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TMI Blog2011 (11) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the "Kar-Niti Paripatra 2002-2003/11 (S. No. 1580:f.16(26) Tax/CCT/90/7637 dated January 10, 2003) by which the State Government issued a clarification that the entry "all kinds of papers and paper products including exercise books" does not cover "packing material". The said clarification issued by the Commercial Taxes Department is reproduced hereunder: "S. No. 1580:F.16(26)Tax/CCT/90/7637 Dated: January 10, 2003 Kar-Niti Paripatra 2002-2003/11. Sub: Regarding entry tax on all kinds of papers. With regards to ambiguity of 'all kinds of papers and paper products including exercise books' the Government has clarified that in notification of even Nos. 133 to 136 dated December 13, 2002 (S.No. 1571 to 1574) 'all kinds of papers and paper products including exercise books' does not cover packing material. Therefore, it is directed to ensure compliance of this clarification to all of your officers." The Tax Board accordingly held that the assessee was not entitled to setoff of entry tax paid against sales tax payable on the sale of corrugated boxes manufactured by it out of paper purchased by it on which entry tax was paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper is used as raw material or processing material in the manufacture of paper products including exercise books; and 2. That such paper products including exercise books are sold within the State or in the course of interState trade or commerce. 3. This notification will be effective with effect from August 13, 2002." therein, shall be payable at such rate as has been shown against them in column 3 of the said List, with immediate effect: LIST S. No. Description of Goods Rate of tax (%) 1 2 3 1 to 11 ... ... 12 All kinds of paper and paper products including exercise books 4 13 to 33 ... [F.4(67) FD/Tax/2004-32] By order of the Governor, (AJITABH SHARMA) Deputy Secretary to Government" By annexure 3 notification dated January 3, 2003 S. No. 1669, the State Government allowed set-off of entry tax paid in the State on paper from sales tax payable on the sale of finished goods on the following conditions; (1) That such paper is used as raw material or processing material in the manufacture of paper products including exercise books; (2) That such paper products including exercise books are sold within the State or in the course of inter-State trade or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only for packing. Therefore, surfane packing paper would fall under entry 24(2) of Schedule C of the Bombay Sales Tax Act, which is a wide one and covers "paper of all kinds". Per contra, learned counsel Mr. Lokesh Mathur for Revenue vehemently submitted that Notification S. No. 1669 dated January 3, 2003 issued by the State Government provides for set-off of the entry tax paid on paper against sales tax if such paper is used as raw material or processing material for manufacture of "paper products including exercise books". Therefore, the corrugated boxes, undoubtedly, being packing material are not the paper products of the type envisaged in this notification. He also relied upon the clarification issued by the State Government vide annexure 4 notification dated January 10, 2003 and submitted that the interpretation of term, "all kinds of papers and paper products including exercise books" does not include the packing material. He, therefore, submitted that the learned Tax Board was justified in allowing the appeal of the Revenue and holding against the assessee that the said set-off could not be given. I have heard the learned counsels at length ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at interpretation to such entry should be given in the manner in which the Department has construed the same during the contemporary period. The "Kar-Niti Paripatra" is merely an interpretative process and cannot be said to be beyond the jurisdiction of the State Government. The corrugated boxes manufactured by the assessee is undoubtedly a packing material and is not covered under the terms, "all kinds of papers and paper products including exercise books" as the notification in hand clearly stipulates that such paper is used as raw material or processing material in the manufacture of paper products including exercise books. It is nowhere established in the present case that corrugated boxes manufactured by the assessee are not the packing material. It may be a paper product but under the conditions stipulated in the notification dated January 3, 2003, the setoff is available only when such paper is used as raw material or processing material in the manufacture of paper products including exercise books, which terms have been interpreted by the State Government in the clarification dated January 10, 2003 to exclude the packing material. Therefore, unless the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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