2002 (1) TMI 1283 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Challenge to the assessment order under the Central Sales Tax Act, 1956.
2. Exemption of inter-State sales of non-leather footwear valued up to Rs. 100 under the Central Sales Tax Act, 1956.
3. Interpretation of the notification dated March 7, 1994, under the Rajasthan Sales Tax Act, 1954.
4. Relevance of previous judgments including Shiv Sainath Rubber Industries Pvt. Ltd. and Pine Chemicals Ltd.
5. Maintainability of the writ petition despite the existence of an alternative remedy.

Detailed Analysis:

1. Challenge to the Assessment Order:
The petitioner challenged the assessment order dated July 15, 2000, which levied tax on inter-State sales of non-leather footwear valued up to Rs. 100. The petitioner argued that these sales should be exempt under the notification dated March 7, 1994, issued under the Rajasthan Sales Tax Act, 1954, and consequently under section 8(2-A) of the Central Sales Tax Act, 1956.

2. Exemption of Inter-State Sales:
The petitioner relied on the decision in Shiv Sainath Rubber Industries Pvt. Ltd. v. State of Rajasthan, where it was held that the exemption under section 8(2-A) of the CST Act could apply to goods identified by certain criteria. The revenue argued that the exemption under the notification was not general and unconditional, thus not applicable to inter-State sales under section 8(2-A).

3. Interpretation of Notification Dated March 7, 1994:
The notification exempted "all kinds of footwear, excluding the footwear made of leather, up to the value of Rs. 100." The court found that this exemption was related to the goods themselves and was not conditional upon the identity of the dealer or the circumstances of the sale, thus qualifying as a general exemption under section 8(2-A) of the CST Act.

4. Relevance of Previous Judgments:
The court examined the relevance of previous judgments, including the Supreme Court's decisions in Pine Chemicals Ltd. (1992) and its review (1995). The court noted that the review decision clarified that exemptions based on the identity of the dealer or specific circumstances do not qualify as general exemptions under section 8(2-A). However, exemptions based on the classification of goods do qualify. The court concluded that the Shiv Sainath Rubber Industries Pvt. Ltd. decision was impliedly overruled by the Supreme Court's review decision in Pine Chemicals Ltd.

5. Maintainability of the Writ Petition:
The writ petition was initially dismissed on the ground of an alternative remedy. However, the court admitted the petition, considering that the alternative remedy was not equally efficacious given the circumstances, particularly the binding nature of the Supreme Court's decision on the issue.

Conclusion:
The court held that the exemption under the notification dated March 7, 1994, was applicable to the inter-State sales of non-leather footwear valued up to Rs. 100. The assessment order was set aside, and the demand notice was discharged. The appeal was allowed, and no costs were ordered.