Rajasthan General Trading Company vs Commissioner, Sales Tax

B.N. Sapru, J.—The assessee had filed a revision before the Judge (Revisions) who issued a notice to the assessee to show cause as to why he should not be treated as a manufacturer of the waste newsprint which the assessee had purchased and thereafter sold.

The Judge (Revisions) was of the view that since the assessee had purchased odd size newsprint from the newspaper in Lucknow and sent it and then converted the same into writing paper and sold it to the newspaper he was a manufacturer of writing papers. He was accordingly taxed.

In this revision it is asserted that what the assessee purchased was odd size newsprint. After cutting it he again sold it back to the newspaper for the use as newsprint in magazine, etc., where the size of the page is smaller. It is Submitted by the counsel that by merely cutting the paper into a different size, the assessee did not become the manufacturer of the newsprint.

The newsprint is subject to a single point taxation and it has already borne sales tax when it was purchased by the assessee from the newspaper.

The assessee did not produce any commercially different commodity by cutting the newsprint "into a smaller size. The assessee can in no case be considered as a manufacturer of different type of paper which would be subjected to tax. In this view of the matter the order of the Judge (Revisions) is not sustainable.

In the result the revision is allowed, the impugned order in so far as it holds that the assessee was a manufacturer of writing paper to the extent of Rs. 85,000 is set aside and the matter will go back to the Tribunal u/s 11(8) for making appropriate order.