TATA EXPORTS LIMITED Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a sales tax reference made Under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958 (since repealed) (herein after for short called "the Act") by the Tribunal (Board of Revenue at the instance of the assessee/dealer to this Court in R. A. No. 7-1/89, which arise out of an appellate order dated April 10, 1989 passed by Tribunal in Appeal-119-5/88 to answer the following questions of law: 1. Whether, on the facts and on the evidence on record, the Board of Revenue was correct in law in rejecting the contention of the applicant that the products in question were covered by entry No. 7 in Part I of Schedule II to the M. P. General Sales Tax Act, 1958 and accordingly the sales thereof were exigible to tax at the rate of 3 per cent only ?

(2.) WHETHER, on the facts and in the circumstances of the case and on a proper construction of the relevant entries in Schedule II to the M. P. General Sales Tax Act, 1958, the Board of Revenue was justified in law in holding that the products of the applicant were covered by entry No. 5 in Part III of Schedule II and the sales thereof were exigible to tax at the rate of 10 per cent ? 2. In order to appreciate the issue involved in the reference, relevant facts which are part of the statement of case drawn by the Tribunal need to be taken note of infra in brief: The applicant/assessee is engaged in the business of manufacturing of items made of leather in their factory at Dewas. These items include (1) leather jackets, (2) leather coats and (3) skins. The question arose in assessment year 1983-84 before the sales tax authority as to under which entry these items be taxed. The contention of the applicant/assessee was that the items such as leather jacket and leather coats are liable to be taxed as ready-made garments in entry No. 7 in Schedule II of Part I whereas the contention of State (sales tax authority) was that the items referred above are liable to be taxed as leather goods in entry No. 5 in Schedule II of Part III. It is essentially this question which was probed. The A. O. by order dated December 30, 1986 (at page 8) held the issue against the applicant and in favour of State. It was held that the two items mentioned (supra) are leather goods and hence exigible to tax under entry No. 5 in Schedule II, Part III. This view of A. O. was upheld in appeal by the Deputy Commissioner (Appeal) by his order dated January 19, 1988 (at page 14) and lastly by the Board of Revenue in an appeal filed by the applicant by order dated April 10, 1989 (at page 20 ). It is against these decisions, the applicant prayed to Tribunal for making reference to this Court Under Section 44 (1) of the Act. As observed supra, the prayer of the applicant was allowed and accordingly the Tribunal made the reference to this Court on the two questions referred supra for answer on merits. This is how this reference has come to this Court.

(3.) HEARD Shri G. M. Chaphekar, learned Senior Advocate with Ku. Vandana Kasrekar, learned Counsel for the applicant and Shri A. S. Agrawal, learned Government Advocate for the respondent.