1987 (11) TMI 369 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of sales tax exemption notification for cattle feed.
2. Impact of subsequent amendments on the exemption eligibility.
3. Validity of assessment order denying exemption for mixed commodities.

Analysis:
1. The petitioner claimed exemption from sales tax for cattle feed, including mixtures of rice bran, pulses, husk, and molasses. The primary notification dated 4th March, 1974, exempted cattle feed but was later amended on 23rd March, 1974, to specify exclusions. A previous court ruling established that the addition of molasses to cattle feed did not alter its character, thus maintaining exemption eligibility.

2. A subsequent amendment on 12th April, 1979, replaced "cattle feed" with specific commodities like rice bran, wheat bran, husk, and pulses. The government argued that the new amendment required these commodities to be sold separately without molasses or salt to qualify for exemption. However, the court held that the earlier rulings permitting mixtures of commodities for exemption still applied, and the addition of molasses or salt did not change the character of the goods.

3. The second respondent denied the petitioner's exemption claim based on the mixed nature of the marketed goods and the presence of molasses and salt. The petitioner contended that the 1979 amendment did not alter the exemption criteria established by previous court decisions. The court agreed with the petitioner, emphasizing that the assessment order failed to consider the precedents set by the court, thus allowing the petitioner's writ petition and dismissing the pre-assessment notice challenge.

In conclusion, the court upheld the petitioner's entitlement to exemption for the mixed commodities under the sales tax notification, emphasizing the continuity of exemption criteria despite subsequent amendments. The judgment highlighted the importance of applying established legal principles in tax assessments and acknowledged the petitioner's right to exemption based on prior court decisions.