9911796707
TMI Blog1983 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... onal excise duty every year. It has been further prayed that the respondents may be further directed by a writ of mandamus or any other appropriate writ, order or direction not to claim any amount as inter-State sales tax for the period commencing from 1965 up till 1976, as mentioned in the notification dated 21st August, 1979, for which additional excise duty in lieu of sales tax had already been deposited and lying to the credit of the account of State. A similar kind of prayer has been made in Writ Petition No. 359 of 1982 filed by the petitioner M/s. Premier Felt Manufacturing Company relating to the petitioner alone. Relevant facts leading to the filing of these writ petitions are that manufacturers of woollen felt were required to pay at the relevant period from 1965 to 1976 Central excise duty, additional excise duty and handloom cess at the rate of 6 per cent ad valorem, 5 per cent ad valorem and 1.9 paisa per square metre respectively. The manufacturers continued to deposit the Central excise duty and additional excise duty. Prior to 1965 no Central excise duty was being charged on the woollen felt and namda manufactured in Rajasthan. However, in view of a letter dated 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to the Government. The case of the petitioners is that under the aforesaid notification, it was made absolutely clear that all those dealers who had paid additional excise duty in lieu of sales tax for the period commencing from 25th August, 1965, to 22nd April, 1976, would not be required to pay any further sales tax. It is contended that the petitioners had admittedly paid additional excise duty in lieu of sales tax and were thus totally exempted for the above period to pay any sales tax, but in spite of that the Commercial Taxes Officer in an illegal and arbitrary manner was raising demand of Central sales tax on the plea that the said notification did not apply to inter-State sales. It is also the case of the petitioners that the sale or purchase of woollen felts from 25th August, 1965, to 22nd April, 1976, has been exempted totally from sales tax without any circumstances or conditions and as such their case is covered under section 8(2A) of the Central Sales Tax Act. It would be proper to reproduce the provisions of section 8(2A) of the Central Sales Tax Act at this stage for properly deciding the question involved in these cases: "Section 8 (2A). Notwithstanding anyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following three circumstances exist, namely, (1) the dealer (manufacturer) concerned has already paid additional excise duty; (2) such dealer concerned has not collected sales tax on the purchase or sale of woollen felts and (3) such dealer has not obtained refund of additional excise duty so paid from the Central Government. It is further submitted that apart from the above mentioned circumstances the exemption is subject to the condition that an undertaking is given that he shall not claim refund. We have given careful consideration to the arguments advanced by learned counsel for both the parties and have carefully gone through the record. The main controversy in the case binges on the question whether the exemption granted under the notification dated 21st August, 1979, is a total exemption generally under the Rajasthan Sales Tax Act or is subject to specified circumstances and conditions, so as to attract the provisions of section 8(2A) along with the explanation of the Central Sales tax Act. We would first deal with the cases cited at the Bar. In a case decided by the Allahabad High Court in Hindustan Safety Glass Works (P.) Ltd. v. State of Uttar Pradesh [1974] 34 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the period of exemption was fixed, it was not regarded as a condition imposed in relation to the exemption. It was also contended there that because the exemption was granted to the registered dealers the exemption was granted to a class of dealers, and therefore, it should be construed to be an exemption in specified circumstances or under specified conditions. The court repelled the contention by stating that the exemption was to all registered dealers without any restriction or condition." Regarding Hindustan Safety Glass Works' case [1974] 34 STC 209 it was observed as under: "The stipulation in the notification in Safety Glass Works' case [1974] 34 STC 209 that the turnover of such sales would for a period of three years be exempt from payment of sales tax did not amount to exempting the turnover of such goods from tax under specified circumstances or specified conditions. " Their Lordships of the Supreme Court in the aforesaid Indian Aluminium Cables Ltd. [1976] 38 STC 108 (SC) held as under: "Section 8(2A) of the Central Act exempts goods from inter-State sales tax where a tax law of the State has exempted them from sales tax. The explanation to section 8 (2A) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court in the light of section 8(2A), as it stood after the amendment in 1972. The omission of the word 'dealer' by the amendment in 1972 is significant. But we are concerned with the unamended definition. The mischief sought to be remedied in 1958 was, as pointed out by us, only this that the mere exemption of goods under the State law did not mean that it was exempt under the Central Act as well. By section 8(2A) it was confined only to those cases where the sales or purchases of such goods by a dealer enjoyed general exemption under the State law. In other words, it was not general exemption of goods but general exemption from sale or purchase of goods of a dealer in the State which entitled a dealer to claim exemption from calculation under the Central Act." It was thus held that the effect of the notification was that the turnover of the assessee at the point of manufacture became exempt from tax generally. On facts and in circumstances of that case it was held that the turnover of the assessee was exempt generally from State sales tax in view of the notification dated 28th May, 1969, as amended by notification dated 27th August, 1969, and consequently, its inter-State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 22nd April, 1976, was subject to the circumstances (1) that the dealer concerned had already paid additional excise duty in lieu of sales tax; (2) that such dealer had not collected sales tax on the purchase or sale of woollen felts and (3) such dealer concerned had not obtained refund of additional excise duty so paid from the Central Government. The exemption is further subject to the condition that the dealer concerned gives an undertaking that he shall not claim refund of such additional excise duty from the Government of India. The notification itself makes a mention that the exemption has been granted subject to certain conditions. The notification itself thus uses the term "conditions", which goes to show that the exemption granted is not a general exemption. In the matter of taxation it is well-settled that the legislature has plenary powers and an assessee has to bring out its case clearly within the purview of exemption granted for a tax liability. The petitioners are liable to Central sales tax on the sale or purchase of woollen felts as regards inter-State sale. They are entitled to claim exemption only if their case is covered under section 8(2A) and is not covere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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