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TMI Blog2008 (8) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... - PRAKASH KRISHNA , J. PRAKASH KRISHNA J. The dealer-opposite party carries on the business of manufacture and sale of P.V.C. sheets and has been granted eligibility certificate under section 4A of U.P. Trade Tax Act, 1948 for the period from August 19, 1991 to August 18, 1999. Similar exemption has been granted to it in respect of inter-State sales under Notification No. 1094 dated July 27, 1991 issued by the State Government in exercise of powers conferred on it under sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (hereinafter referred to as the Act ). Under the said notification, the dealer-opposite party is entitled to claim total exemption in respect of inter-State sales for the two assessment years. In the subsequent years, such a dealer is entitled to exemption at the rate prescribed in annexure 1 to the notification. The dispute in the present case relates to the third assessment year from the date of grant of eligibility certificate. Under the notification, exemption is granted at ten per cent of the rate of tax normally applicable under the Central Sales Tax Act to the goods concerned. The aforestated notification was amended subsequently by noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sra, Advocate appearing on behalf of the dealer-opposite party, on the other hand, submits that the notification was issued under section 8(5) of the Act for the purpose of providing exemption from or reduction in the payment of inter-State sales tax to a nw unit and to the units which have undertaken expansion, diversification or modernization. If literal interpretation, as placed by the learned Standing Counsel is accepted, it would lead to absurd result and the notification in question will provide greater rate of tax than the one prescribed under the Central Sales Tax Act. What to say about grant of exemption or reduction in rate of tax, submits the learned counsel for the dealer-opposite party. Elaborating the argument, he submits that the notification should be interpreted in the light of the words used in section 8(5) of the Central Sales Tax Act whereby and whereunder these notifications were issued. Considered the respective submissions of the learned counsel for the parties and perused the record. It is apt at this stage to have a look to the Notification No. 1094 dated July 27, 1991. Relevant extract is reproduced below: Whereas the State Government is of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd section 8(5) of the Central Sales Tax Act is taken into consideration, as also the purpose and object for which the aforestated two notifications were issued, the legal position appears to be otherwise. Section 8 of the Central Sales Tax Act prescribed rate of tax on sales in the course of inter-State trade or commerce. Sub-section (1) thereof provides that every dealer who in the course of inter-State trade or commerce (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods shall be liable to tax under the Central Sales Tax Act at the rate of four per cent. Under sub-section (2) the tax payable by such dealer in the case of declared goods shall be calculated at twice the rate applicable to the sale or purchase of such goods and in case of goods other than the declared goods shall be calculated at the rate of ten per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher. Sub-section (1) of section 8 thus provides that the sale of goods other than declared goods to a registered dealer is settled at the rate of four per cent if sale transaction is covered by form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to be emphasised is that there has always been and continues to be, a need for delegated legislation. The exigencies of the modern State, especially the social and economic reforms, have given rise to the making of delegated legislation on a large scale (by authorising the Government, almost in every statute passed by Parliament or the State Legislature to make Rules) so much so that a reasonable fear could have arisen among the people that they were being ruled by the bureaucracy. One of the essential requirements of the delegated legislation is that the delegated legislation cannot widen or shorten the scope of the Act or the policy laid down thereunder. It cannot, in the garb of making Rules, legislate on the field covered by the Act and has to restrict itself to the mode of implementation of the policy and purpose of the Act as held by the apex court in Agricultural Market Committee v. Shalimar Chemical Works Ltd. [1997] 5 JT 272. In Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. Assistant Commissioner of Sales Tax [1974] 33 STC 219; AIR 1974 SC 1660, the Supreme Court upheld the validity of section 8(2)(b) of the Central Sales Tax Act, 1956, and ruled, that Parli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable to principles of interpretation of statute it has been laid down time and again that it is the duty of court to avoid head-on collision between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. In Union of India v. Sanyasi Rao (A.) [1996] 219 ITR 330 the apex court read down section 44AC of the Income-tax Act to save its vires. The said section opens with a non obstante clause and on its plain reading excludes the expenditures which are applicable to other businesses, for deduction from the income. Now let us examine the argument of the learned standing counsel. If the argument of the learned standing counsel is accepted, as it is pointed out by the Tribunal, in 8, 9 and 10 assessment year, under the notification, the dealer-opposite party will have to pay five per cent, seven per cent and nine per cent, respectively, of the tax while under the Central Sales Tax Act, on such transactions, the liability to pay the tax is four per cent against form C. Anomalous position would be created. A person who is availing of the benefit of concessional rate, will have to pay more, a situat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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