NILOKHERI BONE MILLS Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE assessee, M/s. Nilokheri Bone Mills, Nilokheri, District Karnal, is a partnership firm registered under the Central Sales Tax Act (for short, "the Central Act") and the Haryana General Sales Tax Act (for brevity, hereinafter referred to as the "state Act" ). It is engaged in the business of manufacture and sale of bone-meal. For the year 1972-73, the assessee returned a total turnover of Rs. 3,46,800. 50 and claimed exemptions on account of sales in the course of export of goods worth Rs. 2,47,161. 50. After excluding a sum of Rs. 450 on account of sale made to a registered dealer in Haryana, the Assessing Authority disallowed the claim of the assessee for exemption. The assessee went up in appeal and raised two contentions : (i) that the order of the Assessing Authority, holding that the sale of bone-meal of the value of Rs. 2,47,161. 50 was not in the course of export out of the territory of India, was illegal and untenable and (ii) that bone-meal was covered by the expression "fertilizer" and was exempt under the State Act, and therefore, the inter-State sale of this commodity would not be exigible to Central sales tax. The Deputy Excise and Taxation Commissioner rejected both the pleas raised before him and affirmed the findings of the Assessing Authority. Still dissatisfied, the assessee filed second appeal before the Sales Tax Tribunal, Haryana.

(2.) THE Tribunal also held that the sales were not in the course of export outside the territory of India but were merely inter-State transaction. On the second point, the Tribunal held that it was for the assessee to prove that the entire quantity of bone-meal sold by it had been actually sold for use as fertilizer. Since at no stage the assessee had contested the finding of the Assessing Authority that the entire quantity of bone-meal had been sold in the course of inter-State trade and commerce for non-agricultural purposes, it is not entitled to exemption on the ground that it was fertilizer. The assessee made a petition under Section 42 of the State Act requiring the Sales Tax Tribunal to refer the questions of law arising out of the order of the Sales Tax Tribunal dated February 26, 1975. The Tribunal has submitted the statement of the case before us and has framed the following questions of law for our opinion : (1) Whether the sales of the value of Rs. 2,47,161. 50 were not in the course of export in view of the fact that the goods had been sold F. 0. B. P. B. T. N. panten Bunder to the two purchasers of Bombay ? (2) Whether the property in the goods sold in the course of export did not pass after the goods had crossed the customs frontiers of India ? (3) Whether bone-meal was not fertilizer and exempt from the Central Sales Tax Act because of the mention of fertilizer in Schedule B of the Punjab General Sales Tax Act as applicable to Haryana during the relevant period ? (4) Whether the department was not bound to bifurcate the sales of bone-meal used as a fertilizer as distinct from its use for other purposes ?

(3.) IT is fairly conceded by the learned counsel for the assessee that questions Nos. (1) and (2) stand concluded against it and in favour of the Revenue by the Supreme Court decisions in Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 (SC) and Manganese Ore (I.) Ltd. v. Regional Assistant Commissioner [1976] 37 STC 489 (SC ). Respectfully following the above two decisions, we answer questions Nos. (1) and (2) against the assessee and in favour of the Revenue.