VADODARA JILLA HYBRID UTPADKONI SAHAKARI MANDALI LTD Vs. STATE OF GUJARAT

JUDGEMENT

(1.) TO start with, we may state the relevant facts which have given rise to a group of reference cases. The applicant, M/s. Vadodara Jilla Hybrid Utpadkoni Sahakari Mandali Limited, is a co-operative society registered under the Co-operative Societies Act, 1961, and is also registered as a dealer under section 29 (1) of the Gujarat Sales Tax Act, 1969, hereinafter referred to as "the said Act". The applicant carries on business to resell cotton-seeds, fertilisers, cloth bags, etc. , at Vadodara.

(2.) DURING the period of account from 30th March, 1974, to 31st October, 1974, the applicant had, inter alia, sold empty cloth bags to its members at a nominal price (which was less than Rs. 10 per bag) and had recovered Rs. 2,55,812 as sale price of those empty cloth bags.

(3.) THE learned Assistant Commissioner of Sales Tax, however, took a different view of the matter and exercised his suo motu powers under section 67 of the said Act. He was of the opinion that the cloth bags were not meant for domestic or personal use of its purchasing members but were meant for commercial purpose or use. He was further of the opinion that entry 51 of Schedule I to the said Act merely covered articles meant for domestic or personal use but was not meant for articles of commercial use and that therefore the applicant's sales of the disputed cloth bags were not sales of tax-free goods covered by entry 51 of Schedule I to the said Act. In his view, the sales of cloth bags would be covered by the residuary entry, being entry 13 of Schedule III to the said Act. Consequently, he revised the order of the Sales Tax Officer and held that the applicant's sales of cloth bags worth Rs. 2,55,812 were covered under residuary goods under entry 13 of Schedule III to the said Act and accordingly levied tax thereon. THE applicant, being aggrieved by the order of the learned Assistant Commissioner of Sales Tax, filed Revision Application No. 52 of 1978 before the Gujarat Sales Tax Tribunal. THE Tribunal, for the reasons given in its order, concurred with the finding of the learned Assistant Commissioner and endorsed the impugned orders of the learned Assistant Commissioner holding that the aforesaid articles, namely, cloth bags were covered by residuary entry 13 of Schedule III to the said Act and were therefore liable to the levy of tax accordingly.