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of <h1>Court rules soda ash used in manufacturing own by-products not taxable. Unlawful assessment set aside.</h1> The Court held that soda ash utilized in manufacturing own by-products is not liable to taxation as it does not constitute a taxable supply. The ... - Issues Involved:1. Interpretation of Section 6 of Ordinance XVIII of 1950 regarding the examination of by-products containing soda ash.2. Whether utilization of soda ash makes it liable to taxation.3. Legality of the assessment made on the price of soda ash utilized.4. Validity of the assessment order passed by the Sales Tax Officer.5. Taxability of utilized soda ash based on the sale or supply of by-products.Issue-wise Detailed Analysis:1. Interpretation of Section 6 of Ordinance XVIII of 1950:The Sales Tax Tribunal sought clarification on whether Section 6, read along with the proviso to sub-section (3), rule 1, mandates the Sales Tax Officer to examine the quantity of by-products containing soda ash sold or supplied by the opponents. The Court inferred that the Tribunal's order necessitates the Sales Tax Officer to assess the quantity of by-products sold or supplied to others. However, since the Court held that soda ash utilized in manufacturing by-products is not liable for sales tax, this question does not arise, and no opinion was expressed.2. Whether Utilization of Soda Ash Makes it Liable to Taxation:The Court agreed with the Tribunal's view that mere utilization does not make soda ash liable to taxation; rather, it is the selling or supplying that attracts tax liability. The Court emphasized that a sale requires two parties, and a supply similarly necessitates a bilateral transaction. Therefore, utilization by the manufacturer himself does not amount to a supply within the meaning of the Ordinance and should not be taxed.3. Legality of the Assessment Made on the Price of Soda Ash Utilized:The assessment made by the Sales Tax Officer included the price of soda ash utilized for purposes other than those mentioned in the registration certificate. The Court held that such utilization does not amount to a supply that could be taxed. Consequently, the assessment was not lawfully made.4. Validity of the Assessment Order Passed by the Sales Tax Officer:The assessment order was challenged on the grounds that it was not in accordance with the provisions of law. The Court affirmed that the order should be set aside since the utilization of soda ash in the manufacture of by-products does not amount to a taxable supply.5. Taxability of Utilized Soda Ash Based on the Sale or Supply of By-products:The Court concluded that soda ash utilized by the opponents in manufacturing their own by-products cannot be taxed. The proviso to rule 1 of sub-section (3) of section 6 comes into operation only if such utilization amounts to a supply liable to tax, which is not the case here.Conclusion:The Court answered the questions referred by the Tribunal as follows:1. No opinion expressed as the question does not arise.2. In the affirmative.3. Assessment was not lawfully made.4. First part in the affirmative; second part in the affirmative.5. Soda ash utilized in manufacturing own by-products cannot be taxed.Reference Answered Accordingly.
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