1970 (2) TMI 98 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the term "salt" in section 4(1)(a) of the U.P. Sales Tax Act for exemption of black salt from sales tax.

Analysis:
The court was tasked with determining whether black salt falls under the exemption provided for "salt" in section 4(1)(a) of the U.P. Sales Tax Act. The assessee, a manufacturer of black salt, claimed exemption under this provision, which was rejected by the assessing authority, leading to an appeal. The Additional Judge (Revisions), Sales Tax, allowed the revision, asserting that black salt is covered under the term "salt" in the Act. The Commissioner, Sales Tax, sought the court's opinion on this matter.

The court considered the method of black salt production by the assessee, which involved mixing sambher salt with charcoal and heating it. The department failed to provide evidence contradicting this process. The learned standing counsel relied on various authorities to argue that black salt is a potassium compound, distinct from common salt (sodium chloride), and therefore not covered under the term "salt" in the Act.

However, the court found the argument unsubstantiated due to the lack of evidence linking the manufactured black salt to the chemical composition described in the authorities cited. The court emphasized that the product produced by the assessee, primarily used for digestion, aligns with common salt's purpose. The court noted that the black salt produced in Northern India is derived from common salt and retains its chemical constitution even after mixing with charcoal.

Section 4(1)(a) of the Act provides a general exemption for essential commodities like water, milk, salt, and newspapers, commonly used by citizens. Given that black salt serves a similar purpose as common salt and lacks evidence to suggest otherwise, the court concluded that black salt manufactured by the assessee qualifies as "salt" under the Act and is exempt from sales tax.

The court answered the question in favor of the assessee, entitling them to costs. The reference was thus answered affirmatively, supporting the exemption of black salt from sales tax under section 4(1)(a) of the U.P. Sales Tax Act.