1990 (1) TMI 300 - HC - VAT and Sales Tax

Summary

Issues:
Petitioner seeking direction against sales tax on oxygen gas manufacturing.

Analysis:
The petitioner, a manufacturer of oxygen gas for industrial and medicinal use, challenged the levy of sales tax by the State of Jammu and Kashmir. The State Government issued a notification imposing sales tax rates under the Jammu and Kashmir General Sales Tax Act, 1962. The petitioner contended that oxygen gas falls under the exempt category as per Schedule "E" of the Act, specifically under clause (viii) of entry 38. However, the court rejected this argument, emphasizing that Schedule "E" lists various exempt goods, including heating systems but not gases themselves. The court interpreted the language of the entry to clarify that heating systems are exempt, not the gases used in those systems. The court also pointed out that oxygen gas is not listed in Schedules A to D, making it taxable under the residuary entry 22 of Schedule "C" at the rate of 8 per cent.

The court dismissed the petitioner's contention that oxygen gas is exempt from tax under the Act based on the interpretation of Schedule "E" and the absence of specific mention in Schedules A to D. The judgment highlights the clear language of the exemption entry and the categorization of goods subject to tax under the Act. The court's decision was based on the specific wording of the relevant schedules and entries, concluding that oxygen gas is taxable at 8 per cent under Schedule "C." Ultimately, the court found no merit in the petitioner's arguments and dismissed the writ petition in limine.