Law: Sales Tax Act, (III of 1951)

Section: 3,7(1),8(2)

(Sales-tax Act (III of 1951)].......Ss 3, 7 (1), 8 (2)-Goods exempted under S. 7 (1) altogether cease to be taxable-Sales of such goods not to be Included in determining 'turnover' of producers' or manufacturers' goods exempted upto a limit under S. 8 (2)­C. B R.'s Notifications No. 7, dated 27th June 1951, made under S. 7 (1), and No. 10, dated 27th June 1951-Interpretation. The tax under the Sales Tax Act, 1951 is levied and collected on the value of the goods, and it goods arc: exempted from sales-tax under section 7 (1) of the Act, as it was done by Notification No. 7, dated 27th June 1951, it follows that they cease to be chargeable to sales-tax, are excluded from the operation of section 3 of the Act, and cannot be considered for charging purposes. The Notification No. 10, dated 27th June 1951, made under section 8 (2), is intended to grant further exemption to a producer or manufacturer whose turnover of unexempted goods does not exceed rupees sixty thousand a year. A contrary inter­pretation leads to anomalous results and has the effect of denying the exemption which has been granted under subsection (1) of section 7, which could not have been the intention of the notifica­tion. JUDGMENT S. A. MAHMOOD, J.-On an application to the Appellate Tribunal Pakistan under section 17 (1) of the Sales-tax Act, 1951, (Act III of 1951), (hereinafter called the Act) the Tribunal has referred the following question to this Court for opinion :- "Whether, in the circumstances of the case, the Tribunal was right in holding that the sales of goods exempted from pay­ment of tax by a notification made under section 7 of the Sales-­tax Act 1951, could not be taken into account for the purpose of determining the `turnover' within the meaning of Notifica­tion No. 10, dated the 27th of June '1951, (as amended by Notification No. 4-S. T., dated the 15th of March 1954), made under section 8 (2) of the Act." 2. We are concerned with the sales-tax for the year 1954-55, in the case of Messrs Agha Textile Mills, Gujranwala, the assessee, who manufactured art-silk yarn cloth with the help of 22 handlooms and six powerlooms. The entire sales of cloth, including those of handlooms for…

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