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TMI Blog2009 (3) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent as indicated in G.O. Ms. No. 693, CT and RE Department, dated June 19, 1982 of the second respondent. A list of members of the petitioner-association has been included in the typed set filed along with the writ petition. W.P. No. 615 of 1998 was filed by the petitioner, Abba Traders, challenging the order of the fourth respondent (DCTO, Coimbatore, R.S. Puram West Circle) dated December 19, 1997 wherein the Central sales tax was sought to be levied at 10 per cent on the cotton waste not covered by "C" forms. Notice was ordered in both the writ petitions on January 21, 1998. This court also granted an interim injunction restraining the respondents from demanding more than four per cent. Subsequently, this court by a further order dated February 26, 2000 made the interim order absolute. A counteraffidavit was filed by the fourth respondent in W.P. No. 615 of 1998 dated July 14, 2000. The State Government issued G.O. Ms. No. 693, CT and RE Department, dated June 19, 1982 based on the request made by the Chamber of Commerce, Coimbatore about their difficulties in having exposed to the risk of paying enhanced rate of CST for non-production of "C" forms and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1996] 8 SCC 639 covers all transactions for which notification is issued under section 8(5) of the CST Act reducing the rate of CST under section 8(2)(b) or otherwise. Therefore, the Deputy Commissioners were directed not to pass orders applying the principles until clarification is received from the Government. It was the contention of the petitioners that the judgment of the Supreme Court in Sarvotam Vegetables Products case [1996] 101 STC 547; [1996] 8 SCC 639 will relate to notification issued under section 8(1)--sale by registered dealers, whereas the petitioners' case will fall under section 8(2)(b)--sale by unregistered dealers. They also relied upon the said judgment to contend that the Supreme Court was not considering the provision of section 8(2)(a). In response to their letter, the third respondent informed them by a letter dated November 6, 1997 that section 8(2)(a) of the CST Act is not an independent provision but a proviso to section 8(1) of the CST Act. Therefore, when a benefit is claimed under section 8(2)(a), it can only be in respect of goods which are exempted from tax generally or is subject to tax generally at a rate which is lower than four per cent. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sale by him, in the course of inter-State trade or commerce, (1)(to a registered dealer or the Government) from any such place of business of any such goods or classes of goods as may be specified in the notification, or that 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; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made in the course of inter-State trade or commerce, (1)(to a registered dealer or the Government) by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to (1)These words are added by section 152(v) of the Finance Act 20 of 2002) any person or to such class of persons as may be specified in the notification, no tax under the Act shall be payable 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of tax from four per cent to 1½ per cent (2½ per cent, as the case may be). Separate conditions are prescribed for availing the rate (which itself is a concessional rate) prescribed in section 8(1) and for availing the further reduction provided by the notification. Those two sets of conditions are prescribed by section 8(4) and by the notifications respectively. One cannot conceive of the said notifications independent of, or apart from section 8(1). They merely reduce the rate in section 8(1) as already mentioned. 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 said notifications, for which purpose again he has to satisfy the conditions prescribed in the notifications. It is therefore wrong to think that section 8(5) or the notifications are self-contained and operate de hors the other provisions of the Act/Rules. The Division Bench has unfortunately failed to appreciate the notifications in their correct perspective. We are of the opinion that the judgment under appeal is unsustainable in law and it is accordingly set aside. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, namely, 'the tax payable under the said Act' shall be calculated at the lower rate of two per cent. (emphasis Here italicised. supplied). Section 8 of the CSTA prescribes the rate of tax on sales in the course of inter-State trade or commerce, while section 6 is a charging provision." Thereafter, in paragraphs 39 and 40, the conclusions arrived at by the Division Bench were as follows: (page 223) "Para 39. In this view of the matter, the order of the Tribunal, adding the rate of levy of two per cent, by way of additional sales tax to the lower rate of levy at two per cent imposed, pursuant to the notification issued by the State Government, under sub-section (5) of section 8 of the CSTA, as noticed earlier, cannot at all be stated to be sustainable in law and therefore, such imposition deserves to be set aside. Para 40. For the reasons as above, we are not inclined to affix our seal of approval to the submissions, emerging from learned Special Government Pleader representing the Revenue that the decision in Sarvotam Vegetables Products [1996] 101 STC 547 (SC); [1996] 8 SCC 639 is applicable on all fours to the facts of the instant case." Therefore, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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