FANCY NETS AND FABRICS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution of India calling in question the order of the assessing authority passed under Section 5 (2) (a) (ii) of the Punjab General Sales Tax Act, 1948 (Act 46 of 1948) (hereinafter referred to as the Act ).

(2.) THE petitioner, Messrs Fancy Nets and Fabrics, Batala Road, Amritsar, is a partnership concern carrying on the business of manufacture of cloth. The firm is a registered dealer under the Act. The registration certificate is No. AMR-III-15152 and is annexure 'a' to the petition. The petitioner purchased yarn, dyes and chemicals, accessories, packing material, etc. , during the year 1969-70. With regard to its turnover, the petitioner filed returns with the Assessing Authority wherein it was indicated that part of the goods purchased during the year 1969-70 were resold whereas the other part was used for the manufacture of cloth which is a tax-free item. The Assessing Authority brought to tax the goods which had been used by the petitioner for the manufacture of cloth under Section 5 (2) (a) (ii) of the Act. The petitioner has objected in the present petition to this assessment. The State has filed the return and has controverted the stand taken by the petitioner. While dealing with the various contentions advanced at the Bar, the respective stands of the parties would be apparent.

(3.) THE contentions advanced by the learned Counsel for the petitioner may now be enumerated. They are as follows: 1. That under the registration certificate, the petitioner being a manufacturer of cloth could buy the goods that have been brought to tax under Section 5 (2) (a) (ii) for manufacturing tax-free goods, i. e. , cloth, and therefore, the use of these goods for the manufacture of cloth is not liable to tax under the aforesaid provision. 2. That the return was filed in form S. T. VIII which has nothing to do with the use of goods for the manufacturing business of the petitioner and, therefore, there was no return regarding the purchase of goods on which purchase tax could be levied. The contention, in short, is that what is sought to be levied from the petitioner is purchase tax which cannot be levied as items which he purchased are not items covered by Schedule C as per the definition of "purchase" in Section 2 (ff) of the Act. 3. That there is no machinery provided in the Act or the Rules for the collection of tax under Section 5 (2) (a) (ii) and, therefore, the tax cannot be levied from the petitioner.