9911796707
TMI Blog2002 (4) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... tax exemption provided to "salt" in entry No. 10 of Schedule III of the PGST Act, 1967? " 2.. The respondent is an assessee in the books of Commercial Tax Officer (IAC), Pondicherry and was an industrial undertaking manufacturing caustic soda, chlorine gas, hydro-chloric acid (100 per cent) and calcium hydro-chlorite under licence issued by the Government of India, New Delhi. The industry has commenced production in their factory at Kalapet with effect from July 2, 1985. For the assessment year 1988-89, the respondent have reported the total and taxable turnover of Rs. 95,70,369.85 and Rs. 71,118.76 claiming exemption on a turnover of Rs. 94,99,251.09 in their return filed. The respondent claimed exemption of sales turnover of liquid chlorine in a sum of Rs. 1,20,029. This exemption has been claimed under the Notification in G.O. Ms. No. 15 dated June 25, 1974 issued by the Government of Pondicherry in exercise of the power under section 19 of the PGST Act, 1967. According to the assessee, the said notification exempts the tax payable under the said Act on the sales turnover of goods manufactured by the small-scale industries, which went into production on or after 6th Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1974 to the petitioner in respect of the sales turnover of liquid chlorine inasmuch as the same is manufactured by the petitioner from the unit taken on lease from the third parties. The very purpose of granting exemption is only for the industrial development. The respondent being not the owner of the unit in which the liquid chlorine was manufactured, such goods are not entitled to the benefit under the notification. He further contended that there is no finding arrived at by the Tribunal in order to grant the relief of tax exemption in respect of the sales turnover of "brine". It is his contention that both the assessing authority as well as the first appellate authority have clearly given a finding to the effect that "brine" is manufactured by purifying the "salt" and diluted with water in a particular proportion and in order to maintain the liquid form, chemical is also added and the "brine " by itself is a new product manufactured out of "salt". Even in common parlance, "brine" could not be considered as a "salt". No ordinary prudent man would buy "brine" for "salt" since "brine" is a mixture of water and "salt" with some chemicals. When such a clear finding has been recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to exempt the tax payable under the said Act on the turnover from the sales of goods manufactured by the following industries located in this Union territory and registered with the Government of Pondicherry, namely: (1) Small-scale industries which went into production on or after 6th November, 1969; and (2) All industries other than small-scale industries which went into production on or after 1st April, 1971. as certified by the Director of Industries, Pondicherry. 2.. The exemption in respect of the abovesaid industries shall be effective and valid for a period of five years from the date of commencement of production. (By order of the Lieutenant Governor) R. BADRINATH, Secretary to Government." 9.. Section 19 of the Pondicherry General Sales Tax Act empowers the Government to exempt or reduce the rate of tax payable under the Act on the sale or purchase of any specified goods or class of goods at all points or at a specified point or points in the series of sales by successive dealers. The exemption or reduction in rate of tax may also be granted in regard to the whole or any part of the turnover of any specified class of persons or in respect of any specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction. There is no stipulation that in order to avail the benefit of exemption as granted by the notification, the goods must be manufactured from the abovesaid class of industry owned by the assessee. In order to give certain reliefs to the classes of industries as stated in the notification, which started their production on or after the date abovestated, the Government has exempted the goods manufactured from the industries from the levy of sales tax. The exemption could only be regarded to the goods manufactured from the abovesaid category of industries. It is not granted with regard to the person who owns such industries. The notification no way prohibits the manufacture of goods by a person from leasehold industries nor it is confined to the industries owned by him. Hence, the finding arrived at by the Tribunal in respect of exemption claimed by the assessee, in our view, is in accordance with the notification. 11.. In respect of the turnover claimed exemption under entry No. 10 of the Third Schedule of the PGST Act on the ground that the sale of "brine" is exempted under the said entry has been rejected by the assessing officer and confirmed by the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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