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Issues: (i) Whether the sale of paper board used as packing material for export goods was entitled to exemption from tax. (ii) Whether additional sales tax could be levied only because the turnover for the whole year exceeded the statutory threshold, or whether the turnover had to be worked out separately for the period up to 31.07.1996 and thereafter.
Issue (i): Whether the sale of paper board used as packing material for export goods was entitled to exemption from tax.
Analysis: The claim was based on the notification issued under the Central Sales Tax Act, 1956 granting exemption to packing material sold to exporters, provided the exporter certified that the material was used for packing goods intended for export. The Tribunal accepted that the assessee had produced the requisite certificate and found that the paper board was used for packing goods or for conversion into packing cases for export. The fact that the buyer may have converted the material into cartons did not alter the essential export-linked use of the goods.
Conclusion: The exemption on the turnover of packing material was rightly allowed and the revenue's challenge failed.
Issue (ii): Whether additional sales tax could be levied only because the turnover for the whole year exceeded the statutory threshold, or whether the turnover had to be worked out separately for the period up to 31.07.1996 and thereafter.
Analysis: The applicable law on additional sales tax changed during the relevant assessment year. The pre-amendment provision governed the period up to 31.07.1996, while the amended provision operated thereafter. The governing principle, as applied in earlier decisions, is that the taxable turnover for the year may be bifurcated for levy purposes, and the liability up to 31.07.1996 must be computed under the unamended provision. Since the assessee's turnover did not cross the threshold warranting interference with the Tribunal's approach, the levy could not be restored on the revenue's reasoning.
Conclusion: The Tribunal was correct in declining to restore the additional sales tax.
Final Conclusion: The revision failed in toto, and the Tribunal's order was left undisturbed, resulting in the dismissal of the revenue's challenge.
Ratio Decidendi: Where the statutory regime changes during a financial year, additional sales tax must be computed by applying the unamended provision to the pre-amendment period and the amended provision thereafter, and exemption for export packing material is available when the prescribed exporter certificate and export-linked use are established.
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