SHREEPAD VALLABHA INDUSTRIES Vs. DEPUTY COMMISSIONER OF COMMERCIAL TAXE APPEALS HUBLI DISTRICT DHARWAD

JUDGEMENT

(1.) The question involved in these writ petitions is identical, pertaining to the rate of sales tax leviable on the "packing shooks" obtained out of timber logs.

(2.) For the sake of convenience, the facts in W.P. No. 18869 of 1990 are referred. The petitioner is a dealer registered under the provisions of the Karnataka Sales Tax Act (for short "the Act"). He is engaged in the business of cut sizes timber. He purchases timber logs from registered dealers or from Forest Department. At the time of his purchase sales tax leviable on the timber logs will be collected by the concerned seller from the petitioner. These timber logs are cut into several sizes in the sawing machine. Thereafter petitioner manufactures packing shooks. According to the petitioner these packing shooks are nothing but cut size planks, which in turn are used in the manufacture of packing boxes. For the period 1st April, 1985 to 31st March, 1986, the petitioner had filed his taxable sales turnover. The petitioner had paid tax at the rate of 2 per cent in respect of the sales of packing shooks. The Additional Commercial Tax Officer issued a notice to the petitioner asserting that the packing shooks fall under section 5(1) of the Act and was taxable at 5 per cent in the light of the clarification issued previously by the Commissioner of Commercial Taxes; therefore he proposed to assess the petitioner by levying tax at 5 per cent on the sales of packing shooks. The clarification of the Commissioner referred herein is dated 10th January, 1986. The petitioner immediately filed W.P. No. 3355 of 1987 and thereafter the assessing authority completed the final assessment proceedings. Consequently, he filed W.P. No. 18869 of 1990. In view of this, the earlier W.P. No. 3355 of 1987 does not survive and it will have to be dismissed as unnecessary.

(3.) The contention of the petitioner is that packing shooks fall within entry No. 45 of the Second Schedule to the Act. Entry 45 reads as follows : Sl. No. Description of the goods Rate of tax 45. (a) Timber, rosewood and sandalwood in log Eight per cent form (b) Timber, rosewood and sandalwood in cut or manufactured form of all sizes and shapes : (i) obtained from out of material which Two per cent has already suffered tax (ii) in other cases Eight per cent