9911796707
TMI Blog1994 (11) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner. For determining the taxable turnover under the KST Act, the assessing authority (respondent) exempted the turnover relating to the sale of Hawaii chappals costing less than Rs. 30 per pair (for the period July 4, 1992 to March 31, 1993). But for determining the taxable turnover under the CST Act, the assessing authority did not exempt the turnover relating to Hawaii chappals costing less than Rs. 30 per pair. Feeling aggrieved by the non-grant of such exemption from July 4, 1992 under the CST Act, the petitioner filed an appeal before the Joint Commissioner of Commercial Taxes (Appeals), Malnad Division, Shimoga in CST Appeal No. 38/93-94, contending that the assessing authority having allowed exemption in regard to footwear costing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the CST Act. Therefore he has filed this petition seeking a declaration that inter-State sales of footwear (Hawaii chappals) costing less than Rs. 30 per pair are exempted from tax having regard to the notification under section 8-A of the KST Act and seeking a direction to respondent to tax such sales at nil rate. 4.. The Government of Karnataka has issued notification dated July 30, 1992 (No. FD. 150 CSL 92) under section 8-A of the KST Act, exempting the tax payable on the sale of footwear costing less than Rs. 30 per pair. The said notification is extracted below: "In exercise of the powers conferred by section 8-A of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957), the Government of Karnataka hereby exempts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods." 6.. The learned counsel for the petitioner contended that under the notification dated July 30, 1992, issued by the Government of Karnataka under section 8A of the Karnataka Sales Tax Act, the tax payable by a dealer on the sale of footwear costing not more than Rs. 30 per pair has been exempted; and having regard to section 8(2-A) of the CST Act, the tax on such goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... small-scale industries from payment of sales tax for a period of five years from the date of commencement of production. In view of the said exemption, the assessee contended that it was exempted from paying Central sales tax also having regard to section 8(2A) of the CST Act. The department denied such exemption from payment of CST, on the ground that the exemption was couched with a specified condition and was under specific circumstances and therefore there was no general exemption. The Patna High Court, applying ratio of the decision of the Supreme Court in Indian Aluminium Cables Ltd. v. State of Haryana reported in [1976] 38 STC 108 and the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax, M.P. v. Kapoor Dori Niw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in International Cotton Corporation case [1975] 35 STC 1 (SC) are general in nature and are of no assistance. The decision of the Patna High Court dealt with a general exemption for a period and not an exemption subject to any specified conditions. 7.. Footwear is taxable under entry 10(i) and 10(ii) of Part F of the Second Schedule to the KST Act. Under entry No. 10(i), footwears sold under brand names are subject to tax at 10 per cent. Under entry No. 10(ii) footwears other than those covered under entry 10(i) are subject to tax of 8 per cent. The Government of Karnataka issued a notification dated July 30, 1992, under section 8A exempting the tax payable in regard to sale of footwear costing not more than Rs. 30 per pair. Thus, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from tax under the State Act before similar exemption from the levy of Central Sales Tax Act can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances there is no exemption from tax generally within the meaning of section 8(2A) of the CST Act. The goods should be totally exempt from tax under the State Act, before similar exemption from the levy of Central sales tax can become available. 9.. If the said test is applied it would be seen that the chappals or footwear costing not more than Rs. 30 per pair will not be entitled for exemption under the CST Act. If the exemption under the KST Act was in regard to the footwear in general, then such exemption would have extended in regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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