NANU MAL AMAR NATH Vs. STATE OF HARYANA

JUDGEMENT

(1.) The petitioner-firm is manufacturer of woollen goods like blankets and shawls and is registered as a Small Scale Industrial Unit with the Department of Industries, Haryana. Apart from this, the petitioner-firm deals in purchase and sale of cotton bed-sheets which are also called cotton carpets. The petitioner-firm is registered as a dealer with the Sales Tax authorities. While framing the assessment of Sales-tax of the petitioner-firm, the Assessing Authority came across certain transactions of sale by which the petitioner-firm is purported to have sold some cotton carpets. The amount reaslised by the sale of such carpets was not entered in the taxable turn over of the petitioner-firm presumably on the ground that the sale of such items was exempted under Entry 30 of Schedule 'B' of the Punjab General Sales Tax Act as applicable to the State of Haryana. This Entry runs as follows :-

(2.) The Assessing Authority did not accept that plea of the petitioner-firm and levied sales tax on all those items of sale on the ground that cotton carpets did not enjoy any exemption under Entry 30 mentioned above. The appeal filed by the petitioner firm before the Sales Tax Appellate Commissioner, Ambala Cantt. failed. Their petition before the Sales Tax Tribunal was also dismissed.

(3.) The petitioner-firm then approached the Chief Minister and the Finance Minister of Haryana and the latter, it is alleged, on realising the justice of the demand held that the so-called cotton carpets sold by the petitioner-firm did not strictly fall within the meaning of the word 'carpet' and the same should not be taxed. The Department was directed to stay the recovery of tax from the various assesses on various counts. The petitioner-firm has challenged the order of the subordinate authorities in this petition on the ground that they have failed to take notice of the process of manufacture involved in the production of this item. It is submitted on their behalf that the word 'carpet' means a 'specially manufactured article' and the mere description in the cash memos given by the petitioner-firm should not have burdened them with the tax liability.