SIDHU RAM ATAM PARKASH Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE following question of law has been referred to us under Section 22 (1) of the Punjab General Sales Tax Act, 1948, hereinafter called the Act, by the Sales Tax Tribunal, Haryana, for our opinion: Whether, on the facts and in the circumstances of the case, the petitioner who is a forest contractor and whose business is to cut the standing trees is a manufacturer?

(2.) MESSRS. Sidhu Ram Atam Parkash, a partnership-firm of Gohana in Rohtak District, got a contract from the forest department for cutting trees. This contract was operated for only four months in 1969-70 and the whole financial year of 1970-71. During the year in question, i. e. , 1969, the firm got a contract for Rs. 68,000, while they actually sold goods worth Rs. 1,10,000, after cutting the trees. The Assessing Authority was of the view that since this firm, after felling the trees, cut them into logs and then converted them into rafters, planks and firewood, etc. , the entire process by which the goods were thus produced fell within the definition of "manufacture" and the firm was not covered by the definition of "general" dealer for whom the taxable quantum was Rs. 40,000. The firm was held to be a "manufacturing" dealer and it could get exemption for sales up to Rs. 10,000 only. It was assessed to sales tax of Rs. 436. 34 as such and a penalty of Rs. 200 was also imposed for not applying for a registration certificate under Section 11 (6) of the Act for the year 1969-70. Similarly, the firm was assessed to sales tax of Rs. 6,438 for the year 1970-71 and a penalty of Rs. 3,000 was also imposed.

(3.) THIS order of the Assessing Authority was confirmed on appeal by the Deputy Excise and Taxation Commissioner, but the penalty for 1970-71 was, however, reduced to Rs. 2,000.