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1962 (8) TMI 65 - HC - VAT and Sales Tax
Issues:
Interpretation of the grant of exemption certificate under section 4(2) of the Rajasthan Sales Tax Act, 1954 for the accounting year 1955-56. Determining the effectiveness of the exemption certificate granted before the end of the accounting year for the entire business transacted in that year. The judgment delivered by the Rajasthan High Court involved a reference under section 15(5) of the Rajasthan Sales Tax Act, 1954, regarding the assessment of a firm's annual turnover for the year 1955-56. The firm, engaged in the business of gold and silver bullion and ornaments, sought exemption from sales tax for the entire year, but the exemption was allowed only from a specific period. The issue revolved around the timing and effectiveness of the application for exemption made by the firm, as well as the interpretation of the relevant provisions of the Act and Rules. The Court considered arguments presented by both parties, including references to previous legal decisions, to determine the applicability of the exemption certificate for the entire assessment year. The Court analyzed the nature of the tax, the language of the Act and Rules, and the absence of specific provisions regarding the commencement of exemption certificates to conclude that the exemption should be deemed effective for the entire assessment year, regardless of the date of application. The Court emphasized that the annual nature of the sales tax and the absence of limitations on the timing of application supported this interpretation. Consequently, the Court held that the exemption certificate granted before the end of the accounting year operated for the entire business transacted in that year, based on a fixed annual fee rather than the date of application. As a result, the second question raised in the reference did not require consideration due to the resolution of the first issue. The Court directed the Commissioner of Sales Tax to be informed of the judgment, and costs were awarded to the assessee against the State for the proceedings.
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