2013 (5) TMI 261 - HC - VAT and Sales Tax

Entitlement to exemption from payment of Sales Tax on Poha (Parched Rice) and Murmura (Puffed Rice) under the notification No.A-5-I/94/ST-V (55) dated 30-3-1994 - Madhya Pradesh General Sales Tax Act, 1959 and Central Sales Tax Act, 1956 - Held that - In the exemption notification the word includes, inter alia, rice as enumerated from (i) to (x), as aforestated. All the terms used are the basic product, not other forms of the product. Paddy, rice, wheat, jowar or milo, bajra, maize, ragi, kodon, kutki & barley are the basic products. As observed rice includes beaten and puffed rice both. Thus, since the exemption is granted to all the goods, as specified in the State Act, the State cannot get any advantage from the fact that there has been a separate entry for exigibility of tax in respect of Poha & Murmura. Accordingly, Poha & Murmura are one form of rice and entitled to exemption under the above-stated notification. The exemption has been granted to cereals, which are enumerated after, that is to say . Cereals used in Section 14 (i) of the Central Act clearly means rice and other like products of rice like Poha & Murmura. Thus, rice including Poha & Murmura are included within the definition of cereals . The notification dated 30-3-1994 is not issued on the basis of entries made in the State Act for the purpose of exigibility to tax and, as such, Poha & Murmura are covered under the notification dated 30-3- 1994 for the purpose of exemption - matter referred back to the AO to make assessment afresh.

Summary

Issues:
Whether Poha and Murmura are entitled to exemption from Sales Tax under the State Act and Central Act based on a specific notification.

Analysis:
The judgment involves the interpretation of a notification regarding the exemption of Poha and Murmura from Sales Tax under the Madhya Pradesh General Sales Tax Act, 1959, and the Central Sales Tax Act, 1956. The petitioners, who are manufacturers of Poha and Murmura, claimed exemption under the notification No.A-5-I/94/ST-V (55) dated 30-3-1994. The Additional Commissioner, Sales Tax, rejected their claim, stating that Poha and Murmura are not cereals and are separately taxable under the State Act. This decision was upheld by the Divisional Deputy Commissioner, Sales Tax.

The petitioners argued that the notification should be interpreted independently of the State Act entries. They relied on a previous decision of the High Court of Madhya Pradesh, which supported their position. On the other hand, the State contended that subsequent amendments to the schedule made the previous decision inapplicable. The relevant entries and notification were provided for clarity.

The court considered the definition of 'cereal' under the Central Act, which includes rice and related products like Poha and Murmura. It was noted that Paddy was excluded from the relevant entry in the State Act, and a separate entry for Poha and Murmura was introduced in 1987. The court referenced previous judgments to support the inclusion of Poha and Murmura under the definition of 'cereal.'

Additionally, the court highlighted the distinction between exigibility to tax and exemption/concession. It referenced a Supreme Court case to emphasize this point. The court also referred to the definition of 'cereal' from Webster's Dictionary to support its interpretation.

Ultimately, the court held that Poha and Murmura should be considered forms of rice and thus entitled to exemption under the notification. The matter was remanded to the Assessing Officer for fresh assessment in line with the court's interpretation. Consequently, all the writ petitions were allowed without any cost orders.