ADVANCE BRICKS COMPANY versus ASSESSING AUTHORITY, ROHTAK & ANR.

Citation: [1988] 1 S.C.R. 272 · Decided: 22-09-1987 · Supreme Court of India · Bench: RANGANATH MISRA, M.M. DUTT · Disposal: Appeal(s) allowed

cites 3 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
ADVANCE BRICKS COMPANY 
v. 
ASSESSING AUTHORITY, ROHTAK & ANR. 
SEPTEMBER 22, 1987 
[RANGANATH MISRA AND MURARI MUHON DUTT, JJ.) 
Haryana General Sales Tax Act, 1973: ss. 15 & 18---State 
Government Notification of 1973-'Sun dried bricks'-Whether 
'bricks'-Whetherexigible to sales tax., 
The Notification dated 5th May, 1973, issued by the State 
Government under s. 18 of the Haryana General Sales Tax Act 
authorised levy of tax under s. 15 of the Act at the fll'St point in 
respect of the named goods, of which brick was one. The appellant, a 
registered dealer claimed deduction of a certain sum out of the gross 
D turnover in respect of assessment of sales-tax for the accounting 
period 1981-82, on the ground that be bad purchased sun-dried 
bricks on payment of sales tax under the Act and that amount re-
presented the sales price of such tax paid bricks, and that a second 
set of tax in the bands of the dealer was not exigible. The claim was 
E rejected by the authorities. 
The appellant filed writ petition before the High Court, which 
rejected bis claim on the ground that raw bricks did not come within 
the purview of the notification. 
F 
Allowing the appeal in part, 
G 
HELD: The notification dated May 5, 1973 issued by the State , 
Government under s. 18 of the Haryana General Sales Tax Act, 1973 
applied to the sun-dried bricks. [274E] 
'Brick' is a generic term in which both the sun-dried and oven-
baked varities of brick are included. Sun-dried bricks are, however, 
required to undergo a further treatment, namely, the burning ~ro­
cess to become bricks proper. They are thus an intermediate stage of 
bricks as understood in comllton parlance and are goods in the ordi-
H nary sense of the term being a commercial commodity. [276G-H; CJ 
272 
' 
ADVANCE BRICKS CO. v. ASSESSING AUTHORITY 
273 
Lilavati Bai v. The State of Bombay, [1957] SCR 721; Gu/raj A 
Singh v. Mota Singh, [19M] 7 SCR 205; Dy. Commissioner, Sales 
Tax, v. PIO Food Packed, [1980] 3 SCR 1271 and Indian Carbon 
Ltd. v. Superintendent of Taxes, Gauhati, [1972] 1 SCR 316, refer-
red to. 
When sun-dried brick is purchased on payment of s:iies-tax and B 
purchasing dealer burns the same and sells the same for a higher 
price, sales tax should be Ieviable on the sale price of such bricks. 
The amount of sales-tax p)lid when sun-dried bricks were purchased, 
on production of appropriate declaration can be deducted from the 
total amount of tax. This would not prejudice the revenue of the 
State nor would it bring about any additional liability unwarranted C 
by law so far as the dealer is concerned. [277C·E] 
In the instant case the bricks which had been purchased as sun-
dried bricks were burnt by the appellant. He had thus further 
treated the sun-dried bricks and produced goods of added value. It D 
would not be proper to extend the benefit of total exemption for the 
turnover of sale of bricks from tax, but it would be appropriate to 
allow set off of the tax paid at the time of the purchase of the sun-
dried bricks, out of the tax exigible on the taxable turnover of burnt 
bricks. (277F-G] 
If it is found that the appellant had paid sales tax on the sun-
dried bricks, the amount of tax then paid should be given credit and 
the balance should be recovered from him. The Taxing Officer to 
hear parties and come to his conclusion afresh. [277H; 274G] 
The interest of the State would be properly protected if the 
impugned notification is changed and so far as brick is concerned 
necessary modification is made. Until that is done, the State should 
adopt the modality indicated. [277G·H] 
E 
F 
CIVIL 
APPELLATE 
JURISDICTION: 
Civil 
G 
Appeal 
No. 2375(NT) of 1987. 
From the Judgment and Order dated 4.9.1984 of the Punjab 
and Haryana High Court in Civil Writ Petition No. 2479 of 1984. 
H 
A 
B 
274 
SUPREME COURT REPORTS 
(1988] I S.C.R. 
Anil B. Diwan and M.R. Ramachandranfor the Appellant. 
S.C. Mahanta, V.K. Mehta, C.V.S. Rao and Mahabir Singh 
for the Respondents. 
The fqllowing Order of the Court was delivered: 
ORDER 
Special leave granted. 
The appellant is a registered dealer under the Haryana 
C General Sales Tax Act, 1973 ('Act' for short) and is also a licencee 
under the Haryana Control of Brick Supply Order, 1972 ('Order' 
for short). In respect of assessment of sales-tax for the accounting 
period 1981-82, it claimed deduction of a sum of Rs.1,49,600.92 out 
of the gross turnover on the ground that it had purchased sun-dried 
D b

Excerpt shown. Read the full judgment & AI analysis in Lexace.