Judgment:
A.N. Gupta, J.
1. The applicant is the manufacturer of bitumenised packing paper which is also called waterproof packing paper. The process of manufacturing as described by the Tribunal in its impugned judgment is that between two sheets of craft paper, a layer of bitumen is laid in order to make it waterproof or impervious.
2. The matter relates to the assessment years 1980-81 (1st part), 1980-81 (2nd part) and 1981-82. The assessing authority had taxed it at 5 per cent up to 6th September, 1981, under Notification No. 332, dated 15th November, 1971 and for the latter period it had taxed at 6 per cent under the Notification No. 5785, dated 7th September, 1981. The Deputy Commissioner (Executive) in exercise of the powers under Section 10B of the U.P. Sales Tax Act, 1948 (hereinafter referred to as 'the Act') held that the bitumenised waterproof paper was not paper but a paper product and, therefore, revised the order passed by the assessing authority taxing its sale as an unclassified item at 8 per cent. The applicant approached the Sales Tax Tribunal but its appeals were dismissed by means of the impugned order dated 22nd June, 1989. It is against this order that the applicant has come up in revision. Before proceeding further it may be mentioned that the applicant does not manufacture craft paper but. it purchases craft paper from its manufacturers or otherwise and after placing a layer of bitumen between two sheets of such craft paper, waterproof packing paper is manufactured by it.
3. Section 3 of the Act is the charging section and Section 3A provides the rates of tax empowering the State Government to issue a notification fixing the rate of tax and point at which it is to be levied. In exercise of these powers under Section 3A which is also a part of the charging section, it issued Notification No. ST-II-332/X-1012-1971, dated 15th November, 1971. Its entry No. 68 reads as follows :
'Paper of all kinds including handmade paper whether meant for writing, printing, copying, packing or for any other purpose.'
4. In supersession of this notification another Notification No. ST-2-5785/X-10(1)-80, dated 7th September, 1981, was also issued under Section 3A of the Act and entry No. 36 of this notification is the same which was entry No. 68 of the previous notification with the difference that the rate of tax was enhanced from 5 per cent to 6 per cent.
5. It has been argued by Sri Bharatji Agarwal, learned counsel for the applicant, that after a layer of bitumen is added between two sheets of craft paper, it does not cease to be paper and it becomes packing paper. The Sales Tax Tribunal has held that 'it is not disputed that the product of the dealer is bitumenised packing paper'. In this connection he also placed his reliance on a decision of this Court given in the case of Commissioner of Sales Tax v. Adarsh Paper and Board Manufacturing Company [1987] 65 STC 243 ; 1985 UPTC 15. In this decision it has been held that mill board which was also used for packing fell within the ambit of the notification dated 15th November, 1971, referred to above. He also referred to a Division Bench decision of the Madras High Court given in the case of Viny Pap Sales Depot v. State of Tamil Nadu [1977] 40 STC 317. In the Tamil Nadu General Sales Tax Act, 1959, the entry was 'paper of all sorts (including ......)'. The question for consideration before the Madras High Court was whether P.V.C. coated paper which is also used for packing purposes fell within the above entry and it was held that it did fail in the said entry.
6. It was argued by Sri. M.C. Gupta, the learned Standing Counsel that simply because an item has been described by the name of paper, it should not be regarded as paper. According to his argument after bitumen layer is placed between two sheets of craft paper, the product coming out ceases to be paper within the meaning of the entries mentioned in the notifications dated 15th November, 1978 and 7th September, 1981. He stressed that the common parlance meaning or the meaning as understood in commercial circles should be adopted for the purpose because the term 'paper' has not been defined either under the Act or in any notification issued thereunder. This argument is misplaced because the common parlance meaning or the term as understood in the commercial parlance is adopted only when the phraseology of the relevant notification is not clear. The two notifications. use the word 'paper of all kinds (including........)' and 'whether meant for writing, printing, copying, packing or for any other purpose'. (Emphasis supplied). The underlined portion uses the words 'meant for packing or for any other purpose'. Thus the entry is wide enough to include all kinds of paper. Simply because the bitumen layer has been laid between two sheets of craft paper, it does not cease to be paper as has been held as a finding of fact by the Sales Tax Tribunal when it said 'it is not disputed that the product of the dealer is bitumenised packing paper'.
7. The learned Standing Counsel also placed his reliance on two decisions of this Court given in the cases of Mahabir Industries v. State of U.P. [1987] 65 STC 251 (All.); 1986 UPTC 369 and Fine Straw & Cardboard Factory (P) Ltd, v. State of U.P. 1988 UPTC 277. Both the decisions are under Section 4-B of the Act wherein recognition certificate was granted to a manufacturer for procuring raw materials on concessional rates. These - decisions do not apply to the controversy in question which has to be seen in the light of charging section, namely, Sections 3 and 3-A of the Act. The Tribunal did refer to the said two decisions (Commissioner of Sales Tax v. S.S. Adarsh Paper and Board Manufacturing Company [1987] 65 STC 243 (All.) ; 1985 UPTC 15 and Viny Pap Sales Depot v. State of Tamil Nadu [1977] 40 STC 317), but it held them inapplicable or of no help to the applicant on one or the other flimsy grounds which need not be mentioned.
8. The result is that the bitumenised packing paper which is also known as waterproof packing paper is covered by entry No. 68 of the Notification No. 332, dated 15th November, 1971 and entry No. 36 of Notification No. 5785, dated 7th September, 1981 and the said paper is to be taxed at 5 per cent and 6 per cent for the periods to which these two notifications relate. The order of the Sales Tax Tribunal is set aside and the revisions are allowed accordingly.