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TMI Blog1975 (10) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... to M/s. Purshottam Bhai Jhorabhai holding registration certificate No. S/126. During the period under assessment tendu leaves were not mentioned as raw material in the registration certificate of the purchasing dealer which was added subsequently, that is, on 9th July, 1964. In view of this, it was held that the imposition of the tax at concessional rate of 1 per cent was wrong which should have been imposed at the rate of 5 per cent. Consequently, an additional demand of Rs. 1,041.56 was created on this count. 3.. Against this order dated 29th April, 1967, the dealer preferred an appeal to the Deputy Commissioner of Sales Tax, Jabalpur. In that appeal, one of the objections taken was that the purchasing dealers gave declaration certificate in form XII-A to the assessee and, therefore, the latter was not bound to check up their registration certificates. Accordingly, an argument was advanced that the Assistant Commissioner was in error in denying to the appellant concessional rate of tax under section 8(1) of the Act. The Deputy Commissioner rejected this objection as also the other one raised before him and dismissed the appeal. 4.. Against that order of the Deputy Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Rules, 1959, and so claimed to be taxed at the reduced rate of 1 per cent under sub-clause (1) of section 8 of the Act. This claim of the assessee was rejected by the taxing authorities on the ground that paper sold to these manufacturers was not "raw material" as defined in clause (1) of section 2 of the Act and that it was used only as a packing material and not as raw material in the manufacture of those articles. The Sales Tax Tribunal, however, held that paper in the circumstances was "raw material" as defined in clause (1) of section 2 of the Act. It also found that as the appellant had produced the necessary declarations in form XII-A of the Rules it was entitled to get the benefit of the reduced tax under clause (1) of section 8 of the Act. In the case of Samaj Paper Mart(1), the question that was referred was as follows: "Is the paper used in wrapping beedis, agarbattis and fire-works is a raw material under clause (1) of section 2 of the M.P. General Sales Tax Act, 1958?" 7.. The learned Judges constituting the Division Bench in Samaj Paper Mart's case[1968] 21 S.T.C. 239; 1968 M.P.L.J. 65. relied on a decision of their Lordships of the Supreme Court in State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer[1965] 16 S.T.C. 607 (S.C.)., while construing section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, which in effect exempts a specified turnover of a dealer from sales tax observed that a "dealer cannot get the exemption unless he furnishes the declaration in the prescribed form". On a consideration of the relevant provisions of the Act and the Rules, their Lordships observed as follows: "We realise that the section and the rules as they stand may conceivably cause unmerited hardship to an honest dealer. He may have lost the declaration forms by a pure accident, such as fire, theft, etc., and yet he will be penalised for something for which he is not responsible. But it is for the legislature or for the rule-making authority to intervene to soften the rigour of the provisions and it is not for this court to do so where the provisions are clear and unambiguous. There is an understandable reason for the stringency of the provisions. The object of section 5(2)(a)(ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered dealer of any raw material for the manufacture of other goods for sale in the State of Madhya Pradesh or in the course of inter-State trade or commerce shall be one per cent of the sale or purchase price of such raw material." The language clearly goes to show that this concessional rate of tax would be permissible only when the restrictions and conditions as have been prescribed are complied with. This being in the nature of an exception it has to be strictly complied with. The relevant condition is provided in rule 20(4) of the Rules framed under the Act, which is as follows: "Rule 20. (4) No registered dealer shall be entitled to pay tax at the reduced rate of 1 per cent in respect of sale or purchase of raw material for the purposes specified under sub-section (1) of section 8 unless- (i) such raw materials are specified in the registration certificate of the purchasing dealer as being required by him for the manufacture of other goods for sale in the State of Madhya Pradesh or for sale in the course of inter-State trade or commerce; and (ii) where the claim is by a selling dealer, the sale has been made to a registered dealer on a declaration in form XII-A du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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