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2014 (12) TMI 1218 - HC - VAT and Sales TaxLiability of tax - Import of raw sugar and consequential sale - Raw sugar imported in to India was processed, converted into white sugar and re-exported and what has been sold locally is only the processed white sugar - Also violation of principles of natural justice - Held that:- if sugar is to attract sales tax under the First Schedule, then it must be one other than what is specified for grant of exemption under the Third Schedule. Considering the emphasis in the Third Schedule that the goods produced or manufactured in India as described in the Additional Duties of Excise (Goods of Special importance) Act, 1957 alone is taken up for consideration, the only sugar that can hence fall for consideration under First Schedule must be one other than what is enumerated in the Third Schedule. Rightly, entry 61 of Part B of the First Schedule gave the description of 'sugar' that is sought to be taxed in the First Schedule as, 'sugar imported into India from foreign countries'. Thus irrespective of the kind of sugar, once it is an imported sugar, the sales tax levy under entry 61 of Part B stands automatically attracted to the sales and if sold as such, retaining its original character attracts tax at four per cent under the First Schedule to the Act. But when once imported sugar is not dealt with as such for sale, but has been subjected to a manufacturing process, the liability under the First Schedule no longer stands attracted to the manufactured sugar. Therefore, the assessment is to be redone. - Matter remanded back
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