RAJ PAUL AND BROTHERS Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THE instant reference under Section 22(1) of the Punjab General Sales Tax Act, 1948 (for brevity, "the Act") has arisen out of the order dated September 29, 1989 passed by the Sales Tax Tribunal, Punjab, Chandigarh (for brevity, "the Tribunal") in Revision Nos. 71 to 73 of 1985 -86 in respect of the assessment years 1977 -78, 1978 -79 and 1979 -80. The Tribunal while accepting the application of the assessee has referred the following questions of law for opinion of this Court while exercising power under Section 22(1) of the Act:

(2.) BRIEF facts of the case are that the applicant is engaged in the resale of general mercantile including handkerchiefs on wholesale basis. Assessments in respect of the years 1977 -78, 1978 -79 and 1979 -80 were finalised by the Assessing Authority, Jalandhar. However, the assessment orders were taken up for suo motu action on the ground that deductions regarding sale of handkerchief are not correct and handkerchiefs are not items of textile. Consequent on revisional proceedings additional demand was created vide order dated February 14, 1985 by taxing the handkerchief by treating them as not textile items. Aggrieved against the order dated February 14, 1985, the applicant approached the Tribunal. The Tribunal vide order dated September 29, 1989 upheld the order of the Revisional Authority. The argument of the learned State Counsel that handkerchief is not an item of textile but it forms a part of ready -made garments was * accepted by the Tribunal by observing that tailored Article made of cloth does not remain as cloth and as such it cannot be treated as item of textile and it is not eligible for exemption.

(3.) WE have heard the learned Counsel for the Revenue and have gone through the paper book with her able assistance. In order to appreciate the legal issue raised, it would be necessary to read Section 6 of the Act and entries 29 and 30 in Schedule 'B', which give the list of goods which are tax -free and the same read thus: