WEBBING AND BELTING FACTORY LTD Vs. SALES TAX OFFICER
HIGH COURT OF PUNJAB AND HARYANA
WEBBING AND BELTING FACTORY LTD., DELHI
SALES TAX OFFICER, DELHI
Click here to view full judgement.
Falshaw, J. -
(1.) This is a petition under Article 226 of the Constitution by a company known as the Webbing and Belting Factory Limited of Delhi challenging certain actions of the respondents, the Sales Tax Officer Ward No. 5 and the Commissioner of Sales Tax of Delhi State, under the Bengal Finance (Sales-tax) Act of 1941 as extended to the State of Delhi.
(2.) It appears that the petitioner company has two factories, one at Delhi where wicks, tapes, 'niwars' etc., are manufactured, and one at Ghaziabad where the manufacture of handloom textiles is carried on. The firm is registered as a dealer under the Act and according to the certificate of registration it was permitted to purchase free of tax certain kind of goods for resale and certain goods including yarn, chemicals, colours and dyes for purposes of manufacture. This privilege was granted under the provisions of Section 5(2)(a)(ii) which allows to be deducted from the taxable turnover of the dealer his turnover on sales to a registered dealer of goods of the class or classes Specified in the certificate of registration of such dealer as being intended for resale, by him, or for use by him in the manufacture of goods for sale.
(3.) Early in 1953 certain alterations were made by the Sales Tax Officer in the petitioner's registration certificate regarding the goods which could be purchased free of tax for purposes of manufacture, and a revision petition was filed by the firm before the Commissioner of Sales Tax under the provisions of Section 20 of the Act with the result that on 3-9-1953 an order was passed to the effect that the orders of the Assistant Commissioner dated 2-2-1953 and the Sales Tax Officer dated 17-2-1953 had been can-Celled and the Sales Tax Officer was directed to examine the matter and allow the purchase of all raw materials being intended for use in the manufacture of goods for sale in the State of Delhi. In March 1954, however, the Sales Tax Officer sent a letter (Annexure 'B') to the firm requesting submission of its registration certificate for deletion of items, of raw materials purchased by it for the purpose of manufacture of cloth at Ghaziabad. It is evident from the letter that the Sales Tax Officer interpreted the provisions of Section 5(2)(a)(ii) as meaning that exemption could only be given with regard to materials purchased for the purpose of manufacturing within the State of Delhi, whereas the manufacture of cloth by the firm was being carried on at Ghaziabad, which is in U.P. On receipt of this letter the firm sent the letter, Annexure E' to the Commissioner of Sales Tax for clarification of his order dated 3rd of September, it being submitted that the correct interpretation of that order was that the raw materials could be purchased free of tax for the manufacture of cloth for sale in the State of Delhi and not merely for the actual manufacturing within the State. To this a reply was sent on behalf of the Commissioner of Sales Tax to the effect that his order was quite clear and needed no further elucidation. On this the present petition was filed in this Court on 13-5-1954.;
Copyright © Regent Computronics Pvt.Ltd.