STATE OF UP vs M/S P.N.C.CONSTRUCTION CO. LTD. .

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