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of <h1>High Court clarifies taxation rules on latex products, denies double tax exemption</h1> The High Court upheld the denial of exemption on the purchase of field latex and sale of centrifuged latex, emphasizing that centrifuged latex is a ... - Issues:1. Exemption on purchase of field latex and sale of centrifuged latex2. Interpretation of circular on sales tax levy3. Benefit of exemption under Notification S.R.O. No. 1003/91 and S.R.O. No. 1727/934. Exemption on rubber cess5. Sales tax exemption based on certificate obtained from Industries DepartmentExemption on Purchase of Field Latex and Sale of Centrifuged Latex:The assessee, engaged in trading and processing of rubber, claimed exemption on the purchase of field latex and sale of centrifuged latex, arguing they are one and the same commodity taxable only once at the point of last purchase. The Tribunal, however, denied the exemption based on previous judgments stating centrifuged latex is a manufactured product. The High Court upheld the Tribunal's decision, emphasizing that the exemption certificate obtained by the assessee declared centrifuged latex as a manufactured product, making the contention for tax exemption on both forms of latex untenable.Interpretation of Circular on Sales Tax Levy:The assessee cited a circular stating that sales tax on rubber in all forms is levied only at one point. The High Court rejected this argument, citing previous judgments confirming centrifuged latex as a manufactured product. The Court held that the circular does not override the fact that the assessee is the last purchaser of field latex used in manufacturing centrifuged latex, making them liable for tax on the purchase turnover.Benefit of Exemption under Notifications S.R.O. No. 1003/91 and S.R.O. No. 1727/93:Regarding the exemption under these notifications, the Court found that the assessee satisfied the conditions for exemption on the purchase turnover of field latex used in manufacturing centrifuged latex sold inter-State. The Court also ruled in favor of exemption on the purchase turnover of field latex sold locally against form No. 25, as the conditions of the notifications were met, reversing the Tribunal's decision on this issue.Exemption on Rubber Cess:The Court clarified that rubber cess should only be added to the taxable turnover of field latex, without an independent levy of tax on rubber cess. The rubber cess is considered a component of the taxable turnover and does not affect the exemption on the turnover of field latex.Sales Tax Exemption Based on Certificate from Industries Department:The Court determined that the certificate of exemption obtained from the Industries Department was irrelevant, as the product, centrifuged latex, was taxable at the last purchase point. The assessee was granted exemption based on form No. 25 obtained from purchasers for local sales of centrifuged latex and met the conditions for exemption under the discussed notifications. Consequently, the Court allowed the tax revision cases to the extent indicated above.
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