SHREEJI TRADERS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE Gujarat Sales Tax Tribunal has referred the following question of law for our decision on being moved by the applicant under section 69 (1) of the Gujarat Sales Tax Act, 1969 : " Whether, on the facts and in the circumstances of the case, and on a narrow construction of the various entries in the different Schedules and scheme underlying, the Gujarat Sales Tax Act, 1969, the Tribunal was justified in law in holding that the two types of yarns sold by the applicant were not yarn within the meaning of entry 2 of Schedule II, Part A to the Gujarat Sales Tax Act, 1969, but were the goods sale of which was taxable at the rate applicable to the goods covered by entry 13 of Schedule III to the Gujarat Sales Tax Act, 1969 ?"

(2.) IN order to answer the question referred to us, it is necessary to refer to relevant facts : (i) The applicant, a registered dealer carried on business of purchase and resale of yarn, cotton, groundnuts, etc. , at Gondal in Rajkot district. The applicant purchased two varieties of yarn from a selling dealer at Bombay and resold them to one dealer at Ahmedabad under sale bill No. 91 dated 25th January, 1978. The applicant thereafter filed an application under section 62 of the said Act before the Deputy Commissioner of Sales Tax, Ahmedabad, for determination of tax payable on the said sale bill. (ii) The Deputy Commissioner of Sales Tax, by judgment and order dated 13th June, 1978, held that the yarn in question covered by the said bill was made out of a mixture of 85 per cent of cotton or cotton yarn and 15 per cent of viscose yarn or viscose and part of it was made out of 80 per cent of cotton yarn and 20 per cent of viscose yarn. The Deputy Commissioner of Sales Tax, therefore, held that what the applicant sold was not "cotton yarn" covered by entry 2 of Schedule II, Part A to the said Act, but the same was covered by residuary entry 13 of the Schedule III to the said Act so as to be liable to pay sales tax at 5 per cent and general sales tax at 3 per cent, i. e. , 8 per cent in all. (iii) Being aggrieved by the judgment of the Deputy Commissioner of, Sales Tax, the applicant preferred appeal to the Gujarat Sales Tax Tribunal, and by its judgment and order dated 9th November, 1979, the Tribunal confirmed the judgment and order of the Deputy Commissioner of Sales Tax that the yarn sold by the applicant was not cotton yarn within the meaning of entry 2 of Schedule II, Part A to the said Act. (iv) Dissatisfied by the said judgment and order of the Tribunal the applicant applied to the Tribunal for referring the question of law arising from its judgment and order under section 69 of the said Act, and the Tribunal has referred the aforesaid question for our decision.

(3.) REFERENCE answered in the negative. .