Law: Income tax Act (XI of 1911)

Section: 2(12),4(a)

Law: Sales Tax Act (III of 1951)

Section:

(NOTE:Wrongly 2 citations added in PLD.Both are mentioned.)   Sales Tax Act (III of 1951), Ss. 2(12) & 4(a) and Sales Tax Rules, 1951, r. 16-"Partly manufactured goods". Definition-Expression "article which is subject to the tax" in S. 2(12)-To be taken due notice of-Rule 16 consistent with S. 4 (a) and not ultra vires-"Batching oil" used in manufacture of jute goods exported to foreign countries-Not "partly manu factured goods"-Such oil used for jute goods sold in Pakistan and being subject to tax constitutes "partly manufactured goods" and is therefore exempt from tax.   Dates of hearing: 11th and 24th August 1965.   JUDGMENT   A. S. CHOWDHURY, J.-The following questions have been referred to this Court under section 17 (1) of the: Sales Tax Act (hereinafter called the Act) for its determination:   "(1) Whether the Appellate Tribunal was justified in holding that the rule 16 is repugnant to section 4 (a) end that the certificate prescribed under rule 16 is ultra vires and has no legal effect in controlling the operation of section 4 in view of the definition of "partly manufactured goods" in section 2 (12)?   (2) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the appellant (assessee) is entitled to the refund under section 27?"   The facts out of which the present reference arises, briefly stated, are as follows: The Assessee Messrs Amin Jute Mills Ltd. is a licensed manufacturer of jute goods and purchased batching oil from B. O. C., I. C. I. Ltd. and others on payment of sale tax at the time of purchase. It is stated that batching oil is used to produce the finished jute goods. Before the Sales Tax Officer the assessee claimed refund or adjustments on account of the sales tax paid on the partly manufactured goods purchased from the said firms. The reference is with regard to the assessment order for the years 1956-57, and 1957-58.   On a reference to the assessment order for' the year 1956-57, it is found that Sales Tax Officer reached the conclusion that 31.5 % of the total…