9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 997 - HC - VAT and Sales TaxPower to grant exemption in respect of categories other than registered dealers under Section 8 (5) (b) of the CST Act - Scope of the expression to such person or class of persons as may be specified in the notification as used in Section 8 (5) (b) of the CST Act - limited to registered dealers or not - HELD THAT - Sections 8 (5)(a) and 8 (5) (b) empowered the State Government to grant total or partial exemption not only in respect of sales of any goods or class of goods to a registered dealer/government, but also empowered to grant total or partial exemption in respect of inter State sales to unregistered dealers of any person or class of persons specified in the notification. - Section 8 (5) (b) remains untouched even after the amendment of 2007, therefore, empowers the State Government to grant exemption in respect of categories other than registered dealers. This view duly supported by judgment in Prism Cement Limited vs. State of Maharashtra, 2013 (7) TMI 668 - BOMBAY HIGH COURT , wherein it was held as under the argument of the Revenue that reference to the words 'sub-section (2)' and the words 'any person or class of persons' in Section 8 (5) as amended by Finance Act 2002 are redundant or surplus cannot be sustained. In this view of the matter, we do not consider it necessary to deal with the decisions relied upon by the counsel for the Revenue in support of their contention that the redundant or surplus words in a statute must be ignored. To the similar effect is the judgment rendered in Diebold Systems (P) Limited vs. Additional Commercial Tax Officer (Iac), Puducherry, 2010 (2) TMI 1103 - MADRAS HIGH COURT , wherein question No. 3 was framed whether under Section 8 (5) (b) of Central Sales Tax Act, 1956 Act, Government still had power to issue notification without requirement of form C in respect of sales to any persons or class of persons, who were non-dealers Unjust Enrichment - HELD THAT - The respondent(s/assessee(s) cannot automatically be held entitled to refund of the said amount unless the assessee(s) establishes that it has not passed on the tax liability to the consumers as any person carrying on the activity of manufacture of goods utilizing some raw material which had already suffered some tax would normally include both the tax component and the cost of such raw material into the cost of the final product and pass on the same to the consumer of the manufactured product. Hon ble Supreme Court in DECCAN CEMENTS LTD. VERSUS ASST. DIRECTOR OF MINES AND GEOLOGY 2014 (8) TMI 1247 - SUPREME COURT held that ' Though it appears from the said judgment, their Lordships relied upon the language of Section 27 of the Customs Act in support of their conclusion. In our opinion, the existence or otherwise of such a provision makes no difference for the correctness of the above stated principle of law Any person carrying on the activity of manufacture of goods utilising some raw material which had already suffered some tax would normally include both the tax component and the cost of such raw material into the cost of the final product and pass on the same to the consumer of the manufactured product.' There are no reason to interfere with the impugned judgment under revision. Consequently, the revision petitions are dismissed.
Issues Involved:
1. Interpretation of the Taxation Amendment Act, 2007. 2. Competence of the State Government to issue notifications under Section 8(5)(b) post-amendment. 3. Validity and consistency of the notification dated 30.6.2005 with the legislative declaration post-amendment. 4. Harmonious construction of the notification dated 30.6.2005 with the amended provisions of the CST Act. Detailed Analysis: Issue 1: Interpretation of the Taxation Amendment Act, 2007 The primary question for consideration was whether the amendment under the Finance Act of 2007 effectively removed the State Government's power to grant exemptions under Section 8(5)(b) of the CST Act, specifically for categories other than "registered dealers." The revenue argued that the omission of the words "or sub-section 2" from Section 8(5) implied that the State Government's power to issue exemption notifications in cases other than those relating to registered dealers was removed. However, the Tribunal concluded that the amendment did not affect the State Government's power to grant total or partial exemptions from tax payable, retaining its authority to issue such notifications. Issue 2: Competence of the State Government to Issue Notifications Under Section 8(5)(b) Post-Amendment The Tribunal held that the State Government retained its competence to issue notifications under Section 8(5)(b) even after the 2007 amendment. The State Government's power to grant exemptions was not denuded by the amendment. The Tribunal's interpretation was supported by the judgments of the Bombay High Court in Prism Cement Limited vs. State of Maharashtra and the Madras High Court in Diebold Systems (P) Limited vs. Additional Commercial Tax Officer. These judgments emphasized that the State Government's power to grant exemptions to any person or class of persons remained intact despite the amendment. Issue 3: Validity and Consistency of the Notification Dated 30.6.2005 with the Legislative Declaration Post-Amendment The Tribunal found that the notification dated 30.6.2005, issued prior to the amendment of Section 8(5)(b), did not run counter to the legislative declaration and remained consistent with the amended provisions. The notification continued to be valid and effective even after the 2007 amendment, as it did not conflict with the legislative intent or the amended provisions of the CST Act. Issue 4: Harmonious Construction of the Notification Dated 30.6.2005 with the Amended Provisions of the CST Act The Tribunal appreciated the notification dated 30.6.2005 and construed it harmoniously with the amended provisions. The notification, which granted a concessional rate of tax to non-dealers like banks, educational and medical institutions, was found to be consistent with the public interest and the legislative framework. The Tribunal's interpretation ensured that the notification operated within the scope of the CST Act and did not exceed the enabling provisions. Conclusion The Tribunal concluded that the State Government retained its power to grant total or partial exemptions under Section 8(5)(b) of the CST Act, even after the 2007 amendment. The notification dated 30.6.2005 remained valid and consistent with the legislative declaration. The revision petitions filed by the revenue were dismissed, and the respondents/assessees were given the opportunity to establish their entitlement to refunds, if they had not passed on the tax liability to consumers. The revenue was directed to dispose of any such applications expeditiously.
|
