M/S M.J. TIMBER MERCHANT & COMM. AGENT vs STATE OF U.P .

The Supreme Court reversed the Allahabad High Court's decision in Bharat Timber vs. State of U.P., holding that the Commissioner's circular regarding tax liability under Section 2(ee) of the Uttar Pradesh Tax Act was indefensible. The Court established that the circular could not create tax liability as it misinterpreted the definition of 'manufacturer' and failed to consider factual determinations necessary for such classification. Consequently, the Court ruled that the High Court's dismissal of the writ petition was erroneous, leading to the quashing of the circular.