COMMISSIONER OF SALES TAX Vs. MAHESHWARI TRADING CO

JUDGEMENT

(1.) THIS is a reference made by the Board of Revenue, Madhya Pradesh, Gwalior, under Section 44 of the M. P. General Sales Tax Act, 1958. In this reference the question referred is : Whether hessian is cloth falling under item No. 6 of Schedule I of the M. P. General Sales Tax Act, 1958 and as such exempted from sales tax ?

(2.) THE Board of Revenue, on appeal by the assessee, held that the turnover of hessian used as packing material has to be excluded from assessment to tax and to this extent the learned member of the Board of Revenue allowed the appeal preferred by the assessee. It appears that after this the Commissioner of Sales Tax moved the Board to state the case under Section 44 of the M. P. General Sales Tax Act, 1958 and the Board has made the reference seeking an opinion on the question referred to above.

(3.) SCHEDULE I, entry No. 6, refers to cloth and a Division Bench of this Court in Commissioner of Sales Tax, M. P. v. New Bhopal Textile Ltd. Bhopal 1970 M. P. L. J. 607, held as under : Just as a cotton or woollen fabric is made of cotton fibre or woollen fibre, so also hessian cloth is made of jute or hemp fibre. Since the entry is comprehensive enough to include 'all varieties of cloth', there is no warrant for excluding hessian cloth from that entry. It appears that after this decision of the High Court an amendment was made by the M. P. General Sales Tax (Amendment) Act (13 of 1971) indicating that hessian is not covered by the term cloth in item 6 of Schedule I of the State Act and, therefore, it is not exempted from sales tax. This Act is given retrospective effect as Section 10 of this Act enacts: