Law: Sales Tax Act, (III of 1951)

Section: 2,2(12),27(1)

Sales Tax Act (111 of 1951)---Ss. 2(12) & 27(1) C. B. R. Letter No. C 21 (16) ST/66, dated 10 9 1966 Packing of cotton after ginning in hessian cloth using sutli and bailing hoops-All three items used in packing , held, "being partly manufactured goods" and as such exempted from levy of sales tax in respect of assessment year in question-Instruction issued by C.B.R. through letter No. C 21 (16) ST/66, dated IO 9.1966, held further, though not law but having been followed previously were neither arbitrary nor unreasonable. JUDGMENT NA31R ASLAM ZAHID, J. This Sales Tax Reference relates to assessment years 1958 59 to 1963 64. For the first four years, a refund has been claimed by the assessee under the provisions of section 27 (1) of the Sales Tax Act, 1951, and in respect of the last two years in question, and adjustment had hen claimed. 2. Briefly the facts are that the assessee owns a cotton ginning factory and cotton sales sold by the assessee were subject to sales tax. It is an admitted position that after the cotton had been ginned in the factory of the assessee, the ginned cotton was packed in hessian cloth using "Sutli" and then tied with bailing hoops. The hessian cloth, Sutli and the bailing hoop" were purchased by the assessee from the market and on these items sales tax had been paid by the manufacturer or sellers of the said items. The assessee had claimed refund under section 27(1) of the Sales tax Act on the basis that sales tax on these three items bad already been paid and after their purchase by the assessee the said three items had been incorporated into Ad formed constituent or component part of the cotton bales sold by the assessee which cotton bales were themselves liable to sales tax. A refund/ adjustment was claimed in respect of the sales tax previously paid by on the aforesaid three items. . The Income tax Appellate Tribunal (Karachi Bench Karachi agreed with the contention of the assessee and held that the aforesaid three items were "partly manufactured" good s as defined in section 2(12) of Sale tax" Act and that for the assessment years in question, the assessee was entitled to. refund/adjustment under section 27(1), in the facts…

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