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TMI Blog1964 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain with him), for the appellant. S.V. Gupta, Solicitor-General of India (S. Gopal Singh and R.N. Sachthey with him), for the respondents. -------------------------------------------------- The judgment of the Court was delivered by HIDAYATULLAH, J.- This appeal by certificate against the judgment of the High Court of Punjab at Chandigarh dated February 18, 1963, questions the inclusion of certain items in the turnover Messrs. Modi Spinning and Weaving Mills Co. Ltd., Modinagar, in the assessment of sales tax for the year 1959-60. In that year the company filed a return of its sales showing a gross turnover of Rs. 40,89,954-24 nP. and a taxable turnover of Rs. 1,30,296-81 nP. In computing the taxable turnover the company deducted Rs. 10,85,842-74 nP. on account of unginned cotton purchased by it on a certificate of registra- tion granted to it on January 3, 1956. This deduction was not permitted by the Assessing Authority, Patiala District, also described as the District Taxation Officer, Patiala District. Exemption from tax was also claimed in respect of purchases of oil-seeds amounting to Rs. 4,47,437-33 nP., which the company claimed to exclude from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of India or of goods specified in his certificate of registration for the use by him in the manufacture in the State of Punjab of any goods for sale and on sales to a registered dealer of containers or other materials for the packing of such goods: Provided that in case of such sales, a declaration duly filed up and signed by the registered dealer to whom the goods are sold and containing prescribed particulars on a prescribed form is furnished by the dealer who sells the goods: Provided further that when such goods are used by the dealer to whom these are sold for purposes other than those for which these were sold to him, he shall be liable to pay tax on the purchase thereof at the rate of tax leviable on the sale of such goods, notwithstanding that such purchase is not covered by clause (ff) of section 2; ....." The registration of dealers is provided by section 7 which provides inter alia: "7. Registration of dealers.-(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate. (2) Every dealer required by sub-section (1) to be registered shall make applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form S.T. III was not amended till a Government Notification issued on September 29, 1961, prescribed the new Form, that is to say, after the period of assessment in the present case. The company, therefore, held a certificate of registration in which there was no condition that the goods were for use by the dealer "in the manufac- ture in the State of Punjab of goods for sale". The italicised words were not present in the old certificate which the company held. The contention of the company is that according to the certificate granted to it there was no condition that cotton purchased under that certificate should be subjected to manufacture in the Punjab. The case of the company was that it purchased raw cotton for manufacture and ginned it in its ginning mills in the Punjab and sent the bales to Modinagar in Uttar Pradesh for manufacture of cloth in the company's mills situated there. It was thus claimed that the purchases of cotton were free of tax under section 5(2)(a)(ii) of the Sales Tax Act. Alternatively, it was submitted that if the section required that the manufacture should be in the Punjab, then as the raw cotton was ginned in the Punjab that condition was satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the goods specified in the certificate of registration must be for the use of the dealer "in the manufacture in the State of Punjab of any goods for sale". There are three conditions involved: the first is that they must be for the use of the dealer; the second is they must be for manufacture in the State of Punjab; and the third is that the manufacture must result in goods for sale. It is not necessary to decide whether the sale should also be in the Punjab, for the reason that no sale as required took place. The exemption could only be claimed if the company satisfied all the three conditions. The last condition does not appear to be fulfiled in this case. The words "for sale" show the quality of goods and it is clear the goods that are manufactured in the Punjab must be for sale. According to the section the goods which are the result of manufacture must be for sale and not for use by the manufacturer in some manufacture outside the State resulting in different goods. The goods which the company manufactured in the State of Punjab were bales of ginned cotton and they were admittedly not for sale because they were sent to its spinning and weaving mills in Uttar Pradesh. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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