1991 (12) TMI 290 - HC - VAT and Sales Tax

Summary

Issues:
1. Exemption under Central Sales Tax Act, 1956 for bamboo and cane products.
2. Interpretation of Entry 52 in Schedule III of Assam Sales Tax Act, 1947.
3. Applicability of Section 8(2A) of Central Sales Tax Act, 1956.
4. General exemption under State Sales Tax Law.

Analysis:
The petitioners, an association of craftsmen producing bamboo and cane products, sought a writ to quash notices for tax returns and payments under the Central Sales Tax Act, 1956. The association members claimed exemption under Assam Sales Tax Act, 1947, specifically under Entry 52 of Schedule III for Khadi and Village Industries products. The dispute arose as the Tax Superintendent insisted on tax payments despite the claimed exemption (Issue 1).

Entry 52 in Schedule III of the Assam Sales Tax Act exempts Khadi and Village Industries products sold by certified producers or organizations. The association members, certified by the Khadi and Village Industries Board, qualified for this exemption. The court noted that the exemption was not limited to specific circumstances, making it a general exemption under the State Sales Tax Law (Issue 2).

Section 8(2A) of the Central Sales Tax Act provides for nil tax if goods are exempt under the State Sales Tax Law generally. The court clarified that a general exemption must not be limited to specific conditions. The exemption for the association members selling village industry products met this criterion, making them exempt from Central Sales Tax (Issue 3).

The court referenced precedents to support its interpretation that the exemption for village industry products was general under the State Law, aligning with the provisions of Section 8(2A) of the Central Sales Tax Act (Issue 4). Consequently, the court declared that the association members were exempt from Central Sales Tax as long as they held the required certificates, as per Entry 52 of Schedule III of the Assam Sales Tax Act.

In conclusion, the writ petition was disposed of with a declaration that the sale of goods by the association members would not be taxed under the Central Sales Tax Act, 1956, provided they possessed the necessary certificates as specified in the State Sales Tax Law.