9911796707
TMI Blog2006 (11) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod in question were initially passed on July 5, 2003. Copies of those orders are at annexures 4 and 5 to the writ petition. From the assessment order passed under the Central Sales Tax Act, 1956 (hereinafter referred to as, the CST Act ) it appears that on production of declarations in form D issued by the DGS D, the Assistant Commissioner of Commercial Taxes, Samastipur (who passed the original assessment order) accepted the figures of sales to DGS D, as shown in the petitioner's return and subjected that amount to levy of Central sales tax at the rate of three per cent in the light of the notification, dated October 13, 1986 (annexure 1) issued by the State Government in exercise of the powers under section 8(1) of the CST Act. It appears that later some audit objections were raised and on that basis the case of the petitioner was subjected to reassessment. In the reassessment proceeding the Commercial Taxes Officer discarded the declarations in form D issued by the DGS D. for the defects pointed out in them by the audit and consequently subjected the sale figure to tax at the rate of 10 per cent as provided under section 8(2) of the CST Act. Mr. Agrawal assailed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. It is an admitted position that gunny bags or jute bags are not declared goods and, therefore, the sale of gunny bags or jute bags would be covered by clause (b) of sub-section (2) of section 8 of the Act and, hence, in case the sales are not covered by sub-section (1) of section 8, those sales shall be taxable at the rate of 10 per cent as provided under section 8(2)(b) of the CST Act. One of the conditions for application of sub-section (1) of section 8 is provided in sub-section (4) which is as follows: (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) if the goods are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification. There are two things of which note must be taken in the provisions as quoted above. The first is that it begins with the non obstante clause and the second is that it empowers the State Government to fix rates of tax applicable both to cases falling under sub-section (1) or sub-section (2) of section 8 of the CST Act. In exercise of the powers conferred under section 8(5) of the CST Act, the State Government issued notification, dated October 13, 1986 (annexure 1). For the sake of convenience the entire notification is reproduced below: In exercise of the power conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act 74 of 1956) the Governor of Bihar is pleased to direct that tax payable under sub-section (1) or (2) of section 8 of the CST Act in respect of sales of jute bags in the course of inter-State trade or commerce from the place of business in the State of Bihar shall be calculated at the rate of three percentum. 2.. This notification shall come into force with effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain unchanged at the rate of three per cent. For the reasons discussed above, we are satisfied that the impugned order of the Commercial Taxes Officer is not in conformity with the law. It is accordingly, set aside. In the result, this writ application is allowed but with no order as to costs. It is thus clear that the State Government fixed the rate of tax on sales of jute bags in course of inter-State trade or commerce at the rate of three per cent both for cases falling under sub-section (1) or (2) of section 8 of the CST Act. That being the position the submission made on behalf of the petitioner appears to have much substance. Even if it is held that the sales turnover relating to jute bags to DGS D, fell outside the purview of sub-section (1) of section 8 of the CST Act for failure to produce proper and valid certificate/declaration in form D , it would fall under sub-section (2) of section 8 of the CST Act. But by virtue of the notification the rate of tax under that sub-section too would only be three per cent and not 10 per cent as applied by the Commercial Taxes Officer in the impugned order. Here it may be noted that Mr.Raj Nandan Prasad, J.C. to A.G., su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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