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TMI Blog1971 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... from whom the bandana was purchased. The plea of the assessee was that as the bandana was already subjected to State tax at the first point of sale, it could not have been assessed on the second sale in the State and that being the position he could not be made liable to pay sales tax on the sale of bandana even when the sale was in the course of inter-State transactions. In support of his submission the assessee had relied on the decision of the Supreme Court in State of Mysore v. Yaddalam Lakshminarasimhiah Setty and Sons[1965] 16 S.T.C. 231 (S.C.). In that case, on the interpretation of sections 6, 8 and 9 of the Central Sales Tax Act (as they stood before their amendment in 1969) the Supreme Court had come to the conclusion that no Central sales tax was payable on the sales by an assessee if, for any reason, under the State Act the sales of those goods were exempt from the State tax; the failure of the assessee to produce 'C' forms in relation to such sales was, therefore, immaterial. 3.. The assessing authorities, however, distinguished the Supreme Court decision and imposed the Central sales tax at 7 per cent., as no 'C' forms were produced by the assessee. When the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , tax will be leviable under the Central Sales Tax Act, 1956, on sale of goods effected by a dealer in the course of inter-State trade according to the sales tax law of the appropriate State. By section 9(2) of the Central Sales Tax Act, 1956, as amended by the Ordinance of 1969, the procedural law prescribed by the general sales tax law of the State applies in the matter of assessment, reassessment, collection and enforcement and payment under the Central Sales Tax Act, but the liability to pay is determined by the provisions of the Central Sales Tax Act. The effect of the amendment of section 2(j) of the Central Sales Tax Act, 1956, by the Ordinance with retrospective effect from the date on which the principal Act was enacted, is that the turnover for the purpose of the Central Sales Tax Act, 1956, has to be determined in accordance with the provisions of that Act and the Rules made thereunder." 7.. This court had also occasion to consider the effect of the amendment of the Central Sales Tax Act. A Division Bench of this court in The Commissioner of Sales Tax, M.P. v. M/s. Bhopal Dal and Flour Mills, Bhopal(1) held that unless there is exemption from tax generally under the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue for the opinion of this court: (1) Misc. Civil Case No. 8 of 1968 decided on 11th September, 1970; printed below. (2) [1965] 16 S.T.C. 231 (S.C.). "(1) Whether on the facts and circumstances of the case a sale of goods purchased after payment of tax is liable to sales tax under the Central sales tax law in the event of such goods being sold in the course of interState trade and commerce? (2) Whether on the facts and circumstances of the case no sales tax is leviable on pulses, cereals and rice in view of Notification No. 1069-VIST dated 22nd April, 1963? (3) Whether on the facts and circumstances of the case the imposition of penalty under section 43(1) was legal?" The first question has been referred at the instance of the Commissioner of Sales Tax, Madhya Pradesh, and the second and third questions have apparently been referred for opinion on the oral request of the assessee-respondent. 2.. The facts, which are material for the disposal of this reference, may be briefly stated thus. The assessee is a registered dealer. It carries on business in food-grains, oil-seeds etc., and manufactures and sells pulses. For the assessment period commencing from 16th No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the imposition of penalty, the view taken by the Board of Revenue was that as the assessee had clearly avoided to pay tax on pulses, mens rea "in technical sense" could be inferred and as the penalty imposed was nominal, there was no reason to interfere with the order of the first appellate authority regarding penalty. 6.. We may now take up the first point for consideration. In State of Mysore v. Yaddalam Lakshminarasimhiah Setty and Sons[1965] 16 S.T.C. 231 (S.C.)., the majority held that the expression "levied" in section 9(1) of the Central Act referred to the expression "levied" in section 5(3)(a) of the State Act and therefore the Central Act had not made a departure in the manner of levy of tax on the specified goods which were taxed only at a single point under the State Act. The minority view of Shah, J., was that the use of the expression "in the same manner" in section 8(2) of the Central Act has not the effect of assimilating the procedural and the substantive provisions relating to the imposition, levy and collection of tax as are provided by the State law in the matter of collection of tax under the Central Act. The learned judge further held that under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended, the procedural law prescribed by the general sales tax law of the State applies in the matter of assessment, reassessment, collection and enforcement of payment of tax under the Central Sales Tax Act, but the liability to pay is determined by the provisions of the Central Sales Tax Act. The clear effect of the amendment is that the turnover for the purpose of the Central Sales Tax Act, 1956, has to be determined in accordance with the provisions of that Act and the Rules made thereunder. In this view, the Board of Revenue cannot be held to be right that in the case of sale of goods in the course of inter-State trade, which were purchased after payment of State sales tax, the assessee was not liable to sales tax under the Central sales tax law. 9.. The further question which arises for consideration is whether the assessee is entitled to claim exemption under section 8(2A) of the Central Sales Tax Act. This section reads thus: "Notwithstanding anything contained in sub-section (1) or sub-section (2), if under the sales tax law of the appropriate State, the sale or purchase, as the case may be, of any goods by a dealer is exempt from tax generally or is subject to tax g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emptions which are permissible under sub-clauses (ii) and (iv) cannot be held to be general exemptions as they are available only in specified circumstances under specified conditions or in relation to which the tax is levied at specified stages. The exemptions are circumscribed by conditions attaching to them. In our opinion, therefore, the Board of Revenue was not right in treating the exemptions under other clauses with which we are concerned in this case as general exemptions. 10.. As a result of the discussion aforesaid, we answer the first question by saying that on the facts and circumstances of this case a sale of goods purchased after payment of tax is liable to sales tax under the Central sales tax law in the event of such goods being sold in the course of inter-State trade and commerce. 11.. The second and third questions may be taken up for discussion together as a preliminary objection has been raised in respect of both of these questions. The preliminary objection is that as the assessee did not comply with the provisions of section 44 for getting a reference made to the High Court, the said questions should not be answered. 12.. The contention of the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of this court held that the duty of the Board of Revenue was to refer all questions of law arising out of its order whether they were stated by the applicant in his application under section 23(1) or not. This observation can be interpreted to mean that it was for the Board of Revenue to find the facts and then to state the point of law which arises out of those facts on which the opinion of the High Court was desired to be taken. If the question was material for answering the point on which a reference was sought to be made to the High Court, the Board of Revenue could frame the question even though it was not suggested by the party which desired the reference to be made. However, the facts of all these cases do not indicate clearly that the success of the parties was divided when the matter was decided by the Board of Revenue and an occasion arose when both parties desired the reference to be made. This question was precisely considered by a Division Bench of this court in M.C.C. No. 195 of 1964 decided on 3rd May, 1966 (The Commissioner of Income-tax, M.P., Nagpur v. The Jiwajirao Sugar Co. Ltd., Dalauda). Their Lordships took the following view in the context of a refere ..... 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