JUDGMENT
1. The petitioner manufactures and sells exhaust fans, water lifting pumps and ceiling fans. The assessment years involved are 2001-02 to 2004-05. The challenge in this writ petition is to reassessment proceedings under Section 21(2) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act). Admittedly, the petitioner has sought exemption from trade tax on the items 'manufactured' and sold by the petitioner treating them to be covered by item No. 17 of the U.P. Exemption Notification dated 31.8.1985 issued under Section 4(b) of the Act. The said Item reads as follows:
Blacksmithy (manufacturing and servicing not involving the use of power; power may be used in case of manufacture of Amber Charkhas and their accessories).
2. There is a subsequent Notification dated 1.10.1994 under Section 4(c) of the Act in which Item No. 8 replaces Item No. 17 and the said Item reads as follows:
Blacksmithy and carpentry (manufacturing and servicing involving use of power upto 10 horse power).
3. Another Notification under Section 4(c) dated 5.10.1995 has also been referred to in the impugned orders in respect of its Entry No. 39, which mentions "electronic goods". The electronic goods specified in Item No. 39 has been modified to read "electronic and electronic made goods, which is used by consumer directly". This modification of the Entry 39 has been done by U.P. Government Notification dated 30.9.2004.
4. The petitioner relies upon a circular dated 4.1.1992 issued by the Khadi and Village Industries Commission (hereinafter referred to as KVIC for short), in which ceiling fans and exhaust fans are mentioned in Item No. 221. A copy of the circular has been enclosed as Annexure 6 to this writ petition.
5. It may be made clear at the very outset that exemption from trade tax is not within the domain of KVIC, therefore, the circular dated 4.1.1992 can not be utilised for determining whether the items in question manufactured by the petitioner are or are not exempt from trade tax.
6. Items will be exempted from trade tax only if they are covered by any of the exemption notifications issued by the U.P. Government.
7. In this context, we may further mention the reliance placed by the petitioner upon a Notification issued by the Commissioner, Trade Tax, U.P. dated 19.1.2000, enclosed as Annexure S.A. 1 to the supplementary affidavit. According to the petitioner's argument, this Notification exempts all items for the manufacture of which a unit has been certified by the KVIC. The contention is misplaced. Firstly, the Notification does not say so. In fact, the Notification says that the Assessing Authority should not exempt those items for which the unit has not been certified by the KVIC. Secondly the Commissioner Trade Tax, does not have the power under the Act to grant exemption from trade tax. Exemption can be granted only by the U.P. Government under Section 4 of the Act.
8. Therefore, what has to be examined is whether the items in question "manufactured' and sold by the petitioner are covered under any entry of any of the exemption Notifications issued by the State Government which have been referred above.
9. The petitioner claims that the exhaust fans, ceiling fans and water lifting pumps all of which are electrical goods are covered by the item "Blacksmithy". The petitioner places heavy reliance upon the decision of a learned single Judge of this Court in the case of Multani Gramudyog Vikas Sanstahan, Bijnor v. Commissioner of Sales Tax reported in 1995 UPTC 914. The particular passage of that decision relied upon is paragraph 6 of that law report which says that the Tribunal's view that Item No. 17 would cover very small instruments is not correct. The size of instruments manufactured by the process of Blacksmithy is not relevant as no such restriction about size has been placed by the exemption Notification. The learned single Judge in that passage further says that even huge things like Howrah Bridge will be covered under Item No. 17 if it is manufactured by the process of Blacksmithy without the use of power.
10. The learned single Judge was examining the case of the manufacture of agricultural implements and certain items used in kitchen such as tava, karhai, etc. The Tribunal had said that kitchen instruments and agricultural implements would not be covered under Item No. 17 as that item covers very small instruments. Whether Howrah Bridge would be covered or not covered by the Item No. 17 was not an issue before the learned single Judge and, therefore, the observation to that effect is merely obiter and if we may say so rather too wide. It is also obvious that the Howrah Bridge could not have been constructed without the use of power. We, therefore, decline to hold that the observation about Howrah Bridge in that judgment is a ratio of the decision of the learned single Judge.
11. Blacksmithy has not been specified either in the exemption Notification or in any other decision placed before us.
12. Understanding the word 'Blacksmithy' as in common parlance would mean the objects which are normally manufactured by a Blacksmith. We have no hesitation in saying that the exhaust fans, ceiling fans and water lifting pumps are not manufactured by Blacksmiths. Learned Counsel for the petitioner has argued that some parts of these electrical goods are or can be manufactured by a Blacksmith. The argument is misconceived. What is taxed under the U.P. Trade Tax Act unlike Central Excise is not the "manufacture" but the "turnover of sales" of the finished products. The sale in this case is not of the individual parts but is of the manufactured or assembled exhaust fans, water lifting pumps and ceiling fans as a whole.
13. We, therefore, hold that these items are not covered by Entry No. 17 or Entry No. 8 of the Notifications dated 31.1.1985 and 1.10.1994 respectively.
14. So far as the Entry No. 39 of Notification dated 5.1.1995, with or without its modification by the Notification dated 30.9.1994, is concerned it is confined to "electronic goods". Exhaust fans, ceiling fans or water lifting pumps are not "electronic goods" but are "electrical goods" and, therefore, will not be covered under Entry No. 39.
15. No other entry has been shown to us which could possibly cover these three items manufactured and sold by the petitioner and, therefore, the view taken by the Additional Commissioner that these items would not be exempted from trade tax appears to be justified.
16. There is yet another reason given by the Additional Commissioner namely that the items are not being "manufactured" by the petitioner but are merely being "assembled", and that the exemption is confined to items which are "manufactured" by the dealer. However, in view of what has been stated above, it is not necessary to go into this question at this stage.
17. In this view of the matter, the writ petition does not call for any interference, and is accordingly dismissed.