TMI Blog2018 (3) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... rchased by it, as cocoon, it would escape the rigour of the charging provision, but this is not the case here. The memo of Second Appeal filed by the revisionist before the Tribunal is not on record so as to enable the Court to ascertain as to whether this plea was raised before it or not. Nevertheless, it being an important aspect which is required to be considered, therefore, it needs to be considered by the Tribunal. The Tribunal shall proceed to decide the Appeals, which stand restored - the impugned order is set aside. - TRADE TAX REVISION No. – 86, 87 of 2005, TRADE TAX REVISION No. – 75, 76, 77 of 2008 - - - Dated:- 8-3-2018 - Hon'ble Rajan Roy, J. For the Applicant : Kailash Pati Mishra,Chandra Has Misra,N.C.Mishra,R.C.Mishra For the Opposite Party : C.S.C.,K.P. Srivastava ORDER Heard. All these five Revisions have been filed by the same dealer and involve similar facts, therefore, they were clubbed and heard together, however, the relevant Notifications under Section 4 of the Trade-tax Act, 1948 (hereinafter referred to as ''the Act, 1948') are not only of a different date but are also worded differently, therefore, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held that the dealer had failed to produce any such order or material to show that cocoon was also exempt from tax. The Law Department of the Head-quarters of the Trade-tax Department and the State Government had also informed accordingly. He rejected the reliance placed by the revisionist upon the order passed by the Appellate Authority in Appeal No. 321 of 2003 pertaining to Assessment Year 2000-01 and Appeal No.264 of 2004 pertaining to Assessment Year 2001-2002 which had been passed relying upon the decision of the Allahabad High Court in the case of Commissioner Sales-tax U.P. vs. M/s Resham Audhyogik Sakhari Sangh, Prem Nagar Dehradoon, Revision No. 195 and connected matters, as the revisionist herein was not a producer of cocoon, therefore, Section 2-(i) [now Section 2(c) and the proviso thereto], was not applicable as exemption therein was applicable only to agriculturist or horticulturists who produced cocoon in terms thereof. He found that the revisionist dealer had purchased cocoon from an unregistered dealer and as it was taxable as an unclassified item, therefore, imposed tax @ 10% on the purchase in Assessment Year 1998-99 which was calculated as ₹ 1928.00. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed hereinafter. His contention before this Court was different from that before the Tribunal and authorities. Here the learned Counsel for the revisionist Sri Mishra that first and foremost the goods should be liable to tax under the Act 1948, as only then any liability of tax on its purchase could be fixed under Section 3-AAAA of the said Act. In this context he contended that cocoon was nothing but raw silk. The silk worm wounds itself with silk fiber in the form of a cocoon and the revisionist dealer without the help of any power generated device merely reeled out the said fiber or thread, which is known as silk yarn. In other words he contended that cocoon was nothing but silk yarn. It was also his contention that if cocoon was taxable why the Resham Vibhag of the Government was not subjected to tax. He relied upon various decisions in support of his contentions. On the other hand Sri Rohit Nandan Shukla learned counsel for the State submitted that silk yarn was made from cocoon by a process of reeling. While silk yarn was exempt from tax vide Notification dated 14.11.1995, there was no such Notification in respect of cocoon and as the purchase had been made by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be liable to pay tax on the purchase price of such goods at the same rate at which, but for such circumstances, tax would have been payable on the sale of such goods; (b) from any person other than a registered dealer whether or not tax is payable by such person, shall be liable to pay tax on the purchase price of such goods at the same rate at which tax is payable on the sale of such goods: Provided that no tax shall be leviable on the purchase price of such goods in the circumstances mentioned in clauses (a) and (b), if - (i) such goods purchased from a registered dealer have already been subjected to tax or may be subjected to tax under this Act; (ii) tax has already been paid in respect of such goods purchased from any person other than a registered dealer; (iii) the purchasing dealer resells such goods within the State or in the course of inter-State trade or commerce or exports out of the territory of India, in the same form and condition in which he had purchased them; (iv) such goods are liable to be exempted under Section 4-A of the Act. Explanation.-- For the purpose of this section and of Section 3-AAA the sale of - (i) ginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated 14.11.1995 issued under Section 4 of the Act, 1948 is ''silk yarn' not ''silk cocoon'. For the purpose of purchase and sale, Silk yarn and silk cocoon are two different kinds of goods. The revisionist purchased cocoon from Resham Vibhag and then undertook a process of reeling so as to extract or unwind the fiber from the cocoon and as a single fiber was too fine and fragile for commercial use, three or more, upto a maximum of ten, fibers, were spurn together to form a single thread of silk yarn, for sale. Thus, cocoon and silk yarn for the purpose of sale, purchase or tax-ability are two different goods. They are so in ordinary commercial parlance also. To illustrate further, a purchaser of silk yarn would not be satisfied by the purchase of cocoon as it will not satisfy his need. Even if, it is assumed, that cocoon is raw silk or pure silk, though it appears that raw silk is a silk prior to the stage of removing the gum or serecin or prior to its softening, the notification dated 14.11.1995 does not use the term ''raw silk' or ''pure-silk'. It uses the words ''silk yarn'. ''Yarn' means spun th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been used in Section 3-AAAA. The words used in clause (iii) of the proviso to Section 3-AAAA are ''in the same form and condition in which he had purchased them' thus only in such an eventuality, that is, if the Revisionist sold the cocoon purchased by it, as cocoon, it would escape the rigour of the charging provision, but this is not the case here. Reference may be made in this regard to the decision in the case of Commissioner of Trade Tax vs. Om Trading reported in (2009) 23 VST 416 (Alld.), wherein, the First Appellate Authority and the Tribunal were of the view that converting timber into pulp wood did not amount to manufacturing activity and as such in view of proviso (iii) to Section 3-AAAA, the sale of pulp wood would not attract tax under Section 3-AAAA of the Act, 1948 and the counsel for the petitioner reiterated this view that manufacture of pulp wood out of wood does not amount to manufacturing and as such the view taken by the Tribunal is legally justified, this Court rejected the argument by saying that the said argument is not tenable. Section 3-AAAA of the Act, 1948 , does not talk about ''manufacture'. On the contrary it provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of above discussion, even for the purposes of clause (iii) of the proviso to Section 3-AAAA cocoon was not sold by the revisionist ''in the same form and condition in which it had purchased them' so as to fall within the purview of the said proviso and as it sold silk yarn and not the cocoon purchased which has a different commercial identity, it was liable to tax.. It is an admitted factual position that the revisionist is not a producer of cocoon, therefore, not covered by the proviso to Section 2(c) of the Act, 1948. In view of the above discussion the decision in Jhunjhunwala (supra) does not help the revisionist as it could not be demonstrated before this Court that cocoon was not taxable as an unclassified item or that it was exempt. The order dated 30.10.1979 passed by this High Court in Sales-tax Revision No. 195 of 1979 also does not apply as the petitioner is not the producer of cocoon. The judgment in the case of State of Karnataka vs. B.V. Aswatha Narayan Setty reported in 1980 (46) STC also does not help the revisionist as in the said case the question was whether pierced cocoon was raw silk as it was exempt under Entry 38-A of the Fifth S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 3-AAAA on the purchase of cocoon from Resham Directorate of the Government of U.P. in view of notification dated 26.02.2000 by which silk-yarn has been exempted from tax under Section 4 of the Trade-tax Act, 1948 and in view of paragraph 10 of the judgment of the Supreme Court in the case of M/s Jhunjhunwala and others vs. State of U.P. and others reported in 2006 NTN (31) 276 . Shorn of the factual details which are the same as in other revisions except that these three Revisions which arise from a common judgment of the Tribunal dated 27th March 2008 pertain to Assessment Year 2000-01(Sales tax; 2000-01 Sales-tax, 2000-01 (Central Tax) respectively. In these Revisions the Joint Commissioner (Appeals)-4, Trade Tax Sitapur allowed the Appeals of the revisionist and set aside the order of the Assessing Authority imposing tax on purchase of cocoon and the disputed amount of tax was ₹ 1,09,193.00; ₹ 61,218.00 and ₹ 6329.00 respectively. The Appeals were allowed only on the ground that the Assessing Officer had ignored the decision of the High Court in the case of Commissioner Sales-tax U.P. vs. M/s U.P. Resham Audhyogik Sahkari Sangh, Prem Nagar, Dehradoon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' and this was relevant for consideration in the light of the aforesaid notification especially as, in respect of Assessment Year 2002-03 the First Appellate Authority vide its judgment dated 23.05.2007 accepted the plea of the revisionist in this regard and the Tribunal dismissed the Second Appeal of the Department affirming the decision of the First Appellate Authority vide judgment dated 28.02.2011 against which no Revision had been filed by the Department before the High Court. Similarly the Tribunal vide its order dated 27.03.2008 had also accepted this plea while deciding Appeal No. 528 of 2003 and 489 of 2004, but, this aspect was not considered by the Tribunal in the instant case nor by the First Appellate Authority. The memo of Second Appeal filed by the revisionist before the Tribunal is not on record so as to enable the Court to ascertain as to whether this plea was raised before it or not. Nevertheless, it being an important aspect which is required to be considered, therefore, it needs to be considered by the Tribunal. If it is found that ''cocoon' is pure silk' exempted from tax under the Act, 1948 then there would be no need to consider the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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