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THE COMMISSIONER, SALES TAX, U.P., LUCKNOW. versus DARSHAN AGROILS LTD., ALIGARH

High Court of Judicature at Allahabad

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The Commissioner, Sales Tax, U.P., Lucknow. v. Darshan Agroils Ltd., Aligarh - SALES/TRADE TAX REVISION No. 946 of 1992 [2004] RD-AH 322 (19 July 2004)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

COURT NO.55

SALES TAX REVISION NO.946 OF 1992

The Commissioner, Sales Tax, U.P., Lucknow. ....Applicant

Versus

Darshan Agroils Ltd., Aligarh ....Opp.Party

...............

Hon'ble Rajes Kumar, J.

This revision under Section 11 of U.P. Sales Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 07.01.1992 relating to the assessment year 1991-92 under the Central Sales Tax Act.

Brief facts of the case are that dealer-opposite party established a new unit as contemplated under section 4-A of the Act for the manufacturing of oil and was holding eligibility certificate. Dealer has applied registration under the Central Sales Tax Act for the manufacturing of tin containers, which was required to be used in the packing of the manufactured oil for sale. Registration certificate was issued for the purchases of tin plate etc. Assessing authority had cancelled the registration under section 7 (4) read with Rule 9 on the ground that registration was granted for the manufacturing of containers for sale, while they were used in the packing of the oil and not sold and as such dealer was held not entitled for registration. First appeal filed against the aforesaid order was rejected. Dealer filed second appeal before Tribunal, which was allowed and the order of assessing authority canceling the registration under the Central Sales Tax Act has been set aside.

Heard learned counsel for the parties. Learned Standing counsel contended that since dealer had purchased tin sheets etc. and used in the manufacturing of containers, which were used in the packing of oil and were not sold as such and therefore, case is not covered under section 8(3) of the Central Sales Tax Act and thus not entitled for registration under the Central Sales Tax Act to avail the benefit of concessional rate of tax in making the purchases against Form-C.

Section 7(2) and section 8(1) and (3) of the Central Sales Tax Act reads as follows: Section 7(2)

"Any dealer liable to pay tax under the sales tax law of the appropriate State, or where there is no such law in force in the appropriate State or any part thereof, any dealer having a place of business in that State or part, as the case may be, may, notwithstanding that he is not liable to pay tax under this Act, apply for registration under this Act to the authority referred to in sub-section (1), and every such application shall contain such particulars as may be prescribed.

Explanation -- For the purpose of this sub-section , a dealer shall be deemed to be liable to pay tax under the sales tax law of the appropriate State notwithstanding that under such law a sale or purchase made by him is exempt from tax or a refund or rebate of tax is admissible in respect thereof.

Section 8 (1) and (3) reads as follows:

(1) Every dealer, who in the course of inter-State trade or commerce-

(a) sells to the Government any goods; or

(b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3);

shall be liable to pay tax under this Act, which shall be four per cent, of his turnover.

(3)The goods referred to in clause (b) of sub-section (1)-

(a) Omitted;

(b) .......are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods a being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power;

(c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale;

(d) are containers or other materials used for the packing of any goods of classes of goods specified in the certificate of registration  referred  in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c)."

Under Section 8 (3) (b), dealer is entitled for the benefit of registration in respect of these goods, which are for use by him in the manufacturing or processing of goods for sale. Under clause (c) dealer is entitled for the benefit of concessional rate of tax on the purchases of containers or other material specified in the certificate of registration of the registered dealer purchasing the goods being containers or material intended for being used for the packing goods for sale.

Admittedly, containers manufactured by the applicant were used in the packing of the oil, which were sold. Price of the containers may not have been charged separately but its value must have been included in the price of oil. Therefore, it can not be said that container was not sold alongwith oil and, thus case is covered under clause (b) of section 8(3). Case of the dealer is also covered under clause (c). "Other material specified" in the certificate of registration intended for being used for packing of goods for sale. It include the use of "other materials", for packing of goods for sale both in the same form and in any other form. Tin sheets purchased by the applicant used  if after moulding etc. in packing of the oil for sale in the form of containers is covered under clause (c) of section 8(3) also. This view is also supported by the  decision of Hon'ble Supreme Court in the case of Lt. Governor, Delhi Vs. Ganesh Flour Mills Limited, reported in 1973 UPTC, 641, in which Apex Court held as follows:

"The fact that tin sheets and tin plates have to be subjected by the respondent to the process of cutting and moulding into tin containers would not take them out of the cutting of materials intended for being used for the packing of goods for sale. The cutting and moulding is essential for putting the tin sheets and tin plates into shape with a view to adapt them for actual user. The process of cutting and moulding does not alter the nature of the "materials intended for being used for the packing of goods for sale"; it only facilitates the actual user for packing.......

As the tin sheets and tin plates purchased for the respondents were intended to be used for packing of vegetable products sold by the respondent, the respondent, in our opinion, was entitled to invoke the benefit of clause (c) reproduced above."

For the reasons stated above, I do not find any error in the order of Tribunal.

Revision lacks merit and is accordingly dismissed.

Dt.19.07.2004

R./


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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