1983 (7) TMI 284 - HC - VAT and Sales Tax

Summary

Issues:
1. Liability of sales tax on the sale of coal-dust by the assessee.
2. Assessment of tax on sales of aluminium and brass caps made from bulbs.

Issue 1: Liability of Sales Tax on Coal-Dust Sale
The High Court addressed whether the sale of coal-dust by the assessee is liable to be assessed for sales tax. The assessee purchased coal, used it in their factory, and sold the residue as coal-dust. The Tribunal found that the coal-dust sold was not locally purchased, and no State sales tax had been paid on it. The assessee argued that as coal is a declared good, the 4% Central sales tax paid on it through a registered dealer should suffice, and there cannot be two impositions of State sales tax on imported coal. The High Court agreed, holding that the sales of coal-dust by the assessee would not be subject to tax.

Issue 2: Assessment of Tax on Caps
Regarding the assessment of tax on sales of aluminium and brass caps made from bulbs, the question was whether they should be taxed at 12% as components of bulbs or as unclassified items. The assessee argued that the caps undergo a manufacturing process before being fitted onto bulbs, making them distinct from the caps sold. They cited legal precedents to support their position. However, the High Court found that the caps, despite undergoing some processing, remain essential for the completion of bulbs and do not change into something different. Therefore, the caps were deemed to be component parts of the bulbs, subject to 12% tax. The Tribunal's decision on the caps was confirmed, and the papers were sent back for further orders.

In conclusion, the High Court partially allowed the revision, exempting the sales of coal-dust from tax but confirming the tax assessment on the caps sold by the assessee. The parties were directed to bear their own costs, and the Tribunal was instructed to make appropriate orders based on the modified judgment.