BHARGAVA, J. - (1.)THIS is a reference under section 15 of the Rajasthan Sales Tax Act (hereinafter referred to as the Act ). The Board of Revenue for Rajasthan, Ajmer, by its order dated 2nd July, 1970, has referred the following question of law :- " Whether under the facts and circumstances of the case leather covers of volleyball and football should be taxed at 7 per cent during the period 1st July, 1962 to 30th June, 1963 (1963-64) or at the general rate in force during the relevant period ?" Brief facts giving rise to this reference are as under : Assessee M/s. Liberty Sports, M. I. Road, Jaipur, is dealing in sports goods. The Assessing Authority held leather covers of volleyballs and footballs taxable as leather goods at the special rate of 7 per cent instead of the ordinary rate (of 5 per cent up to 1st March, 1963 and 6 per cent during the rest of the period in question ). The assessee went in appeal, but the same was dismissed. The assessee thereupon submitted a revision petition before the Board of Revenue, which was heard by a Division Bench and decided in favour of the assessee. The Assessing Authority filed an application before the Board of Revenue under section 15 of the Act requesting for making a reference; but since the said application could not be disposed of within a period of 180 days no order was passed thereon. The assessing authority then applied to the High Court for calling for a reference under section 15 (3a) of the Act. The High Court by its order dated 20th March, 1970, directed the Board of Revenue to refer the above question of law.
(2.)THE learned counsel for the department has submitted that the Government had issued a notification wherein the relevant entry reads as follows :- " All kinds of leather goods except foot-wear 7 per cent. "
The Board of Revenue while accepting the revision has held that since it cannot be denied that the leather covers of football and volleyball are prepared from leather and if taken in a strictly technical and restricted sense they could be termed as leather goods. But since other sport goods are being taxed at the general rate, no distinction should be made with regard to the leather covers of volley ball and football. The learned counsel for the State has submitted that the sport goods are not taxed as a separate item. Therefore, the argument of the Board of Revenue is fallacious. The State had power to carve out exception and to notify a special rate for such excepted goods. In the present case, the State has prescribed a different rate for footwear. Therefore, though, the footwear is included in the leather goods and since footwear is leather goods, the notification specifically says that all kinds of leather goods except footwear. If the State wanted to exempt the sport goods also, it could have very well said in the notification - "except sport goods". Therefore, when it is not disputed that the leather covers of football and volleyball are leather goods, there is no reason why a separate rate should be charged merely because they are used for the purpose of sports. Therefore, in our view, leather covers of volleyball and football should be taxed at 7 per cent during the period from 1st July, 1962 to 30th June, 1963 (1963-64) and not at the general rate in force during the relevant period. The reference is answered accordingly. .