1981 (3) TMI 238 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of a government notification exempting purchase tax on sugarcane purchased by sugar factories during specific months.
2. Determination of whether the petitioner, a partnership firm producing khandasari sugar, qualifies as a sugar factory under the exemption notification.
3. Analysis of the definition of "sugar factory" and "sugar" under the Karnataka Sales Tax Act, 1957.

Issue 1: Interpretation of Government Notification:
The petitioner, a partnership firm producing khandasari sugar, sought exemption from purchase tax for sugarcane bought during May and June 1978 based on a government notification. The respondents denied the exemption, leading to a writ petition under Article 226 of the Constitution.

Issue 2: Qualification as a Sugar Factory:
The petitioner contended that all sugar factories producing sugar should benefit from the exemption notification, as the term "sugar factory" was not defined in the Act. The court noted that the Act did not define "sugar" or "sugar factory," causing ambiguity in interpreting the notification.

Issue 3: Definition of "Sugar" and "Sugar Factory":
The court analyzed the term "sugar" based on various legal definitions and precedents. Referring to the Fifth Schedule of the Act and other legal sources, the court determined that "sugar" encompassed various types of sugar, excluding jaggery. Consequently, the court concluded that the petitioner, a manufacturer of khandasari sugar, qualified as a sugar factory entitled to the exemption.

In conclusion, the court allowed the petition, making the rule absolute and issuing a mandamus to the respondents to refrain from collecting purchase tax from the petitioner for the specified months under the notification. No costs were awarded in the judgment.