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TMI Blog2017 (8) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted under the specified circumstances or under the specified conditions and not generally, under the Provincial Sales Tax laws applicable in the State, then they are liable for payment under Central Sales Tax Act, as they are not covered under Section 8(2A) of the Central Sales Tax Act, 1956. The conditions attached in the notification issued by the erstwhile State of Bihar dated 22nd December, 1976 is to the effect that if such goods are certified by them to be required for the use of UNICEF, then only such sales are exempted from the payment of Provincial Sales Tax, meaning thereby to, there is no general exception for, every type of sale of goods, to the UNICEF. Thus, benefit under Section 8(2A) of the Central Sales Tax Act, 1956 cannot be availed by this petitioner. Rate of tax - Sale made to registered dealer of store materials under Section 8(1) and 8(3) of the Central Sales Tax Act, 1956 - For such sale, the rate of tax applicable is 4%, whereas, the respondents-State Authorities have taxed the sale at the rate of 10% - tax to be levied at 4% or 10%? - Held that: - there is no substance in the contention of the petitioner mainly for the reason that the store articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is relying upon a notification issued by the erstwhile State of Bihar under Section 6(3)(c) of the Bihar Sales Tax Ordinance, 1976 dated 22nd December, 1976, whereby the Government of Bihar was pleased to exempt from levy of Special Sales Tax and General Sales Tax sale made to the United Nations International Children s Emergency Fund (UNICEF) of such goods as are certified by them to be required for use of the UNICEF. For the ready reference, the said notification reads as under :- The 22nd December 1976. Bikri-Kar/San/1005/76-14416 - In exercise of the powers conferred by clause (c) of sub-section (3) of section 6 of the Bihar Sales Tax Ordinance, 1976 (Bihar Ordinance No. 209 of 1976), the Governor of Bihar is pleased to exempt from the levy of Special Sales Tax and General Sales Tax sale made to the United Nations International Children s Emergency Fund (UNICEF) of such goods as are certified by them to be required for use of the UNICEF. 2. This notification shall come into force with effect from 1st January, 1977. By order of the Governor of Bihar, A. HAKIM, Commissioner of Commercial Taxes and ex-officio Special Secretary to Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. Notification No. Date Date of effect Particulars 1. 14416* 22-12-1976 1-1-1977 Sales of goods to the UNICEF certified by them as per the use by it. 2. 14418* do do -do- -do- to WHO -do -do- do- do- 3. 14426* do do Sales of medicines, food, hospital equipments and instruments to all leprosy hospitals in Bihar run by charitable institutions registered under Act 21 of 1960 (*Entries 1 to 3 are as amended by Notification No. 14552, dated 26th December, 1977 4. 1063 1-11-1980 1-11-1980 Sales of newsprints to small and medium newspapers (see item 51 of Part A above) 5. 1199 17-8-1981 17-8-1981 Sales and purchases by the proposed duty free shop established by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Beltron T.V. Sets manufactured by the Bihar State Electronic Development Corporation 1199 8-11-1985 1-4-1985 1250 23-10-1986 1-4-1986 Note :- The validity of this exemption to locally produced goods as against the same goods imported from other States, is of doubtful validity in view of the decision in Weston Elecronics v. State of Gujarat , (1988) 70 STC 52 (SC) 17. 987 13-11-1987 13-11-1987 Sales of cassettes named Azadi ki Kahani released by the Gramophone Company of India 5. Thus, the exemption notification dated 22nd December, 1976 issued under Section 6(3)(c) of the Bihar Sales Tax Ordinance, 1976 is not a sale which is generally exempted from the tax to be levied under the Bihar Finance Act. 6. It has been held by Hon ble Supreme Court in the case of Commissioner of Sales Tax, J K and Others v. Pin Chemicals Ltd. and Others reported in (1995) 1 SCC 58, in Paragraphs 4, 5, 6, 7 and 8 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured by a large or medium scale industry and (ii) that the said goods are manufactured and sold within five years from the date the said industrial unit has gone into production. 7. The simple question before us is whether the Bench which decided Pine Chemicals is right in holding that the benefit of the said sub-section is available even where the goods are exempted with reference to industrial unit and for a specified period, viz., period of five years from the date the relevant unit goes into production. In other words, the question is whether an exemption of the nature granted under Government Order No. 159, dated 26-3-1971 is an exemption available only in specified circumstances or under specified conditions within the meaning of the Explanation to Section 8(2A), as contended by the State or is it a case where the goods are exempt from the tax generally within the meaning of Section 8(2A), as contended by the respondents/dealers? We are of the opinion that the respondents/dealers contention cannot be accepted in view of the clear and unambiguous language of the sub-section. 8. The idea behind sub-section (2A) of Section 8 of the Central Sales Tax Act, which we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured and sold by it would not be entitled to exemption from tax. Indeed, the goods manufactured by that very unit would not be eligible for exemption if they are manufactured after the expiry of five years from the date it goes into production and/or sells them beyond the said period. The period of exemption may also vary from unit to unit depending on the date of commencement of production in each unit. For the above reasons, we are of the opinion that the exemption granted under the aforesaid government order does not satisfy the requirements of Section 8(2A). (Emphasis supplied) 7. In view of the aforesaid decision, the most important ingredient explained under Section 8(2A) of the Central Sales Tax Act, 1956 is sale or purchase of goods if exempted under the specified circumstances or under the specified conditions and not generally, under the Provincial Sales Tax laws applicable in the State, then they are liable for payment under Central Sales Tax Act, as they are not covered under Section 8(2A) of the Central Sales Tax Act, 1956. The conditions attached in the notification issued by the erstwhile State of Bihar dated 22nd December, 1976 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1956 for utilizing the goods which are purchased at a concessional rate, if they are not utilized for the purpose of manufacturing of a specific type of end-use. Similarly, counsel for the petitioner has also relied upon Section 10(d) of the Central Sales Tax Act, 1956 which is also about the penalty. On the basis of these two Sections, it is contended by the counsel for the petitioner that the goods, which are sold to the registered dealers under Section 8(1) and 8(3) of the Central Sales Tax Act, 1956, are levied at the rate of 4% and not at the rate of 10%. These contentions are not accepted by this Court mainly for the reasons that imposition of penalty is one thing, whereas, levy of Central Sales Tax upon the goods, which were purchased at a concessional rate and if are not utilized for the same purpose, is absolutely another thing. The goods, which are purchased at a concessional rate of duty, are always conditional in nature and the condition is to use those goods in the manufacturing of a particular type of end-use. If these goods are diverted for some other purposes other than the particular type of manufacturing of goods, then they are subjected to normal rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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