BRITISH INDIA CORPORATION LTD Vs. COMMISSIONER OF SALES TAX
LAWS(ALL)-1980-2-3
HIGH COURT OF ALLAHABAD
Decided on February 28,1980

BRITISH INDIA CORPORATION LTD. Appellant
VERSUS
COMMISSIONER OF SALES TAX Respondents

JUDGEMENT

R.M.Sahai, J. - (1.)In this revision filed under Section 11 of the Sales Tax Act, the following questions of law have been raised :
(a) Whether, in the facts and circumstances of the case, the assessee is a dealer in respect of the canteen sales made by it during the year 1973-74 amounting to Rs. 26,647.52 and as such these are taxable in its hands ? (b) Whether, in the facts and circumstances of the case, the sale of cardigans and pullovers by the assessee during the period 1973-74 amounting to Rs. 20,14,654.48 is taxable in the hands of the assessee as sale at 3 per cent or as sale of woollen goods at 6 per cent?

(2.)The assessee, Cawnpore Woollen Mills Branch, Kanpur, one of the branches of British India Corporation, manufactures woollen goods and yarn, etc., woollen cardigans and pullovers. It also maintains a canteen as a measure of labour welfare activity under Section 46 of the Factories Act, 1948, read with Rule 68 of the U.P. Factories Rules. It has been held by the Additional Judge (Revisions) that canteen sales are sales within the meaning of the Sales Tax Act and the assessee was a dealer liable to pay tax. Reliance for this proposition was placed on Swadeshi Cotton Mills Co. Ltd. v. Sales Tax Officer [1964] 15 STC 505. In respect of cardigans and sweaters it was held that they were taxable at 6 per cent as held in Ram Lal and Bros. v. Commissioner of Sales Tax 1969 Law Diary 41.
(3.)Both these findings have been challenged. So far as canteen sales are concerned suffice it to say that in Fertilizer Corporation of India Ltd. v. Commissioner of Sales Tax 1980 UPTC 1 (FB), a Full Bench of this Court has overruled Swadeshi Cotton Mills [1964] 15 STC 505 and has held that such sales are exempt from payment of tax and the assessee cannot be considered to be a dealer.
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