1982 (9) TMI 227 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exemption from sales tax for mini rice machines.
2. Exemption from sales tax for ghuria chalnas (also known as churia chalnas).

Detailed Analysis:

1. Exemption from Sales Tax for Mini Rice Machines

The assessee, engaged in manufacturing and selling agricultural implements, claimed an exemption from sales tax for mini rice machines under Notification No. ST-2783/X902(60)-59 dated 1st June 1963, as amended. The Sales Tax Officer, appellate authority, and the Sales Tax Tribunal denied the exemption, stating the certificate produced was from the Khadi Gramodyog Commission, Lucknow, not the All India Khadi and Village Industries Commission, Bombay, as required by the notification.

The Tribunal's decision was challenged based on a precedent set by the High Court in Refugee Trunk and Bucket Industrial Corporation Society Ltd. v. Commissioner, Agra Division, where a certificate issued by the Khadi and Village Industries Commission, Lucknow, was deemed valid due to authorization from the Bombay Commission. The High Court held that the Tribunal erred in denying the exemption based on the certificate's origin. The relevant notification required only a certificate from the Khadi Commission, without specifying its exact nature. Thus, the certificate stating the assessee as a recognized fabricator was sufficient for exemption.

2. Exemption from Sales Tax for Ghuria Chalnas

The assessee also claimed exemption for ghuria chalnas, asserting they were manually operated agricultural implements. The Tribunal denied this, finding the chalnas were sold to Krishi Utpadan Samitis and used by dal and flour mills, not directly by farmers for agricultural operations. The Tribunal concluded the chalnas were not commonly used for agricultural purposes.

The High Court noted that the Assistant Commissioner had found the chalnas were mainly sold to Krishi Utpadan Samitis but not exclusively. The Court emphasized the need to determine whether the chalnas were agricultural implements, regardless of their specific mention in the notification. Supporting evidence included letters from the Assistant Agricultural Engineer and the Ministry of Industrial Development, which recognized the chalnas as agricultural implements.

The High Court cited the Supreme Court's decision in Commissioner of Sales Tax, Madhya Pradesh v. Jaswant Singh Charan Singh, highlighting that common parlance should determine the classification of goods. The Tribunal failed to consider expert opinions and government recognitions treating the chalnas as agricultural implements. Therefore, the High Court directed the Tribunal to reassess whether the ghuria chalnas qualify for exemption under Notification No. ST-911/X dated 31st March 1956.

Conclusion

The revision was partly allowed. The High Court instructed the Tribunal to accept the certificate from the Khadi and Village Gramodyog Commission as sufficient for the mini rice machines' exemption and to re-evaluate the status of ghuria chalnas as agricultural implements for potential exemption. Each party was ordered to bear its own costs.