STATE OF GUJARAT Vs. SHAH BHAGWANJI MANEKCHAND

JUDGEMENT

(1.) THE assessee is a registered dealer dealing in materials used in the building constriction industry. Amongst the items in which the assessee deals is lime. Different varieties of lime are purchased and sold by the assessee for diverse uses in the building construction activity. During the accounting period corresponding to S. Y. 2029, the assessee purchased and sold lime described as merta lime, sojat lime and gotan lime. In the course of proceedings for assessment to sales tax for the said accounting period, the assessee's contention was that the lime of all the three varieties was covered by entry 9 of Schedule II, Part A, to the Gujarat Sales Tax act, 1969 (hereinafter referred to as "the Act" ).

(2.) THE Sales Tax Officer held that whereas sojat lime and gotan lime were covered by entry 9 of Schedule II, Part A, merta lime was not comprehended within the said entry and that the said variety of lime was liable to be subjected to sales tax under the residuary entry 13 of Schedule III to the said Act.

(3.) THE assessee carried the matter in revision before the Gujarat Sales Tax Tribunal (hereinafter referred to as "the Tribunal") under section 67 of the Act. THE Tribunal allowed the revision and held that all the three varieties of lime sold by the assessee were covered by entry 9 of Schedule II, Part A. In reaching this decision, the Tribunal held that the three varieties of lime in which the assessee dealt were used as building materials, more particularly as mortar for plaster and as whitewashing material. It further held that the lime of those three varieties was used as one of the ingredients in mortar as well as in whitewash and that it was not capable of being directly used as building material. THE Tribunal precisely found : ". . . . . . . . . . . . . . . It is common knowledge that lime is not a basic chemical. . . . . . . . . . . . . . . . . So far as the production of mortar is concerned, lime is used as one of the ingredients. . . . . . . . . lime cannot be used without admixture for whitewash. . . . . . . . . . . In the materials furnished on behalf of both the parties, it is nowhere stated that lime can be directly used as building materials. From this it is clear that as a building material the use of lime is not direct but as a raw material in prepration of mortar or for use as whitewash with the mixture of glue or some such material. From this it is clear that lime is a chemical and also that it is an intermediary product. . . . . . "