STATE OF GUJARAT Vs. POLYTHREADS

JUDGEMENT

(1.) THE following question has been referred to this Court by the Gujarat Sales Tax Tribunal under section 69 of the Gujarat Sales Tax Act, 1969, at the instance of the State of Gujarat. " Whether, on the facts and in the circumstances of the case, the Gujarat Sales Tax Tribunal was justified in law in holding that the sales of the goods obtained by the opponent-concern from the waste material originally purchased by it, after subjecting the same to the processes undertaken by it, constituted 'resales' of the original goods purchased, on the ground that no distinct commercial commodities were obtained from the original goods by subjecting them to the processes undertaken by the opponent-concern and, therefore, the opponent-concern was entitled to deduct the value of those sales from its turnover liable to tax ?"

(2.) THE facts, as they appear from the judgment of the Tribunal, are that the assessee, who is a registered dealer under the Act, is engaged in the business of purchasing waste mixture of polyester and cotton fibres from textile mills and selling the same, after removing therefrom dust and other impurities after subjecting them to the process of carding and drafting.

(3.) WHAT is urged by the learned Assistant Government Pleaded is that the assessee, after purchasing the waste mixture of polyester and cotton fibre, subjected them to the process of cleaning, segregating, carding, drafting and winding around bobbins and, therefore, it can be said to have manufactured goods having a distinct identity and, therefore, sales thereof by the assessee cannot be regarded as "resales", as defined by section 2 (26) of the Act.