1975 (8) TMI 115 - HC - VAT and Sales Tax

Summary

Issues:
- Exemption of turnover under the Central Sales Tax Act based on exemption under the Tamil Nadu General Sales Tax Act.
- Interpretation of section 9 of the Central Sales Tax Act prior to its amendment by Act 28 of 1969.
- Applicability of exemption under local law for Central sales tax assessment.
- Exclusion of excise duty paid in taxable turnover and its impact on Central Sales Tax Act.

Analysis:
The case involved two tax cases filed by the revenue challenging the Tribunal's order exempting turnovers in respect of the assessment years 1964-65 and 1965-66. The turnovers related to sales of products exempted from sales tax under the Tamil Nadu General Sales Tax Act. The assessments were under the Central Sales Tax Act, and the sales were in the course of inter-State trade. The assessee claimed exemption under the Central Sales Tax Act based on the exemption provided by the local law. The court referred to previous decisions and the amendment made by Act 28 of 1969, which exempted sales of goods in the course of inter-State trade during a specific period if conditions were met.

The court considered the interpretation of section 9 of the Central Sales Tax Act before its amendment and the applicability of the exemption under the local law for Central sales tax assessment. Previous decisions had varied views on whether an exemption under the local law automatically applied to Central sales tax assessments. The Supreme Court's decision in a specific case clarified that exemption under the State law would be automatically available for Central sales tax assessment. Thus, the exemption granted under the local law for the goods in question was deemed available for Central sales tax assessment.

The revenue contended that exemption under the Central Sales Tax Act required non-collection of tax on the grounds that it could not have been levied or collected. The court disagreed with this contention and held that the exemption was available under section 9 before the amendment by Act 28 of 1969. The court also addressed the impact of excise duty paid on the taxable turnover and clarified that certain previous decisions were not applicable to the case at hand. Ultimately, the court held that the respondent-assessee was entitled to exclude the disputed turnover from the taxable turnover, leading to the dismissal of the petitions filed by the revenue.