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of <h1>Court rules hand-made bidis exempt from sales tax under Orissa Sales Tax Act</h1> <h3>G. Azeez Basha & Co., Jeypore Versus Sales Tax Officer, Koraput</h3> G. Azeez Basha & Co., Jeypore Versus Sales Tax Officer, Koraput - [1972] 29 STC 352 (Ori) Issues:1. Whether hand-made bidis are liable to sales tax under the Orissa Sales Tax Act.2. Interpretation of relevant notifications dated 1957 and 1967 regarding the exemption of tobacco and its products from sales tax.3. Determination of the definition of 'tobacco' under the Central Excises and Salt Act, 1944.4. Analysis of the definition of 'manufacture' in relation to tobacco products.5. Comparison of the definitions and classifications under different Acts to determine the tax liability of hand-made bidis.Analysis:The petitioner, engaged in selling hand-made bidis, contested an assessment order for sales tax, arguing that bidis are not subject to sales tax. The key issue revolves around the interpretation of notifications exempting tobacco and its products from sales tax. The 1957 notification exempted tobacco and all its products from tax until July 1967. Subsequently, the 1967 notification amended the definition of tobacco to align with the Central Excises and Salt Act, 1944. The definition of tobacco under the 1944 Act is broad, encompassing any form of tobacco, whether cured or uncured, and includes manufactured products like bidis.The definition of 'manufacture' under the 1944 Act clarifies that processes related to tobacco products, including bidis, fall under the definition of manufacturing. The court emphasized that bidis are considered manufactured tobacco and, therefore, exempt from sales tax under the notifications. The contention that only machine-made bidis are exempt was dismissed, as the classification in the Act is for excise duty purposes and does not limit the broader definition of tobacco.The judgment draws support from a previous case in the Patna High Court, reinforcing the interpretation of similar notifications under a different Sales Tax Act. Consequently, the court allowed the writ application, quashing the assessment order and restraining the tax collection. The judges unanimously agreed on the decision, highlighting the comprehensive analysis and interpretation of the relevant legal provisions to determine the tax liability of hand-made bidis.
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