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TMI Blog2005 (1) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... facture and sale of radio pagers. It was earlier known as M/s. Casio Bharti Mobile Communications Ltd. During the assessment year 1997-1998, the petitioner filed monthly returns, the summary of which reads as under: Gross turnover: 16,36,41,107.00 Inter-State Sales: 16,27,18,200.06 Exports 3,12,318.00 Stock transfers: 6,10,589.44 Tax deposited HGST 29,658.00 Tax deposited CST 40,693.00 3. After scrutiny, Excise and Taxation Officer-cum-Assessing Authority, Gurgaon (East) (hereinafter described as the Assessing Authority ) issued notice dated July 13, 1998 in form ST-25 and called upon the petitioner to explain as to how it was entitled to exemption in respect of the goods purchased from M/s. Bharti Telecom Ltd. In its reply, the petitioner claimed that the inter-State sales and stock transfers of the goods purchased from M/s. Bharti Telecom Ltd., which had been granted exemption under rule 28A of the Haryana General Sales Tax Rules, 1975 (fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther brief order dated September 9, 2002 by making reference to a detailed order passed in S.T.A. No. 146 of 1997-98 filed by M/s. Siemens Telecom Ltd., Gurgaon. The Tribunal held that the petitioner is not entitled to exemption under notification dated September 4, 1995. 5.. Shri Rajesh Bindal, learned counsel for the petitioner, referred to the provisions of rule 28A(2)(n), 28A(4), (6) and (7) of the Haryana General Sales Tax Rules, 1975, section 8(2A), (4) and (5) of the Central Sales Tax Act and notification dated September 4, 1995 and argued that the petitioner is not liable to pay tax on the inter-State sale of goods which were purchased from an exempted unit, namely, M/s. Bharti Telecom Limited. Shri Bindal submitted that notification dated September 4, 1995 issued by the State Government provides for grant of exemption on the sale of goods manufactured in the State of Haryana by any dealer holding valid exemption certificate under rule 28 of the Rules and not to the dealer and, therefore, the goods sold by the petitioner in the course of inter-State trade were not liable to be taxed. In support of his arguments, Shri Bindal relied on the judgments of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, rule 28A(2)(n), (4)(c) of the HGST Rules, 1975 and notification dated September 4, 1995. The same read as under: Section 8(2A) and (5) of the Central Act: 8.. Rate of tax on sales in the course of inter-State trade or commerce. (1).......... (2A) Notwithstanding anything contained in sub-section (1A) of section 6 or sub-section (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent (whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate. ......................... (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct (a) that no tax under this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appearing in this rule not defined above shall unless the context otherwise requires carry the same meaning as assigned to them under the Act and the Rules made thereunder. ............................... (4)(a) and (b) .......... (c) The goods manufactured by an eligible industrial unit availing exemption under this rule shall be exempt from the levy of tax at all the successive stage(s) of sale or purchase subject to the condition that the dealer effecting the successive purchase or sale furnishes to the Assessing Authority a certificate in form S.T. 14-A to be obtained from the Assessing Authority against payment of such sum as may be fixed by the State Government from time to time, duly filled in and signed by the registered dealer by whom such goods were purchased. Notification dated September 4, 1995 No. S.O. 89/CA. 74/56/S.8/95 dated the 4th September, 1995. In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956, the Governor of Haryana being satisfied that it is necessary so to do in the public interest, hereby directs that no tax under the said Act shall be payable with effect from April 1, 1988, on the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax shall be payable under the Central Act or tax shall be calculated at lower rates in respect of all sales of goods or classes of goods as may be specified in the notification which are made in the course of inter-State trade or commerce by any dealer having his place of business in the State or class of dealers specified in the notification. Notification dated September 4, 1995 declares that no tax shall be payable under the Central Act, with effect from April 1, 1988 on the sale of goods manufactured in the State of Haryana by any dealer holding a valid exemption certificate under rule 28A of the Rules, provided that such dealer has not charged tax under the Central Act on the sale of goods manufactured by him. 9.. In our opinion, even though, notification dated September 4, 1995 is not happily worded, on a plain construction thereof, we are inclined to approve the view taken by the Tribunal in the case of Siemens Telecom Ltd., Gurgaon, which has been followed in the case of the petitioner that the same does not exempt the goods sold in the course of inter-State trade by dealers other than those who hold valid exemption certificate granted under rule 28A of the Rules. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at one point, whether of purchase or of sale, a subsequent inter-State sale of the same commodity is liable to tax, but where that commodity is not liable to tax at all if it were an intra-State sale the inter-State sale of that commodity is also exempt from tax. Where an intra-State sale of a particular commodity is taxable at a lower rate than 3 per cent then the tax on the inter-State sale of that commodity will be at that lower rate. An inter-State sale of any commodity is not exempt from tax if as an intra-State sale the purchase or sale of that commodity is exempt only in specified circumstances or under specified conditions or the tax is leviable on the sale or purchase at specified stages. 12.. In Pine Chemicals Ltd. v. Assessing Authority [1992] 85 STC 432, their Lordships of the Supreme Court interpreted section 8(2-A) of the Central Act and held as under: The benefit of the exemption under the Government orders is also available in respect of turnover on inter-State sales in view of section 8(2-A) of the Central Sales Tax Act. The facts which the dealer has to prove to get the benefit of the Government orders are intended only to identify the dealer and the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her provisions of the Act and the Rules. One must first satisfy the condition in section 8(4) to become eligible for the concessional rate in section 8(1). It is only thereafter that he can claim the benefit of the notification under section 8(5) for which purpose he has to satisfy the conditions prescribed in the notification. Even for sales of goods, the rate of tax for which are governed by a notification under section 8(5) granting exemption or prescribing a lower rate, there is an obligation to produce the C form. Action can be taken in relation to those sales against the dealer for producing invalid or spurious C forms. 15.. In Commissioner of Sales Tax v. Industrial Coal Enterprises [1999] 114 STC 365, the Supreme Court held that a provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision. 16.. In our opinion, the proposition of law laid down in none of the aforementioned judgments has any bearing on the interpretation of rule 28A(2)(n) and (4)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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