9911796707
TMI Blog1991 (4) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... the sand manufactured at Pali factory was used as a further raw material in the manufacture of glass for sale at Vallabh Vidyanagar, and in confirming the levy of purchase tax on that count under section 50 of the Gujarat Sales Tax Act, 1969? 3.. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in concluding that, there was no bona fide belief on the part of the applicant-company, of being eligible to make purchase of 'beaters' against form 'Z' and also whether the consequent conclusion about the absence of reasonable cause within the meaning of section 45(6) of the Gujarat Sales Tax Act, 1969, as drawn by the Tribunal was unreasonable or not? " 2.. The applicant-company, i.e., M/s. Vallabh Glass Works at Pali is a registered dealer and it is a "new industry" holding eligibility certificate from the Commissioner of Industries in terms of entry 53 in Government notification issued under section 49 of the said Act. The said company is also registered as a dealer at Vallabh Vidyanagar, Anand. The unit at Pali was holding eligibility certificate and not the unit at Vallabh Vidyanagar. 3. For the accounting year 1974-75 the applicant-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risale, or as packing materials als by a registered in the packing of goods so dealer to a certimanufactured. fied manufacturer, who(2) If the certified manufacturer has obtained an eligibility (a) establishes a certificate from the Indusnew industry, tries Commissioner, Gujarat (b) is a regisState, containing, inter alia, tered dealer that the new industry has not holding a been commissioned on or after recognition 1st April, 1970, in areas under section beyond 24 kms. from the 32 of the Act municipal limits of cities of or if holding Ahmedabad and Baroda and the recogni16 kms. from the municipal tion, on surlimits of Surat, Bhavnagar, rendering it Rajkot and Jamnagar. for cancella- tion within (3) If the certified manufacturer sixty days furnishes to the selling dealer from the date a certificate in form "Z" of the coming appended hereto declaring, into force of inter alia, that the goods are the notificarequired for use by him within tion, and the State as raw materials, processing materials, or as (c) is certified by machinery in the manufacthe Commisture of any goods for sale, or as sioner of packing materials in the Sales Tax for packing of goods so the purpose. man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packing materials mentioned in bill/cash memo/invoice No..........dated..........of M/s..........will be used by me/the said..........within the State in the manufacture of any goods or in the packing of the goods so manufactured, namely..........for sale. I further certify that the aforesaid certificate was in force on the date of the aforesaid purchase of goods. Place:.................... Signature:.................... Date:.................... Status:......................." A certified manufacturer is required to certify in form "Z" that he is a registered dealer holding certificate of registration and also holding certificate granted by the Commissioner under Government Notification, dated 11th November, 1970 and further that the goods being raw materials, processing materials, machinery or packing materials mentioned in the bill will be used by him within the State in the manufacture of goods or in the packing of any goods so manufactured for sale. 10.. At this stage, it will be necessary to make reference to section 50 of the said Act which, inter alia, provides that if any specified class of sales or specified sales or purchases is exempted under section 49 wholly o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust exemption to the new industry which is to be established in backward areas. In support of this submission, Mr. Mody, learned advocate appearing for the applicant, relies upon the decision of the Division Bench of this Court in the case of State of Gujarat v. Minu Chemical Pvt. Ltd. reported in [1982] 50 STC 339. It may be stated that in that case the Division Bench was dealing with the claim of exemption under this very notification issued by the State Government. The assessee before the Division Bench was a certified manufacturer who had established new industry within the meaning of this very entry 53(1) of the Government Notification, dated 11th November, 1970. Before the Division Bench the assessee purchased certain articles, namely: (a) Deoxidised copper ethyl acetate purification unit with copper kettle and packed column No. 1; (b) Copper deoxidised condenser horizontal type 10 M.Z. No. 1 (c) Resident tank flat bottom and conical top No. 1; (d) Aluminium ethyl acetate tank of 10 M. capacity No. 1; and (e) Benzene horizontal underground tank capacity 2560 M. x 500 M. long with accessories No. 1. In the course of assessment proceedings the assessee claimed set-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , form a complete machine. In the case before us the "beaters" which are used by the assessee as parts of crushers they at least play the role of a part of member of a machine. In fact, the function of "beaters" is to beat constantly or hammer constantly the quartz stones into sand. In such a process even the beaters get worn out. Beaters are, therefore, the most essential part of that machine which is being used for the purpose of crushing or grinding quartz stones. Beaters would, therefore, be machinery and we cannot give restricted meaning to the word "machinery" specifically when we construe the word in the context of exemption notification. The object of the said entry is to give benefit to "machinery" in its wider sense so as to include its parts also. Any restricted meaning to the word "machinery" would render the exemption meaningless because a new industry would be required to pay tax for purchase of essential parts of machine. The very object of exemption would be defeated. We, therefore, hold that the word "machinery" as used in entry 53 must be widely construed. In the case before us the beaters are the most integral part of the crusher or the machine without which qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he article manufactured by it. It may be mentioned at this stage that the assessee is a certified manufacturer and it has purchased beaters against form "Z" from the registered dealer. Admittedly, the parent unit of the company at Vallabh Vidyanagar is not the certified manufacturer. The benefit of exemption is to be available to the certified manufacturer. Certified manufacturer required the beaters for the purpose of manufacturing its final product, namely, sand. Such product was required to be sold by the certified manufacturer as per the recitals contained in form "Z". Admittedly, the assessee did not wholly sell the goods manufactured by it and as per the findings of the Tribunal part of the goods manufactured by it were transported to the parent company for the purpose of manufacturing glass. To that extent, the assessee committed breach of liability to pay purchase tax under section 50 of the said Act. We, therefore, find that the Tribunal was right in holding that there was breach of recitals of declaration in form "Z" when the sand manufactured by Pali factory was used as further raw material in the manufacturing of glass for sale at Vallabh Vidyanagar. 18.. As regards t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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