1996 (7) TMI 508 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of provisions of section 4B and related provisions of the Punjab General Sales Tax Act, 1948 regarding exemption from purchase tax on raw materials used for manufacturing goods exported out of India.

Analysis:
1. The judgment addresses multiple cases involving the interpretation of section 4B of the Punjab General Sales Tax Act, 1948. The central issue is whether raw materials purchased within the country for manufacturing goods exported outside India are exempt from purchase tax under section 4B.

2. The Assessing Authority imposed purchase tax on goods purchased for manufacturing shoddy woollen blankets, despite a significant portion of the goods being exported. The petitioner argued that no purchase tax should apply to raw materials used for goods exported outside the State. The petitioner cited section 4B(ii) in conjunction with section 29(1)(a)(ii) to support the exemption claim.

3. Various cases challenged the levy of purchase tax for different assessment years, all revolving around the same issue of exemption under section 4B. The petitioner contended that goods not subject to sales tax locally but exported should be exempt from purchase tax.

4. The petitioner's counsel argued that the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, supported the exemption claim from purchase tax on raw materials used for manufacturing goods like shoddy blankets. The counsel also distinguished previous court decisions to support their interpretation of section 4B.

5. The court analyzed previous judgments, including a Full Bench decision related to the Haryana Act, to determine the liability for purchase tax on goods manufactured and exported. The court upheld the levy of purchase tax on raw materials purchased by the petitioner, citing statutory provisions and previous court decisions.

6. The court dismissed the petitioner's argument based on the 1957 Act, stating that it lacked factual foundation and relevance to the exemption claim under the 1948 Act. The court found no merit in the writ petitions and upheld the levy of purchase tax on raw materials used for manufacturing goods exported outside India.

7. The court answered the Sales Tax Tribunal's question against the assessee and directed a reassessment of interest based on observations from a previous Full Bench decision. Ultimately, the writ petitions were dismissed, affirming the levy of purchase tax on raw materials used for manufacturing goods exported out of India.