Purchase tax is payable on timber purchased as firewood and used in the manufacture of wooden planks and 'payas' of cots, as the assessee had purchased timber as firewood, not firewood itself, and that the mere description of timber as firewood would not convert it into firewood.

1. - This is an application for reference under Section 15(2)(b) of the Rajasthan Sales Tax Act, 1954.

2. Anand Wood Industries, Jaipur - hereinafter referred to as the aaseseee, is engaged in the business of manufacture and sale of wooden planks and 'payas' for cots. During the assessment years 1967-68 and 1968-69, the assessee purchased as firewood logs and branches of felled trees in lots. Out of there, it utilised the logs for manufacture of planks and 'payas' for cots. The planks and 'payas' were sold within the State as well as in the course of inter-state trade and commerce and outside the State. The assessee has paid sales tax on sales in the course of inter-state trade as well as on sales out side the State.

3. The assessing authority, however, subjected that part of the purchase of firewood which had been used in the manufacture of planks and 'payas' of cots, though purchased along with other logs which were, in fact, sold as firewood, to purchase tax. The break up of the purchase was furnished by the assessee. Upon that basis, the assessing authority imposed purchase tax @ 1% under Section 5C on the purchase price of timber used in the Roods manufactured and sold within the State and at the general rate of 6/7% on the purchase price of timber used in the manufacture of goods sold outside the State. The imposition of purchase tax was affirmed in appeal by the Deputy Commissioner (Appeals) as well as by the Board of Revenue in revision as also in second appeal.

4. The assessee thereafter applied to the Board under Section 15(1) of the Act for making a reference of the question that, since firewood was exempt from sales tax under item 13 of the Schedule to the Act, no purchase tax was payable.

5. The contention of the assessee before the Board of Revenue was that the assessing authority was not justified in imposing purchase tax because it purchased timber as firewood and firewood was exempt from tax. When no sales tax could be imposed on the sale of firewood, no purchase tax could also be imposed on purchase Further, that no purchase tax could be imposed on a part of the turnover representing utilisation of some of the logs of tiles as timber in the manufacture of wooden planks and 'payas' of cote. It was urged that the liability of tax is to be seen at the point of purchase and, therefore, what was done to the timber after purchase should be left out of consideration. The assesses could not predicate as to what part of the timber purchased would be used as raw material for the manufacture. It was said that at the time of purchase of wooden 'payas' and planks it was not known what part would be sold as firewood and, therefore, no purchase tax could be levied These contentions, however, did not prevail.

6. In declining to make a reference the Board of Revenue observed, -

"It has been clearly held that the applicants intention was to purchase logs of wood as firewood which is exempt from sale or purchase tax in accordance with item No. 13 of the Schedule appended to the R.S.T. Act, 1954 but as the dealer used part of firewood in the manufacture of planks and legs of cots be has acted contrary to his original purpose and so purchase tax became attracted under Section 5(C)(2) of the R.S.T. Act, 1954 in the instant case."
We regret to say the observation does not truly reflect the findings reached by the Board of Revenue in revision as well as in special appeal.

7. It was urged before us that what the assessee, in fact, purchased was firewood and not timber and, therefore, no purchase tax could be imposed under Section 5C of the Act merely because some of the firewood was used for the manufacture of wooden planks and 'payas', inasmuch of firewood is exempt under item 13 of the Schedule. There is no warrant for this submission. It has been concurrently found by all the taxing authorities that the assessee purchased timber as firewood. Indeed, the Board of Revenue observes:-

"The petitioner's case is that he had purchased fe