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TMI Blog2012 (7) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ns granted to inter State sales turnover either the class of dealers with reference to the goods or otherwise who are not registered dealers and not Government - restriction brought about by the amendment cannot regulate or effect an exemption if has been granted or is to be given in respect of inter State sales turnover effected in favour of non-registered dealers and other Governments - this is the only proper way of understanding of the amendment as we find that sub-section (5) of section 8 of the CST Act is an enabling provision to grant exemptions in situations where it is a case of levy of tax under the CST Act. On a reading of the plenary legislation and the notification issued being only to effectuate that, there was no conflict in the view expressed by the division Bench earlier upholding the notification - this is the only possible way of giving full effect to the exemption provision u/s 8(5) of the CST Act and at the same time effectuating the restrictions imposed therein insofar as inter State sales turnover effected in favour of registered dealers and the Governments, are concerned, while the benefit of exemption is claimed – thus, the order of the revisional author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption in terms of the Government notification dated November 15, 1996 can avail of the same only by producing C form or D form as the case may be and not otherwise. 7. While there is no dispute that the assessing officer had not denied the benefit available to a dealer who effects inter-State sales and produces forms C and D and on the other and had brought to tax inter-State sales turnover at the rate as is provided under section 8(2) of the CST Act in respect of inter-State turnover of the assessee though claimed to have been sales in favour of registered dealers or the Government but had failed to file the declaration in form C or form D, the further question is only as to whether the assessee should have been denied the benefit of exemption also, in respect of inter-State sales effected in favour of dealers other than registered dealers and the Government, though was so entitled to claim the exemption on the basis of the November 15, 1996 notification which had been issued by the State Government. 8. The assessing officer having taken the view that in the light of the amendment to sub-section (5) of section 8 of the CST Act and the notification dated May 31, 2002, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 16 of this judgment, submission is that the Allahabad High Court had occasion to examine an analogous notification issued by the U.P. Government in the context of the very provisions of section 8(5) of the CST Act as amended; that it has been held that the dealer is entitled for concession or benefit of the nature as had been, extended earlier notwithstanding the notification and the amendment to section 8(5) of the CST Act, and submits that this view of the Allahabad High Court has to be accepted and the appeals allowed on such premise. 14. It is also brought to our notice that the Allahabad High Court was seized of the matter in the background of the matter having gone before the Supreme Court earlier and on this limited aspect, the matter having been remitted to the High Court. It is submitted that the restricting provisions in terms of amendment brought about in section 8(5) of the CST Act are not attracted to the present transactions which are in the nature of sales effected in favour of unregistered dealer or dealers who have not issued C forms and sales in favour of the Government, but not covered by issue of D forms, etc. 15. On the other hand, countering such su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no way of the assessee claiming exemption and therefore submits appeals have to be dismissed. 19. We have been taken through the legislative history of the amendment and it is submitted that amendment was necessitated and Parliament stepped into bring about such amendment to the enabling exemption provision in view of the rampant malpractice that prevailed earlier by unscrupulous dealers claiming transactions which were not necessarily in favour of Government and registered dealers, also as inter-State sales turnover covered by section 8(1) of the CST Act and therefore the Parliament having consciously brought about the legislative change by amending the requirement of production of forms C and D for claiming exemption, the dealer cannot avail of such exemption without production of C and D forms. 20. It is also submitted that the notification is only to effectuate the amendment to section 8(5) of the CST Act and validity of this notification also having been upheld, the assessee and dealers are bound to fall in line with this requirement failing which they lose the benefit of exemption. 21. We have perused the orders under appeal, looked into the record and bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of inter-State trade or commerce, to a registered dealer 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 any person or to such class of persons as may be specified in notification no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) as may be mentioned in the notification. (6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce to a registered dealer for the purpose of setting up, operation, maintenance, manufacture, trading, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as packing material or packing accessories in a unit located in any special economic zone or for development, operation and maintenance of special economic zone by the developer of the special economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such special economi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of goods as enabled under clause (b) of this section. 30. The words 'on the fulfilment of the requirements laid down in subsection (4) by the dealer have been inserted by the amending Act of the year 2002. It is because of such amendment, the question has arisen as to what is the meaning of this provision and what is the effect of sale in the wake of amendment and in what manner it affects the claim for exemption though either the class of goods or class of dealers have been notified for grant of exemption. 31. Submission of Smt. S. Sujatha, learned Additional Government Advocate, is that the amendment having been to the main part of section 8(5) of the CST Act and being in common to both clauses (a) and (b), amendment has to necessarily be read as one governing situations occurring under both clause (a) and (b) and therefore there is no escape from the requirement of production of C and D forms for claiming exemption. 32. We have examined this submission in some detail. We find that the requirement of sub-section (4) of section 8 of the CST Act in itself is for the purpose of claiming the benefit of the lower rate of tax as indicated in subsection (1) of section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the line of reasoning indicated in the judgment by the Allahabad High Court. 36. We also hold that while the validity of the notification by this court and therefore the notification operating in the manner in which it is so provided does not in any way affect or make difference to the manner in which the very provisions of section 8(5) operates and is to be interpreted and understood after the amendment. 37. As we are expressing the view as above, on a reading of the plenary legislation and the notification issued being only to effectuate that, we do not find any conflict in the view expressed by the division Bench earlier upholding the notification and the present view taken by us in this judgment. We are of the view that, this is the only possible way of giving full effect to the exemption provision under section 8(5) of the CST Act and at the same time effectuating the restrictions imposed therein insofar as interState sales turnover effected in favour of registered dealers and the Governments, are concerned, while the benefit of exemption is claimed. 38. The appeals are allowed. The order of the revisional authority is set aside in the wake of the understanding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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