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2016 (9) TMI 463 - HC - VAT and Sales TaxEligibility of exemption village industries - the exemption notification in G.O.Ms.No.122 dated 20.03.1992 TNGST Act, 1959 CST Act, 1956 Held that - in case of Ramnad District Sarvodaya Sangam, Srivillliputhur it was decided that once exemption of the products specified in the schedule to the Khadi and Village Industries Commission Act, 1956 without any condition relating to goods, are granted in favour of certain institutions under the Tamil Naud Government Sales Tax Act, such institutions are also deemed to be enjoying the same benefit of exemption under the Khadi and Village Industries Commission of Act, 1956, by virtue of Section 8(2-A) of Central Sales Tax Act, 1956 following the above judgement it is held in this case that exemption granted to the petitioner under the provisions of the Central Sales Tax Act, 1956 matter remanded to apply the case of Ramnad District Sarvodaya Sangam, Srivillliputhur and to allow exemption petition allowed
Issues:
Challenge to orders rejecting Revision Petitions under TNGST Act and CST Act; Interpretation of exemption under CST Act for Village Industries. Analysis: The petitioner, a registered dealer under TNGST Act and CST Act, challenged orders rejecting Revision Petitions by the Joint Commissioner of Commercial Taxes. The Revisional Authority rejected the petitions on technical grounds, stating no error apparent on the face of the order. The petitioner had previously approached the court, and the Joint Commissioner rejected the Revision Petitions on technicalities. The key issue was whether the petitioner was entitled to exemption under the CST Act as a Village Industry, based on G.O.Ms.No.122 dated 20.03.1992. This issue had been settled in a previous case by the Madurai Bench of the Court, confirming exemption for certain institutions under the TNGST Act. The Court held that once exemption was granted under the TNGST Act, the same benefit extended to the CST Act under Section 8(2-A). The Court emphasized that the object of exemption under the CST Act was to benefit worthy Khadi and Village Industries, and a narrow interpretation would defeat this purpose. The Court referred to a previous decision where it was established that institutions enjoying exemption under the TNGST Act were also entitled to the same benefit under the CST Act. The Court ruled in favor of the petitioner, setting aside the impugned orders and remanding the matter to grant exemption under the CST Act, following the precedent set in the Ramnad District Sarvodaya Sangam case.
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