Supreme Court confirms Denial of Exemption to Tea under the Assam industries (Sales Tax Concessions) Act.
While confirming the denial of sales tax exemption to “tea” under the provisions of the Assam industries (Sales Tax Concessions) Act, 1987 the two-judge bench of the Supreme Court has categorically held that the benefit of the said Act cannot be available to “tea” since it is not a raw material. The apex Court confirmed the order of the High Court in which it was observed that, the appellant-company, who are engaged in the activity of mere blending and packing of tea cannot be treated as manufacturers of the said product.
The appellant company in the instant case, is engaged in the business of blending and packing tea. The grievance of the appellant was that sales tax concession declared by the respondent-State under the provisions of the Assam Industries (Sales Tax Concessions Act), 1987 has not been granted to them. As per the provisions of the said Act, certain new industries, subject to certain conditions, were to be given exemption from payment of sales tax but the exemption was not to be given in respect of certain commodities.According to them, they are eligible for the said concession as per the industrial policy fixed by the Government before the enactment of the said legislation. The respondent-State submitted that the benefit of the Act is not available to the appellant-company since their product “tea” is not a raw material which is not exempted under the Act. Further, they claimed that the appellant-Company was merely blending and packing tea and was not having any manufacturing activity. Though the appellant challenged this decision of the State before the High Court, they could not secure any relief.Therefore, the company approached the Apex Court for relief.
While upholding the order of the High Court, the Court held that “tea” is not a raw material and therefore n exemption can be claimed by the appellant in respect of such product. Further, the Court pointed out that the appellant is not entitled to the benefit provided under the Act since no certificate of authorization has been granted to them by the state.
Read the full text of the Judgment below.
