1979 (2) TMI 186 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether "calico cloth" falls under item 7 of the Third Schedule to the General Sales Tax Act.
2. Whether the assessee is entitled to claim deduction under rule 9(b)(ii) of the General Sales Tax Rules for "sales returns."

Analysis:
1. The first issue revolves around determining if "calico cloth" falls under the category of "cotton fabrics" as defined in item 7 of the Third Schedule to the Act. The court referred to definitions in the Central Excises and Salt Act for clarification. Previous court decisions, such as Ateesee v. State of Kerala, Hind Engineering Company v. Commissioner of Sales Tax, and East India Rubber Works' case, were cited to establish the principles guiding such determinations. The Tribunal's decision was deemed inadequate in applying these principles, leading the court to set aside the order and remand the matter for a fresh determination in line with the established principles.

2. The second issue involves whether the assessee can claim deduction under rule 9(b)(ii) of the General Sales Tax Rules for "sales returns." A Division Bench ruling in Jay Engineering Works Ltd. v. State of Kerala supported the assessee's position, indicating that turnover for which deduction is sought need not be within the assessment year. Consequently, the court upheld the Tribunal's decision on this matter, as it aligned with the legal interpretation provided by the Division Bench ruling.

In conclusion, the court allowed the revision, setting aside the Tribunal's order on the first issue and remanding it for reconsideration based on established legal principles. The court upheld the Tribunal's decision on the second issue regarding deduction for "sales returns." No costs were awarded in this judgment.