M N KHAMBHATWALA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS is a reference at the instance of the dealer registered under the appropriate provisions of the Gujarat Sales Tax Act, 1969. The dealer is a partnership firm. It carries on its business of manufacture and selling of hair-oil, agarbatti, masala for hair-oil in the form of padi (small packets ). Since it is a manufacturer, it also holds recognition certificate under section 32 of the Act, which enables it to purchase raw and processing materials and consumable stores on the declaration being made in form 19 without payment of tax so that it can use the goods so purchased in the manufacture of taxable goods. The declaration in form 19 is to be effect that the goods purchased will be used as raw/processing materials or consumable stores in the manufacture of taxable goods for sale and that such sale shall not take place outside the State of Gujarat.

(2.) DURING samvat year 2029, the dealer purchased wooden boxes or cartons for Rs. 23,166 from unregistered dealers and used the same in packing of its various finished products. Such goods were dispatched for sale in the course of inter-State trade or commerce. It was contended before the Sales Tax Officer that the wooden boxes so purchased were resold for a price, over and above the sales of the manufactured goods packed therein. Such sales were in the course of inter-State trade and commerce. Therefore it was contended that since the goods were resold it was not liable to pay purchase tax under section 15 of the Act. The Sales Tax Officer rejected the contention on the ground that no express or implied sales of wooden boxes were proved.

(3.) BEFORE the Tribunal it was contended that the wooden boxes or cartons for Rs. 23,166 were resold in the course of inter-State trade and therefore there was no breach of declaration made in form 19. The Tribunal, however, did not accept this plea. The Tribunal held that the wooden boxes were also consumable stores. But, wooden boxes were "prohibited goods" as provided under section 21 of the Act. Therefore the dealer was not relieved of its obligation to pay the purchase tax. Thus the Tribunal held that there was no resale of wooden box. The Tribunal partly allowed the second appeal. As regards the wooden boxes the Tribunal held that there was no resale of the wooden boxes which were purchased from unregistered dealers for Rs. 23,166 and that the dealer was liable to pay the purchase tax thereon under section 15 of the Act. Thus in so far as the purchase of wooden boxes was concerned, the order passed by the Assistant Commissioner of Sales Tax in appeal was confirmed. The Tribunal delivered its judgment on July 4, 1980.