9911796707
TMI Blog1996 (1) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... tions are common and so also the issue raised in the appeals, it is convenient to dispose of all the appeals by this judgment. 2.. The appellants are dealers in raw agarbathis and are assessed to sales tax under the provisions of the Karnataka Sales Tax Act, 1957 and also under the Central Sales Tax Act, 1956. The appellants had filed returns for the assessment year 1989-90. The assessing authority served notice on the appellants calling upon to make payment of difference in tax on the turnover of raw agarbathis in the course of inter-State sales. The notices, inter alia, state that on perusal of the monthly returns filed in form 3, it was noticed that the appellants had effected inter-State sales of raw agarbathis and tax collected at 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravamen of the complaint was that the department had never made any distinction between agarbathis and raw agarbathis during the course of assessment proceedings and the appellants were taxed under the entry agarbathi under the Act. Appellant claimed that it is not permissible for the department to deny the benefit of exemption notification by claiming that the benefit is available only in respect of sale of agarbathis and not in respect of sale of raw agarbathis. The department, on the other hand, claimed that the exemption notification should be strictly construed and that the exemption is available only in respect of sale of agarbathis and not in respect of sale of raw agarbathis and therefore, the appellants are not entitled to any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for the department to depart from the consistent practice when the benefit is sought under the exemption notification. 6.. Learned Government Pleader, on the other hand, submitted that eventhough the relevant entry during the assessment year 1989-90 was only agarbathi and did not make any distinction between agarbathi and raw agarbathi, still the two commodities are commercially known as different See page 74 infra (Mahendra Perfumery Works v. State of Karnataka-S.T.R.P. No. 91 of 1980 decided on 8th February, 1984). commodities and the benefit of exemption notification is not available to the appellants. 7.. In view of the rival contentions, the question which requires determination is, whether the benefit of notification issued un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are sold. The appellants are claiming benefit of payment of tax at the rate of 2 per cent in pursuance of this notification and the resistance of the department to the claim is only on the basis that what is prescribed under the notification is in respect of sale of agarbathi and not in respect of sale of raw agarbathi . 10.. The contention of the department cannot be entertained because while levying tax the taxing statute has not made any distinction between agarbathi and raw agarbathi . The demand for tax is on the basis that the sale of raw agarbathi is liable to payment of duty at the rate of 8 per cent. The learned counsel for the appellants referred to the assessment order dated November 17, 1989 in the case of M/s. Mahala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, 1984 delivered by the division Bench of this Court in S.T.R.P. No. 91 of 1980 (Mahendra Perfumery Works v. State of Karnataka*). 12.. In the case before the Division Bench the assessee was manufacturer and dealer in agarbathis and was assessed to tax under section 6 in respect of the purchase turnover in raw agarbathis during the year 1975-76. The assessee challenged the assessment by filing appeal before the Deputy Commissioner and later before the Tribunal but was unsuccessful. The assessee thereupon approached this Court by filing revision petition as prescribed under the Act. The disputed turnover related to purchase of raw agarbathis by the dealer from unregistered dealers. Raw agarbathis were subjected to further processing by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 infra. other goods and the goods which were consumed were such which were not leviable for tax under section 5 of the Act. The question which came up for consideration before the division Bench was whether the liability to pay tax under section 6 of the Act arose because the claim of the department that raw agarbathis which were purchased by the assessee were consumed in the manufacture of agarbathis. The division Bench was concerned only to examine the issue as to whether the exercise undertaken on raw agarbathis by dipping in scented solution lead to the manufacture of another article known differently in the market. The division Bench held that new article did come into existence. The question as to whether the assessee was liable fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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