2009 (4) TMI 870 - HC - VAT and Sales Tax

Interpretation of the notifications dated May 6, 1986 and January 21, 2000 - Held that - This court is of the opinion that the present revision petition of the petitioner-assessee deserves to be dismissed and the assessee cannot be held entitled to the benefit of partial exemption under the notification dated May 6, 1986 for the assessment year 2001-02 in question. Even though the assessee s assessments might have been completed in accordance with the circular dated April 15, 1994 issued by the Commissioner and even the assessment of preceding year 2000-01 in terms of the order passed by this court in earlier writ petition filed by the assessee, the same does not furnish a valid ground to allow the petitioner-assessee to avail of benefit of partial exemption contrary to the condition No. 3 of the notification dated January 21, 2000 for the assessment year 2001-02, involved in the present case.

Issues Involved:
1. Interpretation of notifications dated May 6, 1986, and January 21, 2000.
2. Eligibility for partial exemption from sales tax.
3. Applicability of condition No. 3 in the notification dated January 21, 2000.
4. Impact of circulars issued by the Commissioner of Commercial Taxes.
5. Principles of statutory interpretation in taxing statutes.

Detailed Analysis:

1. Interpretation of Notifications:
The primary issue was the interpretation of two notifications: one dated May 6, 1986, which provided partial exemption from sales tax, and another dated January 21, 2000, which offered a concessional rate of tax at six per cent but included a condition (No. 3) that prohibited availing benefits under the earlier notification if the concessional rate was availed.

2. Eligibility for Partial Exemption:
The assessee, a cement manufacturer, argued that it should be entitled to partial exemption for inter-State sales not covered by the notification dated January 21, 2000. The assessee contended that the partial exemption aimed to encourage inter-State sales and should not be curtailed by a later notification.

3. Applicability of Condition No. 3:
Condition No. 3 of the January 21, 2000 notification stated that a dealer availing the concessional rate of six per cent would not be eligible for benefits under the May 6, 1986 notification. The Revenue argued that this condition should be strictly construed, meaning that once the concessional rate is availed, the partial exemption cannot be claimed.

4. Impact of Circulars Issued by the Commissioner:
The assessee referred to earlier circulars issued by the Commissioner that interpreted similar conditions in a manner favorable to the assessee. However, the court noted that these circulars could not override the clear terms of statutory notifications. The court emphasized that circulars are not statutory and cannot expand or restrict the scope of notifications.

5. Principles of Statutory Interpretation in Taxing Statutes:
The court reiterated the principle that exemption notifications in taxing statutes must be strictly construed. The plain language of the notification should be given its literal meaning without any intendment. The court cited several Supreme Court judgments to support this principle, emphasizing that the eligibility criteria for exemptions must be strictly followed.

Conclusion:
The court held that the assessee was not entitled to the benefit of partial exemption under the notification dated May 6, 1986, for the assessment year 2001-02, as it had availed the concessional rate of six per cent under the notification dated January 21, 2000. The court dismissed the revision petition, reinforcing that the eligibility criteria for exemptions must be strictly construed and that circulars issued by the Commissioner cannot override statutory notifications.

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