1957 (2) TMI 44 - SUPREME COURT

Whether the 1st respondent, the State of Uttar Pradesh, illegally and unauthorisedly levied sales tax on the 2nd petitioner-firm, under the Uttar Pradesh Sales Tax Act (U.P. Act XV of 1948) with regard to the cloth manufactured by the 2nd petitioner, with a view to exporting such cloth outside the territories of India, by customers of the 2nd petitioner called "indentors"?

Held that:- There is a vast difference between prepared cashew-nuts and printed cloth and the observations there can, by no stretch of imagination, have any application to this case. We are of the view that the words "such cloth or yarn" would mean the cloth or yarn manufactured in U.P. and sold. It has nothing to do with the transformation by printing and designs on the cloth. The cloth exported is the same as the cloth sold with this variation or difference that the colour has changed by printing and processing. In the view which we take that the cloth exported is the same as the cloth sold by the petitioners, there can be no question about the exemption clause not applying to it and if the exemption applies, then the tax has been levied without jurisdiction. The disputed levy of sales tax for the year 1953-54 is not according to law and to that extent the levy of tax is hereby quashed. Appeal dismissed.