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TMI Blog1978 (4) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 11(1A) in respect of raw materials purchased and used in the manufacture of ice-cream on the sale of which, amounting to Rs. 2,07,790, no tax was payable under the Act?" The facts giving rise to this reference are as follows: The respondents are registered as a dealer and hold a recognition certificate under the said Act. The respondents manufacture ice-cream on a large scale. In the assessment of the respondents for the period 1st April, 1964, to 31st March, 1965, it appears that the respondents claimed that sales of ice-cream amounting to Rs. 2,07,790 were free from tax as being sales of ice-cream sold within the premises of the respondents at less than Re. 1 per person. It may be noticed that the actual exemption at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout 19 per cent where no tax was leviable. The Tribunal held that it was not the sale aspect of certain goods which was to be taken into consideration to find out as to whether there was any contravention of the recitals of the aforesaid certificate. Ice-cream as such is not in any of the entries in Schedule A to the said Act and hence it must be held to be a taxable commodity. The Tribunal upheld the contention of the respondents and directed that purchase tax levied under section 14 of the said Act should be deleted and if recovered from the respondents should be refunded to them. The present reference arises out of this decision of the Tribunal. In order to appreciate the contentions raised before us, it is useful to take note of cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir premises at less than Re. 1.50 per person. These sales were exempt from the levy of tax under entry 14 of Schedule A to the said Act as it stood at the relevant time. On proportionate basis it was found that raw materials of the value of Rs. 76,122 had gone into the making of the ice-cream, the sales of which were not liable to tax as aforesaid. The recital in form 15, to which we have already referred, is to the effect that the materials purchased will be used in the manufacture of taxable goods for sale by the recognised dealer. In view of this, it seems to us that there is considerable force in the contention of Mr. Sanghvi, the learned Advocate for the applicant, that the respondents have contravened the aforesaid recital to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. What can be said is that at the relevant time ice-cream sold for consumption in the premises at a rate of less than Re. 1.50 per person was not subject to the levy of tax by reason of entry 14 of Schedule A, as it stood then. Ice-cream sold at a higher rate was liable to the levy of tax. Hence ice-cream sold by the respondents of the value of Rs. 2,07,790 was exempt from the levy of tax by reason of the said entry and in respect of the raw materials which had gone into the manufacture of the same there was contravention of the aforesaid recital in the certificate issued in form 15. Mr. Patil drew our attention to the decision of the Gujarat High Court in Ruby Laboratories v. Commissioner of Sales Tax[1971] 27 S.T.C. 326. This decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude by necessary implication goods, the sale or purchase of which is totally exempted from tax at all points under section 8 or section 17(1) of the Madras General Sales Tax Act. We are unable to see how this can support the contention that only goods the sale or purchase of which is completely exempt from tax can be said to be excluded from the levy of tax under the said Act, viz., the Bombay Sales Tax Act, 1959. In fact, the observations in this judgment of the Supreme Court clearly show that the event on which the sales tax or purchase tax is imposed is the sale or purchase of goods. In the result, we must answer the question referred to us in the negative. The respondents must pay to the applicant the costs of this reference fixed at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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