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TMI Blog1966 (10) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover in the years 1955-56, 1956-57 and 1957-58 from sales of "chewing tobacco". Their appeals to the Commercial Tax Officer and the Sales Tax Tribunal, Madras, were dismissed. The respondents then approached the High Court of Madras in exercise of its revisional jurisdiction and raised three principal contentions: (1) that they were not liable to pay sales tax on their turnover from the sales of packets of chewing tobacco prepared by them; (2) that the cost of packing material was not liable to be included in computing the taxable turnover; and (3) that they were entitled to rebate of the excise duty paid by them on the raw tobacco from which the chewing tobacco was prepared. The High Court held that in computing the taxable turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This decision is prima facie determinative of the only question which is raised in these appeals by the State. But counsel for the respondents contended that chewing tobacco is the same com- modity as raw tobacco, and therefore excise duty paid on raw tobacco is an admissible deduction. Counsel said that in Swasthik Tobacco Factory's case [1966] 17 S.T.C. 316., it was conceded by counsel that "chewing tobacco" was a manufactured product, and the Court decided the case on the footing of that concession, whereas in the present case there is no such concession made. The Sales Tax Tribunal has set out the process of preparation of chewing tobacco. Raw tobacco is purchased under a transport permit issued by the Central Excise Department and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 6(1) shall be levied on the net turnover of a dealer. In determining the net turnover the amounts specified in clauses (a) to (1) shall, subject to the conditions specified therein, be deducted from the gross turnover of a dealer- * * * * (i) the excise duty, if any, paid by the dealer to the Central Government in respect of the goods sold by him." It is clear on the terms of the rule that if the dealer has paid excise duty in respect of the goods sold by him, that excise duty is liable to be deducted in the computation of the net turnover of the dealer. But if the excise duty has been paid in respect of another commodity, it is not liable to be deducted. We have pointed out that chewing tobacco is not ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) the sale of cigars and cheroots at less than two annas per cigar or cheroot and bidis, snuff, chewing tobacco or any other product manufactured from tobacco, shall be liable to tax under section 3, sub-section (2) only at the point of the first sale effected in the State of Madras by a dealer who is not exempt from taxation under section 3, sub-section (3), but at the rate of six pies for every rupee on his turnover; (viii) raw tobacco, whether cured or uncured, shall be liable to tax under section 3, sub-section (2) only at the point of the first purchase effected in the State of Madras by a dealer who is not exempt from taxation under section 3, sub-section (3), but at the rate of six pies for every rupee on his turnover: Provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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