Case: State Of Uttar Pradesh Vs. M/S. Kores (India) Ltd

It appears that the respondent which is a company incorporated under the Indian Companies Act dealing in carbon paper, typewriter, ribbon, stepler machines and stepler pins, despatches the said goods from its head office at Bombay to its branch office at Kanpur wherefrom sales thereof are effected in the State of Uttar Pradesh. During the course of the assessment proceedings for the assessment year 1956-57, the respondent claimed that carbon paper not being paper falling within the ambit of Entry No. 2 of the Schedule to the aforesaid Notification but a specialised article used for copying purposes, its turnover had to be assessed at the rate of 2 per cent prescribed for unclassified goods and not at the rate of 6 paise per rupee i.e. 6% prescribed in the aforesaid Notification. The respondent further claimed that ribbon being an accessory anti not a part of the typewriter, its turnover could not be subjected to sales tax at the rate of 10% prescribed inter alia for typewriters and parts thereof by Notification No. ST-1738/X-I012-1963 dated June 1, 1963. The Sales Tax Officer, (Section IV), Kanpur, did not accede to the contentions of the respondent and holding that carbon paper remained paper even after going through certain chemical processes and that ribbon was a part of the typewriter, taxed the turnover of carbon paper for the period commencing from July 1, 1966, to the end of March, 1967 at 6% and that of ribbon at 10%. He, however, taxed the turnover of carbon paper for the period April 1, 1966 to June 30, 1966 at 2%. The validity and correctness of this order in so far as it related to the levy of tax on carbon paper at 6% and ribbon at 10% was challenged by the respondent by means of the aforesaid writ petition before the High Court at Allahabad which by its aforesaid judgment and order allowed the same and quashed the levy. Hence this appeal

Court's reasoning:
From the above definitions, it is clear that in popular parlance, the word paper is understood as meaning a substance which is used for bearing, writing, or printing, or for packing, or for drawing on, or for decorating, or covering the walls. Now carbon paper which is manufactured by coating the tissue paper with a thermo-setting ink (made to a liquid consistency) based mainly on wax, non drying oils, pigments and dyes by means of a suitable coating roller and equalising rod and then passing it through chilled rolls cannot be used for the aforesaid purposes but is used. according to The Randon House Dictionary of the English Language  between two sheets of plain paper in order to reproduce on the lower sheet that which is written or typed on the upper sheet i.e. making replicas or carbon copies cannot properly be described as paperBearing in mind the ratio of the above mentioned decisions, it is quite clear that the mere fact that the word paper forms part of the denomination of a specialised article is not decisive of the question whether the article is paper as generally understood. the word paper in the common parlance or in the commercial sense means paper which is used for printing, writing or packing purposes. We are, therefore, clear of opinion that Carbon paper is not paper as envisaged by entry 2 of the aforesaid NotificationRegarding ribbon also to which the above mentioned rule construction equally applies, we have no manner of doubt that it an accessory and not a part of the typewriter (unlike spool) though it may not be possible to use the latter without the former. Just as aviation petrol is not a part of the aero- plane nor diesel is a part of a bus in the same way, ribbon is not a part of the type- writer though it may not be possible to type o ut any matter without it.