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TMI Blog1994 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ers to question the correctness of the first three points decided in the judgment under review. We are told that section 8-B of the Jammu and Kashmir General Sales Tax Act permits refund of sales tax only in cases where the dealer has not collected the same and that the question whether the dealers herein did or did not collect the tax in respect of transactions concerned herein has been left open by this Court though a finding against the dealer was recorded by the High Court. We are also told that proceedings for refund are now pending where the State has taken the defence based on section 8-B of the State enactment. We need express no opinion in that behalf. Inasmuch as the judgment in Pine Chemicals [supra] is now being set aside in so far as the interpretation of section 8(2-A) is concerned and because the only issue involved in Civil Appeals was the one relating to the meaning and applicability of the said sub-section, these review petitions are liable to be allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... -A), relevant for our purposes, reads thus: "8. (2-A) Notwithstanding anything contained in sub-section (I-A) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent (whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate. Explanation.-For the purposes of this sub-section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods." A reading of the sub-section yields the following features: (a) The sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured and sold within five years from the date the said industrial unit has gone into production. The simple question before us is whether the Bench which decided Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683, is right in holding that the benefit of the said sub-section is available even where the goods are exempted with reference to industrial unit and for a specified period, viz., period of five years from the date the relevant unit goes into production. In other words, the question is whether an exemption of the nature granted under Government Order No. 159 dated March 26, 1971, is an exemption available "only in specified circumstances or under specified conditions" within the meaning of the Explanation to section 8(2-A), as contended by the State or is it a case where the goods are exempt from the tax "generally" within the meaning of section 8(2-A), as contended by the respondents-dealers. We are of the opinion that the respondents-dealers' contention cannot be accepted in view of the clear and unambiguous language of the sub-section. The idea behind sub-section (2-A) of section 8 of the Central Sales Tax Act, which we have analysed hereinbefore, is to exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be entitled to exemption from tax. Indeed, the goods manufactured by that very unit would not be eligible for exemption if they are manufactured after the expiry of five years from the date it goes into production and/or sells them beyond the said period. The period of exemption may also vary from unit to unit depending on the date of commencement of production in each unit. For the above reasons, we are of the opinion that the exemption granted under the aforesaid Government order does not satisfy the requirements of section 8(2-A). We may point out that this was also the view taken by this Court in two earlier cases. In Indian Aluminium Cables Ltd. v. State of Haryana [1976] 38 STC 108 (SC), the question was whether the poles and cables sold by the appellant therein to Delhi Electric Supply Undertaking were exempt from Central sales tax by virtue of the fact that section 5(2)(a)(iv) of the Punjab General Sales Tax Act exempted "sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, of goods for use by it in the generation or distribution of such energy" fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision rendered by a Bench of three learned Judges was binding upon the Bench which decided the Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683. (This Bench too comprised three learned Judges). It is, however, interesting to notice that when the above two decisions were brought to the notice of the Bench, it referred to the ratio of the said decisions but neither followed it nor made any attempt to distinguish it but proceeded to make it a basis for their decision notwithstanding the fact that the said ratio ran exactly counter to the one adopted by the Bench. The two decisions did not certainly support the interpretation adopted in the judgment under review. On the contrary, they, and in particular the decision in Indian Aluminium [1976] 38 STC 108 (SC) militated against the said interpretation. It is for this reason, coupled with the fact that the interpretation placed in the judgment under review on section 8(2-A) may affect a large number of cases all over the country, that we agreed to re-examine the issue, which we would not have agreed to ordinarily. We may now refer to and examine the basis on which the judgment under review holds that the exemption granted by Jamm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record, and, therefore, liable to be reviewed. We are also of the opinion that in the interest of law, it is necessary that the said error is rectified. Sri Raja Ram Aggrawal, learned counsel for one of the respondents-assessees, submitted that the object behind section 8(2-A) was to bring about uniformity in the matter of incidence and rate of tax between the State sales tax enactment and Central sales tax enactment. He submitted that where a particular sale or purchase is exempt from tax under the State sales tax enactment, it should equally be exempt under the Central enactment. While the broad objective underlying section 8(2-A) is certainly the one pointed out by the learned counsel, it is not possible or permissible to ignore the clear and unambiguous language employed in section 8(2-A). The sub-section does not say that wherever a particular sale or purchase of goods is exempt from tax under the State enactment, it would equally be exempt from tax under the Central enactment. It imposes a further and a very important requirement, viz., that the sale or purchase of goods, in respect of which exemption is claimed under the Central Act, should be exempt from tax generally und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76 of 1993 in Civil Appeals Nos. 3148 to 50 of 1989 (pertaining to M/s. K.C. Vanaspati) are concerned, we are told that the said case did not involve the interpretation of section 8(2-A) of the Central Sales Tax Act. These review petitions, therefore, stand on a different footing altogether. For the above reasons, Review Petitions (C) Nos. 1372 and 73 of 1993 in Civil Appeals No. 2309 and 10 of 1989, Review Petition (C) No. 1381 of 1993 in Civil Appeal No. 3151 of 1989, Review Petition No. (C) 1377 of 1993 in Civil Appeal No. 3151 of 1989 are allowed and the civil appeals preferred by the dealers dismissed to the extent indicated above. Review Petitions (C) Nos. 1374 to 76 of 1993 in Civil Appeals Nos. 3148 to 50 of 1989 are dismissed. No costs. Review Petitions (C) Nos. 1753 to 55 of 1993 in Civil Appeals Nos. 5073 to 75 of 1985. Civil Appeals Nos. 5073 to 75 of 1985 (Hindustan Paper Corporation Ltd. v. State of Kerala [1993] 89 STC 473) were disposed of by a Bench comprising one of us (B.P. Jeevan Reddy, J.) and N. Venkatachala, J., following the judgment in Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683, at the same time pointing out the error in the reasoning relati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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