STATE OF UTTAR PRADESH Vs. KORES INDIA LIMITED

JUDGEMENT

(1.) This appeal by certificate which is directed against the judgment and order dated February 20, 1970, passed by the High court of Judicature at Allahabad in writ petition No. 2943 of 1969 raises tow interesting questions viz. (1) whether carbon paper is paper falling within the purview of the word paper as used in serial No. 2 of Notification No. ST-3124/X-1012 (4)-1964 dated July 1, 1966, issued by the Governor of Uttar Pradesh in exercise of the power vested in him under Section 3-A of the U. P. Sales tax Act, 1948 (U. P. Act No. XV of 1948) so as to be liable to sales tax at the point and at the rate specified in the Schedule to the Notification and (2) whether ribbon is an accessory or a part of the typewriter.

(2.) It appears that the respondent which is a company incorporated under the India companies Act dealing in carbon paper, typewriter ribbon, stapler machines and stapler pins, despatches the said goods from its head office at Bombay to its branch officer at Kanpur wherefrom sales thereof are effected in the State of Uttar Pradesh. During the course of the assessment proceedings for the assessment year 1966-67, the respondent claimed that carbon paper not being paper falling within the ambit of Entry No. 2 of the Schedule to the aforesaid Notification but a specialised article used for copying purposes, its turnover had to be assessed at the rate of 2 per cent prescribed for unclassified goods and not at the rate of 67 paise per rupee i.e. 6% prescribed in the aforesaid Notification. The respondent further claimed that ribbon being an accessory and not a part of the typewriter, its turnover could not be subjected to sales tax at the rate of 10% prescribed inter alia for typewriters and parts thereof by Notification No. ST-1738/X-1012-1963 dated June 1, 1963. The Sales Tax Officer, (Section IV), Kanpur, did not accede to the contentions of the respondent and holding that carbon paper remained paper even after going through certain chemical processes and that ribbon was a part of the typewriter, taxed the turnover of carbon paper for the period commencing from July 1, 1966, to the end of March, 1967 at 6% and that of ribbon at 10%. He, however, taxed the turnover of carbon paper for the period April 1, 1966 to June 30, 1966 at 2%. The validity and correctness of this order in so far as it related to the levy of tax on carbon paper at 6% and ribbon at 10% was challenged by the respondent by means of the aforesaid writ petition before the High Court at Allahabad which by its aforesaid judgment and order allowed the same and quashed the levy. Hence this appeal.

(3.) Appearing in support of the appeal, Mr. Manchanda has assailed the reasoning and approach of the High Court and has vehemently urged that carbon paper does not lose its character as paper even after being subjected to chemical processes and that ribbon is not an accessory but an essential part of the typewriter. We have carefully considered the submissions made by Mr. Manchanda but find ourselves unable to accept the same.