# State of Uttar Pradesh 8Dd Anr v. Kores

- **Citation:** [1985] Supp. 3 S.C.R. 739
- **Court:** Supreme Court of India
- **Decided:** 1985-11-19
- **Bench:** D. Tulzapukkar, R.S. 'Pathak
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-uttar-pradesh-8dd-anr-v-kores-9199
- **Pages:** 5

## Headnote

U,P,
Sales Tax Act,
1948 & Notification No.
ST
-
3124/X-1012 (4) - 1964, dated July l, 1966 - Sales Tax - Levy of
-
'Ammonia Paper' and' ferro paper ' - Whether "paper other than
hand made paper."
The respondent-assessee, a dealer in stationery and drawing
material, sells ammonia paper and ferro paper• In assess..,nt
proceedings under the U.P. Sales Tax Act, 1948 for the assess...nt
year 1966-67 the assessee clai..,d that &lllllOnia paper and ferro
paper were liable to tax as unclassified goods at the rate of two
per cent prescribed by s.3 of the Act. The Sales Tax Officer
rejected the claim holding that ammonia paper and ferro paper
fell under the entry "paper other than hand made paper" included
in notification no.ST-3124/X-1012(4) -
1965 dated July l, 1966
and its turnover was, therefore, liable to tax at six per cent.
The appeal as well as the revision petition of the assessee
were dismissed.
At the instance of the assessee a reference was made to the
High Court, which.held that "ammonia paper and ferro paper do not
fall within the category of paper".
Dismissing the Appeal of the Comnissiooer of Sales Tax,
llKW: 1. Amnonia paper and ferro paper do not fall within
the entry "paper other than hand made paper" in the notification
dated July 1, 1966 issued under the U.P. Sales Tax Act, 1948.
[743 D]
2. Amnonia paper and ferro paper are used for preparing
prints and sketches of site plans. An impression of the print or
sketch is made on the paper, and it is then exposed to light for
a period of ti.., during which the chemical evaporates resulting
in the emergence of the print or sketch of the site plan.
Therefore, ammonia paper and ferro paper cannot be regarded as
paper in the popular sense of that term. Paper is used for
A
B
c
D
E
F
G
H
740
SUPRE.ME. COURT REHJRTS
[1965] SU~f. 3 s.c.R.
A
printing or writing or for packing. Amnonia paper and ferro paper
are not employed for any of the purposes and subjected to any of
the processes for which paper, as commonly understood, is
generally used. [742 C-E]
State of Uttar Pradesh 8Dd Anr. v. Kores
(India) Ltd.,
B
(1977) s.r.c. 8 and State of Orissa v. Gestetuer Duplicators (P)
Ltd., (1974) 33 s.r.c. 333, relied upon.
llahsrajs !look Depot V• State of Gujarat, (1979]
2 S.C.R.
138, distinguished •
. CIVIL Af PI:.LLATE. JURISDIC1101<
Civil Appeal l\o. 1338 of
c
1973.
D
From
the Judgment and Order dated
19.2.1973 of the
Allahabad High Court in Sales Tax Reference No. 357 of 1971.
S.C. Nanchanda, R.A. Gupta and Ljjal Singh for the AppelS.T. Desai, R.K, Puri, N.N. 1andon and Randhir Chawla for
the Respondent.

## Text

739
COMMISSIONER OF SALES TAX, U.P.
Vo
NOVEMBER 19, 1985
[V,D. TULZAPUKKAR. AND R.S. 'PATHAK, JJ.]
U,P,
Sales Tax Act,
1948 & Notification No.
ST
-
3124/X-1012 (4) - 1964, dated July l, 1966 - Sales Tax - Levy of
-
'Ammonia Paper' and' ferro paper ' - Whether "paper other than
hand made paper."
The respondent-assessee, a dealer in stationery and drawing
material, sells ammonia paper and ferro paper• In assess..,nt
proceedings under the U.P. Sales Tax Act, 1948 for the assess...nt
year 1966-67 the assessee clai..,d that &lllllOnia paper and ferro
paper were liable to tax as unclassified goods at the rate of two
per cent prescribed by s.3 of the Act. The Sales Tax Officer
rejected the claim holding that ammonia paper and ferro paper
fell under the entry "paper other than hand made paper" included
in notification no.ST-3124/X-1012(4) -
1965 dated July l, 1966
and its turnover was, therefore, liable to tax at six per cent.
The appeal as well as the revision petition of the assessee
were dismissed.
At the instance of the assessee a reference was made to the
High Court, which.held that "ammonia paper and ferro paper do not
fall within the category of paper".
Dismissing the Appeal of the Comnissiooer of Sales Tax,
llKW: 1. Amnonia paper and ferro paper do not fall within
the entry "paper other than hand made paper" in the notification
dated July 1, 1966 issued under the U.P. Sales Tax Act, 1948.
[743 D]
2. Amnonia paper and ferro paper are used for preparing
prints and sketches of site plans. An impression of the print or
sketch is made on the paper, and it is then exposed to light for
a period of ti.., during which the chemical evaporates resulting
in the emergence of the print or sketch of the site plan.
Therefore, ammonia paper and ferro paper cannot be regarded as
paper in the popular sense of that term. Paper is used for
A
B
c
D
E
F
G
H
740
SUPRE.ME. COURT REHJRTS
[1965] SU~f. 3 s.c.R.
A
printing or writing or for packing. Amnonia paper and ferro paper
are not employed for any of the purposes and subjected to any of
the processes for which paper, as commonly understood, is
generally used. [742 C-E]
State of Uttar Pradesh 8Dd Anr. v. Kores
(India) Ltd.,
B
(1977) s.r.c. 8 and State of Orissa v. Gestetuer Duplicators (P)
Ltd., (1974) 33 s.r.c. 333, relied upon.
llahsrajs !look Depot V• State of Gujarat, (1979]
2 S.C.R.
138, distinguished •
. CIVIL Af PI:.LLATE. JURISDIC1101<
Civil Appeal l\o. 1338 of
c
1973.
D
From
the Judgment and Order dated
19.2.1973 of the
Allahabad High Court in Sales Tax Reference No. 357 of 1971.
S.C. Nanchanda, R.A. Gupta and Ljjal Singh for the AppelS.T. Desai, R.K, Puri, N.N. 1andon and Randhir Chawla for
the Respondent.
The Judgment of the Court was delivered by
E
PAlllAK, J. The short question in this appeal by special
leave is whether ammonia paper and ferro paper can ·be described
as ''paper other than hand made paper" for the purposes of the
notification No. ST-3124/X-1012(4) -
1965 dated July 1, 1966
issued under the U.P. Sales Tax Act, 194&.
F
The respondent asses see is a dealer in stationery and
drawing material, and sells ammonia paper and ferro paper. In
assessment proceedings under the U.P. Sales Tax Act, 1948 for the
assessment year 1966-67 the assessee claimed that affilLOnia paper
and ferro paper were liable to tax as unclassified goods at the
rate of two per cent prescribed by s.3 of the.Act. The claim was
G
not accepted by the Sales Tax Officer who hold that anmonia paper
and ferro paper fell under the entry "paper other than had made
paper' included in notification No. ST-3124/X-1012(4) -
1965
dated July 1, 1966 and its turnover was, therefore, liable to tax
at six per cent. Against the assessment so made the assessee
appealed,
but his appeal was
dismissed
by
the Assistant
R
Commissioner (Judicial), Sales Tax. A revision petition by the
WMMNR. OF SALES TAX v. MACNEILL & BARRY (PATHAK, J.]
741
assessee thereafter was dismissed by the Revising Authority. At
the instance of the assessee a reference was made to the
Allahabad High Court for its opinion on the following question :
"Whether ammonia paper and ferro paper fall within the
category of paper? 11
The High Court has expressed the view that ammonia paper and
ferro paper, being chemically coated paper used for obtaining
prints and sketches of site plans, were paper to which a chemical
process had been applied and a chemical coating had been given,
and were not paper in the popular sense of the word, and
therefore did not fall within the entry in the aforesaid
notification of July 1,
1966. Accordingly ·it answered the
question referred to it in the negative, in favour of the
assessee and against the Colllllissioner of Sales Tax. ·
In this appeal, the entire contention on behalf of the
Commissioner of Sales Tax is that the opinion eXpressed by the
High Court to,erroneous and that upon a proper view ammonia paper
and ferro paper must be regarded ·as "paper other than hand made
paper" within the meaning of the aforesaid notification of July
1, 1966.
Section 3 of the U. P. · Sales Tax Act charges sales tax on
goods sold by a dealer at a specified rate, the charge being
imposed on every sale in the series of sales through which the
coDDodity may pass, coomencing from the manufacturer to the ultimate retail dealer. It imposes a multi-point tax. Section 3 A of
the act, however, provides for the imposition of sales tax on one
only of the sales of the commodity in the series of sales,
the
single point being specified by notification by the State Government. If ammonia and ferro paper fall under the entry "paper
otherthan hand made paper ''mentioned in notification ST-3124/-
Xl012(4) - 1965. 4ated July 1, 1966 the turnover of ammonia and
ferro paper sold by the assessee is liable to tax at six per
cent. The charge is imposed on the sale either by the manufacurer
or by the importer. Presumably, the assessee is either the
manufacurer of a.mJOOnia paper or ferro paper or their importer. If ":,:,
ammonia paper and ferro paper do not fall within the aforesaid
notification the turnover of such paper is liable to sales tax
under s.3 of the U.P. Sales Tax Act at two per cent on every sale
in the series of sales through which the goods pass.
According to the facts admitted between the parties, the
following extract set forth in the assessee's revision petition
explains accurately the nature of ammonia paper and ferro paper :
A
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E
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A
B
c
D
E
F
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R
742
5UPREME COUl<.T l\EPOR15
[1985] 5UPF. 3 S.C.R.
"1he ferro and aIDIIX)nia paper is made of paper of rough
and special texture by apflying a chemical process and
giving chemical coating thereon. The chemicals which
are used are d)'e, tartaric acid, therein, ethylene,
glycole and some other chemicals. These chemicals are
absorbed by the base paper and the coated paper is
again passed through another set of rollers so that
the chemicals are properly and evenly impregnated in
the base paper. It is only this chemical coating which
is important for making the use of anmonia and ferro
paper, otherwise it is nothing but an ordinary rough
base paper. This ferro and aruLonia paper has got only
this specific use of obtaining prints and sketches of
site plans and it cannot be used as an ordinary paper
because of these special texture and its chemical
properties".
The paper is used for preparing prints and sketches of site
plans. An in.pression of the print or sketch is made on the paper,
and it is then exposed to light for a period of time during which
the chemical evaporates resulting in the emergence of the print
or sketch of the site plan. Plainly,
aIIlL.onia
paper
and
ferro
paper cannot be regarded as paper in the popular sense of that
term. Paper is used for printing or writing or for packing.
Annnonia paper and ferro paper are not employed for any of the
purposes and subjected to any of the processes for which a paper,
as commonly understood, is generally uses. In State of Uttar
Pradesh and Anr. v. Kores (India) Ltd.,
[1977]
39 s.r.c. 6,
this Court held that carbon paper was not paper as envisaged by
the relevant entry in notification no. SI-3124/l'..-1012(4) -
1965
dated July 1, 1966, and referred to the fact that carbon paper
was manufactured by coating tissue paper with a thern.osetting ink
based mainly on wax, non-drying oils, pigments and dyes by means
of a suitable coating roller and equalising rod and then passing
it througi1 chilled rolls. It is used between two sheets of plain
paper in order to reproduce on the lower sheet that which is
written or typed on the upper sheet, uaking a replica or carbon
copy of the original docu...nt. The learned Judges observed
that carbon paper could not be applied to the same uses to which
paper, as senerally understood, was used, that is to say, for
preparing, writins or printing or for packing or drawing on or
for decorating or covering the walls of a room. Indeed, the
learned Judges appear to have approved of this very
judgment
under appeal when considering the question whether carbon paper
could be regarded as paper within the aforesaid notification.
Cel1MNK, OF SALES TAX v. MACNEILL & BARRY [PATHAK, J,]
743·
Learned counsel for the Commissioner of Sales Tax has invited our
attention to Habaraja Book Depot v. State of Qijarat, [1979] 2
S,C,l{, 138, where this Court laid down that exercise books were
included within the term "paper" mentioned in sub-cl. (vii) of
Cl. (a) of s. 2 of the Essential Commodities Act, 1955 and in
Item 13 of Schedule I to the Gujarat Essential Articles Dealer
(Regulation) order 1971. The learned Judges supported their conclusion by reference to the object and purpose of the Act and the
Regulation order. That case in our opinion, is distinguishable
from the instant case. On the contrary, more to the point is the
decision of the Orissa High Court in State of Orissa v. Gestetoer
Duplicators {P) Ltd., (1974] 33 S.T.C. 333, .where it was held
that stencil paper was not paper within the meaning of serial No.
7A of the Schedule to the notification issued by the State
Government under the first proviso to sub-a. (1) of s.5 of the
Orissa Sales Tax Act, 1947.
A.ocordingly, we agree with the High Court that ammonia paper
and ferro paper does not fall within the entry "paper other than
hand made paper" in notification No. ST-3124/X-1012(4) -
1965
dated July 1, 1966.
The appeal is dismissed with costs.
A.P.J,
Appeal dismissed.
A
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