COMMISSIONER OF SALES TAX Vs. MAHA LAXMI CHEMICALS

JUDGEMENT

(1.) This revision is directed against the order dated February 12, 1993 passed by the Sales Tax Tribunal, Bareilly in Second Appeal No. 711 of 1988.

(2.) The opposite party-dealer carried on the business of manufacture and sale of sulphur and sulphur's sludge. It disclosed for the assessment year 1985-86 a taxable turnover of Rs. 37,12,970. The assessing authority has accepted its account books but was of the view that the sale of sulphur sludge is taxable as waste products and as unclassified item and is taxable at the rate of eight per cent. It accepted the disclosed turnover of sulphur sludge amounting to Rs. 3,18,240 and levied the tax at the rate of eight per cent vide order dated May 25, 1989. This order was confirmed by the Deputy Commissioner (Appeals) by the order dated October 12, 1989. The Tribunal by the order under revision has held that sulphur sludge is not a waste product and is not liable to be taxed as unclassified item. Challenging the legality and propriety of the order passed by the Tribunal the present revision has been filed under Section 11 of the U.P. Sales Tax Act, 1948, by the Commissioner of Sales Tax. Following question of law as framed in the memo of the revision is said to be involved in the revision: Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal was legally justified to hold that the sulphur sludge falls under the category of mineral and is taxable at the rate of four per cent despite the fact that the same should be taxable as an unclassified item?

(3.) Heard the counsel for the parties and perused the record. The dealer has purchased sulphur sludge which is also called as sulphur waste. It has purchased it from Fertilizer Corporation of India. A copy of contract with Fertilizer Corporation of India was produced before the Tribunal. From this contract the Tribunal found that the dealer purchased it at a price of Rs. 450 per metric ton and the percentage of sulphur was declared from 68 per cent to 95 per cent. In addition to the sulphur it contained silica ash, chloride and some percentage of moisturizer acid. Similarly, the contents of sulphur has been certified to be 85 per cent to 87 per cent in the sulphur sludge purchased from Southern Petro Chemical Industries Corporation Limited. The dealer-opposite party is manufacturer of sulphur role from sulphur sludge and the sulphur roll is taxable at the rate at which the mineral is taxable. Therefore it was urged that sulphur sludge should be taxable as mineral.