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1952 (8) TMI 20 - HC - VAT and Sales Tax
Issues:
1. Taxability of turnover from the supply of bags under the Assam Sales Tax Act. 2. Exemption status of khudi as a form of rice under Item 1 of Schedule III of the Act. 3. Exemption status of bhushi under Item 1 or 12 of Schedule III of the Act. Analysis: The judgment pertains to a reference under Section 32(3) of the Assam Sales Tax Act, 1947, addressing three key questions of law raised by the Commissioner of Taxes, Assam. The first issue revolves around the taxability of turnover from supplying bags along with rice. The argument presented by the assessee's advocate focused on whether the assessee, engaged in a rice-milling business, should be taxed for the gunny bags provided with rice. The court clarified that as per the Act, the supplier charging the government for bags supplied qualifies as a "dealer" liable for assessment under the Act, dismissing the contention that the assessee was merely an agent for bag supply. Regarding the second issue concerning the exemption status of khudi, broken rice, the Commissioner and the Junior Government Advocate agreed that khudi falls under Item 1 of Schedule III, exempting cereals and pulses not sold in sealed containers. The court concurred, exempting khudi from assessment under the Act. The third issue addressed whether bhushi, rice bran, is exempt under Item 1 or 12 of Schedule III. The Commissioner contended that bhushi is not a form of rice or bran as specified in the Act. However, the court interpreted the term "bran" broadly, considering rice bran akin to wheat bran within the definition of "cereal." Given the health benefits of rice with bran, the court deemed bhushi exempt under Item 1 of Schedule III. In conclusion, the court held that turnover from supplying bags is taxable, while khudi and bhushi are exempt from assessment under the Assam Sales Tax Act. As two issues favored the assessee, no costs were awarded. The judgment was delivered by Judges Ram Labhaya and Deka H., answering the reference accordingly.
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