1997 (6) TMI 355 - AT - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the term "cattle feed" under the Rajasthan Sales Tax Act, 1954.
2. Whether a notification prescribing the rate of tax can override an exemption granted under the Act.

Analysis:

Issue 1: Interpretation of "cattle feed"
The case involved a dispute regarding the classification of rice bran as cattle feed for tax purposes under the Rajasthan Sales Tax Act, 1954. The assessing authority initially assessed the sale of rice bran by the assessee-petitioner as taxable at three percent, considering it not to be cattle feed. The Deputy Commissioner and the Board upheld this decision. The petitioner contended that rice bran should be exempt as cattle feed under Section 4(1) of the Act. Various judgments were cited to support both sides of the argument, including cases from Allahabad and Madras High Courts. The Tribunal analyzed these precedents to determine the classification of rice bran as cattle feed.

Issue 2: Notification vs. Exemption
The second issue revolved around whether a notification prescribing the rate of tax could override an exemption granted under the Act. The Tribunal referred to a previous case involving the exclusion of gowar from cattle feed under entry No. 9 of the Schedule. The Tribunal held that the fields of operation of sections 4 and 5 of the Act are distinct and separate. It was concluded that a notification under section 5 prescribing the tax rate would not nullify an exemption provided under the Schedule. Therefore, in the present case, the Tribunal declared that rice bran, being classified as cattle feed, is exempt from tax under the Act, setting aside the orders of the subordinate authorities.

In conclusion, the Tribunal allowed the petition, emphasizing that rice bran is considered cattle feed and exempt from tax under the Rajasthan Sales Tax Act, 1954. The judgment highlighted the importance of interpreting statutory provisions and precedents to determine the taxability of goods under the Act, ultimately providing clarity on the classification of rice bran and the impact of notifications on exemptions granted under the legislation.