HARBANS SINGH, C.J. - (1.) THIS appeal under clause 10 of the Letters Patent is directed against the judgment of the learned Single Judge, accepting Civil Writ No. 1287 of 1968 filed by Messrs. Karnal Gur and khandsari Industries (hereinafter referred to as the respondent-firm) against the State of Haryana and the Assessing Authority, Sales Tax, and quashing the order of the Assessing Authority, Karnal, dated 10th April, 1968, in so far as it levied tax of Rs. 7,891. 32 on the purchase value of gur amounting to Rs. 1,31,522. 31 under section 5 (2) (a) (ii) of the Punjab General Sales Tax Act (hereinafter referred to as the Act ).
(2.) ADMITTEDLY , the gur of the value, as stated above, was used by the respondent-firm for the manufacture of khandsari. There is also no dispute that a certificate of registration, copy annexure A, was issued by the authorities under the Act in the name of the respondent-firm. The copy of the certificate of registration, annexure A, is slightly confusing. The original certificate has been shown to us and column No. 2 of this certificate, while giving the business of the respondent-firm, states as follows :- "mainly gur, khandsari, bardana, etc. , dealer and manufacturer of khandsari, gur-sheera. " Column No. 3 starts by saying, "the sales of the following goods to this dealer will be free of tax". Then there are two sub-columns, (a) "for purposes of manufacture"; (b) "for resale". Under sun-column (a) are mentioned "gur, firewood, sajji, lime" and under sub-column (b) "gur, etc. " From the above it is clear that according to the certificate of registration, the respondent-firm was a dealer in gur, khandsari, bardana, etc. , and manufacturer of only khandsari and gur-sheera. Amongst other things, this registered dealer was entitled to the sales of gur to it free of tax, which was to be used for the purposes of manufacture. Obviously, the purpose of manufacture referred to is the manufacture of khandsari and gur-sheera mentioned in column No. 2. Similarly, the registered dealer was entitled to the sales to it free of tax for resale all the items mentioned in column No. 3 (b) read with column No. 2 i. e. , gur, khandsari, bardana, etc. The gur, which was sold to the registered dealer for resale, was not liable to tax and that is not a matter in controversy.
(3.) THE contention of the counsel for the assessing authority was that notwithstanding the fact that a certificate of registration was issued, the gur purchased by the respondent-firm was subject to purchase tax. This was negatived by the learned Single Judge on the clear reading of the wording of the certificate of registration. The learned Single Judge held that the registered dealer had not used the gur for a purpose other than that for which he had purchased it, namely, for manufacture of khandsari and, consequently, the second proviso to section 5 (2) (a) (ii) of the Act was not applicable and that the first proviso was fully satisfied, because the declaration had been duly given. The learned Single Judge, inter alia, observed as follows : " The registration certificate entitled the petitioner-firm to purchase gur for the manufacture of khandsari and gur-sheera free of tax. It cannot, therefore, be said that the petitioner-firm used gur purchased for the manufacture of khandsari and gur-sheera for any purpose other than that for which it was sold to it. There was thus no misuse of the registration certificate by the petitioner-firm when it purchased gur free of tax for the manufacture of khandsari and gur-sheera on the strength of the registration certificate. . . . . . . . . . . . . " ;