RAM NARAYAN NANDALAL Vs. STATE OF ASSAM

JUDGEMENT

(1.) THIS is a reference under Section 32(3) of the Assam Sales Tax Act, 1947, from the Commissioner of Taxes, Assam.

(2.) THE assessees were registered dealers under the Assam Sales Tax Act. In their return they claimed exemption from sales tax on their turnover from cloth of the value of Rs. 2,77,024 under item 16 of Schedule III of the Assam Sales Tax Act. This amount represented the sale proceeds of cloth sold in pieces (thans) of 20 to 30 yards. But the quality of the entire cloth was such that the price of a unit of six yards was less than Rs. 10. The deduction claimed was not allowed by the Superintendent of Taxes. The Assistant Commissioner of Taxes agreed with the Superintendent and dismissed the appeal. The assessee's second appeal to the Commissioner of Taxes met with no better fate. The view of the taxing authorities was that the price per yard calculated on the basis of Rs. 10 for six yards was not the only criterion for determining the availability or otherwise of the exemption under item No. 16 of Schedule III of the Assam Sales Tax Act and the length of the cloth actually sold was another relevant factor of the test. In their view exemption could be claimed under item No. 16 of Schedule III of the Act only if pieces of cloth sold did not exceed six yards in length and the price of each piece did not exceed Rs. 10. The assessee disputed the correctness of the interpretation placed on this item and applied for the reference. The question referred by the Commissioner of Taxes is as follows :

(3.) IN the reference the learned Commissioner expressed the view that in item No. 16 there was emphasis not no price alone but also on the yardage sold. The claim to exemption, therefor, depended on two factors - the price per yard and the yardage sold at any one time. He thought the words "per piece" appearing in Column 3 of the Schedule against item No. 16 supported this view.