Law: Sales Tax Act, 1990

Section: 2,2(16),2(33),3,33(4),SixthSched

Law: Central Excise Act, (I of 1944)

Section: 2(25),3

Sales Tax Act (VII of 1990)---Ss. 2(16), 2(33), 3, 33(4) & Sixth Sched.---Central Excise Act (I of 1944), Ss.2(25) & 3---Central Excise Rules, 1944, R.210---Notification S. R.O. No.456(I)/96, dated 13-6-1996---Taxable supply---Polyethylene poly bags, manufacturing of---Respondents were manufacturers of vegetable ghee/oil and authorities issued notices for recovery of sales tax and central excise duty on polyethylene poly bags in which vegetable Ghee/oil was packed---High Court in exercise of Constitutional jurisdiction declared polyethylene poly bags as inseparable part of vegetable ghee and not a distinct product liable to levy of central excise tax and sales tax---Validity---Preparation of pouches/poly bags by converting polyethylene film was a manufacturing process---Word `manufacture' under S.2(25) of Central Excise Act, 1944, included any process incidental or ancillary to the completion of a manufactured product, any process of remanufacture, re-melting, reconciliation or repair and process of packing or repacking such product---Pouches/poly bags manufactured by respondents were capable of being sold in market and it would not make any difference even if conversion of polyethylene bags were manufactured for self or home consumption---Notification S.R.O. 456(I)/96, dated 13-6-1996, issued under S.3 of Central Excise Act, 1944, and Sales Tax Act, 1990, were clearly applicable---Poly bags were put to business use and were not exempt from sales tax under the provisions of S.3 read with Sixth Sched. of Sales Tax Act, 1990---Mere fact that vegetable oil/ghee was exempt from central excise and sales tax would not exclude production/manufacturing of polyethylene poly bags from the ambit of taxable activity. or goods for the purpose of Central Excise Act, 1944 and Sales Tax Act, 1990---High Court took the erroneous view of the matter in treating the manufacturing activity of polyethylene poly bags as an inseparable part of vegetable ghee/oil making and not a distinct product---Judgment passed by High Court was set aside---Appeal was allowed. Commissioner of Sales Tax and others v. Hunza Central Asian Textile and Woolen Mills Ltd. and others 1999 SCMR 526;…

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