The judgment of the Court was delivered by

DESAI, J. - In this reference made at the instance of the assessee under section 69 of the Gujarat Sales Tax, 1969 (hereinafter referred to as "the Act"), the Gujarat Sales Tax Tribunal (hereinafter called "the Tribunal") has referred the following question for the opinion of this Court :

"Whether, on the facts and in the circumstances of the case, the levy of purchase tax under section 16 of the Gujarat Sales Tax Act, 1969, on the purchases of glass ampules made against declaration in form 19 was justified on the ground that such ampules were neither raw materials, processing nor consumable stores used in the manufacture of goods for sale ?"

The assessee herein is a manufacture of pharmaceuticals. Amongst the pharmaceutical products manufactured by the assessee are included various kinds of injections. The injectible liquid medicine, after it is prepared, is required to be filled in glass ampules made of special glass. The assessee does not manufacture such ampules but purchases them. After those ampules are properly washed and subjected to sterilisation, the injectible liquid medicine is poured into them without touch of human hand. The tops of the ampules are thereafter automatically sealed. This entire integrated process of manufacture of injectible liquid medicine and filling and sealing it in glass ampules takes place in the plant of the assessee under expert supervision because extreme care has to be taken to ensure against any contamination.

During the assessment period from 1st April, 1971, to 31st March, 1972, the assessee purchased glass ampules worth Rs. 12,174.44 against certificates in form 19. In the course of proceedings for the assessee's assessment of sales tax, the Sales Tax Officer held that, contrary to the certificate, certain percentage of the glass ampules purchased by the assessee was used for another purpose, namely, for manufacture of non-taxable goods, since the manufactured product (injections) to the extent of that percentage, was not sold within the State but it was sold on consignment basis outside the State. The Sales Tax Officer thereupon levied purchase tax under section 16 on that portion of the purchase price of the glass ampules which was relatable to the ampules consumed in the manufacture of injections sold on consignment basis.

It appears that upon scrutiny of the assessment proceedings of the assessee, the Assistant Commissioner of Sales Tax prima facie entertained the view that since the glass ampules purchased against the certificate were used as containers of the injectible liquid medicine medicine manufactured by the assessee, they could not be said to have been used as raw or processing materials or as consumable stores in the manufacture of goods for sale and that, therefore, there was contravention of the declaration made in the certificate in form 19. The Assistant Commissioner of Sales Tax thereupon issued a notice in exercise of the powers conferred upon him under section 67 to the assessee to show cause why purchase tax under section 16 should not be levied on the purchase price of the remaining lot of glass ampules purchased under the certificate. The assessee showed cause. After giving to the assessee a reasonable opportunity of being heard, the Assistant Commissioner of Sales Tax revised the order of the Sales Tax Officer and he levied additional purchase tax in the sum of Rs. 973.92.

Against the aforesaid order of the Assistant Commissioner of Sales Tax the assessee preferred a revision application before the Tribunal. The Tribunal, upon an appraisal of the process of manufacture and after taking into consideration certain decided cases, concurred in the decision of the Assistant Commissioner of Sales Tax and dismissed the revision application. At the instance of the assessee, however, the Tribunal has stated a case in respect of the question set out above.

It is necessary to set out at the outset the material finding r