9911796707
TMI Blog1973 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... 1965. The Assessing Authority rejected the contention of the assessees that the sale of poles and cables to the Delhi Electric Supply Undertaking was exempt from inter-State sales tax by reason of the provisions of section 5(2)(a)(iv) of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as the State Act) read with section 8(2A) of the Central Sales Tax Act (hereinafter referred to as the Central Act). An appeal to the Deputy Excise and Taxation Commissioner on this matter met with no success in both the cases. A revision was taken to the Excise and Taxation Commissioner, but with no result. Thereafter, an appeal was taken under section 20(1) of the State Act, read with section 9(3) of the Central Act to the Sales Tax Tribunal, Haryana. The Sales Tax Tribunal accepted the contention of the assessees that the sales in question were not liable to inter-State sales tax and the appeals were allowed by two separate orders dated 26th March, 1969. The department being dissatisfied moved an application under section 22 of the State Act on behalf of the Commissioner, Excise and Taxation, requiring the Tribunal to refer a question of law for our opinion. The Tribunal has referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification not less than thirty days' notice of its intention so to do, may by like notification add or delete from Schedule B and thereupon Schedule B shall be deemed to be amended accordingly." Section 8(2A) of the Central Act is in the following terms: "8. (2A) Notwithstanding anything contained in sub-section (1A) of section 6 or sub-section (1) or sub-section (2) of this section, 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 generally at a rate which is lower than three per cent (whether called a tax or fee or by any other name), the tax payable under this Act on his turnover in so far as the turnover or any part thereof relates to the sale of such goods 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 goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law it is exempt only in specified circumstances or under specified conditions or in relation to which the tax is levied at specified s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain categories that are purchased by a certain class of electrical undertakings should be exempted. One method would be to draw up a list of all such articles and enumerate them by name. In case this be not practicable, the other equally legitimate method would be to make the divisions with reference to either the source or consumptive use of such commodities. It is nobody's case that electricity poles are a commodity which can be put to any use other than distribution of energy. Classification of goods by consumptive use is of common occurrence and is not the kind of restriction, condition or circumstance hit by the explanation to section 8(2A) of the Central Act. Plain reading of sub-section (2)(a)(iv) of section 5 of the Punjab Act shows that it is descriptive. In any case, in respect of goods which cannot be put to any use other than generation or distribution of electric energy, no conditions have to be fulfilled by the seller or the purchaser in order to be exempt from tax. The exemption in respect of electricity poles, in my opinion, is, therefore, general and without restrictions of any kind. The next question is whether restricting concession to licensed undertakings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Central Act are restricted to section 6 of the State Act and do not cover section 5 of the State Act. Therefore, we find no fault with the decision of the Tribunal on this aspect of the case. However, the question on which the Tribunal went wrong was that it did not appreciate the ambit and scope of the explanation to section 8(2A) of the Central Act. The explanation to this provision whittles down the main provision. The main provision exempts goods from inter-State sales tax where the tax law of the appropriate State has exempted them from sales tax. However, the explanation puts a rider on this and takes away the exemption where it is not general and has been granted in specified circumstances or under specified conditions. Therefore, the short question that requires determination is, whether the sales in the present case are of a nature which have not been made under specified circumstances or under specified conditions. This brings us to the provisions of section 5(2)(a)(iv) of the State Act which have already been reproduced. The sales excluded are those made under specified circumstances and specified conditions; the specified circumstances being that the sale must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of sales of niwar by unregistered dealers, the exemption from tax is not general in regard to sales by registered dealers.' If the notification in the Madhya Pradesh case is compared with the provisions of section 5(2)(a)(iv) of the State Act in the cases in hand, it will appear that there is a world of difference between the two. So far as the Madhya Pradesh notification is concerned, there were neither specified circumstances nor specified conditions regarding sales of niwar by registered dealers, whereas in the case of sales to the undertaking of various items covered by section 5(2)(a)(iv), this does not happen. Those sales are subject to specified circumstances as well as specified conditions and, therefore, this authority does not help the learned counsel for the assessees. In M.A. Abbas and Co. v. State of Madras[1962] 13 S.T.C. 433., a Bench decision of the Madras High Court, which dealt with section 8(1), and now after amendment is equivalent to section 8(2A), it was observed: "To our minds, the correct interpretation of this expression is that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become ..... X X X X Extracts X X X X X X X X Extracts X X X X
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