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Civil Appeal No. 34‑D of 1967

Civil Appeal No. 35‑D of 1967

Civil Appeal No. 36‑D of 1967

Civil Appeals Nos. 34‑D to 36‑D of 1967, decided on 24th C December 1969.

(On appeal from the judgment and order of the High Court of East Pakistan, Dacca, dated the 7th April 1965, in Reference Cases Nos. 4, 5 and 6 of 1963).

Ss. 7(1) & 8(2)---‑Goods once exempted from tax under S. 7‑Go out of purview of Act and their gross takings cannot be taken into account for any purposes of Act‑Central Government Notification No. 5, dated 16‑3‑52 read with Notification No. 7, dated 27‑6‑51 and Notification (Sales Tax) No. 10, dated 27‑6‑51‑Government by Notification No. 5 read with Notification No. 7 exempting Ayurvedic medicines from tax payable under Act‑Such goods cannot be added to the turnover of not exempted goods in determining total "turnover" in Notification No. 10, dated 27‑6‑51.

Ayurvedic medicines were exempted from sales tax by Government vide Notification No. 5, dated 16‑3‑52 read with Notification No. 7, dated 27‑6‑51. According to another Notification No. 10, dated 27‑6‑51 a producer or manufacturer having a turnover not exceeding Rs. 60,000 a year is completely exempted from payment of sales tax. The assessee on the basis of the exempted goods claimed that his turnover was less than Rs. 60,000. On the other hand the Sales Tax Officer asserted that notwithstanding the fact that some of his goods might have been exempted by notification issued under section 7(1) of the Sales Tax Act, 1951, all the same in calculating the total turnover of an industry manufacturing both exempted and unexampled goods the gross takings of both kinds of goods are to be added:

Held, once some goods have been exempted under section 7, they go out of the purview of the Act and their gross takings cannot be taken into account for any of the purposes of the Act in the absence of express words permitting the same. The turnover of non‑taxable commodities cannot have any bearing in determining the size of an industry for the purpose of the Notification No. 10, dated 27‑6‑51 issued under section 8(2) of the Act. If it was intended to take into account the turnover of the exempted goods also for ascertaining the total turnover the Notification would have said so. It follows, therefore, that fin order to determine the turnover for the purpose of the Notification under section 8 gross takings of goods which have not been exempted only are to be considered.

Commissioner of Income‑tax v. Agha Textile Mills P L D 1962 Lah. 816 ref.

Afzalul Haq, Senior Advocate Supreme Court instructed by Abdul Matin Khan Chowdhury, Advocate‑on‑Record for Appel lant.

Sisir Kumar Sen, Advocate Supreme Court instructed by Zinnur Ahmed, Advocate‑on‑Record for Respondent (in Civil Appeal No. 34‑D of 1967).

Respondent: Ex parte (in Civil Appeal No. 35‑D of 1967).

B. C. Panday, Advocate‑on‑Record Supreme Court for Respondent (in Civil Appeal No. 36‑D of 1967).

Date of hearing: 15th December 1969.

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