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TMI Blog1996 (1) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral Clauses Act, 1904 (for short, "the General Clauses Act") purchases of raw material, which is mentha oil, as aforesaid, in this case, were fully exempted. By the impugned notification dated May 21, 1994 (annexure "2" to the writ petition) issued under section 4-B of the Act, read with section 21 of the General Clauses Act, purchase tax was levied at the rate of 2 per cent on the sales as well as purchases and, therefore, the petitioner, adi-nittedly-a purchasing dealer--became liable to pay purchase tax at the rate of 2 per cent on the purchases of the raw material, i.e., mentha oil, used for the manufacture of the notified goods, i.e., menthol, as mentioned at serial No. 2 of annexure 11 to the notification dated August 29, 1987. The notification dated August 29, 1987, when properly read, states that in supersession of all the previous notifications issued under section 4-13 of the Act, the Governor is pleased: (a) to declare the goods mentioned in column 2 of annexures 1, 11 and III to this notification to be notified goods for the purposes of the aforesaid section 4-B, and (b) .................... (1) .................... (2) No tax hall be payable in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate remians effective, full exemption granted under the notification of August 29, 1987, will continue, says Shri Bharat Ji Agarwal. The question for consideration is whether exemption was granted under the recognition certificate. Sub-section (2) of section 4-13, briefly, states that where a dealer requires any goods referred to in subsection (1) for use in the manufacture by him, in the State of any notified goods, such notified goods manufactured or possessed by him, and such notified goods are intended to be sold by him in the State or in the course of inter-State trade, etc., he may apply to the assessing authority in such form and manner and within such period as may be prescribed, for the grant of a recognition certificate in respect thereof and if the applicant satisfies such requirements and conditions as may be prescribed, the assessing authority shall grant to him in respect of such goods a recognition certificate in such form and subject to such conditions as may be prescribed. Clause (b) to the second proviso to clause (al) of sub-section (1) of section 4-B, pithily state that where any goods liable to tax under any other provision of this Act are sold by a dealer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion either wholly or partly, but the exemption is not founded in the recognition certificate. It is true that unless a purchasing dealer liable to tax under sub-section (1) of section 3-D, holds a recognition certificate, no exemption either wholly or partly can be granted to him. A purchasing dealer may qualify to get exemption under the notification published in the gazette by the State Government, but the exemption is granted by the notification issued under sub-section (1) of section 4-13 in that behalf. The exemption-either' whole or part--not being emanating from the recognition certificate, but from the notification, published in the Gazette by the State Government, the submission of Sri Bharat Ji Agarwal that unless the recognition certificate is legally amended under sub-section (4) of section 4-13, full exemption granted to the petitioner cannot be taken away by respondent No. I by the impugned notification (annexure "2" to the writ petition), has to be rejected. Sri Bharat Ji Agarwal lost sight of the fact that exemption was granted to the petitioner by the notification of August 29, 1987, and not by the recognition certificate (annexure "3" to the writ petition). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to, the second proviso to clause (al) of sub-section (1) of section 4-13 merely carves out an exception, in that if a recognition certificate is furnished by a purchasing dealer to the selling dealer, then the latter shall be liable in respect of those goods to tax either at concessional rate or wholly or partly exempt from tax as may be notified in the Gazette by the State Government. By clause (b), liability to tax the purchases under sub-section (1) of section 3-D was shifted to the selling dealer provided a recognition certificate is furnished by the purchasing dealer to the selling dealer, but by the impugned notification with a view to rationalising the tax liability, as contended by learned Additional Advocate-General, the liability to tax on purchases is again fastened on the purchasing dealer at the rate of 2 per cent. From annexure III to the notification dated August 29, 1987, it is clear that the purchases of raw material as mentioned in column 3 of the annexure II to the notification were fully exempt, but the purchases of raw materials mentioned in column 3 of annexure III to the notification, rate of tax varied from 2 per cent to 4 per cent. To rationalise the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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