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TMI Blog2024 (6) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... nment to grant exemption in respect of categories other than registered dealers. This view duly supported by judgment in Prism Cement Limited vs. State of Maharashtra, [ 2013 (7) TMI 668 - BOMBAY HIGH COURT] , wherein it was held as under: the argument of the Revenue that reference to the words 'sub-section (2)' and the words 'any person or class of persons' in Section 8 (5) as amended by Finance Act 2002 are redundant or surplus cannot be sustained. In this view of the matter, we do not consider it necessary to deal with the decisions relied upon by the counsel for the Revenue in support of their contention that the redundant or surplus words in a statute must be ignored. To the similar effect is the judgment rendered in Diebold Systems (P) Limited vs. Additional Commercial Tax Officer (Iac), Puducherry, [ 2010 (2) TMI 1103 - MADRAS HIGH COURT] , wherein question No. 3 was framed whether under Section 8 (5) (b) of Central Sales Tax Act, 1956 Act, Government still had power to issue notification without requirement of form C in respect of sales to any persons or class of persons, who were non-dealers Unjust Enrichment - HELD THAT:- The respondent(s/assessee(s) canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orms and held that notification dated 30.6.2005, whereby the tax was payable under sub-section 2 of Section 8 of the Central Sale Tax Act (for short, the CST Act) on the sale of goods made in the course of inter-state trade or commerce by the industrial units manufacturing information technology and bio technology goods to the non-dealers, to be calculated @ 1% subject to furnishing of declaration in form CC, had become inoperative by the Taxation Laws (Amendment) Act 2007, vide notification dated 28.3.2007 issued by the Ministry of Law and Justice (Legislative Department, New Delhi. The assessing authority thereafter held that the tax should have been paid by the respondents at VAT rate and not @ 1% against the CC-forms and accordingly levied differential amount of tax, interest and penalty upon the respondents leading to the impugned demand. 4. The respondent(s) preferred writ petition(s) before this court, however the same came to be disposed of by directing the respondent(s) to avail of alternate remedy. The appellate authority thereafter rejected the appeal(s) that were preferred before it constraining the respondents to file the second appeal(s) before the learned Tax Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Advocate General that since the words or sub-section 2 of Section 8 of CST Act have been omitted in terms of the amendment made in 2007, therefore, the power of the State Government to issue any exemption notification in all cases, other than those relating to registered dealer, has been done away with. 8. It is argued that this is in consonance with the statement of objects and reasons of the Taxation Laws (Amendment) Bill 2007. He further urges that by the omission of the words or sub-section 2 from Section 8 (5) of the CST Act, the intention is to restrict the grant of exemption only to registered dealers and the same was done because the CST Act was to be replaced and phased out with the proposed introduction of the GST Act. 9. It is also argued that a similar attempt had been made at the time of amendments made to the CST Act in 2002, however, since the words or sub-section 2 had not been omitted at the time of 2002 amendment, the objection of the revenue was rejected. But, with the introduction of the 2007 amendment, the said words stand omitted and the same can therefore only mean that the power of the State Government to grant exemption in the case of unregistered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established principle in taxing statues that there is no room for any intendment and regard must have been given only to the clear meaning of the words and the language of the notification/amendment etc etc. 16. We have heard the learned counsel for the parties and have also gone through the material place on record. 17. The primary question that arises for consideration in all these petitions is whether in terms of the amendment introduced under the Finance Act of 2007, power to grant exemption in respect of categories other than registered dealers under Section 8 (5) (b) of the CST Act, has effectively been done away with by the assessing authority and appellate authority and the ancillary question that arises for consideration qua the scope of the expression to such person or class of persons as may be specified in the notification as used in Section 8 (5) (b) of the CST Act and whether the scope of the same can only be limited to registered dealers as has been sought to be argued by the Revenue-appellant. 18. At the outset, we may express our dismay and disapproval in the manner in which the State while drafting the petition(s) has quoted Section 8 (5) (b) clearly omitting ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in [***] clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c). [(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority: Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.] [(5) Notwithstanding anything contained in this section, the State Government may [on the fulfillment of the requirements laid down in sub-section (4) by the dealer] if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein direct, (a) that no tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed form obtained from the authority specified by the Central Government under sub-section (6) in sub-section 5 duly filled in and signed by the registered dealer to whom such goods are sold. Explanation For the purposes of sub-section (6), the expression special economic zone has the meaning assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944 (1 of 1944). 21. If one was to advert to the scheme of Section 8 of the CST Act, it would show that insofar as sub-section (1) is concerned, the same provides for the rate of interest which is to be charged in case of inter-state sales made to registered dealers . Earlier, Section 8 (1) also related to sales made to the government , however the same i.e. government was omitted after the amendment introduced in 2007. 22. Section 8 (2) of the CST Act provides for a rate of interest which is to be levied in respect of those cases which are not covered under Section 8 (1). 23. Noticeably, under the pre-amended provisions, interest had been specified e.g. @ 10% in certain instances. However, post amendment since the rate of tax payable is same as payable in the respective States, obviously no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That apart, this is the provision under which the State Government has been empowered to issue an exemption notification, subject to the conditions that may be specified therein. 32. In the instant case, it is applicability of Section 8 (5) (b) of the Act, which is in question. A reading of the first part of sub-Section (b) indicates that the same is made applicable in respect of sales of goods to a registered dealer , by any dealer having his place of business in the State. 33. Second part of the definition expands the scope of application of the provision by making it applicable in respect of sales that may be made by any dealer or 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 the notification . 34. In our considered opinion, use of the phrase can only relate to all persons other than registered dealers . 35. Noticeably, second part of Section 8 (5) (b) has remained untouched even after amendment introduced on 1.4.2007. 36. In such circumstances, obviously the Tribunal has rightly held that the amendment 2007 cannot be interpreted to mean that the State Government has lost power to grant exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en away especially when Section 8 (5) as amended by Finance Act 2002 specifically refers to the power of the State Governments to grant exemption from tax payable in respect of inter-State sales to any person or any class of persons. In other words, when the legislature with a view to meet the unforeseen circumstances had conferred power upon the State Governments to grant total / partial exemption from tax payable by any person or class of persons under Section 8 (1) or 8 (2), in the absence of any material to show that either the unforeseen circumstances have ceased to exist or the State Governments have misused such power or for any other reason it became necessary to withdraw such power, the self-destructive argument of the Revenue that by 2002 amendment the powers of the State Governments to grant exemption to any person or class of persons has been taken away cannot be accepted, especially the language used in the amended Section 8 (5) negates such argument of the Revenue. 57. The alternative argument of the Revenue that the words 'sub-section (2)' as also the words 'to any person or to such class of persons' in Section 8 (5) (a) and 8 (5) (b) must be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of section 8 of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), read with the Notification No. F. 2/4/71-UTL, dated the December 9, 1971 of the Government of India, Ministry of Home Affairs, New Delhi, the Lieutenant Governor, Pondicherry, being satisfied that it is necessary so to do in the public interest is pleased to reduce the rate of tax to two per cent without form C in respect of inter-State sale of computers, information technology products, their spares and accessories. 2. This notification shall come into force with immediate effect. 13. From a reading of the above, it is clear that any inter-State sale made relating to information technology product is subjected to two per cent tax without form C. The Petitioner/Assessee has availed of the benefit as per the notification and there is no dispute regarding the same. Later the Parliament amended the provision of section 8 (5) of the CST Act. The said provision was introduced by the Finance Act, 2002 with effect from May 11, 2002. The said amended provision reads as follows: Notwithstanding anything contained in this section, the State Government may, on the fulfilment of the requirements laid down in Sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the requirement laid down in Sub-section by the dealer. Sub-section (1) and Sub-section (4) are applicable to sales made by dealer to registered dealer or Government and the dealer is also directed to comply with certain requirements as prescribed under the section. Therefore, insertion of the word as mentioned is applicable only to the inter-State sale made by dealer to the registered dealer or Government. Therefore, unless and until there is fulfilment of the requirement, they are not entitled to concessional rate of tax without producing form C. The conditions or requirements are confined to its applicability only to such person as capable of fulfilling it. It is relevant to consider section 8 (5) (b) of the Act. It contemplates two categories of dealers or persons--(i) registered dealer or Government; (ii) by any person or to such class of persons as may be specified in the notification. Therefore, the latter category to any person or any such class of person cannot be registered dealer or the Government . Certainly, they are different and distinct persons and we have to give different meaning to the same. We are conscious of the principle that in construing a provision or ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here- Description of goods Quantity Sale price No. and date of cash-memo (1) (2) (3) (4) I undertake to: (i) Comply with the provisions of the Central Sales Tax Act, 1956, the Rules framed and the notifications issued thereunder ; and (ii) utilise the goods so purchased for the purpose of which the same have been purchased. 16. The Government of Uttaranchal Shasan Vitta Vibhag also issued notification dated January 9, 2006 after amendment of section 8 (5) of the Central Sales Tax Act, 1956, which reads as follows: In exercise of the powers conferred by Sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956), read with section 21 of the General Clauses Act, 1897 (Act No. 10 of 1897), the Governor is pleased to direct in the public interest that with effect from the date of publication of this notification, the tax payable under Sub-section (2) of section 8 of the said Act by any manufacturer having his place of business in Uttaranchal, in respect of the sales by him from any such place of business in the course of inter-State trade or commerce, of information technology goods as specified in annexure A, to non-dealer institutions specified in annexure B, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nconsistent with the legislative declaration and, therefore, remains untouched even after Taxation Amendment Act, 2007. iv) The Tribunal has correctly appreciated notification dated 30.6.2005 and has construed it harmoniously with the amending provisions. 42. Mr. Sood had argued that in the event of the revisions petitions filed by the petitioner-revenue being dismissed, then the amount(s) deposited by the respondent(s/assessee(s) before the authority should be ordered to be refunded with interest. 43. We have considered the submission and find that the respondent(s/assessee(s) cannot automatically be held entitled to refund of the said amount unless the assessee(s) establishes that it has not passed on the tax liability to the consumers as any person carrying on the activity of manufacture of goods utilizing some raw material which had already suffered some tax would normally include both the tax component and the cost of such raw material into the cost of the final product and pass on the same to the consumer of the manufactured product. 44. In taking this view, we are duly fortified by the observations made by the Hon ble Supreme Court in M/s Deccan Cements Ltd. vs. Asst. Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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