1972 (9) TMI 122 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 6(2) of the Central Sales Tax Act regarding exemption for second or subsequent inter-State sales to registered dealers.
2. Whether exemption under section 6(2) applies to sales made to Government departments not registered as dealers.
3. Distinction between concessional rate of tax under section 8(1) and exemption under section 6(2) for inter-State sales.

Analysis:
The case involved a petitioner-firm assessed under the Central Sales Tax Act for the assessment year 1963-64, claiming exemption for a turnover representing second or subsequent inter-State sales to Andhra Pradesh under section 6(2). The firm contended that the turnover should be taxed at a concessional rate of 2% due to producing a D form certificate. The assessing authority rejected the claim, but the Tribunal allowed the concessional rate while denying complete exemption based on sales being to an unregistered Government department. The issue was whether section 6(2) exempted sales to unregistered dealers. The petitioner argued for a broad interpretation to include dealings with unregistered Government departments, citing section 7(2) as optional for such entities. However, the court held that section 6(2) strictly exempts only sales to registered dealers, emphasizing the statutory requirement for exemption. The court noted the distinction between concessional rates under section 8(1) and exemptions under section 6(2), highlighting the legislative intent to limit exemptions to registered dealers. Ultimately, the court dismissed the case, upholding the Tribunal's decision and emphasizing the need for a strict construction of exemption provisions.