EAST INDIA COTTON MANUFACTURING CO PVT LTD Vs. ASSESSING AUTHORITY-CUM-EXCISE AND TAXATION OFFICER GURGAON

JUDGEMENT

(1.) THE petitioner-Company is registered under the Companies Act, 1956, with its registered Office at Calcutta. It has a factory at Faridabad for the manufacture and processing of textiles of all varieties, in which factory about 500 workmen are employed. This factory was established in 1955 and since then it has been continuing its activities of manufacturing, processing and sale of textiles.

(2.) THE petitioner-Company is a dealer registered under the Punjab General Sales Tax Act, 1948 and also under the Central Sales Tax Act, 1956 (hereinafter called the Act ). On July 1, 1957, a certificate under Section 7 of the Act was granted to the petitioner-Company and according to sub-sec (3) of S. 7 of the Act, the said certificate is to contain the classes of goods for the purposes of sub-section (1) of S. 8. The relevant provisions of Section 8, which require interpretation in this petition, are thus contained in Clause (b) of sub-section (1) and sub-section (3) thereof which reads as under :"

(3.) IN the certificate issued to the petitioner-Company goods for re-sale and goods for use in manufacture are separately mentioned. The petitioner-Company purchases these goods on the basis of the certificate and issues 'c' Forms to the selling dealers who claim the deductions and pay tax at the reduced rate in the State from which the movement of goods is originated. On September 17, 1966, the Excise and Taxation Officer, Gurgaon issued a notice to the petitioner-Company stating " it has come to the notice that you have been misusing te registration certificate under the Central Sales Tax Act, 1956. You are therefore directed to appear before me on 22-9-1966 at 10. 00 a. m. at Canal Rest House, Faridabad, and show cause why action under Section 10 of the Central Sales Tax Act should not be taken against you for this gross negligence. You should produce your account books from the date when you started doing sizing, bleaching, and dyeing for the third party on job basis. "