COMMISSIONER OF SALES TAX Vs. SYNTHETICS LIMITED

JUDGEMENT

(1.) THIS order shall also govern the disposal of M. C. C. No. 78 of 1980 as facts stated and questions referred are common.

(2.) THESE are references under Section 44 (1) of the M. P. General Sales Tax Act, 1958, made by the Board of Revenue, M. P. , seeking this Court's decision on the following question of law : Whether, under the facts and circumstances of the case, the Tribunal was justified in setting aside the purchase tax imposed on the purchases of building materials by M/s. Synthetics Ltd. , Ujjain ?

(3.) FACTS as stated by the Tribunal/board of Revenue and admitted before us are as follows: The assessment periods involved in these references are 25th October, 1970, to 31st March, 1971, and 1st April, 1971, to 30th June, 1972. The assessee, M/s. Synthetics Ltd. , Ujjain, is a registered dealer engaged in the business of manufacture of synthetic yarn. The assessee started construction of the factory for manufacture of synthetic yarn during the assessment periods in question. Production of synthetic yarn actually commenced on 1st October, 1972, i. e. , after the assessment period ending on 30th June, 1972. There was no manufacturing activity during the periods of assessment under reference. The assessee had purchased building materials and furniture from unregistered dealers during this period for construction and furnishing of the factory. The Sales Tax Officer assessed these purchases to purchase tax under Section 7 of the M. P. General Sales Tax Act.