BADRI PRASAD PRABHA SHANKER Vs. SALES TAX COMMISSIONER

JUDGEMENT

(1.) This is a reference under Section 11(1) of the U.P. Sales Tax Act made by the Judge (Revisions) referring the following question for this Court's opinion : Whether crushed and sieved tobacco was exempt from sales tax under the U.P. Sales Tax Act by virtue of exemption granted under Section 4(1)(a) of the Act under Notification No. S.T. 119-X-928-1948, dated 7th June, 1948, item No. 9.

(2.) The same question has been referred in the connected reference. The reference has been made at the instance of the applicants who are dealers in tobacco. No tax under the Act is payable on the sale of goods which are notified by the State Government in the Official Gazette. The State Government have issued a Notification No. S.T. 119-X-928- 1948, dated 7th June, 1948, notifying the goods which are exempt from the payment of sales tax, and item No. 9 of the notification is : Tobacco leaves, whether green or dried, not having been subjected to any process of manufacture.

(3.) The applicants deal in "crushed and sieved" tobacco. Crushing and sieving consists of crushing dried tobacco leaves and passing the crushed tobacco through a sieve. The applicants claim that crushed and sieved tobacco is covered by item No. 9 of the notification and that they are exempt from payment of tax on sale of it. Their contention is that crushing and sieving is not a process of manufacture at all.