NANDI PRINTERS PVT LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE matters arise under the Karnataka Tax on Entry of Goods into Local Areas for consumption, Use or Sale Therein Act, 1979 (hereinafter referred to as "the Act") for the assessment years 1985-86 to 1988-89. The petitioner before us is a manufacturer of paper cartons and playing cards. For the purpose of its manufacture, it purchases paper boards and duplex boards from outside the State and brings the same into local area. For the assessment years in question, the petitioner filed returns under the Act claiming exemption with respect to paper boards and duplex boards on the basis that the expression "raw material, component parts and inputs" under Explanation II to entry 16b of the Schedule to the Act excludes "paper". Thus, it was contended that no tax could be levied under the Act now. The assessing authority did not agree with this contention for all these years. Matters were carried in appeal to the appellate authority. The appellate authority also affirmed the view of the assessing authority. Therefore, the matter was carried further by way of second appeal to the Tribunal. The Tribunal referred to entry 6 of the Schedule and stated that Explanation II was restrictive in scope and could not comprehend pulp boards and duplex boards which were being brought into the local area by the petitioner. It held that the expression "paper" must mean only that paper which is used for writing and would not include items like pulp boards and duplex boards which are used only for printing in that paper, cartons are not used as writing papers. Therefore, this revision petition is filed under Section 15a of the Act, raising the question as to whether pulp boards and duplex boards purchased by the petitioner and brought into the local area were "paper" within the meaning of Explanation II to entry 16b in the First Schedule to the Act, and therefore, they are not taxable for the purpose of the Act.

(2.) IT is necessary to refer to the legislative history of this entry, that the tax levied on various items of goods referred to in the First Schedule on their entry into a local area for the purposes mentioned therein at the rates setforth there, Under item 16b of the Entry Tax Act certain items were added on which tax could be levied, which included all raw materials, component parts and inputs which are used in the manufacture of an intermediate or finished product and Explanation ii was attached thereto, which defines certain expressions which are covered by entry 16b and the said Explanation reads as follows :

(3.) NOW, Sri Sarangan, learned Senior Advocate for the petitioner submits that the expression "paper" used in Explanation II and the notification issued thereunder would include a paper board and therefore the turnover relating thereto is not subject to any tax. The Tribunal has taken a very narrow view of the expression "paper" confining it only to writing material. He submitted that the expression "paper" is understood a different kind of definition from stage to stage and to give it a narrow meaning as is available in common parlance would mean paper used in writing, printing or packing.