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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 ..... d are being disposed of as such. However, for the sake of brevity and in order to maintain clarity, facts are being extracted from C.R. No. 35/2021. 3. Brief facts of the case are that the assessing authority found the respondent(s) herein to be still conducting sale against CC forms 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Since all these questions of law are intrinsically interrelated and interconnected, therefore, they are taken up together for consideration and are being answered by common reasoning. 7. It is vehemently argued by Mr. Anup Rattan, learned Advocate General, assisted by Mr. Ramakant Sharma, learned Additional 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Bombay High Court in Prism Cement's case that the words "any person or to such class of persons as may be specified in the notification" in Section 8 (5) (b) are referable to the registered dealers as is evident from para 56 and para 57 of the said judgment. 15. Lastly, it is contended by Mr. Sood that it is well 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; [in the tele-communications network or] in mining or in the generation or distribution of electricity or any other form of power; (c) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he certificate of registration of the registered dealer referred to in that sub-section. (8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the [prescribed authority referred to in sub-section (4) a declaration in the prescribed manner on the prescribed 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 int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication is issued under Section 8 (5)(a) or 8 (5) (b), then either no rate of interest shall be payable or the rate of interest payable shall be calculated at a lower rate than the rates specified in sub-section 1 or sub-section 2, which now stands omitted. 30. The omission of "sub-section 2" is for a specified purpose, as after amendment in 2007, there was no rate of interest mentioned in Section 8 (2). 31. 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 noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Governments to grant in public interest total / partial exemption from tax payable under the CST Act as it was not possible to visualise in advance the cases in which such exemptions or reductions may be necessary. Therefore, when the power to grant exemption to any person or class of persons was conferred upon the State Governments to cater to the needs of unforeseen circumstances, it cannot be said that power has been taken 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication and also amended provision of section 8 (5) of the Central Sales Tax Act. Earlier, the Government of Pondicherry has issued a notification dated October 1, 2001 in G. O. Ms. No. 37/2001/ F2 granting concessional rate of tax of two per cent without form C in respect of inter-State sale of computers, information technology products and accessories, which reads as follows: In exercise of the powers conferred by Sub-section (5) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate of registration for the purposes of levy of tax, etc.; (v) withdraw powers of the State Government to waive the requirement of C form. 15. Relying on the above amended provision and also the note on clause, the learned Special Government Pleader (Pondicherry) appearing for the Respondents submitted that the State Government has no power to grant concessional rates of tax without form C and by mainly relying on insertion of word on the fulfilment of 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 contemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logy and bio-technology goods to the non-dealers like banks, educational and medical institutions, autonomous bodies, etc., shall be calculated at 1% subject to furnishing of following declaration in form CC by the purchaser, with immediate effect in the public interest. FORM CC Certified that we have purchased following goods from M/s. ...holding registration certificate No. ...under the Central Sales Tax Act, 1956 for our official use: Give broad description of goods 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 (Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing all other provisions of 8 (5) (a) (b), the State Government still has power to grant total/partial exemption from tax payable, which has remained intact even after the aforesaid amendment. ii) The Tribunal has rightly held that the State Government even after the Central Sales Tax Amendment Act, 2007 has not been denuded of its competence to issue notification under section 8 (5) (b). iii) The notification dated 30.6.2005 issued prior to amendment of section 8 (5) (b) does not run counter and has not become inconsistent 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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