Law: Sales Tax Act, (III of 1951)

Section: 2(11),3(6),3(6)(c),8(2)

Sales-tax Act, 1951 -- Sections 3(6), 8(2) -- Notification No. 10 dated 27th June 1951 --Computation of taxable 'turnover' -- Whether manufacturing charges of goods manufactured out of raw material supplied by others includible in gross turnover -- ORDER SYED ALI KHAN (PRESIDENT).-- These three appeals arise out of the appellant's Sales-tax assessments made, respectively, for the three quarters ending the 31st March, 1952, and all the quarters of 1952-53 and 1953-54. 2. The assessee is a manufacturer of hollow tins used as containers of oil, ghee etc. He manufacturers such tins out of his own material and also manufactures for other parties who supply the raw materials. In the relevant year of account the assessee manufactured goods on behalf of (1) G(2) C and (3)3. 3. In the first year the assessee's sales of own goods amounted to Rs.7,245. In addition he received manufacturing charges amounting to Rs.18,450 in respect of goods made for others and out of material supplied by such others. In the present year the limit of turnover which was exempt from tax was Rs.25,000. For purposes of assessment, the Sales-tax Officer clubbed together two sums which gave an aggregate of Rs.25,695 although he levied tax on Rs.7,245 only. In other words, the assessee's gross turnover was taken to be Rs.25,695. Likewise, for the second year the sales of own goods amounted to Rs.15,222 and the manufacturing receipts amounted to Rs.58,976. The total turnover thus came to Rs.74,198 but sales-tax was levied on Rs.15,222 only. In the third year the sales of own goods came to Rs.7,603 and the manufacturing charges-aggregated Rs. 86,541. For purposes of assessment the turnover was taken to be the total sum of Rs.94,144 and whereas the Sales-tax Officer levied tax on Rs.7,603 only, the Appellate Assistant Commissioner enhanced the assessment and tax the whole amount of Rs.94,144. For the latter two years the limit of total non-taxable income was Rs.36,000. 4. It is contended on behalf of the assessee that the manufacturing charges which the assessee received in respect of goods manufactured out of materials supplied by other parties, do not constitute turnover and should not, therefore…

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