9911796707
TMI Blog1989 (8) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... old the goods manufactured by him in his newly set up small-scale industry and claimed the sales of taxable goods made by him as exempt from tax by virtue of the provisions contained in sub-section (2) of section 3 of the Act and sub-rule (2) of rule 5 of the Tripura Sales Tax Rules, 1976 (hereinafter referred to as "the Rules"). The Superintendent of Taxes, Agartala, rejected the contention of the petitioner on two grounds: Firstly, that sub-section (2) of section 3 is only an enabling provision and the same becomes effective only when a notification, as contemplated therein, is made by the State Government. As no such notification had been made in the present case, it was held that the petitioner was not entitled to claim exemption under the said provision. Secondly, that exemption under sub-rule (2) of rule 5 was not allowable to newly set up industry. Accordingly, claim for exemption from tax was rejected and tax was levied on its turnover, which was also estimated and the actual figures of sales were enhanced. 3.. The appeal of the petitioner was not admitted for non-payment of the demanded tax. On revision before the Commissioner, the Commissioner held that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by notification in the Official Gazette subject to such restrictions and conditions, exempt from payment of tax, either in whole or in part the sale of any taxable goods or class of taxable goods or any dealer or class of dealers for such period as may be specified therein. (3) Subject to such restrictions and conditions as may be prescribed, the State Government may make an exemption, or reduction in rate, in respect of any tax payable under this Act on the sales of any taxable goods to such person or class of persons as may be prescribed. (4).................." 6.. The expression "prescribed" has been defined in clause (e) of section 2 of the Act to mean "prescribed by Rules under this Act". The State Government made Rules under the Act, namely, Tripura Sales Tax Rules, 1976. Rule 5 of the said Rules deals with the various deductions that are allowable in computing taxable turnover of a dealer. Sub-rule (2) thereof, which is relevant reads as follows: "5. (1) In calculating his taxable turnover a dealer liable to pay tax under section 3 may deduct from his gross turnover, his taxable turnover on the following, namely: (i)................. (ii)................. (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxable goods or class of taxable goods or any dealer or class of dealers who shall be exempt from payment of tax, the said provision does not come into operation at all and no exemption can be claimed by any dealer on the basis of the same. The case of the Revenue is that no notification has been made by the State Government in exercise of the power conferred on it under the said sub-section. The learned counsel for the petitioner also could not produce before us even at the time of hearing any such notification. He, however, placed reliance on a report of the Working Group of the Government of India published in April, 1969, in the matter of fiscal and financial incentives for starting industries in backward areas which recommended certain fiscal incentives for attracting entrepreneurs or to set up industries in selected backward areas. One of the recommendations was to grant exemption from sales tax, both on raw materials and finished products to such units for a period of five years from the date of their going into production. We are unable to appreciate the aforesaid contention of the petitioner. No claim can be based on the recommendations of the working group or any comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 5 of the Rules. The said rule has been framed in exercise of the powers conferred under sub-section (3) of section 3 of the Act. It provides for exemption from levy of tax in respect of sales by a newly set up small-scale industry during a period of 3 years since the date of its first sale of such manufactured goods. The expression "newly set up small-scale industry" has been defined in the explanation to the said sub-rule. Certain conditions have also been laid down for claiming the benefit of exemption. Some of the conditions are that the dealer has to keep separate accounts in respect of the newly set up small-scale industry, to issue serially numbered cash or credit memos for sales of goods manufactured in such industry, to keep vouchers and other documents for purchases of plant and machinery for establishment of such industry and maintain other records to prove that sales claimed exempt under the said clause were of goods manufactured in such an industry set up by him and that no amount by way of tax under the Act had been realised by him in respect of such sales. In the instant case, admittedly the petitioner is a newly set up small-scale industry. Apparently, it falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfilment of the requirements of the said sub-rule. It may be pertinent to mention that the various requirements regarding maintenance of accounts, cash memos, etc., are intended only to enable the assessing authority to satisfy itself that the sale in respect of which exemption is claimed is a sale of goods manufactured by it in its newly set up industry. The aforesaid satisfaction must be in respect of each and every sale. If the evidence in respect of a particular sale is not satisfactory, the claim can be rejected only to the extent of that sale. The taxing authorities shall not be justified to reject the entire claim of a dealer for exemption on the ground of defect in cash memos or lack of evidence in respect of a particular sale or transaction claimed to be exempt. 10.. Mr. Majumdar, learned Government Advocate, fairly stated that the taxing authorities in this case acted on the assumption that the petitioner being a newly set up industry, was not covered by sub-rule (2) of rule 5 and rejected the claim on the ground itself without properly applying its mind to the facts of the case and fulfilment of the requirements of the said rule. It was submitted that if the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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