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TMI Blog1967 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturers of bidis, agarbattis and fire-works, having registration certificates, after obtaining declarations from them in Form XII-A of the Madhya Pradesh General Sales Tax Rules, 1959, and it claimed to be taxed at the reduced rate of one per cent. under sub-section (1) of section 8 of the Act. It was not disputed at any stage of the proceedings that paper was shown as one of the items required for the manufacture of either bidis or agarbattis or fire-works in the registration certificates of the purchasing (manufacturing) dealers. The claim for reduced rate of one per cent. was, however, rejected by the Sales Tax Authorities on the ground that the paper sold to these manufacturers was not "raw material" as defined in clause (1) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fuel and lubricants required for the process of manufacture, but does not include bullion and specie; Section 8. (1) Notwithstanding anything contained in section 6 or 7 but subject to such restrictions and conditions as may be prescribed, the rate of tax payable on the sale to or purchase by a registered dealer of any raw material for the manufacture of other goods for sale in the State of Madhya Pradesh or in the course of inter-State trade or commerce shall be one per cent. of the sale or purchase price of such raw material. (2) Where any raw material purchased by a registered dealer under sub-section (1) is utilised by him for any purpose other than a purpose specified in the said sub-section, such dealer shall be liable to pay as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommerce; We manufacture and/or produce for sale the following classes of goods: " Rule 8 then provides that the Sales Tax Officer, after making such enquiry as he may think necessary, if satisfied that the applicant has given all the requisite information, shall grant the registration certificate in Form IV. In Form IV there is a provision for indicating the articles that are required by the dealer as raw material for use by him in manufacture. 4.. The provisions extracted above clearly indicate that the reduced rate can be claimed both by the purchasing dealer as well as by the selling dealer. In the case of the purchasing dealer, however, the condition is that the article must be mentioned in the registration certificate; while in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. That provision is wide enough to cover a case where any article, though mentioned in the registration certificate as raw material, is not used as such, that is to say, is not an ingredient in the manufacture or is not an article consumed in the process of manufacture. As to the selling dealer, no duty is cast on him at the time of sale to satisfy himself that the article sold by him was, in fact, "raw material" for the purposes of the manufacture of the purchasing dealer; nor is the dealer called upon to satisfy the Sales Tax Authorities about it at the time of assessment. Once he has obtained the necessary declaration from the purchasing dealer, that the article is included as raw material in the registration certificate of the purchasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions of sale and purchase in the course of inter-State trade and commerce, no control over the purchaser. He has only to rely upon the representations made to him. He must satisfy himself that the purchaser is a registered dealer, and the goods purchased are specified in his certificate; but his duty extends no further. If he is satisfied on these two matters, on a representation made to him in the manner prescribed by the Rules and the representation is recorded in the certificate in Form 'C', the selling dealer is under no further obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. Whether the goods specified in the registration certificate in Form 'B' c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to enable fermentation for the required period to make tobacco mature for use in cigarettes, cigars etc. must be regarded as an integral part of the process of re-drying and not independent of that process. The same reasoning may be appropriately applied in the case of the bidis, the agarbattis and the fire-works. The wrapping of the bidis and the agarbattis in the tissue paper sold by the assessee is necessary for preserving the aroma and freshness of the bidis and the scent of the agarbattis. In the case of the fire-works, such wrappers are necessary to keep them dry and thus save them from atmospheric interference. It thus follows that the paper is consumed in the proccss of manufacture of those articles, though it may not be an ingred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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