1994 (3) TMI 356 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Whether aluminium foil purchased and exported as printed aluminium foil or pharmaceutical packing materials are identical goods under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941, rule 27C(2) of the Bengal Sales Tax Rules, 1941, and section 5(3) of the Central Sales Tax Act, 1956.
2. Entitlement to declaration forms XXIV-A and XXXIII for tax exemption purposes.
3. Whether the processing of aluminium foil into printed aluminium foil constitutes manufacturing a new commercial commodity.
4. Compliance with section 5(3) of the Central Sales Tax Act, 1956, for tax exemption on export sales.

Issue-wise Detailed Analysis:

1. Identical Goods under Relevant Sections:
The core question was whether aluminium foil purchased and exported as printed aluminium foil or pharmaceutical packing materials are considered identical goods under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941, rule 27C(2) of the Bengal Sales Tax Rules, 1941, and section 5(3) of the Central Sales Tax Act, 1956. The applicant contended that despite processing, the aluminium foil remained the same commodity. The Tribunal concluded that for the purpose of section 5(3) of the 1956 Act, printed aluminium foil does not constitute a different commercial commodity from plain aluminium foil.

2. Entitlement to Declaration Forms XXIV-A and XXXIII:
The applicant required declaration forms XXIV-A and XXXIII to avoid additional tax liability. The assessing officer's refusal to issue these forms was challenged as arbitrary. The Tribunal directed the respondents to issue the appropriate declaration forms according to law, recognizing the applicant's entitlement to these forms for export turnover and local sales.

3. Processing as Manufacturing:
The respondents argued that the processing of aluminium foil into printed aluminium foil constituted manufacturing a new commercial commodity, thus disqualifying the applicant from tax exemption. However, the Tribunal, referencing case law, determined that laminating, printing, and sizing aluminium foil for export purposes did not amount to manufacturing a new commercial commodity. Therefore, the processed foil remained the same as the purchased foil for tax exemption purposes.

4. Compliance with Section 5(3) of the Central Sales Tax Act, 1956:
The Tribunal evaluated whether the applicant's activities complied with section 5(3) of the 1956 Act, which exempts the last purchase of goods preceding export from sales tax. The Tribunal found that the applicant met the conditions stipulated in section 5(3), as the processing done to the aluminium foil did not produce a different commercial commodity. Consequently, the applicant was entitled to the tax exemption for the last purchase of aluminium foil intended for export.

Conclusion:
The Tribunal allowed the application, granting the applicant the benefit of section 5(3) of the Central Sales Tax Act, 1956, for the last purchase of aluminium foil for export. The orders dated December 4, 1992, and January 22, 1993, were set aside, and the respondents were directed to issue the appropriate declaration forms. The operation of the judgment was stayed for eight weeks to allow the State to appeal to the Supreme Court.