Law: Sales Tax Act, (III of 1951)

Section: 17,4,17,2(12),3(6)(d)

Sales Tax Act (III of 1951)---Ss. 4 & 17 read with Ss. 2 (12) & 3 (6) (d) and Notification dated 1st May, 1953 Exemption "Yarn" Ginned cotton used in manufacture of "yarn" exported and "yarn" used in manufacture of cloth exported Held, not exempt from sales tax. 1975 P T D 75; (1974) 29 Taxation 103; (1974) 29 Taxation 44; (1971) 23 Taxation 203; (1965) 11 Taxation 184 and 1980 PTD 17 ref. JUDGMENT G. M. KOUREJO, J. The following questions have been referred to this Court in Sales Tax References Nos. 65 (assessment year 1956 57), 69/72 (assessment year 1959 60) and 71/72 (assessment year 1957 58) under section 17 (1) of the Sales Tax Act : (1) Whether the Tribunal is right in holding that raw material consumed in manufacture of cloth and of yarn is liable to sales tax under the Sales Tax Act, 1951 ? (2) Whether in the facts and the circumstances of the case the Tribunal is right in holding that raw material for the manufacture of cloth exported is yarn and not cotton ? In Sales Tax References Nos. 66/72 (assessment year 1955 55), 67/72 (assessment year 1960-61). And 68/72 (assessment year 1958-59, the following question has been referred: "Whether the Tribunal is right in holding that raw material consumed in the manufacture of yarn exported is liable to sales tax under the Sales Tax Act, 1951." 2. The facts are identical in all the above mentioned references. We, therefore, dispose of them by this common order. 3. The applicant/assessee is a manufacturer of textile goods including yarn and cloth. Some of these goods are exported. In the original assessments the Sales Tax Officer taxed cotton as raw material consumed in the manufacture of exported goods. Subsequently, the assessments were reopened under subsection (2) of section 28 of the Sales Tax Act for revising the value of raw material consumed as it was held to be yarn in respect of cloth exported and ginned cotton in respect of the yarn exported. The matter was taken in appeal before the Appellate Assistant Commissioner, Sales Tax, who dismissed the appeals of the appellate assessee with the result that appeals were filed before the Income tax Appellate Tribunal. The Tribunal also dismissed the…

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