-veneers, tax shall be leviable on the sale to or, as the case may be, purchase by the said units of "raw materials" required by it for the manufacture or packing of goods manufactured by it at the concessional ratesinclusive of additional tax, if any, payable under section 3-F of the said Act of 1948, indicated below: (a) Oilseeds as defined in section 14 of the Central Sales Tax Act, 1956 (Act 74 of 1956) 2 per cent. (b) Oil Cake 3 per cent. (c) Any other 'raw material' 4 per cent. Provided that no concession under this notification shall be admissible in the turnover of goods manufactured by the unit is exempt under clause (a) or (b) of Section 4 of the said Act of 1948. . Explanation 1- 'New Unit' means a factory or workshop using machinery, or accessories or components thereof, not already used or acquired for use in any other factory or workshop in Uttar Pradesh but does not include any factory or workshop established on the site of an existing factory or workshop manufacturing the same goods or any addition to or extension of an existing factory or workshop. Explanation 11- 'Date of starting production' means the date on which any raw-material rendered for use in the manufacture or packing of the notified goods is purchased for the first time. ANNEXURE – 'I' List of Notified goods referred to in clause (I) : 1- Oil Engines and Oil Expellers. 2- Power tillers. 3- Refractories. 4- Radios. 5- Gramophones. 6- Television Sets. 7- Plastic Products. 8- Hospital Equipment and Surgical Instruments, Needles and Syringes. 9- Scientific and Professional Instruments. 10- Tyres and Tubes. 11- Electric Motors of more than 7.5 Kw. Rating. 12- Chemicals, including industrial explosives, Nitric acid, Sulphuric acid and Stable-Bleaching Powder. 13- Perfumery. 14- China Potteries. 15- Sewing Machine Needles. 16- Sewing Machine. 5- Gramophones. 6- Television Sets. 7- Plastic Products. 8- Hospital Equipment and Surgical Instruments, Needles and Syringes. 9- Scientific and Professional Instruments. 10- Tyres and Tubes. 11- Electric Motors of more than 7.5 Kw. Rating. 12- Chemicals, including industrial explosives, Nitric acid, Sulphuric acid and Stable-Bleaching Powder. 13- Perfumery. 14- China Potteries. 15- Sewing Machine Needles. 16- Sewing Machine. 17 - Transformers. 18- Electronic Equipment. 19- Pumps and Compressors. 20- Soap and other Synthetic detergents. 21- Boiled and stand oils, synthetic resins And printing inks. 22- Drying oil products, viz. oil-cloth. 23- Lubricants and greases. 24- Scooters. ANNEXURE - 'II' List of Districts: (1) Almora (2) Azamgarh (3) Bahraich (4) Ballia (5) Banda (6) Barabanki (7) Basti (8) Badaun (9) Bulandshahr (1 0) Chamoli (11) Deoria (12) Etah (13) Etawah (14) Faizabad (15) Farrukhabad (16) Fatehpur (17) Garhwal (18) Ghazipur (19) Gonda (20) Hamirpur (21) Hardoi (22) Jalaun (23) Jaunpur (24) Jhansi (25) Lalitpur (26) Mainpuri (27) Mathura (28) Moradabad (29) Pilibhit (30) Pithoragarh (31) Pratapgarh (32) Raebareli (33) Rampur (34) Shahjahanpur (35) Sitapur (36) Sultanpur (37) Tehri Garhwal (38) Unnao (39) Uttar Kashi. ANNEXURE - 'III' List of Notified goods referred to in clause (2) : 1- Bicycles, Tricycles, perambulators, and accessories and parts thereof. 2- Glass and glass ware including optical glass in all form. 3- Oils extracted by solvent extraction process. 4- All kinds of packing materials including cases and containers. 5- Rubber and rubber products. 6- Pencils. 7- Paints, varnishes, enamels, thinners and allied surface casting products and constituents thereof. 8- Vitreous enameled products. 9- Pressure cookers and parts thereof. 10- Sports goods including Sports Shoes and Play Field and Gymnasium equipments. 11- Iron and Steel as defined in Section 14 of the Central Sales Tax Act, 1956. 12- All kinds of batteries and their parts. 13- Electric furnace, and their parts and accessories. 14- (A) Lighting Fixtures for use with Bulbs, Tubes or Mercury Vappur Lamps but excluding : (i) Bulbs, tubes or mercury vappur lamps. (ii) Wooden boards, switches, external writing and all other wiring material like buttons, cleats, clips etc. (B) Accessories of lighting fixtures namely Chokes, starters, starter seats holders, and condensers for power factor correction. 15- Measuring and controlling equipment and photo electric cells, heating elements resistance wires regulators and gauge for measuring equipments. 16- X-ray, infra-red and High frequency equipment and their component parts for medical and industrial application. (B) Accessories of lighting fixtures namely Chokes, starters, starter seats holders, and condensers for power factor correction. 15- Measuring and controlling equipment and photo electric cells, heating elements resistance wires regulators and gauge for measuring equipments. 16- X-ray, infra-red and High frequency equipment and their component parts for medical and industrial application. 17- Raxine, linoleum and flecked, velvety or suede type plastic cloth. 18- Tooth powder and tooth paste. 19- Small tools, cutting tools, portable power tools and other workshop tools. 20- All kinds of buttons. 21- Canvas shoes. 22- Electric switchgear and motor starters. 23- Miniature and auto bulbs. 24- Hosiery products. 25- Fountain pens, ball pens, artist pens." 13. The aforesaid Notification thus clearly shows that no tax shall be payable on the sales to or purchase by a new unit in respect of the 'raw material' required by it for use in the manufacture of the goods mentioned in Annexure-I to the aforesaid Notification. But there is a proviso that such exemption would be only with the condition that if the date of production does not fall later than 1-1-1979. 14. In the present case the record reveals that the date of production is well after 11-1979 and therefore, the total exemption from the tax envisaged by clause-I of the Notification is not available to the dealer/O.P. and he is only entitled for partial exemption under clause 3(c) of the Notification, which provides 'in other raw material taxable @ 4%'. 15. This case is covered by the provisions of Section 4-B of the Trade Tax Act which deals with the specific relief to certain manufacturer. In the instant case the' provision of Section 4-B(b) of the Act is attracted which deals a case where the manufacturer holding recognition certificate for purchasing raw-material, purchases raw-material whether such material is fully exempt or partially exempt, meaning thereby that he can purchase raw-material without paying tax (exempt) or at concessional rate as may be notified in the gazette by the State Government in that behalf. Therefore, the exemption is subject to the notification and it cannot be said that merely by holding a recognition certificate the goods purchased by the manufacturer become fully exempted. The exemption wholly or partially, does not flow from the recognition certificate, but the notification published in the gazette by the State Government in that behalf. Therefore, the exemption is subject to the notification and it cannot be said that merely by holding a recognition certificate the goods purchased by the manufacturer become fully exempted. The exemption wholly or partially, does not flow from the recognition certificate, but the notification published in the gazette by the State Government in that behalf. The recognition certificate is merely a prerequisite condition to qualify for the- exemption either wholly or partially, but the exemption is not founded in the recognition certificate. My view is fortified by the Division Bench decision of Allahabad High Court in the case of Mentha and Allied Products and another Vs. State of U.P. and another reported in Sales Tax Cases Volume-I, 1996 page 317. The Allahabad High Court in an another decision Calcutta Bakers & Confectioners, Allahabad Vs. The Commissioner Trade Tax, U.P. Lucknow reported in (2005) N.T.N. (Volume•27) 193, has further held that the exemption flows from the notification and recognition certificate is merely one of the conditions to be fulfilled. 16. In view of the aforesaid preposition of law, the Sales Tax Tribunal was not legally justified to allow full exemption. U/S 4B of the U.P. Trade Tax Act for the sales made to manufacturer. 17. The Tribunal has further committed an illegality in holding that the sealing dealer has no authority to challenge the validity of the recognition certificate of the purchasing dealer for the form issued by the purchasing dealer to him. The assessing authority in the instant case has neither questioned the authority of the recognition certificate nor has rejected Form No. 3-Kha which prescribed for purchasing the raw material by the party holding recognition certificate. The assessing authority has merely accepted the form and has allowed the exemption partially as per clause 3(c) of the aforesaid notification on the basis of the very fact that the date of starting production being after 1-1-1979 mentioned in the form. 18. The dealer/O.P. claiming exemption from tax has to establish the factual and legal ground for such exemption and it was incumbent upon the assessee to have satisfied himself whether the Form No. 3B issued by the purchaser is for full or partial exemption and to have realized concessional rate of tax, when the date of validity was after 1-1-1979. 18. The dealer/O.P. claiming exemption from tax has to establish the factual and legal ground for such exemption and it was incumbent upon the assessee to have satisfied himself whether the Form No. 3B issued by the purchaser is for full or partial exemption and to have realized concessional rate of tax, when the date of validity was after 1-1-1979. Since the date of starting production is after 1-1-1979, therefore, clause 3( c) of the aforesaid Notification is applicable and the items (raw material-oil) sold at concessional rate of 4% and not fully exempt. The learned Tribunal was also not legally justified in holding that no tax could be realized from the selling dealer if the purchasing dealer had issued wrong declaration in form No. 3-Kha despite the fact that the exemption could only be granted if it is provided that the dealer was entitled for exemption. 19. In view of the aforesaid discussion, it is quite clear that the Tribunal was wrong in granting the full exemption in the present case where the transactions were covered by clause 3(c) of the Notification and merely because of holding recognition certificate, cannot lead to grant full exemption. The notification is binding factor, which has to be followed in letter and spirit. The questions of law framed in these revisions are decided in favour of the appellant and against the dealer / O.P. 20. In view of above, both there visions filed by the department are liable to be allowed and the impugned judgment and order passed by the Tribunal deserves to be set aside. 21. I, accordingly allow both the revisions and set aside the impugned judgment and order dated 27 -9-90 passed by the Sales Tax Tribunal and the judgment and order dated 4- ~ 01986, of the Deputy Commissioner, Sales Tax, Bareilly, passed in Appeal Nos. 95/1985 and 96 of 1985 Jindal Solvent Extraction Vs. Satyendra Kumar, is hereby confirmed. 22. Let a copy of this judgment be placed in the file of S.T.R. No. 22/2003 (Old No. 178/1991 ). * * *