P.K. Banerjee, J. - (1.) In this Rule the Petitioner challenges the assessment proceeding on the sale of jute caddies imposing sales tax thereon. The facts which are not disputed are as follow: The Petitioner is a dealer in raw jute including jute caddies and is registered under the Bengal Finance (Sales Tax) Act, 1941, having its certificate registered No. LR/2378A. The Petitioner stated that the jute caddies consist of short fibres separated during the processing of raw jute prior to weaving and during weaving. Carding operation prior to weaving leaves out dropping of short fibres which, it is alleged, are jute caddies. It differs from jute waste because jute waste includes all kinds of rejections collected from mill and factory, that is jute dust, small strips of gunny cuttings etc. It is alleged that jute caddies are nothing but jute cuttings and falls within the meaning of raw jute under the Bengal Finance (Sales Tax) Act, 1941. 'Raw jute' has been defined under Sec. 2(8) of the Bengal Raw Jute Taxation Act, 1941. It is stated that even the Customs authorities hold that jute caddies are raw jute under the Indian Tariff Act, 1954. Under the Bengal Finance (Sales Tax) Act, 1941, 'raw jute' has been declared to be tax -free goods. Under Sec. 5(2)(a)(i) of the Bengal Finance (Sales Tax) Act the sale of goods declared to be tax -free under Sec. 6 of the said Act and included in Schedule I to the said Act are exempted from tax under the said Act. For the assessment year 1960 -61, the Commercial Tax Officer, Lyons Range, made an assessment on January 7, 1963, wherein the said officer treated 'jute caddies' as raw jute as defined under Sec. 2(8) of the Bengal Raw Jute Taxation Act and exempted from tax under the said Act and allowed the claim of the Petitioner under Sec. 5(2)(a)(i) of the said Act. In the said assessment order, the Commercial Tax Officer arbitrarily disallowed the sale of jute caddies for Rs. 17,100 in absence of purchase invoices and treated the same as purchase of taxable goods other than 'jute caddies'. Aggrieved by the said disallowance, the Petitioner preferred an appeal before the Asstt. Commissioner, Commercial Tax, Chowringhee Range, Calcutta. Thereafter, in a subsequent assessment year 1368 B.S. (1961 -62) and 1369 B.S. (1962 -63) the Petitioner claimed for exemption in respect of sale of jute caddies and that was exempted. The appeal preferred by the Petitioner for the year 1367 B.S. was taken up for hearing and the Asstt. Commissioner of Commercial Tax relying on the decision of the Board of Revenue in Kharda and Co. v/s. The State of West Bengal held that jute caddies are something other than raw jute and therefore, is not entitled to the exemption. Again, for the year 1371 -72 B.S. the assessment order did not exempt the sale of jute caddies from the purview of the Bengal Finance (Sales Tax) Act, 1941. Being aggrieved by the said order the Petitioner moved this Court and obtained the present Rule.
(2.) On behalf of the Respondent affidavit has been filed reiterating that the Petitioner is not entitled to the exemption under the Act as jute caddies are not raw jute, inasmuch as jute caddies are obtained after spinning and weaving of raw jute.
(3.) Mr. Bose on behalf of the Petitioner contended that jute caddies are raw jute and therefore, is exempted from tax that the jute caddies fall within the definition of raw jute when being processed till remains raw jute and therefore, is entitled to exemption under the Bengal Finance (Sales Tax) Act, 1941. The short point, therefore, is whether the jute caddies are raw jute or not. 'Raw jute' has been defined under Sec. 2(8) of the Bengal Jute Taxation Act, 1941, as follows: 'Raw jute' means the fibre of jute which has not been subjected to any process of spinning or weaving and includes jute cuttings, whether loose or packed in drums or bales. Under Item No. 32 of Schedule I, read with Sec. 6 of the Bengal Finance (Sales Tax) Act, 1941, it has been provided that the goods mentioned in the schedule is exempted from taxation. Sec. 8 is in the following terms: 6(1) No tax shall be payable under this Act on the sale of goods specified in the first column of Schedule I subject to the condition and exceptions, if any, set out in the corresponding entry in the second column thereof. (2) The State Government, after giving by notification in the Official Gazette, not less than 3 months notice of its intention so to do, may be like notification add to Schedule 1 and thereupon Schedule I shall be deemed to be amended accordingly. Therefore, the sale of raw jute is not taxable under the Bengal Finance (Sales Tax) Act, but the question which still remains is whether jute caddies are raw jute within item No. 32 of Schedule I of the Bengal Finance (Sales Tax) Act.;