M/S
J.K. Synthetics Ltd. ANR Vs. Commercial Tax Officer & ANR [1997] INSC 91
(28 January 1997)
CJI,
S.P. BHARUCHA, K. VENKATASWAMI BHARUCHA.
J.
ACT:
HEAD NOTE:
WITH R.P.
(C) NO. 1674/93 IN SLP (C) NO. 8995/92, C.A.
Nos. 3381/93, 3382/93, 3179-52/85 C.A. No.
3381/93 The impugned judgment (reported in 87 S.T.C. 534) was delivered by a
learned single Judge of the High Court of Rajasthan. It rejected in writ
petition filed by the present appellant against an order of the Board of
Revenue.
The
Assessment Years in question are 1965-66, 1966-67 and 1967-68. The assessee
(respondent) manufactures tyre cord fabric. That tyre cord fabric was, at the
relevant time, covered by term `textile' is not in dispute.
Three
notifications were issued by the State Government in exercise of powers
conferred by Section 8(5) of the Central Sales Tax Act, 1956. They are dated 14th December, 1957, 12th August, 1980, and 2nd
January, 1981, and
they read thus:
1.
"F. 5(48) E&T/57-II, dated December 14, 1957:
In
exercise of the powers conferred by subsection (5) of section 8 of the Central
Sales Tax Act, 1956 (Central Act No. 74 of 1956), the State Government being
satisfied that it is necessary so to do in the public interest, directs that no
tax under the said Act shall be payable, on and from the fourteenth day of
December, 1957, by any dealer having his place of business in the State of
Rajasthan in respect of the sale by him to a registered dealer from any such
place of business, of the following goods, in the course of inter-State trade
and commerce, namely:
(i) sugar,
(ii) tobacco and its products, and (iii) all textiles, whether cotton, woollen
or silken, including rayon, art-silk or nylon, but exclusive of pure silken
cloth of all varieties (howsoever manufacture)." 2. "F.4(46)FD/Gr.
IV/80-7 dated August
12, 1980 :
In
exercise of the powers conferred by sub-section (5) of section 8 of the Central
Sales Tax Act, 1956, the State Government being of the opinion that it is
necessary in the public interest so to do, hereby directs that the tax in
respect of sales made in the course of inter- State trade or commerce by any
dealer having his place of business in the State from any such place of
business of tyre cord fabrics or warp sheets shall be payable and be calculated
at 4 per cent.
This
shall have immediate effect." 3. "F.17(71)FD/Gr. IV/71-I dated January 2, 1981:
In
exercise of the powers conferred by sub-section (5) of section 8 of the Central
Sales Tax Act, 1956, the State government being satisfied that it is necessary
so to do in the public interest hereby directs that all the notifications
issued under the said sub-section in so far as they relate to the sales made in
the course of inter- State trade, or commerce by any dealer having his place of
business in the State, from such place of business, of tyre cord fabrics and/or
warp sheets shall stand superseded." The relevant notifications that were
issued by the State Government under the powers conferred by Section 4(2) of
the Rajasthan Sales Tax Act, 1954, are dated 14th December, 1957, 1st July, 1958
and 20th February, 1968, and they read thus:
1.
"F.5(48)E&T/57/I dated December 14, 1957:
In
exercise of the powers conferred by sub-section (2) of section 4 of the
Rajasthan Sales Tax Act, 1954, (Rajasthan Act XXIX of 1954), the State
Government being of the opinion that it is necessary in the public interest so
to do, does hereby exempt the sale of.
(i) sugar,
(ii) tobacco
and its products, and
(iii) all
textiles, whether cotton, woollen or silken, including rayon, art-silk or nylon
but exclusive of pure silken cloth of all varieties (howsoever manufactured)
from payment of the tax payable under the said Act on the from the fourteenth
day of December, 1957, on the following conditions, namely:
(a)
that every dealer in the aforesaid goods shall not later than the 2nd January,
1958 correctly declare in the form appended hereto all goods of the aforesaid
classes held by him, whether in stock or in transit, upon the close of business
on the 13th of December, 1957, separately in respect of :-
(i) the
goods purchased by him from dealers registered under the said Act, and
(ii)
the goods otherwise purchased, whether from outside or within the State of
Rajasthan, and (b) that every such dealer shall on or before the 10th July,
1958 pay to the appropriate assessing authority under the said Act, in respect
of the goods of the aforesaid classes declared under clause (a), either (i) an
amount in the case of sugar and tobacco, calculated at the existing rate of tax
payable under the said Act on the total purchase price thereof increased by way
of profit by 3% and 6 1/4% respectively and in the case of textiles eight per
cent of the amount calculated at the existing rate of tax payable under the
said Act on the total purchase price thereof.
(ii) an
amount equal to the sum paid by him as tax under the said Act for the quarter
of the previous year corresponding to the quarter of the current year in which
the 14th day of December, 1957, falls;
Provided
that the amount referred to in clause (b) of this notification shall not be
payable in respect of stocks declared under clause (a) thereof, if the
Additional Duties of Excise (Goods of Special Importance) Act, 1957, (No. 58 of
1957) of the Central Legislature applies thereto, whether by virtue of the said
Act being passed by Parliament or by virtue of the provisions of the
Provisional Collection of Taxes Act, 1931, of the Central Legislature:
Provided
further that upon payment of the amount indicated in clause (b) - (i) a dealer
in textiles mentioned above shall be eligible to a rebate of 15%, and (ii) a
dealer in tobacco and its products or sugar shall, if such payment is made in
full within one month of the 13th December, 1957, be eligible to a rebate of
5%:
Provided
also that nothing contained in conditions (a) and (b) above shall be applicable
to handloom textiles:
Provided
further that the option contained in sub-clause (ii) of clause (b) above shall
not be available to the dealers in the aforesaid goods in the area of Abu, Ajmer and Sunej:
Provided
further that if a dealer is unable to furnish by the 2nd January, 1958, a
declaration as aforesaid in the Form already prescribed, he may submit by the
2nd January, 1958, a declaration stating according to his books the values and
the quantity of the stock in hand on the said fourteenth day of December, 1957,
separately in respect of the articles liable to different rates of sales tax
but he shall furnish further information as and when required of him by the
appropriate assessing authority.
The
amount payable under the aforesaid notification by a dealer may be paid upto 31st March, 1961:
Provided
that the assessing authority, after such enquiry as it may deem fit, is
satisfied that the amount deposited or to be deposited is based on a correct
declaration:
Provided
further that no rebate admissible under the aforesaid notification (as amended upto
date) shall be allowed to such a dealer.
Extract
from Press Note (1) In the case of dealers who fail to deposit the requisite
amount by the 30th June, 1958, the exemption under the aforesaid notification
would not be available and all sales made by them upto and including 30th June,
1958 would be subject to sales tax at the rates in force from time to time
irrespective of the fact whether the sales are of goods which have been subject
to additional duty of excise imposed on 13th December, 1957, or not.
(2)
Dealers thus exempted would not be liable to pay tax on fents, rags, dyed and
printed cloth including tyed and dyed cloth.
2.
"F.5(48)E&T/57 dated July 1, 1958:
In exercise
of the powers conferred by sub-section (2) of section 4 of the Rajasthan Sales
Tax Act, 1954, (Rajasthan Act XXIX of 1954) the State Government being of the
opinion that it is necessary in the public interest so to do, does hereby
unconditionally exempt from the 1st July, 1958, from tax, the sale of - (i)
sugar including refined sugar, khandsari and palmyra sugar but excluding all
preparations thereof such as sweets, sugar candy, confectionery, etc.;
(ii) all
varieties of tobacco manufactured or unmanufactured;
(iii)
all varieties of textiles (other than pure silk cloth) made wholly or partly of
cotton, rayon, nylon, wool or artificial silk including handkerchiefs, towels,
napkins, dusters, cotoon velvets and velveteen, hosiery cloth in lengths excluding
finished items thereof, tapes, niwars and laces." 3. "F.5(96)FD(CT)/67-I
dated February 20, 1968:
In
exercise of the powers conferred by sub-section (2) of Section 4 of the
Rajasthan Sales Tax Act, 1954, the Government of Rajasthan being of the opinion
that it is expedient in the public interest to do so, hereby rescinds the
following notification with immediate effect:
1.
Excise & Taxation Department Notification No. F.5(48)E&T/57, dated 1st July, 1958.
2.
Excise & Taxation Department Notification No. F.5(139)E&T/57, dated the 11th August, 1959.
3.
Finance (Revenue & Economic Affairs) Department (Commercial Taxes Section)
Notification No. F5(54) FD(RT)/64 dated the 23rd February, 1965.
The
provisions of Sections 8(1), (2A) and (5) of the Central Sales Tax Act read
thus:
"8.
Rates of tax on sales in the course of inter-State trade or commerce. - (1)
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 of the description referred to in sub- section (3);
shall
be liable to pay tax under this Act, which shall be four per cent of his
turnover.
(2-A)
Notwithstanding anything contained in sub-section (1-A) of Section 5 or in
sub-section (1) or clause (b) of sub-section (2) of this section, the tax
payable under this Act by a dealer on his turnover in so far as the turnover or
any part thereof relates to the sale of any goods, the sale or, as the case may
be, the purchase of which is, under the sales tax law of the appropriate State,
exempt from tax generally or subject to tax generally at a rate which is lower
than four per cent whether called a tax or fee or by any other name, shall be
nil or, as the case may be, shall be calculated at the lower rate.
Explanation
- For the purpose of this sub-section a sale or purchase of any goods shall not
be deemed to be exempt from tax generally under the sales tax law of the
appropriate State if under that law the sale or purchase of such goods is
exempt only in specified circumstances or under specified conditions or the tax
is levied on the sale or purchase of such goods at specified stages or
otherwise than with reference to the turnover of the goods.
(5)
Notwithstanding anything contained in this section, the State Government may,
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 under this Act shall be payable by
any dealer having his place of business in the State in respect of the sales by
him, in the course of inter-State trade or commerce, from any such place of
business of any such goods or classes of goods as may be specified in the
notification, or that the tax on such sales shall be calculated at such lower
rates than those specified in sub-section (1) or sub-section (2) as maybe
mentioned in the notification;
(b)
that in respect of all sales of goods or sales of such classes of goods as
maybe specified in the notification, which are made, in the course of
inter-State trade or commerce, 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 maybe specified in
the 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) or sub-section (2) as may be mentioned in the
notification." The provisions of Sections 3, 3A and 4 of the Rajasthan
Sales Tax Act read thus:
"3.
Incidence of taxation 0 (1) Subject to the provisions of this Act every dealer
whose turnover in the previous year in respect of sales or supplies of goods
exceeds:- (a) in the case of a dealer who imports goods, or manufactures any
goods other than cooked food excluding bakery products - Rs.50,000/-, (b) in
the case of a dealer not falling in clause (a) Rs. 1,00,000/-, shall be liable
to pay tax under this Action his taxable turnover if his taxable turnover
exceeds Rs. 10,000/- in the previous year;
Provided
that a dealer who ceases to be liable to pay tax as a result of any amendment
in this sub- section, shall be liable to pay tax in respect of any goods
purchased by him at a concessional rate of tax or without paying any tax on the
strength of any declaration furnished by him as a registered dealer on the
purchase price of such goods at the full rate applicable to the sale of such
goods after adjusting the tax if already paid by him in respect thereof.
Explanation:-
For the purpose of limits specified in clause (a) or (b) the turnover shall
include the aggregate amount for which all goods are sold or supplied,
irrespective of the fact whether any of such goods are imported or manufactured
or otherwise obtained by the dealer concerned or whether or not they are
exempted from payment of tax; and (2) A dealer who is not liable to pay tax
under sub-section (1) or who had no business in the previous year, shall be
liable to pay tax under this Act with effect from the date when his sales for
the period from the first day of April are of such an amount as would render,
the proportionate sales upto 31st March liable to tax according to sub- clauses
(a) or (b) of sub-section (1).
(3) (i)
A casual trader, or (ii) any other dealer in goods (except cereals and pulses)
notified for the purpose of Clause (ccc) of section 2.
Who is
not liable to pay tax under sub-section (1) shall nevertheless be liable to pay
tax under and in accordance with the provisions of this Act and the rules made thereunder,
whatever maybe the amount of extent of his turnover in respect of the sales of
goods made by him within the State.
3A.
Liability of dealers registered under Central Act 74 of 1956.- 91) A dealer
registered under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) who
is not liable to pay tax under section 3 of this Act, shall nevertheless be
liable pay tax under and in accordance with the provisions of this Act and the
rules made thereunder, whatever may be the amount or extent of his turnover, in
respect of sales of goods made by him within the State on or after the
commencement of the Rajasthan Sales Tax (Second Amendment) Act, 1958.
(2) A
dealer who is liable to pay tax under sub-section (1) shall be deemed to be a
registered dealer for all purpose of this Act and the rules made thereunder.
4. Act
not to apply to certain sales - (1) No tax shall be payable under this Act on
sale or purchase of any of the exempted goods if the conditions specified in column
3 of the Schedule are satisfied.
(2)
Where the State Government is of opinion that it is necessary or expedient in
the public interest so to do, the State Government may, by notification in the
Official in the Official Gazette, exempt, whether prospectively or
retrospectively from tax the sale or purchase of any goods or any a person or
class of person on such conditions and on payment of such fee as may be
specified in the notification.
(3)
The Excise and Taxation Department notification No.F.5(139) E.&T./57, dated
the 11th day of August, 1959, published in Rajasthan Rajpatra, Part IV-C, dated
the 15th October, 1959 issued under sub-section (2) shall be deemed to have ben
rescinded with effect on and from the 11th day of August, 1959, and notwithstanding
such rescission, sale of old gunny bags during the period commencing on the
11th day of August, 1959 and ending on the 20th day of February, 1968 shall be
deemed to have been exempted from payment to tax." Entry 18 of the
Schedule to the Rajasthan Sales Tax, as it read at the relevant time, was this
:
"All
cotton fabrics rayons or artificial silk fabrics woollen fabrics, sugar and
tobacco as defined in the Additional Duties of Excise (Goods of Special
Importance) Act, 1957 (Central Act 58 of 1957)." The contention on behalf
of the appellant is that the notifications dated 14th December, 1957, were
superseded by the notification dated 1st July, 1958, issued under the
provisions of the State Act and, in any case, in 1964 by the insertion of Entry
18 in the Schedule to the State Act. The notification dated 1st July, 1958, under the State Act gave
unconditional exemption to textiles. thereby Section 8 of the Central Act was
attracted. It covered the field and implicitly rescinded the notification dated
14th December, 1957, issued under Section 8(5) of the
Central Act which had given such exemption. Entry 18, inserted in 1964, for the
same reason also covered the field. The field having been covered, the said
notification dated 14th
December, 1957, stood
rescinded by necessary implication.
The
contention must be rejected having regard to the terms of the three
aforementioned notifications issued under the provisions of the Central Act.
The notification dated 2nd January, 1981, stated that the State Government, being
satisfied that it was in the public interest so to do, directed that "all
the notifications" issued under Section 8(5) in respect of sales of tyre
cord fabric made in the course of inter-State trade or commerce by any dealer
having his place of business in the State from such place of business should
stand superseded. It will be noted that the phrase used is "all the
notifications". the phrase, using the plural, covers not only the
notification dated 12th
August, 1980, but also
the only other notification that meets the requirements, being the said
notification dated 14th
December, 1957. The
State Government, therefore, acted upon the basis that the said notification
dated 14th December,
1957, issued under
Section 8(5) of the Central Act, was in force on 2nd January, 1981. The appellant, its officer, cannot be heard to contend
that the terms of the notification dated 2nd January, 1981, were the result of
non-application of mind and that the said notification dated 14th December,
1957, had stood impliedly rescinded long before 2nd January, 1981.
On
this short ground the appeal must fail. It becomes, therefore, unnecessary to analyse
the provisions of the Central and State Acts under which the notifications were
issued for the purpose of examining the appellants' aforestated contention.
The
appeal is dismissed. No order as to costs.
C.A.
No. 3179-82/85, C.A. No. 3382/93 and Review Petition No. 1674/93 in SLP(C) No.
8995/82 & Review Petition These appeals are dismissed in the light of the
above judgment and order. No order as to costs.
C.A.
No. 1757/82 In this matter the assessee is in appeal. It had challenged in a
writ petition before the High Court provisional assessments made on the basis
that we have rejected above. During the pendency of the writ petition, the
provisional assessments were finalised. The assessee applied for an amendment
of the writ petition to challenge the final assessment orders. The amendment
was refused. We find no valid ground for such rejection. However, it is fairly
pointed out that in respect of one of the two assessment years in question, the
assessee has filed the statutory appeal available to it. We think that it is,
therefore, proper that even for the remaining year, namely, Assessment Year
1974-75, the assessee should file such statutory appeal and we direct that the
bar of limitation shall not be raised or considered in such appeal; in other
words, the appeal shall be decided on merits if filed within 12 weeks from
today. Order on the appeal accordingly. No order as to costs.
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