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TMI Blog2013 (9) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be occasioned by the sale and not for/by any other purpose. Therefore, when a purchasing dealer did not adhere to the declaration, which he had furnished, the State was wrongfully deprived of revenue i.e. sales tax. Accordingly, the turnover of the purchasing dealer would include the goods covered by the mis-declaration. The taxable event was mis-utilisation of the declaration form, which took place when the goods were transferred for manufacturing outside Delhi. But for the declaration form, the purchasing dealer was liable to pay sales tax at the time of the purchase made by him. Thus, the taxable event and the tax, which was due and payable but not paid in view of the declaration, became payable as there was mis-utilisation and false or wrong declaration Decision in Seagull Laboratories (I.) Private Limited versus Delhi Administration and Others [1990 (12) TMI 300 - DELHI HIGH COURT] followed - Decided against the assessee. - Sales Tax Reference No. 1/2012 - - - Dated:- 11-9-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Petitioner : Mr. Rajesh Mahna Mr. Ramanand Roy, Advocates. For the Respondent : Mr. A. K. Babbar, Advocate. ORDER Sanjiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar, Meerut, Uttar Pradesh and M/s Emrold Jewellers, Coimbatore, Kerala for making jewellery according to specific designs provided by the petitioner. 3. Question arose whether the said purchases made by the petitioner against statutory form, i.e., form No. ST-1 should be added to the turnover of the petitioner in view of violation of Section 4(2)(a)(v) of the Act. 4. Adjudicating Authority held that as the goods were manufactured outside Delhi, there was violation of third proviso to Section 4(2)(a)(v) of the Act and, therefore, the purchase value of the said goods should be included in the taxable turnover. Before the adjudicating authority, the petitioner had written a letter dated 7th May, 1999 accepting that the purchased raw material on which no tax was paid on strength of the statutory forms was sent to M/s Surender Kumar Vijay Kumar, Meerut for job work as per specific designs and the goods were received in form of 22 Carat gold ornaments. It was stated that finishing, polishing and accessories were attached in Delhi in order to give the product a self life and thereafter the goods were exported to various countries. 5. Adjudicating Authority on examination of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the tribunal, the petitioner had contended that the word manufacture has been defined in Section 2(h) of the Act and would include polishing and other allied works carried out, including finishing work. It was accordingly submitted that the ultimate and final manufacturing activity was undertaken at Delhi and, therefore, there was no violation of Section 4(2)(a)(v). The tribunal, however, did not agree and held there was violation of the declaration made by the petitioner when they submitted ST-1 form. 9. Learned counsel for the petitioner has drawn our attention to Section 2(h) of the Act, which reads as under:- 2.(h) manufacture , with its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods, but does not include any such process or mode of manufacture as may be prescribed; 10. It is accordingly submitted that finishing or polishing or attaching accessories to ornaments or otherwise processing or treating the ornaments amounts to manufacture. In other words, the contention raised is that even after the gold ornaments were received from Meerut/Coimb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be furnished by the dealer in respect of the said sale: PROVIDED FURTHER that no deduction in respect of any sale referred to in sub-clause(iv) shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority is furnished in the prescribed manner and within the prescribed time, by the dealer who sells the goods: PROVIDED ALSO that where any goods are purchased by a registered dealer for any of the purposes mentioned in sub-clause (v), but are not so utilised by him, the price of the goods so purchased shall shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer; and (b) the tax collected by the dealer under this Act as such and shown separately in cash memoranda or bills, as the case may be. 12. In the present case, we are concerned with sub-clause (A) to Section 4(2)(a)(v). It is accepted that the goods in question are not covered by Third Schedule or newspapers. Sub-clause (A) was considered by the Delhi High Court in Seagu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of the condition/declaration that the goods purchased under statutory form were raw material for manufacture of goods in Delhi. In other words, the goods should be used as raw material for manufacturing in Delhi and should not be transferred outside Delhi for manufacturing activities. In the present case, the goods, i.e., standard gold were transferred out of Delhi to Meerut, State of Uttar Pradesh and Coimbatore, State of Tamil Nadu. The reason for the said transfer was manufacture of ornaments. Thus, manufacturing activity was carried out and the standard gold was converted into ornaments. 24 Carat gold became 22 Carat gold, when the ornaments were skilfully fabricated by the goldsmiths as per the designs given by the petitioner. A new and different product, with considerable value addition, known and identified as a different commodity came into existence. The petitioner before the Assessing Officer had accepted that they had provided specific designs and had received back the gold in form of 22 Carat gold ornaments. 14. Learned counsel for the petitioner emphasised that the petitioner had carried out finishing, polishing and had attached accessories at Delhi. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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