1997 (2) TMI 518 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the Sales Tax Tribunal was justified in holding that the raw material was not purchased prior to October 1, 1982.
2. Whether the business of brick kiln remained closed for more than six months.

Detailed Analysis:
1. The first issue revolves around the question of whether the raw material for a brick kiln business was purchased before October 1, 1982. The Sales Tax Commissioner initially took the view that the production had started before this date based on the acquisition of land by a partnership on September 3, 1982. However, the Sales Tax Tribunal disagreed, emphasizing that land alone is not the raw material for brick kiln business; rather, it is the clay obtained through mining. The Tribunal highlighted that the extraction of clay was only possible after obtaining a mining permit on November 14, 1982. Therefore, the Tribunal concluded that the production did not commence before October 1, 1982, as asserted by the Sales Tax Commissioner.

2. The second issue pertains to whether the brick kiln business remained closed for more than six months. The Sales Tax Commissioner contended that the business was closed for certain periods, relying on specific dates. However, the Tribunal, referring to a Supreme Court decision, explained the various stages involved in brick manufacturing, including the pathai operation. The Tribunal noted that pathai operation, which is part of the manufacturing process, continued during certain periods, indicating that the business was not closed for more than six months. The Tribunal concurred with the view that pathai operation is integral to the manufacturing process of brick kilns. Consequently, it was held that the business did not remain closed for extended periods as alleged by the Sales Tax Commissioner.

In conclusion, the High Court dismissed the revision petition based on the above analysis, affirming the decisions of the Sales Tax Tribunal.