YASHWANT VARMA,J. - (1.) Heard Mr. R.R. Agrawal, learned Senior Counsel in support of the revision and Sri B.K. Pandey, learned Standing Counsel for the State-respondents.
(2.) This revision arises from proceedings taken by the respondents levying additional tax upon the assessee on the view that the sale of waste products by the assessee is not liable to be treated as "waste" as contemplated under the Notification dated 7 September 1981. The Department has taken the further stand that the paper waste and BOPP are liable to be taxed at the same rate as the principal product.
(3.) Sri Agrawal, learned Senior Counsel has drawn the attention of the Court to the Notification dated 7 September 1981 as also to the subsequent Notification dated 31 March 1992 to submit that paper waste and BOPP were waste products which came to be generated in the course of facture of decorative laminates. In his submission, the sale of these articles by the assessee clearly fell within the ambit of Entry-32 of the Notification dated 7 September 1981 as amended subsequently by the Notification dated 31 March 1992. The submission was that the Assessing Authority as well as the Tribunal have clearly erred in failing to appreciate the import of the entries appearing in the notifications referred to above. As this Court reads the order of the Assessing Authority as also that of the Tribunal, it does appear that there is a lack of due application of mind on the issue of the nature of the product which was sold by the assessee. As noticed above while the assessee claimed that the sale was of articles which were waste generated in the course of facture of laminates, the Assessing Authority as well as the Tribunal have proceeded on the assumption that the articles sold was sale of the principal commodity. It becomes relevant to note here that although the Tribunal does notice the judgment rendered by three learned Judges of the Supreme Court in Dy. Commissioner, (Law) Board of Revenue (Taxes) v. M/s. M.R.F. Ltd. it has failed to appreciate the following observations as made in paragraph 4. The said paragraph is extracted hereinbelow for reference: "4. The next item that we are concerned with is the scrap that was sold by the respondent. The scrap consisted of butyl rubber, banbury tailings, brass valves, empty drums and gunny bags. The Tribunal found, taking into consideration the nature of the articles and the manner in which they were sold, that they had been treated as condemned articles and not as articles which could be put to use again and, accordingly, should be treated as scrap. It was contended on behalf of the Revenue that each of these items of butyl rubber, banbury tailings etc. should have been assessed under the particular tariff entry in which they fell and that the Tribunal was in error in taking into account the intention of the buyer and the seller in this behalf. It was not only the intention of the buyer and the seller that was taken into account but the nature of the articles that were being sold and, obviously, the Tribunal was satisfied that they were really no more than scrap and found that they should be taxed accordingly. The High Court was, therefore, right in not interfering.";