NASIR ASLAM ZAHID, J.-This judgment will govern Sales Tax Case No. 1/81 and Sales Tax Case No.2/82, both filed by M/S. A.B. Food Industries Limited. Case No.1/82 relates to assessment years 1975-76 and Case No.2/82 relates to assessment years 1976-77 of the assessee/applicant. In both cases, the questions raised by the applicant are the same. The applicant is represented by Mr. Iqbal Naeem Pasha Advocate and the Department by Mr. Nasrullah Awan, Advocate. We have heard the learned counsel.
2. The applicant, a company carrying on the business of manufacture of biscuits, filed quarterly returns under the Sales Tax Act, 1951, during the assessment years in question and, inter alia, claimed exemption from payment of sales tax on sales of biscuits by the applicant during the years in question on which biscuits- name, brand name or trade mark of the applicant was not embossed. The exemption was claimed under Entry No.61 of Finance (Revenue Division)'s Notification (Sales-Tax) No. 9 dated 27.6.1951, as amended by S.R.O 5(1) 75 dated 1.1.1975. Under the said Notification No.9 dated 27,6.1951 certain goods, specified in the said Notification, were exempted from payment of sale tax. In the original Notification Entry No.61 read as follows: "61. All biscuits except those packed and sold in tins or card boards or paper containers of cartons."
By S.R.O, dated 1.1.1975, the aforesaid Entry in the Notification dated 27.6.1951 was substituted by the following Entry:- "61. Biscuits which are marketed without any name, brand name or trade mark."
3. The Sales-Tax Officer, by separate assessment orders dated 30.12.1978, allowed exemption in respect of biscuits exported by the applicant but did not allow exemption claimed by the applicant under the aforesaid Entry No. 61 observing as follows:- "The entire products were sold in packed from in different types of packings (I).e. In tins, cartons, cardboard boxes, paper containers, polythene, cellophene bags and wooden boxes. The assessee's name was invariably printed on the packings. Biscuits are thus sold in packed form under the assessee's brand name."
The applicant, being aggieved , filed appeals against the impugmed orders before the Appellate Assistant Commissionerof Sales Tax'A' Range Karachi who by a consolidated order dated 223.1979, inter alia, held that as the biscuits sold or marketed by the applicant were not embossed with any name, brand name or trade mark, the same were exempt from payment of sales tax under Entry No.61 of Notification No.9 dated 27.6.1951 relying upon the order dated 30.5.1978 of the Appellate Tribunal in the case of the applicant for the earlier assessment year 1974-75. In the order of the Appellate Tribunal for the earlier assessment year 1974-75, it was held by the Tribunal as follows: "We however, cannot agree with this Departmental interpretation. In our view the qualification of name, brand name and trade marks must be attributed to the biscuits and not to the marketability. Our reason is that if the Income-Tax Officer's interpretion is to be accepted it would result in a very anomalous position inasmuchas, all the biscuits with name, brand name and trade marks produced on machines with embossed dyes, even if sold loose and without any containers in or packs would be entitled to exemption outright. Any manufacturer would arrange this devide easily, with this dealers to whom loose biscuits would be supplied with the responsibility of packing the name into discounted prices and the entire sales would thus escape taxation altogether. We must, therefore, hold that all biscuits with names, brand names of trade marks embossed thereon alone would remain liable to sales-tax irrespective of the way in which the same are marketed whereas the plain biscuits without any such name, brand name or trade mark would remain exempt. We would accordingly direct the Sale-Tax Officer to bifurcate the sales disclosed for this period into these two categories of biscuit manufactured as the appellant states that there are two distinct set of machines to manufacture these biscuits. The respective production would enable the Sales-Tax Officer to bifurcate the sales into these two categories if the appellant's record rightly furnished the production figures on this basis. In case the appellant falls to do so, the Sales-tax Officer will have to resort to estimates and in our view the safest formula for this purpose would then be the past history of case. The ratio in which the taxable and non-taxable sales were made will provide a suitable guide for determining the exempt and taxable sales of the appellant in that situation. The present orders in these circumstances will be vacated for denov assessment on the lines indicated above."
According to Mr. Iqbal Naeem Pasha, Advocate, against the aforesaid order of the Appellate Tribunal for the assessm ent year 1974-75, the Department had brought the matter before this Court in Sales-Tax Case No.27/1979 and a Division Bench of this Court by judgment dated 3.4.1991 decided the case against the Department. A copy of the judgment dated 3.4.1979 passed in S.T.C.
No. 27/79 by this Court has been placed on record by Mr. Iqbal Naeem Pasha but we find that in the said judgment the question of interpretation of Entry No.61 of Notification dated 27.6.1951 was not involved and the case of the Department was dismissed and argued that no question of law had arisen requiring opinion of this Court. The judgment in S.T.C. No.27/79, accordingly, is of no help to the applicant in the present cases where the question involved relates to interpretation of aforesaid Entry No. 61.
5. Against the consolidated order dated 22.3.1979 of the Appellate Assistant Commissioner of Sales-tax, the Sales-tax Officer filed second appeals before the Appellate Tribunal which allowed the appeals, by order dated 8.9.79 in favour of the Department holding as follows: "We have gone through the facts carefully and have also perused the order of this Tribunal which has been relied upon by the learned AA.C. The Tribunal's finding was that biscuits with names and brand-names etc., embossed thereon were liable to sales tax irrespective of the way in which the same are marked. Whereas only the plain biscuits without any such name or brand name would be exempt. According to the item 61 notification No. 7 dated 27.6.1951 which was made effective w.e.f. 1.1.1975, the exemption was available ' only to "biscuits which are marketed without any names, brand names or trade-marks, In the case before us, it has been proved by the STO and also admitted by the learned Counsel, that all the sales of the biscuits marketed, sold or disposed. Of, were packed and bore the name of A & B Biscuits manufacturers etc. A very plain reading of the item 61 of the said notification refered to above, suggests that all the biscuits which are marketed without any names or brand names or trade marks will be exempt. In the instant case it is not disputed that the entire quantity of biscuits manufactured by the appellant were marketed in packings bearing the names or brand names of the manufacturers. Obviously, therefore, all such biscuits marketed in the manner mentioned above, would fall outside the scope of exemption. The STO, while making the assessm ent order, took all possible steps to find out if it was possible for the appellant to prove with reference to relevant records, if biscuits which Could be classified as exempt were manufactured or not. Admittedly, no such material was placed before the STO and as such he gave a clear-cut finding that the entire products have marketed with the brand names of the manufacturers and as such the entire sales were liable to sales Tax.
It is an accepted proposition of law that if any particular item is exempt from sales tax the burden of proof is upon the manufacturer. He should shadow of doubt that some products manufactured by it were covered by the exemption granted by the law. In the instant case, notwithstanding the efforts made by the Sales Tax Officer, which have , not been rebutted by the learned counsel while arguing on behalf of the clients before us or earlier through an affidavit. In view of this matter the facts mentioned by the learned D.R. In support of the order of the S.T.O. Remain unrebutted and as such we are of the opinion that the Sales Tax Officer was justified in not allowing exemption on some sales as claimed by the Respondent.
6. The applicant then filed applications under Section 17(1) of the Sales- Tax Act requesting the Tribunal to refer the following three questions to this Court for opinion:
(1) Whether the learned Tribunal has correctly interpretated Entry No.61 of Notification No.9 dated 27.6.1951?
(2) Whether the learned Tribunal has mis-directed itself in law by deciding the issues which had not been adjudicated upon by the learned Appellate Assistant Commissioner of Sales-Tax?
(3) Whether the learned Tribunal is legal in restoring (he assessment order instead of setting aside the orders of the lower authorities?
7. By order dated 28.9.1981, the Appellate Tribunal dismissed the applications on the ground that the Tribunal did not consider or decide any legal issue which could entitle the applicant to raise any legal question for the opinion of the High Court, in the circumstances, present applications under Section 17(4) of the Sales-Tax Act, 1951, have been filed praying that the aforesaid three questions are question of law and they arise out of-the order dated 22.3.1979 of the Appellate Tribunal and such questions may be decided by this Court.
8. In our opinion the question about the applicability or otherwise of Entry No. 61 of Notification No. 9 dated 27.6.1951 and its interpretation is a question of law and does arise out of the order dated 22.3.1979 of the Appellate Tribunal, and as such we propose to consider it and decide the same.
9. According to Mr. Iqbal Naeem Pasha, learned counsel for the applicant, under the aforesaid Entry No. 61 of the Notification dated 27.6.1951, biscuits which were not embossed with any name, brand name or trade mark, were exempt from payment of sales-tax. According to learned counsel, the deciding factor is the marking on the biscuits with any name, brand name or trade mark, and not the name, brand name or trade mark on the packing of the biscuits. It was emphasised that, while considering the question of exemption under the aforesaid Entry No. 61, the qualification of the name, brand name or trade mark is to be attributed to the biscuits and not to their marketability. In our view, the contention of the learned counsel for the applicant is not correct. According to our view, the qualification about name, brand name or trade mark is with reference to marketability or saic of biscuits and is not restricted to biscuits. If the intention was to grant exemption from payment of sales-tax to biscuits which had no name, brand name or trade mark embossed on them without reference to their sale or marketability with such name, brand name or trade mark, the Entry would perhaps have been as follows: "Biscuits not embossed or marked with any name, brand name or trade mark."
Our view finds support from other entries in the said Notification where goods are named without any reference to their sale or marketability. It may, therefore, be reiterated that in case biscuits are marketed or sold without any name, brand name or trade mark, such biscuits would be entitled to exemption from payment of sale-tax under the said Entry No. 61 of notification dated 27.6.1951, but in case biscuits were sold or marketed with any name, brand name or trade mark, benefit could not be taken of Entry No. 61 in such a case.
10. In these the cases for assessm ent years 1975-76 and 1976-77, there is a finding by the Sales-tax Officer that all biscuits were sold in packings which were marked with name or trade mark of the applicant. In this context, reference may be made to the following observations of the appellate Tribunal in their order dated 28.9.1981 while dismissing the applications under Section 17(1) of the Sale Tax Act filed by the applicant:- "2. Briefly stated, the facts as could be relevant in this regard, are as under. The appellant manufactured biscuits, some of which were liable to sales tax whereas the others did not attract any sales tax. The Sales Tax Officer, while making the assessment, allowed exemption from sales tax on export sales but did not consider the plain-biscuit sales to be exempt in both the years. The same Income tax Officer adopted this course of action because he directed the assessee- company to produce evidence in support of the sales of plain-biscuits with complete details and alongwith books of accounts consisting of other supporting books and vouchers etc. The assessee did produce some books but the stock register of finished goods and raw materials were not produced before him. Similarly, no day to day production record was shown to him because no such record was maintained. He also called for the details of plain biscuits but the same were also not fil6d before him. According to the Sales Tax Officer, the entire quantity of biscuits was sold in packed from under the assessee's brand-name. In order to verify the assessee's claim for exemption the Sales Tax Officer also scrutinised the books of accounts thoroughly to verify if the respondent's claim for exemption was genuine. The Sales Tax Officer also examined cash memoes bills produced by the assessee-applicant and noted that all the sales shown in the bills and the cash memoes were of the packed kind of biscuits with brand- names. He, therefore, concluded that the sales were made in different packings bearing their brand-names and that there were no sales whatsoever of the plain or loose biscuits which could be classified as exempt from sales tax.
This procedure was adopted by the Sales Tax Officer in view of the Tribunal's directions on the issue."
11. The Appellate Tribunal correctly interpretated Entry No 61 of Notification No. 9 dated 27.6.1951 and as such our answer to the said question is in the affirmative. No other question of law arose out of the Appellate -Tribunal. S.T.C. No. 1/82 and S.T.C No. 2/82 are decided accordingly.
There will be no order as to costs.