State Of U.P. And Others vs M/S. P.N.C. Construction Co. Ltd. & ...

The Supreme Court held that the circulars issued by the Commissioner, Trade Tax, U.P. on 17.1.2001 and 23.2.2001, which restricted the purchase of raw materials for road construction against Form No.3B, were invalid as they contradicted the earlier recognition certificate granted under Section 4-B of the U.P. Trade Tax Act, 1948. The Court established that the raw materials used in works contracts constituted 'deemed sale' under Article 366(29A) of the Constitution, entitling the assessee to a concessional rate of tax. Consequently, the Court upheld the Tribunal's decision and directed the issuance of the recognition certificate to the assessee for the purchase of raw materials at a concessional rate.