1988 (4) TMI 398 - HC - VAT and Sales Tax

Issues Involved:
1. Applicability of Notification No. ST-II-7994/X-6(31)/1975-U.P. Act XV/48, Order-80, dated 30th September 1980.
2. Interpretation of Notification Nos. ST-II-8446/X-1(2)-75, ST-II-8449/X-1(2)-75, and ST-II-8453/X-1(2)-75, all dated 1st October 1975.
3. Classification of 'gulli' and 'silli' as 'utensils' or 'parts thereof' under the aforementioned notifications.
4. Relevance of circulars and prior judicial decisions in interpreting the notifications.

Detailed Analysis:

1. Applicability of Notification No. ST-II-7994/X-6(31)/1975-U.P. Act XV/48, Order-80, dated 30th September 1980:
The learned Standing Counsel argued that this notification, which came into force on 1st October 1980, is not applicable to the assessment years in question, which are up to 1978-79. The court agreed that the Tribunal erred in referring to this notification while deciding the controversy for the relevant assessment years.

2. Interpretation of Notification Nos. ST-II-8446/X-1(2)-75, ST-II-8449/X-1(2)-75, and ST-II-8453/X-1(2)-75, all dated 1st October 1975:
The core issue was whether 'gulli' and 'silli' fall under the term 'utensils' or 'parts thereof' as used in these notifications. The notifications provided exemptions to 'karkhanedars' who manufacture and sell art brasswares, brass utensils, or parts thereof without polishing, buffing, engraving, or coloring. The court examined the definitions and conditions stipulated in these notifications to determine the eligibility for exemption.

3. Classification of 'gulli' and 'silli' as 'utensils' or 'parts thereof':
The learned Standing Counsel contended that 'gulli' and 'silli' are raw materials and do not qualify as 'utensils' or 'parts thereof.' However, the court referred to dictionary definitions and the manufacturing process to conclude that 'gulli' and 'silli' are indeed parts of utensils. The court emphasized that these items are integral to the manufacturing process of utensils and thus qualify for exemption under the notifications.

4. Relevance of circulars and prior judicial decisions:
The court considered various circulars and prior judicial decisions to interpret the notifications. The Standing Counsel cited the case of Commissioner, Sales Tax, U.P. v. Manohar Glass Works, arguing that 'glass tubes and glass rods' are not 'glasswares,' drawing a parallel to 'gulli' and 'silli.' However, the court found this case irrelevant as it dealt with a different context. The court also examined the case of Radha Ballabh Satish Chandra v. Commissioner of Sales Tax, U.P., where 'brass circles' were not exempted due to the lack of a specific notification. The court concluded that this case did not apply to the current context.

The court also considered a circular issued by the Commissioner of Sales Tax, which suggested that the process of making 'sillis' and 'gullis' could be included under the term 'utensils' or 'parts thereof.' The court found this circular persuasive, although it acknowledged that such circulars do not have statutory force.

Conclusion:
The court concluded that 'sillis' and 'gullis' manufactured by 'karkhanedars' are parts of utensils within the meaning of the notifications in question. The court emphasized the need for a liberal interpretation of welfare statutes aimed at benefiting specific industries, such as the brassware industry in Moradabad. Consequently, all revisions filed by the Commissioner of Sales Tax were dismissed, and the exemptions granted by the Sales Tax Tribunal were upheld.

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