9911796707
TMI Blog2009 (3) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the respondents, a counter-affidavit dated January 21, 2008 was filed. It is the case of the petitioners that they are the registered wholesale dealers both under the Central Sales Tax Act, 1956 (for short, the CST Act ) as well as the Tamil Nadu General Sales Tax Act, 1959 (for short, the TNGST Act ). The first petitioner was carrying on wholesale business in pulses, grams, paddy, rice and other items at Tiruvarur. Similarly the other petitioners were also carrying on similar trades at Tiruvarur, Kumbakonam and Papanasam. According to the petitioners, in terms of section 3 of the TNGST Act, every dealer whose total turnover per year exceeds Rs. 3 lakhs and every casual trader or agent of a non-resident dealer, whatever be his turnover for the year, shall pay tax for each year in accordance with the provisions of the Act. Section 8 of the TNGST Act exempts certain commodities from payment of tax subject to the terms and conditions prescribed. A dealer who deals in goods specified in the Schedule is not liable to pay any tax in respect of such goods. Section 59(1) of the TNGST Act empowers the Government to issue notification to alter, add or to cancel any of the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t specified stages or otherwise than with reference to the turnover of the goods. In the light of the above Explanation, it was sought to be argued that pulses and grams are totally exempt by the TNGST Act. Therefore, correspondingly they are deemed to be exempted under the CST Act. It is in the light of these facts, the G.O. levying tax was sought to be challenged. The G. O. as notified in the Tamil Nadu Gazette reads as follows: 'LEVY OF CENTRAL SALES TAX ON CERTAIN ITEMS G.O. Ms. No. 339, Commercial Taxes and Religious Endowments, 13th September 1996 No. II(1)/CTRE/111/96. In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), the Governor of Tamil Nadu, having been satisfied that it is necessary so to do in the public interest, hereby directs that the tax payable by any dealer in respect of the sale by him of (a) Pulses and grams, the following, including brokens, splits, husk and dust thereof: (i) Gram or gulab grain (ii) Tur or arthar (iii) Moong or green gram (iv) Mastur or lentil (v) Urad or black gram (vi) Moth (vii) Lekh or kesari (b) Chillies, tamar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be levied on a sale or purchase and this argument implies that all sales are exempt from tax. The plain meaning of the said sub-section is that if under the sales tax law of the appropriate State no tax is levied either at the point of sale or at the point of purchase at any stage the tax under the Act shall be nil. Reading section 6(1A) and section 8(2A) together along with the Explanation the conclusion deducible would be this: where the intraState sales of certain goods are liable to tax, even though only 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 three per cent then the tax on the inter-State sale of that commodity will be at that lower rate. A sale or purchase of any goods shall not be exempt from tax in respect of inter-State sales of those commodities if as an intraState sale the purchase or sale of those commodities is exempt only in specific circumstances or under speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular manufacturer-dealer are exempt from the State tax in his hands, they must equally be exempt under the Central Act. But sub-section (2A) requires specifically that such exemption must be a general exemption and not an exemption operative in specified circumstances or under specified conditions. Can it be said that the goods sold by the dealers in this case are exempt from tax generally under the State sales tax enactment? The answer can only be in the negative. Such goods are exempt from tax only when they are manufactured in a large or medium industrial unit within five years of its commencement of production and sold within the said period, i.e., in certain specified circumstances alone. The exemption is not a general one but a conditional one. The exemption under the Government Order No. 159 is not with reference to goods or a class or category of goods but with reference to the industrial unit producing them and their manufacture and sale within a particular period. For the purposes of the Government order, the nature, class or category of goods is irrelevant; it may be any goods. It is concerned only with the industrial unit producing them and the period within whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking engaged in supplying electrical energy to the public under a licence and the specified condition was that the goods purchased by the undertaking must be used for generation or distribution of electrical energy. If any of these circumstances are not satisfied, it was pointed out, the sale of such goods was not exempt from tax. It was emphasised that (SCC page 31, para 15, page 112 of STC): 'General exemption means that the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances there is no exemption from tax generally'. In our respectful opinion, the ratio of this decision clearly concluded the question arising in Pine Chemicals [1992] 85 STC 432 (SC); [1992] 2 SCC 683 against the assessees inasmuch as it was not a case where goods were 'totally exempt from tax'. It was a case where the exemption operated or was attracted only if it was established that such goods were manufactured in a large or medium industrial unit within five years of its going into production and were sold within that period. As poin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
