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TMI Blog1970 (10) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing authority that the additional excise duty had been paid on the said cloth?" The respondent, M/s. Ram Saran Jagannath, deals in mill-made cloth. He was assessed to tax under the U.P. Sales Tax Act for the year 1957-58. An appeal by the respondent was dismissed. He applied in revision. His principal submission during the hearing of the revision application was that the turnover of mill-made cloth was exempt from tax for the period 14th December, 1957, to 31st March, 1958, by reason of Notification No. 4485/X dated 14th December, 1957. The Additional Judge (Revisions) accepted the plea, and granted relief. At the instance of the Commissioner of Sales Tax, the Additional judge (Revisions) has made the present reference. The conn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia, cotton fabrics, rayon or artificial silk fabrics and woollen fabrics, produced or manufactured in India and on all such goods lying in stock within the precincts of a factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto. Section 3 of the U.P. Sales Tax Act charges tax for each assessment year at a specified rate on the turnover of that year. Section 4(1) exempts the turnover of certain commodities from the tax. Clause (a) enumerates the commodities respecting which there is absolute exemption, and clause (b) provides for the exemption of: "The sale of any goods by the All-India Spinners' Association or Gandhi Ashram, Meerut, and their branches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed. The notification did not grant an unconditional exemption. It was issued under section 4(1)(b) and exemption in respect of the turnover of such goods only regarding which the dealer had paid the additional Central excise duty and had satisfied the assessing authority of such payment. No exemption was contemplated in respect of goods which did not attract that levy. The assessee contended before the Additional judge (Revisions) that the mill-made cloth sold by him was exempt from sales tax by virtue of the notification. It was urged that the cloth was imported by him and was lying in his stock; and therefore he was not liable to pay the additional excise duty and no question arose of his proving such payment. The contention found fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional excise duty. The Supreme Court observed: "The 1st paragraph of the notification grants an exemption which, if it stood alone, provides that no sales tax would be leviable on and from December 14, 1957, on the sale or purchase of every variety of textiles. This, however, is subject to a proviso which undoubtedly cuts into and restricts the operation of the exemption clause and we have to determine the extent of the restriction of the area carved out. A plain and prima facie reading...... would appear to show that an exception is made in cases where additional duties of excise are 'leviable' by the Central Government under clause 3 of the Bill. In such cases the conditions which follow the proviso have to be satisfied, viz., that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled under the 1st paragraph of the notification they have been deprived of by the operation of the proviso. If the proviso on its proper construction, as we have endeavoured to point out earlier, cannot apply to cases where an additional duty of excise is not leviable under clause 3 of the Bill, it would follow that the operation of the exemption is unaffected by the proviso. The appellants were, therefore, entitled to the relief from sales tax granted by the notification dated December 13, 1957." In the case before us, the notification dated 14th December, 1957, does not contain any provision granting unconditional exemption. We have already pointed that it was a notification under section 4(1)(b) granting conditional exemption, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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