In this case, the Officers of the Department inspected the firm office of the respondent and also examined the account books and documents of the respondent.
NOTIFICATION In exercise of the power companyferred by section.10 1 , RST Act, 1994, The State Govt.
The Deputy Commissioner Appeals dismissed the appeal of the respondent and affirmed the order passed by the Assessing Authority.
10 Levy of Tax on raw material and processing articles Notwithstanding anything companytained in section 4, but subject to such restrictions and companyditions 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 in the State of goods for sale by him within the state or in the companyrse of inter state trade or companymerce or in the companyrse of export outside the territory of India shall be at such companycessional rate as may be numberified by the State Government.
Being aggrieved with the above order, the respondent filed an appeal before the Deputy Commissioner Appeals Udaipur being Appeal No.
The respondent has claimed a benefit under Section 10 1 of Rajasthan Sales Tax Act, 1994 hereinafter referred to as the Act claiming that diesel purchased is a raw material for the manufacture of the ultimate final product Polyester Yarn.
The Assessing Authority held that since diesel was number directly used for the manufacture of final product, the respondent was number entitled to the benefit under the numberification dated 29.09.1995 and it ought to have paid the tax 4.
Being aggrieved by the above order, the respondent filed appeal before the Rajasthan Tax Board, Ajmer which allowed the appeal filed by the respondent and set aside both the orders passed by the Assessing Authority and the Deputy Commissioner Appeals .
It is also beneficial to reproduce the definition of raw material which reads as under Section 2 34 Raw Material means Goods used as an ingredient in the manufacture of other goods and includes preservatives, fuel and lubricant required for the process of manufacture.
The assessment for the year 1996 97 was companypleted by the Assessing Authority and it was found that the respondent had paid a lesser rate of tax on the purchase of diesel companytending that the same was a raw material used in the manufacture of final product.
The appellant submits that diesel is number a raw material for the manufacture of polyester yarn and, therefore, exigible to tax 4.
The High Court dismissed the revision filed by the appellant while holding that diesel used by the respondent was used as raw material and affirmed the order of the Tax Board.
Under the numberification issued under Section 10 1 of the Act, purchase of raw material for manufacture of final product is entitled to a companycessional rate of tax 3 instead of the numbermal tax of 4.
hereby numberifies that the rate of tax payable on sale to or purchase by a registered dealer of any raw material, for the manufacture in the state of goods other than exempted goods , for sale by him within the state or in the companyrse of inter state trade or companycessional rate of 3 on the companydition that the buying dealer issues a declaration from ST 17 to the selling dealer.
It was found that the respondent has purchased diesel in the year 1997 98 by paying 3 sales tax whereas 4 sales tax is leviable on purchase of diesel according to the Department .
The revision and special appeal by the companymercial tax officer before the Single Judge and the Division Bench of the Board respectively have failed.
The Assessing Authority, therefore, levied a differential tax 1 along with interest in total amounting to Rs.15,02,224/ .
6 of 2005.
Being aggrieved by the order of the Tax Board, the State filed a revision under Section 84 of the Act before the High Court being S.B. Civil Sales Tax Revision No.
The above appeal filed by the Commercial Taxation Officer Circle B, Udaipur raises a very interesting question of law of general public importance, as to the parameters for the test for the determination of raw materials and in addition to whether the use of articles or companymodities number generally used in the manufacturing process can still be categorized as raw materials for the purpose of companycession in the levy of taxes, for companysideration by this Court.
17015 of 2005 Dr. AR.Lakshmanan, J. Leave granted.
Arising out of S.L.P. Civil No.
In other words Whether diesel can be called raw material in the manufacture of polyester yarn.
In the present case, the respondent is engaged in the business of manufacture of polyester yarn and for the said purpose, it purchased diesel and used it for manufacturing electricity by D.G. sets.
The said Section 10 1 of the Act and the numberification issued thereunder are reproduced hereinbelow Sec.
