Univeral Polyvinyl Chloride Gramodyog Sansthan vs State of Uttar Pradesh and Others

Heard Sri Bharat Ji Agrawal learned Counsel for the Petitioner and the learned Standing Counsel appearing for the Respondents.

The Petitioner is a registered society manufacturing and selling latex solution. In this connection the State Government issued notification dated 1.10.1994 u/s 4(c) of the U.P. Trade Tax Act. A copy of which is Annexure 2 to the writ petition. By this notification sale of certain products of village industries certified by the All India Khadi and Village Industries Commissions or U.P. Khadi and Village Industries Board were exempted from trade tax. The exemption granted by the notification dated 1.10.1994 was further amended by notification dated 27.2.1997 vide Annexure 6 to the writ petition by which exemption was limited to the turn over of rupees fifty lacs per year. In Item No. 3 (12) of the said notification dated 1.10.1994 an item which was exempted from trade tax was dipped latex and rubber products. Admittedly, the Petitioner is registered with. Khadi Gramodyog Board vide Annexure 1 to the writ petition. The Petitioner was also issued certificates by the Uttar Pradesh Khadi and Village Industries Board vide Annexures 3 and 4 to the writ petition, certifying that it was exempted from trade tax.

It is alleged in para7 of the writ petition that latex solution is a rubber product manufactured from latex raw rubber acquired by the Petitioner on the basis of licence granted by Rubber Board. The manufacturing process for making latex solution is mentioned in para 7 of the writ petition.

The Petitioner is aggrieved by the circular dated 24.9.1993, Annexure 7 to the writ petition, in which it has been stated that latex solution cannot be treated as ''rubber product'' in view of the opinion of the Law Department, vide Annexure 7. The grievance of the Petitioner is that this circular letter interferes with the judicial discretion of the Assessing Authority.

The learned Counsel of the Petitioner has relied upon a decision of this Court rendered in Mercury Laboratories Pvt. v. State of U.P. and Ors.'' reported in 2000 U.P.T.C. 82 in which it has been held that the Commissioner cannot issue such guide line or circular letter since they interfere with the judicial discretion of the Assessing Authority. We are in respectful agreement with the aforesaid decision and hence, we quash the circular letter dated 24.9.1993. Annexure 7 to the writ petition and direct that the appellate authority before whom Petitioner''s appeal is pending shall now decide the appeal in accordance with law ignoring the aforesaid circular letter.

The writ petition is accordingly allowed.