1992 (8) TMI 254 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment addresses the issue of tax liability on inter-State sales of oil-cakes under the Bombay Sales Tax Act and the Central Sales Tax Act, focusing on the interpretation of a notification exempting oil-cakes from tax within the State of Maharashtra.

Details of the Judgment:

1. The petitioner, a registered partnership firm operating an oil-mill in Maharashtra, sought clarification on tax liability for inter-State sales of oil-cakes due to a notification exempting all sales of oil-cakes within Maharashtra from tax under the Bombay Sales Tax Act.

2. The Deputy Commissioner initially ruled that inter-State sales of oil-cakes were not taxable under the Central Sales Tax Act due to the exemption under the Bombay Sales Tax Act. However, the Additional Commissioner and the Maharashtra Sales Tax Tribunal disagreed, arguing that the exemption was not general and did not cover inter-State sales.

3. The petitioners contended that the exemption under the notification fell within the scope of section 8(2A) of the Central Sales Tax Act, which provides for nil tax if goods are exempt from tax generally under the State sales tax law.

4. The respondents argued that the exemption in the notification only applied to sales within Maharashtra and did not extend to inter-State sales, citing a Supreme Court decision on a similar matter.

5. The Court analyzed section 8(2A) of the Central Sales Tax Act, emphasizing its overriding effect and clarifying that the exemption for oil-cakes in Maharashtra was unconditional and fell within the ambit of the provision.

6. The Court dismissed the reliance on the Supreme Court decision cited by the respondents, noting that the circumstances in that case differed from the present case, where the exemption was clear and general.

7. Ultimately, the Court held that the sales of oil-cakes in Maharashtra were generally exempt from tax under section 8(2A) of the Central Sales Tax Act, and therefore, inter-State sales of oil-cakes were also exempt. The orders of the Additional Commissioner and the Tribunal were set aside, and the writ petition was allowed without costs.