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TMI Blog1975 (4) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1956, and the explanation thereto?" 3.. The assessee is an Ayurvedic Physician. He runs his business called "Vayaskara Medicals" at Kottayam. His accounts disclosed inter-State sales evidenced by the V.P. Register amounting to Rs. 746.85. No declaration in C form was filed for these sales. So the assessing authority taxed this turnover at 10 per cent. On appeal by the assessee, this order was confirmed by the Additional Appellate Assistant Commissioner of Sales Tax, Kottayam. In second appeal, the Appellate Tribunal held that the assessee is entitled to exemption on the sales outside the State. The Tribunal decided the case interpreting sub-section (2A) of section 8 of the Central Sales Tax Act, 1956, for short the Act, and the Notification G.O. MS. No. 388/65/Rev. dated 22nd April, 1965, in favour of the assessee. 4.. Before dealing with the question of law raised, it will be useful to read the relevant section and the notification concerned. Subsection (2A) of section 8 of the Act reads as follows: "Notwithstanding anything contained in sub-section (1) or subsection (2), if under the sales tax law of the appropriate State, the sale or purchase, as the case may be, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under specified conditions. We have therefore no hesitation in holding that the Appellate Tribunal went wrong in extending the benefit of the exemption to the assessee. 6.. However, it will be useful to refer to a few decisions rendered by various High Courts on this point in reinforcement of the view we have taken. We shall refer to the decisions in the chronological order. 7.. In M.A. Abbas Co. v. State of Madras[1962] 13 S.T.C. 433. , the Madras High Court was considering the exemption under section 8(1) and (2) of the Central Sales Tax Act before introduction of section 8(2A). The assessee there was a dealer in hides and skins. The contention on behalf of the assessee was that these goods were taxable at a single point and therefore the rate of sales tax on inter-State sales should be at the "nil" rate. In this case the Madras High Court was considering the scope of the section before the introduction of section 8(2A) of the Central Act and the explanation thereto. The Madras High Court considered the expression "exempt from tax generally " and "not in specified cases or in specified circumstances..." obtaining in section 8(1) of the Central Act and observed that on a cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and even if a licence was obtained under the State Act which gives the benefit of exemption to the assessee, the same will not be a general exemption as contemplated in sub-section (2A) of section 8 and the explanation to that sub-section. The tax imposed on the turnover of "green ginger" under the Central Sales Tax Act (74 of 1956) for the period 1st October, 1958, to 31st March, 1959, is therefore justified." (see para 18 of 13 S.T.C. 838). Thus the imposition of tax under the Central Sales Tax Act was held to be justified by this court. 10.. In Commissioner of Sales Tax, Madhya Pradesh v. Kapoor Dori Niwar and Co.[1968] 22 S.T.C. 152., the Madhya Pradesh High Court considered the same question. There, the sales of niwar by registered dealers were exempt from sales tax for a particular period under the local law. The question considered there was whether this exemption would be available to the dealer under section 8(2A) of the Central Act. The court held that during the period of exemption, there was a general exemption within the meaning of section 8(2A) and therefore the assessee was entitled to the benefit of the Central Act. It was contended on behalf of the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchase is not exempt from tax generally. The plain meaning of the said sub-section is that if under the sales tax law of the appropriate State no tax is levied either at the point of sale or at the point of purchase at any stage, the tax under the Act shall be nil." The earlier Mysore case reported in Mysore Silk House v. State of Mysore[1962] 13 S.T.C. 597., was referred to in this case and was dissented from by the same court. 12.. In Hanuman Prosad Singhania v. Commercial Tax Officer[1971] 27 S.T.C. 289., this question came up for consideration before the Calcutta High Court. There the petitioner, who was carrying on business as a commission agent, invoked the benefit of section 8(2A) of the Central Act under these circumstances. The petitioner was a registered dealer under the State Act as well as under the Central Act. By a notification in the official Gazette, it was specified that commodities mentioned in the notification should be exempted from taxation. The contention was that since the sale of the commodity took place within the State of West Bengal, the petitioner will not be liable to tax under the State Act, for the sales within the State were sales of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Sales Tax Act if the contention of the counsel for the assessee is right." In that case, exemption under section 8(2A) of the Central Sales Tax Act was claimed for commodities which were taxable under the State law only at the last purchase point inside the State. The court held that it was not a general exemption coming within section 8(2A). 14.. In Commissioner of Sales Tax, M.P. v. Bhagwandas Rikhiram, Rajnandgaon[1972] 29 S.T.C. 541. , the Madhya Pradesh High Court considered the same question. There, the sales of bardana, which were exempt from the local sales tax law, being second sales, were held to be liable to sales tax under the Central Act since the exemption under the State Act was not general. The court observed as follows: "The explanation makes it clear that unless there is exemption from tax generally under the State law the turnover in the course of inter-State trade and commerce will be liable to tax and that would be so notwithstanding the fact that under the State law, such turnover may be exempt from tax subject to certain specified conditions or in specified circumstances." 15.. In State v. Indian Aluminium Cable Ltd.[1974] 33 S.T.C. 152., th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention of the department that in respect of mirrors and toughened glasses manufactured by the assessee in Allahabad, the exemption granted was only conditional was not accepted and the court held that, in its opinion, there was no force in the submission made by the State. The court further observed: "So far as this class of goods is concerned, it has not been laid down anywhere that the sale of goods would be liable to be taxed on the fulfilment or non-fulfilment of any condition." The exemption granted for a period of three years, according to the learned Judge, was not an exemption under specified conditions or under specified circumstances. We are constrained to observe with respect that we find it difficult to agree with the principle of law enunciated in this decision, since it does not take note of the phraseology used in the relevant section and the explanation in the Central Act. 18.. From the discussion of the various authorities above, it is clear that the assessee will be entitled to exemption under section 8(2A) of the Central Act only when the goods are exempted generally and not under specified circumstances or under specified conditions. In the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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